Incubator busy hatching new businesses
Anyone who thinks Dunedin’s business future is anything less than bright should talk to Norman Evans, CEO of the business incubator Upstart; he will soon change their mind.
Upstart brokers several million dollars of new business investment each year, mainly tapping into a core group of nearly 100 investors – largely from the Otago/Southland area – who are interested in backing new businesses.
“They either want the sort of returns they can get from a start-up business, or they want to give something back,” says Evans.
“Our focus is on businesses with rapid growth potential – companies that can be turning tens of millions of dollars in a few years, and eventually hundreds of millions of dollars.”
Most of the companies started so far have been in the ICT sector, but there have been a couple of engineering companies, including the innovative Crouching Truck venture, and a book publishing company producing niche books with medical information for children in a form they can understand.
Of the ICT companies, Evans is particularly enthusiastic about TracPlus Global – a global satellite tracking company – and Vouchermate, an electronic discount voucher system that allows retailers to offer specials online.
TracPlus Global’s key point of difference is its software system that allows the varied tracking systems run by companies and organisations to talk to each other – allowing the likes of emergency services to share up-to-the-minute onscreen tracking information with each other.
“TracPlus is a classic example – it could be a $100 million company in 10 years,” says Evans.
“Even if we only produce three significant companies in three years – that means we are on course to build ten in ten years.”
TracPlus employs eleven staff currently, but Evans points out that by the time it is a $100 million company it will be employing about 30 people.
“If we can get several companies like that we can add a lot to the economy, as these companies use few resources to generate their returns.”
Perhaps the most important part of the equation is keeping those companies in Dunedin once they have grown, Evans explains.
“That’s why we have such a big focus on ICT. All our companies are knowledge-based, not product-based,” he says.
“Until the knowledge economy took off you had to build infrastructure and links for your distribution network. Now you can do business like this anywhere.
“The Internet has given Dunedin a huge opportunity, but with many cities fighting to build knowledge economies, the important thing is people. We need to have the knowledgeable people.”
The key to retaining those people and attracting new ones is making Dunedin an easy place to build companies.
“We also want it to be fun and we want them to have a great lifestyle. Yes you can make more money in big places but Dunedin has a desirable lifestyle,” says Evans.
“It might have well under 200,000 people but it feels like a city and thinks like a city. We’re going to make it the most entrepreneur-friendly city in the world.”
A University of Otago graduate, Evans left Dunedin to pursue career opportunities but upon his return thirteen years later, he could see the seeds of potential.
“I often get asked: ‘What is going on in Dunedin? I keep hearing about great innovation.’
“I love hearing that,” he says.
They are also building an ICT cluster, bringing people in the industry together to reaffirm that feeling that they really are part of something.
“If you create an environment where they feel valued, they will want to be here.”
Evans says Dunedin also possesses enviable potential in areas such as biotechnology and agritech – areas where there is real depth thanks to the University of Otago and Agresearch Invermay.
Dunedin is also nurturing very real potential in design, largely through the design schools at the University and Polytechnic.
“We have enough people passionate enough to drive us to being a knowledge economy, and that drive will be enough to see it happen.”
Education remains a major industry for the city and the driving force for the development of intellectual capital.
“Dunedin has much of the intellectual horsepower that drives the country,” says Evans.
“The old money here is making the investment – but it will be the new money that will rebuild the city.
“People don’t necessarily have to come back but investing here allows them to be part of it.”