New Zealand’s tech community – Kiwi Landing Pad – is on the move in San Francisco.
Set up in 2011 with funding from the New Zealand government and private investors, the Kiwi Landing Pad (KLP) has already helped hundreds of innovators keen to break into the highly competitive United States start-up scene.
The non-profit organisation caters for high growth technology companies. As well as reducing the risks and time involved in setting up an office, KLP also offers valuable access to necessary business information and networks.
In this insightful article, angel-backed Fuel50 talk about the really nitty gritty aspects of entering the US market and have some lovely accolades for angel investment.
Small Business: Eyes on the US – Business – NZ Herald News
In October last year the folks behind Kiwi company Fuel50 won big in Las Vegas – but the source of their winnings wasn’t the roulette or blackjack tables.
Instead the company’s offering was awarded as one of the best new human resources technologies at the HR Technology Conference, which is held annually at the desert resort mecca.
Fuel50 creates career path software, typically aimed at companies with a high concentration of knowledge workers and with 1000 or more employees, and its CEO Anne Fulton says the win opened the door to coverage in the Wall St Journal and other US publications.
It all helps when you’re a tiny Kiwi company targeting major US-based customers in a competitive landscape that includes the likes of technology giants Oracle and SAP.
“In the US there are 11,000 companies in our target market versus 100 in New Zealand and 444 in Australia.
So there’s no question that’s the market we want to be in,” says Fulton.
“We’re trying to build a really big business brand, so our marketing has been critical to us acting like a bigger company. We talk about being David and Goliath; we’re a micro business down here in New Zealand, but we market like we’re a large enterprise.”
Like Fulton, many New Zealand small business owners making inroads into the US cite the scale of opportunity as a reason for their focus on the market, but the sheer size of the US also means small Kiwi companies need to direct their efforts carefully.
“We’re such generalists and in the US you really need to narrow your focus, and even as you keep narrowing it you find you’re still dealing with opportunities far greater than you could ever get here,” says Ben Ridler, CEO of business management software firm Results.com, which has a San Francisco office with around a dozen staff.
Ridler says hiring Americans is helping mould the company’s thinking.
“I think they’re the most advanced society when it comes to sales and marketing. Both our head of US sales and our head of marketing are American, so they’ve knocked the Kiwi thinking out of us a bit. But I think Kiwis have a lot to offer too. We’re very good at delivering a product or service to a client need and we innovate really well, so I think between us it’s a really nice mix.”
Hiring locally has also been important for Spotlight Reporting, a software as a service (SaaS) company that produces business intelligence add-ons to online accounting software platforms Xero and QuickBooks Online.
The firm has one US-based staff member – sales director Leslie Riggs, a Californian – who Spotlight’s CEO Richard Francis says “already has great knowledge of different ecosystems in the US”.
But it’s still crucial for Kiwi company leaders to regularly get on a plane to the US, he says, and that all efforts in the market are adequately resourced.
“The main thing that’s distinguishing the companies who make it in the US and the ones who aren’t is investment,” says Francis. “If you’re going to go there, you’ve got to do it seriously, and for investors, particularly in the SaaS world, you have to have a US market play.”
Q&A: Anne Fulton, Fuel50
Anne Fulton is the CEO of Fuel50 / Career Engagement Group, which creates career path software and has offices in Auckland and New York.
When did Fuel50 first start engaging with the US market?
We took on our first angel investment at the end of December 2013, started looking at establishing our US operation in January 2014 and had appointed and trained staff by April that year. So we’ve been going for about 15 months in the US. We’ve learnt a lot.
Why is the US market such a focus for the company?
The US market for HR tech is the most sophisticated in the world; it’s valued at $14 billion a year and it’s still growing. We work with enterprise clients who have a high concentration of knowledge workers and typically with 1000 or more employees – so banking, finance, health care, higher education, technology companies. In the US there are 11,000 companies in our target market versus 100 in New Zealand and 444 in Australia. So there’s no question that’s the market we want to be in.
