Lesson number one: Don’t eat at the Thai restaurant at Paihia. I did on the evening of Morgo’s second day after just about everyone else had dispersed south and my stomach has only just come right. The Thai beef tasted a little funny when I was eating it but I just assumed that was the tang of MSG or something. Boy did I pay for that mistake!
Anyway, Morgo was a great event once again. I hope the feature below, which ran in The Business gives the impression of a tight-knit group of entrepreneurs getting together to discuss some of the issues their businesses are facing, because that’s what Morgo is. Without any proper representation for the IT sector at an industry level it’s sort of a defacto event for setting the agenda, examining the isues of importance. In addition to the feature, I also blogged from Morgo for the Herald:
MORGO 2007 – highlights from the tech talkfest
By Peter Griffin
Jenny Morel knows how to get a good crowd together. The venture capitalist’s invite-only retreats have, for five years straight, drawn the top ranks of the tech sector.
Last week’s Morgo summit in Waitangi was no different.
The seeds of business deals have been planted at Morgo, stock exchange listings quietly planned. A sense of kinship pervades the proceedings. The competitive spirit may have come out during the haphazard games of Segway polo held on the manicured lawn of the Copthorne Hotel, but Waitangi was full last week of innovative people united in the goal of growing their technology businesses quickly.
If anyone knows a thing or two about that, its Trademe founder Sam Morgan, who in the space of seven years built his tiny internet auction business into the country’s most popular website before selling it last year to Fairfax in an unprecedented $700 million deal.
Morgan also knows the value of Morgo – he met entrepreneur Craig Meek at last year’s conference and went on to invest in his data visualization company, iVistra. It was Morgo that put him in touch with DeviceWorks, which recently won worldwide attention with its Lomak light-operated mouse and keyboard, which is designed to help the disabled use computers. Morgan is now an investor in the business and is casting the net wide for new opportunities to plough his share of the Trademe sale proceeds into. Morgan’s investment adviser accompanied him to Morgo in the hope of finding some leads.
“I’ve made a few start-up investments and I’ve made a few social investments,” says Morgan.
“I don’t invest in stem cell research, just because I don’t get it,” he says.
He has underwritten the formation of a micro-finance scheme in Samoa and in addition to iVistra and Lomak, has put money into people management software maker Sonar6. Morgan spent much of his talk at Morgo outlining how little his life has changed since the Trademe sale. He has earn-out targets to meet, so is still preoccupied with Trademe.
“I’m planning on being there in some capacity for quite a while yet,” he says.
But he recognizes succession planning is underway and that involves building a team he trusts – then leaving them to get on with their work. His “Don’t be a dick” mantra, the equivalent of Google’s “Don’t be evil”, became a bit of a catchphrase at Morgo.
“Moving out of the picture means making sure everyone has the ‘Don’t be a dick’ certificate,” says Morgan, who sits on the board of listed accounting software Xero, the creation of another Morgo regular, Rod Drury.
“I really hope it’s the Nokia of New Zealand,” Drury said of Xero towards the end of his speech at Morgo.
“This is a ten year play. I plan to work until I’m at least 50,” he added.
After last year selling his mail archiving company Aftermail to US software company Quest, Drury could have retired. That wasn’t an option. Drury says the aim was always to sell Aftermail so he could fund his next venture, which he always anticipated would be a public company, listed on the NXZ.
“I thought if we want to be here in the long term, we’ve got to do it as a public company,” he said.
For Drury, preparing Xero for going global has meant investing heavily in getting top talent onboard and designing a software platform that can easily be tweaked for bigger markets.
“The breadth of the wall chart was built from day one,” he said.
“We did a lot of R&D so… we could have one system across the world.”
Sysdoc founder and director Katherine Corich faced a different challenge trying to scale her document management company in Britain – negotiating the old boy’s network that pervades business over there.
“It’s definitely a land of old boy networks,” she told Morgo. No more obvious was that than in the Government sector, where Korich says seven IT providers claim over two-thirds of the budgeted IT spend.
“You have to align yourself with one of ten providers. I’ve focused on getting non-executive directors with extensive UK government experience,” she said.
If those who spoke at Morgo honed in on some specific examples of how they have refined their businesses for global expansion, it was left to Endace-founder Selwyn Pellet to issue a rallying cry for the tech sector in general.
“As New Zealanders, we don’t have to be second class citizens. We are good,” Pellett reminded his fellow entrepreneurs.
eeling off a list of similarly small countries that have grown thriving technology sectors – Ireland, Israel and Finland among them, he reminded them that New Zealand is “outgunned and outnumbered” and needs some visionary thinking to stay competitive.
“If you stick with five – ten per cent growth a year, it’s not going to happen,” said Pellett.
“The business plan needs to be a hairy-arsed audacious goal.”
Endace, a maker of networking management technology with a global blue chip client base, was the first New Zealand registered company to list on the London stock exchange’s alternative investment market.
“If you want to get out of the trenches and start charging, list your company,” Pellet advised. But for those considering a public listing, and there were several at Morgo, we told them to “look beyond the listing”, to have a long term goal for success.
“We listed Endace. The end goal was the listing. Suddenly we had to pump really hard to get going again.”
Endace had created seven New Zealand-based millionaires who have gone on to reinvest.
“Instead of us being bought, we’re going around the world buying companies.”
“The entrepreneurs in the room have to do more and more companies. They’re not allowed to retire,” he added.
Andy Lark, a Silicon Valley-based marketing guru, who heads NZTE’s technology beachhead in the US and is a director of Morel’s No. 8 Ventures, likewise encouraged kiwi entrepreneurs to think big.
“The real model for me is Israel. These guys are building more hi-tech companies than any small nation on earth,” he said.
“It’s because they’ve differentiated between what’s a good business model and what allows them to succeed outside of their market.”
Later, in a small session devoted to using the internet to overcome the tyranny of distance, he explained how much New Zealand companies can do with blogs, wikis and search engines to cheaply market their companies.
“People are breaking down the barriers between themselves and the customer using the web,” he said.
“Information is a commodity and it doesn’t cost too much to share it.”