NZ tech leaders 'at tipping point'

Expatriate Andy Lark heads Dell Computers' global marketing. Photo / Andy Lukey

As it often does in transtasman encounters, the conversation turns to the rugby.

The Australians at the table don't really want to discuss the topic, so I suggest the game is more watchable this year.

Andy Lark, expatriate New Zealander and our host, then offers a crisp explanation of how the latest rule changes have sped up the movement of the ball after the tackle, making turnovers harder to achieve and discouraging teams from kicking the ball away.

That ability to cut through the jargon and explain technical things in simple terms is one of the attributes that have taken Lark to his role as global vice-president of marketing for Dell Computers.

The ostensible purpose of this roundtable in Sydney was to discuss how Dell's technology can help create an "efficient enterprise", though many of the journalists there seem more interested in the Dell tablet Lark is carrying (smaller than an iPad, but twice the real estate of the iPhone screen).

Lark doesn't need to do a hard sell - by the time Dell gets around to making something, the customers want it, and they also want the smart tools and ease of use that the company tries to add.

He says what Dell is constantly doing with its enterprise lines is "democratising" technology, making high-end solutions available to all.

"And it's on those platforms that the new engines of business get built, whether it's a trading house, an online auction site, or it could be a Xero," he says, citing the New Zealand-developed online accounting system whose board he sits on.

Despite living out of the country for more than two decades, Lark takes an active interest in the tech sector here and gives many entrepreneurs the benefit of his experience and networks.

He says that with the evolution of technology and the emergenceof cloud computing as a hyper-scalable model for delivering solutions, it's time to take stock.

"I think that New Zealand's technology leaders on the entrepreneurial side and the capital side and the governance side need to come together and look back over the last five to 10 years and say what were the learnings, and are we living up to those learnings or are we ignoring them."

Lark says there have been a number of well-managed venture capital funds in that period investing in technology companies, many of them working with the Government-backed Venture Investment Fund, but the model is no longer working.

"For the most part the venture industry is not available any longer to the tech sector. That is an urgent matter that needs to be addressed."

The problem, as he sees it, is not the lack of private investors, nor is it VIF, although that fund's role needs to change.

"New Zealand will not have an active venture capital industry actively investing in start-ups because the institutional investors haven't got involved, not because the Government isn't doing enough.

"New Zealand needs a healthy investment infrastructure from angels to venture capital to the sharemarket. It needs that ecosystem. Maybe it doesn't need to be dedicated to New Zealand, maybe it can be part of a broader ecosystem that includes Australia. In Australia, those [pension] funds are actively involved in the venture capital market and nurturing great technology companies.

"I think New Zealand's really at a tipping point where it is going to lose control of many of its most vibrant tech companies at a very early stage, and that is going to inhibit and hinder economic growth and development. "

Lark says companies will move abroad because that's where their investors will come from, and it's not convenient to fly to the bottom of the world every two or three months to see how your investments are doing.

He says too many Kiwi investors expect to hand over the money and wait for the cheques to roll in.

"The most successful early stage investors are quite active through the entire life cycle of the venture up until the point of liquidity. To avoid dilution they continue to invest, often on an increasing basis.

"The problem [in New Zealand] is the inability of venture capital firms to raise second, third, fourth funds so they are not able to continue investing in and supporting the companies they founded."

Lark also sees a need for a network of experts who can help tech companies grow. While there are some notable exceptions, many New Zealand tech companies head offshore without the necessary marketing prowess, so they are unsure how to pitch and price their products.