Icehouse offers firms designer start to life

The Icehouse business incubator is designer cool.

Launched in August 2001 - its branding is slick and the management team use designer Imac computers - the unit is exactly the type of place you would expect to find humming with "start-up" businesses.

The Icehouse (The International Centre for Entrepreneurship) is a partnership between Bank of New Zealand, Carter Holt Harvey, Chapman Tripp, Compaq, Deloitte Touche Tohmatsu, Microsoft, Telecom New Zealand, The Boston Consulting Group and the University of Auckland Business School.

Ironically, the Icehouse is having more impact on the economy by helping develop existing businesses than through the sexy startups it is hatching.

Business school dean Barry Spicer said 61 business operators had gone through the owner-manager programme.

"We work extensively with the BNZ at the front end of that to bring the small to medium-sized enterprises in.

"Aspirations have been raised, the businesses are borrowing money from the bank and engaging in acquisitions."

Icehouse chief executive Andrew Hamilton says the results have been immediate.

"When you've got successful businesses and they're already in the $5 to $10 million category, you can actually have a more immediate effect in the economy than a startup can."

New programmes will be added at Icehouse next year. They include:

* A "Moving On" programme for successful managers who want to plan their departures. * A professionals' programme to develop established practices with growth potential. * An agribusiness programme.

A research programme is also being developed.

Within the university, 30 students have just completed the first course in "Creating Wealth through Technology" - a cross-faculty exercise which teaches how to commercialise ideas.

"The reaction of students to that was just really stunning," said Spicer.

A course on innovation and new product development starts next year and the university is poised to announce its first Chair in Entrepreneurship.

A graduate diploma in new ventures is being updated and an undergraduate major in entrepreneurship is being considered.

"We think the most successful thing to do is to provide modules that will be attractive to students in other faculties who have an interest in doing this," said Spicer.

There will also be a business planning competition open to students from other faculties.

The university recently brought Cambridge University's Peter Hiscocks to New Zealand to talk about "spin-outs from academia" - which has resulted in 1550 high-tech businesses employing about 45,000 people around that university town.

"We're probably right at the end of our first crop of companies coming through the Icehouse," says Hamilton.

In 18 months about 14 companies have gone through the incubator - and 10 are now in residence.

"We've raised about $3.3 million for five of those companies," said Hamilton.

"The funding environment is challenging but there is hope things are starting to loosen up a little bit."

Most entrepreneurs get their seed capital from business angels, namely friends, relatives or associates.

Last year the equivalent of 2.44 per cent of GDP was invested in business development through angels - the fourth-highest figure in the countries studied, dwarfing the 0.041 per cent from venture capital, a figure amongst the lowest in the world.

The partners in The Icehouse have made a three-year commitment to provide financial, human and in-kind resources. They have contributed $2.4 million in cash and services and a further $100,000 comes from Industry New Zealand each year.

The Icehouse

Herald feature:
Global Entrepreneurship Monitor Report - 2002