Andrew Hamilton is chief executive of The Icehouse, a business growth centre focused on making a difference for New Zealand.
While much has been made of the fact that we are a nation of small businesses, we are not very different from other countries.
The distribution of our businesses is made up of the thousands of small firms with a few large ones.
What role do these large companies play in the entrepreneurial community and why is this important?
The New Zealand economy is not going to make long-term advances until our companies achieve more international success. Just being successful in New Zealand is not enough any more.
This environment is a great opportunity for our large businesses to play a part and also to significantly benefit their own businesses, given that it is accepted that most innovations come from the entrepreneurial world as opposed to large corporate firms.
From the perspective of the entrepreneurs who are peddling their world-changing ideas, large New Zealand companies can potentially provide a very powerful environment to test assumptions, adapt features and be a critical beta customer.
This testing is commonly called market validation, where the entrepreneur is attempting to identify a "pain point" which, if solved, the customer would be prepared to pay for.
It is like gold, because once you get that first customer it provides evidence to others that "there must be something there".
It also provides experience for the entrepreneur's team in being a real, grown-up company.
From the perspective of large companies, they struggle with being flexible, fast-moving and open. The majority of managers are managing processes and optimising the business to provide the requisite return.
By nature, they are not necessarily thinking about what is over the horizon, so having an open approach as a large business to the entrepreneurial world can provide some great insights into future products that could benefit the corporate. For large companies, engaging in the entrepreneurial community is relatively easy today.
Over the past 10 years, New Zealand's entrepreneurial ecosystem has been built out.
There are now incubators, angel networks, seed funds, university technology transfer offices and successful business plan competitions which are typically evaluating up to 5000 innovations each year.
Organisations such as The Icehouse provide a good "middle ground" for corporate organisations to participate as the executives can readily explain what they are looking for and/or how to engage with them.
Why is all of this important? For entrepreneurs, do you want to test your assumptions in your local market or do you want to get on a plane and go to a foreign country every week?
To have a vibrant entrepreneurial community, you need to see the home community supporting innovations at their earliest phase, so that you can get that critical first customer and then build out from there.
Just like children learn to walk before they run, our entrepreneurs need to learn in New Zealand first, get their training wheels on and then quickly venture into global markets.
If our large companies readily engage in the entrepreneurial ecosystem we will have a bright future and will start to produce a lot more international success stories.
Tomorrow, we look at how entrepreneurs can get the attention of a big company.