The US really leads the way when it comes to thinking around HR technology. The companies are so sophisticated and they use multiple HR technologies to support their people strategies, plus the HR technology landscape up there is super exciting. Our product fits a niche in the market – currently there’s very little dedicated technology to support career pathing – so that’s our opportunity, to become the leading career pathing technology in the US and globally.
What’s the current state of your business in the US, and some of your goals for growth there?
We have a goal to have 100 US clients by the end of next year; we have five now, but that includes some big names and some Fortune 100 companies and 100 best places to work in the US. At the moment everything is trending in the right direction. Last year we doubled our recurring revenue, and we’ve doubled that again in the past six months.
What do you think has helped you get your foot in the door of that market?
We’re trying to build a really big business brand, so our marketing has been critical to us acting like a bigger company. We talk about being David and Goliath; we’re a micro business down here in New Zealand, but we market like we’re a large enterprise. In our competitive landscape we’ve got Oracle and SAP, so we’re playing into that space and we look carefully at their marketing and try to emulate or do better than anything they’re doing, particularly in the career pathing research and thought leadership space.
Underpinning our marketing is a foundation of research. We’re aiming to be thought leaders and providing research and insight into what best practice ‘career enablement’ looks like. We’re regularly invited on to the conference speaking circuit, particularly in the employee engagement industry. We were fortunate enough to also get noticed by picking up the award for being one of the best new technologies at the HR Technology Conference in Las Vegas last year, and that opened us up to coverage in the Wall St Journal and other publications, which all helps credibility.
The other thing is engaging with the HR community in the US, so really having quality conversations and building strong relationships with our prospects. We work really hard on what we call our ‘Fuellie’ culture – to be fast, fun and fantastic as a team – so everyone has fun together but they also have aspirational performance objectives. Our US team have some big goals, but they’re incredibly high performing.
How about things that haven’t worked as well? What have been some of your major learnings so far in the US?
Because we’re about the people proposition we really have to live our business values. What’s been interesting in the US is people are more prepared to come and go quickly, so you’ve got to be really focused on engaging them, keeping them motivated and have a good pipeline of talent.
How have you grown that pipeline?
The same way we’ve found our clients – through contacts, relationships and attending events within the HR industry. Having a strong board has also helped us attract great talent and the angel investment community behind us has been outstanding. We wouldn’t be doing what we’re doing, or have achieved what we’ve been achieving without their backing. Being able to tap into people like the ex-chair of Xero, Sam Knowles – who’s one of our investors – has been incredible.
Angel Association members from all over New Zealand have been crossing paths in Air New Zealand Koru lounges on their way to the US this week for the annual ACA Summit in San Diego.
An important event on the calendar of kiwi investors, the ACA Summit is an opportunity to tell great New Zealand stories, connect with international angels, funds, VC’s and meet potential market-entry and acquisition partners from all over the world.
New Zealand’s Angel messengers, carrying kiwi success stories overseas include Marcel van den Assum, Chair and Suse Reynolds, Executive Director of AANZ and Michelle Cole from Angel HQ along with; Bill Murphy and James Beale from Enterprise Angels; Rudi Bublitz from Flying Kiwi Angels; Brent Ogilvy from Pacific Channel; Darryl Lundy, David Russel, Robbie Paul, Cecillia Tarrent from IceAngels; Chris Twiss from NZVIF and Karen Chang from NZTE/LAX to name just a few.
Learning and networking as they go, the Kiwi contingents key collective mission is two fold.
First, entice ‘overseas friends of New Zealands angels’ (affectionately known as OFONZ’s) to ABAF in Queenstown from Wednesday 14 October to Friday 16 October to meet their investee’s in person, experience the energy of New Zealand’s angel community and learn about the benefits of doing business with and in New Zealand.
