The Business Herald’s markets and banking reporter.

Kiwis need to be willing to fail, expert says

Start-up experts Laura Reitel and Nick Churchouse.  Photo / Natalie Slade
Start-up experts Laura Reitel and Nick Churchouse. Photo / Natalie Slade

Kiwi entrepreneurs need to embrace failure more, a visiting start-up expert says.

Estonian-born Laura Reitel is in New Zealand to help co-ordinate the Lightning Lab, a three month, boot-camp style accelerator programme founded by Wellington start-up incubator Creative HQ for digital companies.

She said Kiwis seemed to view failure as something that was always negative.

"Whereas in the US and other places it's viewed as a positive thing because when you fail you learn something and move on," said Reitel, who has been the manager of the TechStars accelerator programme in Boulder, Colorado, for the past two programmes.

She said it was better for start-ups to fail quickly - and let entrepreneurs move on to another idea - than to slowly fade.

Accelerator programmes, such as the Lightning Lab and TechStars, could help speed up that process.

"If you go through an accelerator you'll fast forward your company by two years," Reitel said.

"Basically, if your business idea is not going to work it's better to realise that sooner so you can move on to something else or change something in your business model."

Creative HQ venture manager Nick Churchouse said there were a lot of cliched ways to explain Kiwis' aversion to failure, such as "tall poppy" syndrome.

"I think what it comes down to is the DIY gene in us - wanting to do it yourself," Churchouse said. "Kiwis are real battlers, we've got that at heart ... so we see a lot of value in busting through hard times and we're perhaps not as well conditioned to knowing when to call it and say, 'Let's learn from this, put it to bed and move on to something else'."

But attitudes were changing.

"We're seeing investors whose eyes light up when they meet someone who says, 'yeah I did a start-up and it completely flunked'."

Some prominent players in the New Zealand start-up space had great failure stories and needed to tell them more, Churchouse said.

Close to 100 applications were received for the first intake of the Lightning Lab.

Nine firms, which received $18,000 in seed funding each, entered the programme and Creative HQ says 100 mentors from across New Zealand are working with the businesses, which include a start-up that has created a new way for sports teams to raise sponsorship money and another that has developed a cloud-based tracking and analytics system that manufacturers can use to fight back against counterfeits.

The Lightning Lab culminates in a demo day at Wellington's Te Papa on Wednesday.

- NZ Herald

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