Zeacom puts accent on communication

By Jacqueline Smith

Miles Valentine orders an Americano coffee at his local Grafton cafe. It's just one of the American traits he's adopted; his company Zeacom boasts many more.

Without them, the New Zealand business would never have spread through the United States telephony market. The wee Kiwis simply wouldn't have been taken seriously.

Valentine moved his family to the US in 2000 when he launched Zeacom's unified communications technology there. That way he was able to give the company an American address; prospective clients would have simply tossed his business card if it pointed to New Zealand, Valentine says.

It also meant he was able to exchange stories about his children's school with the heads of his target companies. "Then they knew I was the real deal."

But despite his choice of coffee and his subtle drawl, Valentine's story tracks the typical Kiwi business model: ingenuity, hard yakka and running on a shoestring. It even started in a back room of a Grafton office with three guys, a big idea and very little cash.

Valentine has been in the telecommunications industry for 20 years. In 1994 he saw a chance to unify the call centre technology of small and medium-sized businesses.

He approached local companies which he knew had call centres with his business proposition. Essentially, it would have allowed them to screen calls.

"They said, `Look, that would be nice, but we would like to fix the actual system which is pretty weak'," says Valentine. So that's what Zeacom focused on first.

Twelve years on it is offering cutting-edge communications solutions to some 2500 organisations in 25 countries and has annual revenue of $22 million, says this year's Technology Investment Network report.

Last month Valentine won the technology category at the 2008 Ernst & Young Entrepreneur of the Year awards.

Zeacom technology links a company's computers, cellphones, landlines and remote offices so employers can track staff - and their availability - at all times. Some bosses view it as a control tool, but most see it as a way of improving communication, Valentine says.

Zeacom's extension into its first export market - Australia - was relatively painless because its relationship with reseller NEC took it there and then on to Asia.

After that Valentine underestimated the time, energy and expense needed to establish the company in the US. The first challenge to growing an internationally successful company out of New Zealand is lack of capital, he says.

Venture capital was a new concept to New Zealand when Zeacom raised its first round through NZ Trade and Enterprise in 1999. The small company also attracted a Taiwanese computer company which pledged $1 million.

"We thought we would use that to get into America, but we spent it within six months," Valentine says. With no US credit history, he found he had to prepay on everything: office rentals, car leases, house leases. Insurance was a minefield and everything took five times longer than in New Zealand.

He says the best thing he did was hire a proficient administration assistant: "She knew the ins and outs and everyone was more receptive to her because she had the right accent and knew the right phrases."

That said, Zeacom's Kiwiness was also an advantage. Americans love the directness, lack of formality and sense of humour of New Zealand business people. "We tend not to beat around the bush and the Americans love it," Valentine says.

They've never heard sayings like "chalk and cheese" and "a whole new kettle of fish", and Valentine found that when clients got to know him well enough, they would stop him and ask him to repeat what he just said.

"There was one guy there I used to say `good on you' to; he thought I was calling him a good little onion for a year-and-a-half," Valentine remembers.

He clearly wasn't offended by it.

Zeacom set its forecasts too high when it went to the US - a classic example of New Zealanders thinking too big but not being prepared to spend the money to get there, Valentine says. "Kiwis are really good at bootstrapping, getting the most out of nothing. But the reality is, it's just not the way to grow a business."

His advice to exporters has not changed: "Halve your expected sales and double your funding and, if that model doesn't work, don't go."

After a series of setbacks, Valentine has learnt to set realistic targets for Zeacom. It is growing at 20 per cent a year, a figure Valentine hopes to maintain for several years by investing profits back into the company.

Zeacom is working with NZ Trade and Enterprise's Beacheads programme to establish itself as a prominent brand in Britain, and Valentine is considering the possibility of listing the company there or in the US - but not at home.

Despite its global presence, Zeacom is a New Zealand-based company, with New Zealand values and a New Zealand chief executive, but the New Zealand exchange is not ready for it yet. "To list in New Zealand you need a profit story, but we are a growth story."

- NZ Herald

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