Start-up tech firms need to repeat modest successes, says US Icehouse visitor.
New Zealand technology start-ups should not be overly focused on becoming the next Facebook or Google, says a visiting United States expert.
Rob Adams, spending two weeks in this country as Entrepreneur in Residence with business incubator The Icehouse, said the American social networking juggernaut and the search engine giant - with valuations upwards of US$80 billion ($96 billion) and US$190 billion respectively - were unusual success stories.
"That's kind of like catching lightning in a bottle," he said. "It's not about the runaway successes - it's more about the incremental steps."
Adams, who has founded or financed more than 40 companies and raised more than a billion dollars in capital, said building a successful technology environment was like constructing a pyramid.
"Once the base gets laid, stuff starts happening," he said. "I would say don't worry about the huge hits, you should worry about small successes that are repeatable."
However, Adams said there was no reason why a tech business with the clout of Facebook or Google could not one day emerge from New Zealand.
"Those ideas can come from anywhere," he said. "The world's getting smaller every day and the internet's helping to make it smaller."
Adams started his tech career with US software firm Lotus in the early 1980s.
He then went on to found his own software start-up, Business Matters, which developed financial modelling products.
Adams said after that company was sold, he moved to Austin, Texas, where he helped set up and raise venture capital for Pervasive Software, which listed on the NASDAQ in 1997. He now teaches in the MBA programme at the University of Texas in Austin.
Adams has also authored two books - A Good Hard Kick in the Ass: Basic Training for Entrepreneurs (published in 2002), and If You Build It Will They Come? Three Steps to Test and Validate Any Market Opportunity (2010).
His last visit to New Zealand was five years ago and he said the amount of funding going into start-ups had increased dramatically since then.
"If you look at the data, when I was last here it was about one investment a week," he said. "Now it's about two investments a week, countrywide."
Adams said the New Zealand innovation sector was not alone in thinking there wasn't enough capital around to start new businesses and fund the growth of others.
"I was in Silicon Valley six weeks ago and everyone thinks there's not enough money available."
Adams said he would conduct a series of workshops on market validation and take part in a lecture series while in New Zealand.
He spoke at the launch of the 2011 University of Auckland Business School's Entrepreneur's Challenge on Tuesday night, and will address The Icehouse's Ice Ideas conference this morning, alongside Peter Thiel, an American billionaire who was the first external investor in Facebook.