What this Aussie VC learnt from lunch with Jacinda Ardern
Tuesday, August 6, 2019/
For those in the Aussie startup community, what is more unusual: sitting down for a face-to-face discussion with a government leader, or seeing a VC investor in a shirt and tie?
On a winter’s day in Melbourne last month, both came to pass, as a group of Aussie investors sat down for lunch with New Zealand Prime Minister Jacinda Ardern.
Among the group was Right Click Capital partner Benjamin Chong. Speaking to StartupSmart, Chong says it was “certainly a privilege to be invited” to the event, partly because Right Click Capital has been investing in startups in New Zealand for some time.
But, given the relative disinterest of the Australian government in the tech sector as a whole, he also says it was satisfying to have the people leading a country take an interest in the startup and investment scene as a whole.
Having said that, however, the Aussie government may have been taking notes. Just last week, Minister for Industry, Science and Technology Karen Andrews sat down with a group of startup leaders in a bid to boost collaboration and address some of the challenges facing the sector.
This week, Andrews is having a similar roundtable meeting with larger, international tech companies.
In the lunch meeting with Ardern, the NZ PM quizzed Aussie investors on what makes a country ripe for investment, and attractive to foreign investors, Chong says.
She was also open to questions from them, offering her opinions and insights readily.
The whole event “does seem to be a wild contrast” to the Aussie startup community’s dealings with its own leaders, Chong says.
“There seems to be reticence in the Australia political scene to have serious engagement with folks who are at the coalface, who are building the startups and the large businesses of tomorrow.”
Right Click Capital has been investing in New Zealand for the past three or four years, and Chong says he is particularly won over by the sheer enthusiasm and sense of community in the startup ecosystem across the ditch.
“I see a lot of collaboration. There is a real openness and willingness … to share information, to share contacts, and to help each other grow.”
While we’re starting to see more of this in Australia too, it’s something Chong thinks founders here could do better.
“It’s very important to us to celebrate the success of others, and to benefit from any lessons they may have too,” he says. “To really adopt this approach that when one wins, we all win.”
Chong also suggests that, because New Zealand is a smaller country, founders are more aware, right from the beginning, that “any business they build has to go beyond their shores”.
Again, this is something that Australian founders are starting to realise too, but Chong says he still comes across “too many” founders who, when talking, only consider Australia as their target market.
Very few New Zealand companies will become unicorns off the back of only serving Kiwis, he adds. By definition, they have to think bigger. And Aussie should too.
“What we need to continue to do is shake out of our founders in Australia this notion that if you win in Australia you are going to be significant on a world scale,” Chong says.
“If we want our businesses to be of scale, to be of significance, to possibly change or define the industries of today and tomorrow, then we’ve got to think beyond Australia, like our Kiwi friends.”
Leveraging your expertise
Of course, that’s not to say that New Zealand trumps Australia in every way. There are one or two things the Kiwis could learn from us too.
Australia is “very fortunate” to have a number of investors who have taken a long-term approach to investment.
There are investors in New Zealand, and several of the biggest VCs in Australia also invest there, but there is still room for more.
“It’s healthy when you have a number of options, not only because more capital is available, but because each VC will have a specific specialisation, whether that’s in a certain stage of startup, or a sector, or technology type,” Chong explains.
“We want for a bit of depth in the NZ market.”
Finally, he says he would like to see a bit more investment into R&D in New Zealand — although he admits Australia could also do better in this department.
In Australia, R&D spend is about 2% of GDP, he says. In New Zealand, it is significantly less.
More spend on R&D could allow New Zealand to develop and commercialise tech to boost its existing industries, Chong explains. For example, the dairy industry accounts for some 20% of New Zealand exports, he points out.
“I want to see more wonderful agricultural, foodtech-related businesses that leverage the heritage, the expertise, as well as the reputation of that country.”
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