KEY POINTS:
Ever wondered how you take your brilliant idea and create a multi-national business? How to attract venture capital and other funding to keep afloat? What it takes to crack the North American market?
nzherald's Business Chat talks to Brian Peace, founder of Peace Software.
Peace is
back in New Zealand to receive a World Class New Zealand award, which recognises successful New Zealanders who give their time, knowledge and skills to help other New Zealand industries succeed internationally.
Peace founded software development company Peace Software in 1984, specialising in customer information and billing systems for utilities companies.
In 2006 he sold the business to NYSE-listed First Data.
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You sold your company last year, which after 20 years must have been quite a decision. How did you come to sell Peace Software?
Well we always wanted to list on Nasdaq, that was our ambition if you like, and the reasons behind that were primarily for growth, credibility and being able to penetrate the market better.
If you're a listed company, you've got significant capital behind you, you can more rapidly build you software and also move into new markets faster.
There was a global market for us in utilities and we wanted to tap into it and the best way to do that was Nasdaq.
As you know after 2000 the markets were declining and damp and not amenable for companies like ours to go into the market.
So then we just continued to fuel our growth by internal means - we had quite some momentum at that point - and just to look at how we could organically grow.
First Data, whom we knew for some time, had been focussed on the utilities industry and they hadn't been able to break into the utilities sector.
First Data is a massive transaction processing company. For example they do a lot of the credit card transactions in the United States. Imagine how many billions of transactions being processed all the time.
One of the industries they wanted to tackle was the utilities sector. What they didn't have was the right IP, the right intellectual property or software to enable them to do that.
So our product, being recognised as one of the top three brands in the world combined with the deep resources and capabilities of the people that we had within the organisation - our two greatest assets - married with their enormous size and their processing capability was a perfect fit, a natural marriage.
So they talked to us over several months about how much added value could be created by the two organisations coming together.
We're obviously a tiny pimple compared to their overall size, but it has enabled them to move rapidly with big customers and technology and resources into the utilities sector and I think they'll do extremely well.
The thing that we always suffered from was not technological advantage, not understanding of the market or ability to apply ourselves to it, but was credibility in terms of our size and that's what they have in spades.
I think it will be a tremendous brand going forward. I think there was a natural fit. We couldn't continue to fight and growth little bit by little bit.
I think you add the two together and they can be a rapid grower and potentially be the largest, most dominant participant in the market.
I always wanted to be number one in that market sector. Now with First Data behind our product I truly believe it can be number one in the world.
In New Zealand, 2007 has been named year of the exporter - what do you believe is key to companies achieving export success?
Fundamentally I think it is getting off their butts and getting on a plane and getting over there.
So many people are trying to solve their business issues about how to market into other places by sitting here.
You can't do it here. You need a base here, you need some good people to run your base here.
Like 42 Below - they were off in every bar in New York selling their product and they did a damn good job of doing so up against some enormous organisations who really controlled that market. They just went out there.
He [Geoff Ross, 42 Below founder] said last night [Kea World Class New Zealand awards] "we gave our guys a business card and a bottle of vodka and said 'go out there and sell it"'.
We did the same. We went out there and went and visited utilities and said 'we think we understand your market, we have some great technology, can we show you?'.
I always said in America it's the two minute rule. Within two minutes of sitting down in the meeting you've got to show these people something they've never seen before and for us it was the creation of our web services capability round our product and they were completely blown away.
They'd talked about, they'd thought about it. It was the first time they'd seen it demonstrated to them and that certainly got there attention.
So for exporters, it's most important to get in and understand the market you are trying to address.
They're huge markets. America is 50 countries in one. Be prepared to spend many hours sitting in airports and on aeroplanes.
But you cannot do it by telephone or by webcast, you have got to face-to-face. There is nothing quite like sitting across the table from someone and explaining your value proposition and how you can help their organisations.
So you've got to get out there - by the way, Kiwis are very good at doing that - and when you're out there you'd be surprised at the network that is available to you of expat Kiwis.
Someone said last night there are five million people in New Zealand - four of them are in New Zealand and there's another million of them out there somewhere in the world doing wonderful things, who would love to help their countryfolk to be successful in the various regions.
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Listen to the audio for the full interview, including why Peace formed a company straight out of university rather than take a salaried job, why he believed his product is a world beater, what were the lessons he learnt selling his company and what his one piece of advice to start-up companies would be.