Second mission, sharing the skinny! To ensure as many of the learning and insights our Angel-team glean are shared with the early-stage community at large we are expecting to receive posts and tweets from many of the team during the conference.
As they listen to keynote serial-entrepreneur and Lean Startup founder Steve Blank tell you how he changed the course of the startup industry through customer development – we’ll get the highlights as they happen and share reflections.
As serial entrepreneur and profilic angel Gil Penchina, the most active syndicator on AngelList talks about his experience and shares his mental models, we’ll get the benefit of their attendance.
Look out for tweets #ACA15NZ. This hash tag will tell a story about angels from NZ at ACA – who they are, what they think, who they think is worth listening to, words of wisdom they hear, insights they gain, things they find out that those back home should know about the US and the rest of the world… and people they’ve met who are coming to the ABAF2015 in NZ!
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Kiwi start-up Notable attracts angel investment from the US for the first time
In securing funding from US investors, Notable is setting a terrific example of what is not only possible but to be enthusiastically welcomed. Congratulations to AANZ members NZVIF, Sparkbox and Flying Kiwis who have been part of this deal.
Kiwi start-up Notable has attracted funding from US investors YCombinator, a start-up accelerator, and Peter Thiel’s Founders Fund in its latest round of capital raising.
The Auckland-based company has just closed its third fundraising round for an undisclosed amount with a range of angel investors including the two US investors, Flying Kiwi Angels, the NZ Venture Investment Fund, Sparkbox Ventures Group and EFU, the NZ investment company of Japanese billionaire Soichiro Fukutake.
Want a sense of the personality profile required to be an angel investor? Miles Valentine, profiled in this fascinating story of his path to angel investment, provides a great example. High energy, tenacious, loves sales, ambitious and all with an innate belief in New Zealander’s ability to make a mark in global markets.
Valentine says New Zealand companies aiming for overseas markets need to think big right from the start.
“And we don’t. We were guilty of this at Zeacom, absolutely.
“It took us a long time to figure out how wrong we were.”
He says New Zealand companies heading to North America need to lift their eyes above the small-to-medium business market and aim for corporates.
“Sell the sales that are worth hundreds and hundreds of thousands of dollars as opposed to 30 to 40 [thousand] because that’s what makes it worthwhile.
“That’s what makes you more successful but because we do come from small-to-medium, we feel very good at that space and we feel an affinity for it and so inevitably we find ourselves doing it.
“You’ve got to sell an awful lot of things at 20 to 30 grand to make a meaningful number, as opposed to selling something for $200,000 or $300,000 or $400,000.”
In the case of PitchMetrics, he says, a good-sized sale in New Zealand would be to a company with a sales force of 300 people.
In the United States he wants it to push a market where it’s selling to companies with no less than 1000 people in a sales team. To do that, PitchMetrics needs to be structuring its product now to match the scale and demands of those clients, he says.
Valentine doesn’t just have an affinity with PitchMetrics’ goals to conquer the US; he also loves the product.
Since his first business selling telephones in the late 1980s, Valentine has been very sales-driven and he could see the potential to add substantial value beyond his investment stake, incorporating his sales experience into the product design.
He’s also taking his passion for selling to help salespeople hone their skills with a training business, Sales Builder.
Valentine says most people get into sales because they have the “gift of the gab” but very few have any understanding of the different sales theories, models and process.
“Frankly I’ve always loved that.” The importance of having a well-trained sales force came from his telephone selling days, when the company adopted methods espoused by training guru Brian Tracy and destroyed the competition, growing sales from nothing to $12 million in four years before selling the business to U-Bix.
He says sales is a dirty word in business, thanks to the “horrible old sales methods” used by the likes of the Encyclopaedia Britannica salesmen.
“For me, for my career, it’s always been about sales and therefore this thing that I’m doing now, this sales training, it’s almost the conclusion of all the things that I’ve done previously.
“It’s always been about sales.
“Every single business that you think of right now, it’s all about revenue and we as the managers often don’t give it enough focus.”