Small business: Your business online - Ian McCrae

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Ian McCrae, is the CEO and majority shareholder of Orion Health, the large Auckland health software company which has just celebrated its 20th birthday. Orion Health, with 750 staff, has a global operation, with offices in North America, the UK, Europe, Australia, Japan and South East Asia. His message to fast growing tech businesses is: “Be patient.”

Orion Health founder Ian McCrae. Photo / NZH
Orion Health founder Ian McCrae. Photo / NZH

Why are you based in New Zealand?

We have been told in the past that we should base ourselves overseas but we went against this advice and remain a New Zealand headquartered company. If it's reasonable to build mobile phones from Finland it's reasonable for software to be created from New Zealand.

Who have you asked for advice over the years as you've expanded?

A lot of advice can come from the organisations who are already in your industry and are bigger than you are. They've been there and done it before. The best help we have had over the years has been from Fisher & Paykel Healthcare. They are set up in countries where we are not. New Zealand companies are usually terribly generous in their support.

Should tech businesses expect to grow faster than other industries?

It takes a long time to go from a small to a large tech business even if you have double digit growth. Being patient is key.

What makes your business unique?

Generally our business is unique in that we can sell to customers software development projects that become products so a lot of upfront R & D can be de-risked by working with the customer. It's quite different from building a device or a consumer electronics product.

What was Orion Health's route overseas?

Within a couple of years of launching Orion Health, we were selling our software over the internet. After a global roadshow with some success in the US, we thought: "This is pretty easy, let's set up operations in North America." When we arrived we thought we would hire five sales people, a few would work out and a few wouldn't. But when you are a small NZ company going into North America, it's very difficult to attract top sales people. They didn't know the brand and the sales guys were very hard to interview. We didn't understand their manner nor they the Kiwi culture. We retrenched most of them and Paul Viskovich, who went to set up the office stayed on. In the last 10-12 years he has gradually grown the North American market. We are now the market leader in a couple of niches and in the US today we are a sought after brand. A lot of people come to us for jobs from our competitors, particularly sales and technical people. What I realised was we should have shipped New Zealanders up there as our sales team. They do pretty well in these countries and are hard working with lots of initiative. If you hire someone in Dallas, Texas, they won't understand the NZ culture and know-how. It is important to establish a beachhead when starting out in a new market, take the best tech and sales people to permeate your culture.

In the UK, we were surprisingly successful, we landed a large deal within 12 months. In Australia we won a large customer in New South Wales then we set up in Canada and landed a very big project in Alberta and then in most of the other provinces. These five English-speaking countries, including New Zealand are our major markets. We have also set up in Singapore, Thailand, Japan and China and do business in all these markets but selling software there is a little trickier than pots of honey or milk powder.

How has growing bigger helped you?

Nowadays we can get the best talent in the world and attract outstanding senior leaders. In the early days you are doing the sales and marketing and photocopying. One thing we found was that leadership teams that work at a certain size no longer work when you are bigger. We have had several transformations and I expect more to come. What we have in front of us now is the possibility of becoming one of the largest global health IT providers.

Tips on growth to small tech start-ups:

When you first set up you have got to get some local customers in New Zealand who will give you feedback and help you innovate and improve your product. If you don't do this it will be much harder. Then find an early "beachhead" customer in a different overseas market or two, then once they are successful, they can be your advocates. It does take a while to establish this. I don't know any company that has gone into an international market and been a blockbuster success overnight. It takes time.

Tell us the stories of your family businesses. We are looking for a broad range of ethnicities. What makes you think your business will keep going for a number of generations?

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