Movac likes to back high growth potential businesses that will provide superior investment returns and the foundations for the next wave of prosperity for the New Zealand economy. Movac has a track record of investment success, the most well-known being Trademe.
Hire the best
The most important factor for success is ensuring you attract the very best people to the team. We invest in companies that have the potential to grow rapidly to tens of millions of dollars of revenue, so they tend to be targeting global markets. The best people who can operate on this global stage will have options and in some cases will be looking for a balance between a new challenge and other things in their lives. A small growing company may not be able to match big corporate salaries, but can provide a compelling mix of job satisfaction and flexibility.
Give and take
High growth companies require enormous commitment from staff and often a lot of travel away from family. It's important that people have flexibility to enable them to recharge their batteries and manage their wider lives.
A good example is wireless power company PowerbyProxi. They've never done a sales call in New Zealand. To attract and support exceptional people, our portfolio companies like PowerbyProxi often need to be very flexible in their approach.
Families as important as work
We have flexible roles and to a large extent balance work informally amongst ourselves. We spend a lot of time away from the office and because we juggle exploring new investments with working with our existing companies, workloads can go from normal to crazy with little notice. We're all highly motivated and determined to achieve good outcomes with our investments which fosters the trust that enables us to operate as a high performing team while each having a great deal of autonomy.
The partners all have young families and it is part of our values as an organisation that our families are as important to us as our work. We allow ourselves the flexibility -often random - to be good parents and partners.
Recognising new business models
There will always be some roles that require a person to be in a certain place at a given time. But I see there being less and less of that as new business models continually challenge and deconstruct how we've traditionally done things.
In terms of entrepreneurial thinking, the continual failure of big established companies to innovate and adopt new business models demonstrates just how stifling their culture is to innovation. When you think of large companies that do manage to continuously innovate you think of the likes of Google which works very hard to maintain an environment that promotes creativity. And one of their tools is flexibility. Many of the smarter big corporates now acknowledge that they can't match the innovative capability of dynamic and flexible small companies and effectively outsource it by buying them up once they get market traction. That's great for us venture capitalists!
More SMEs using contractors
We're seeing more and more of small businesses contract lately. Many companies are securing the best talent by contracting them. Sometimes the contractors want to spend time on other interesting projects, or the company can't afford them full time. And often the employees or contractors are located in other countries. This generation of entrepreneurs has a global mindset and isn't uncomfortable managing a geographically dispersed team via Skype. Some companies we meet have only ten or so staff, but they're in five different countries. It seems to be proof that the world really has shrunk. While there's good evidence this is working well for many companies, I still believe that long term you need some element of co-location and team permanence in order to build culture and a company soul.
Start by attracting the best quality people and broaden your horizons about who those people might be. Think about what you can offer that the corporates can't. Parents looking to return to the workforce and people who're late in their careers and are looking for challenge and job satisfaction more than big pay packets can bring experience and contacts that you couldn't hope to buy. Contractors can be an effective way of working with talent that values autonomy. If you're building a new, high growth company there will be huge demands on your and your staff's time and headspace. Make sure you build a company that shares your collective values around how you take time to live and recharge.
Next week, we are looking at professional businesses such as dentists, doctors, accountants who are thinking outside the box to expand their practices. Tell us your stories.