Pennies for your thoughts

July 13, 2009 14:13

By Harriet Geoghegan

How many times have you said, or heard a friend say “There should so be a [insert business idea here]?” Whether they are out on the piss, sitting round the dinner table, or not listening in class, everyone at some stage has had a business idea. Maybe it is because I am a commerce geek, but I can think of many that I have had in the last 24 hours. Some of them are products I wish were available but know I will never pursue (like a little LED ticker on your EFTPOS card that displays your balance); others are practical solutions or services, like decent coffee in the Commerce Building; and some just a bit of fun, like personalised colouring books (an idea spawned from a 21st present).

The best time to take these ideas and launch a business from them is while you are here in Dunedin. The University, Polytechnic, DCC, and government are all pouring funding in to developing entrepreneurs to fuel the New Zealand economy. What this means for students is that there are a multitude of free services being offered to assess the feasibility of your ideas and help get them off the ground. Furthermore, we are surrounded by a massive collection of students, with a variety of skills, who could make ideal business partners.

First things first ...

Your first port of call should be Ryan Priemus, the University's Audacious Student Business Coach. The Business Coach service is free and confidential. It is designed to help students and make sure they don't lose cash. The first meeting is usually pretty informal, and students can bounce around ideas with Priemus to see if they are feasible and work out the next step. He has a resource database at his disposal which includes basic guides to starting up a business, business plan templates, marketing strategies, and market research guides. Priemus is also the coordinator of a service called Food for Thought, a network of Dunedin business professionals that will help students out for the price of a coffee.

The Business Coach Service sees roughly 700 students per year. While it isn't hugely publicised, it appears that there has been some growth in the number of students using it. Priemus says “Those with a real entrepreneurial edge tend to make their way to the service through word of mouth or lecturers. You don't want to force yourself to have an idea; good ones tend to find you.”

The second service run through Audacious is the Startup Lounge. Priemus is not based on campus, but is frequently to be found in the Lounge (found on Level 2 of the Commerce Building, right next to the lifts). The Startup Lounge is designed to be a casual meeting place for students, and has a small boardroom and computers with internet and audio/visual resources, as well as business magazines and some rather suave leather couches, to give you a taste of the good life.

Money makes the world go ‘round

Then there is the NBR Audacious Challenge. This is a two-part competition with events running throughout the year. The first part is the $10k Business Idea Challenge, which takes place in the first semester each year. The best ten ideas win $1000 each – just by being written down on a piece of paper. This year, the $10k Challenge had 94 entrants.

The second semester part of the competition, the $40K Business Plan Challenge, “is the real test of these ideas. Students have to provide a detailed plan that covers all aspects of their businesses, from management, financials, and marketing. This allows them to work out where the issues are and if in fact the idea is viable,” Priemus says. He expects between 25 and 40 entrants in the second semester competition.

Both challenges involve a series of events in the lead up to each competition, with guest speakers and workshops to help inspire entrants. As well as the chance to win $1000 in first semester, and prizes from a pool of $40 000 in second semester, more bonuses include all the free food and drinks at the events, the chance to listen to some really inspiring speakers, and to network with budding entrepreneurs, and both locally and internationally successful businesspeople.

While it is great to get students thinking more practically about their ideas and taking the next step, there is a downside. The premise of the Idea Challenge is to come up with an “Audacious” idea – not necessarily a realistic one. Many of the 84 entries this year that didn’t win were great, but just not “audacious” enough. Or they simply didn't quite make it to the top ten. When you don't win such a competition, it is easy to think “Dammit, must have been a bad idea,” and lose all the momentum you built up before the competition, and this could lead to some fantastic ideas being unnecessarily abandoned by the roadside.

In an effort to reduce this feeling of inadequacy, students were invited to receive feedback from Ryan Priemus and the judges of the competition. Also, the guest speaker at the prizegiving was Jason Leong, a previous Audacious loser who has gone on to launch his entry very successfully. His business, Pocketsmith, is an application that helps both businesses and individuals with budgeting and financial planning. The application is unique in that it works with a calendar to show you exactly how much money you should have on any given day. He admits he was devastated when his idea wasn't accepted, and shelved it for a year until picking it up again with two partners, Franscois Bondiguel and James Wigglesworth. The application has now been contracted by the world's largest employee services company, United States-based Workplace Options, to help its client companies' employees. Pocketsmith hasn't had much help financially; however, its founders have always had a philosophy of community development. Jason Leong says, “From the get-go we were telling people about our idea. It was important to get the initial validation.”

Leong believes that sharing your ideas with as many people as possible is the most beneficial thing you can do, and is more helpful than getting large amounts of cash up front. “Support means more than just money.” That was the initial idea behind starting up the Distiller. The Distiller is a network of “technopreneurs” founded by Jason Leong, Pierre-Emmanuel De La Bussiere, Tim Calder, James Wigglesworth, and Francois Bondiguel.

They are based in the Centre for Innovation and meet regularly to share ideas and help inspire each other. Leong advises students to recruit a team, saying it is “hard for single entrepreneurs to go out and do things by themselves. Find people you know, can work with, and who have complimentary skills.” He also suggests seeking help, affirming that Ryan Priemus is a great resource for helping people get started. For students with web-based ideas, the Distiller is a great intermediate step after getting your idea going, and its members invite any student to visit the Distiller in the Centre for Innovation. “This kind of open community interaction and social contribution has actually helped our business gain quite quickly. In ten months’ time we are exporting, have major clients, and have a global presence,” says Leong. Not many other young businesses can say the same.

Start me up

A third service available is the Upstart Incubator, run by Upstart, a not-for-profit organisation founded by the Dunedin City Council, the University of Otago, Otago Polytechnic, and New Zealand Trade and Enterprise to fuel economic growth in Dunedin.. The Incubator looks for high growth ideas – that is, ideas that can be making $3-$5 million within five years. It is not necessarily looking for students, and those it takes on are expected to be very dedicated to their cause. Ideas don't have to be high-tech or web-based, but they don't want to waste their resources on something small, as they can only help around a dozen companies at a time. According to CEO Norman Evans, there are a lot of big opportunities in technology, but “if you came in here with a brilliant idea for a spade and I thought we could sell that spade round the world, we'd support you.” Evans also judges the Audacious competition. He advises anyone with an idea to talk to people about it, “but you have to be receptive to someone telling you what is wrong. And sometimes it is just a dumb idea.” Is he the Simon Cowell of business ideas? “I do tend to be very focused on the issue because it is a terrible thing to lead someone on and have them spend hours of their time and money building something that you know won't work. If you do feel that something is a dumb idea and you don't tell them in a way that they understand, then you are not doing them a service.”

If your idea is accepted by the incubator, Upstart helps invest in the idea and gives as much help as possible to get it off the ground, usually in return for five percent of the revenue in five years. If it doesn't get off the ground, then there is no loss to you. One of the better-known companies that has gone through the Incubator is Vouchermate.

Otago University Student Jaroslav Novak is currently an incubation client with Upstart, as well a member of the Distiller. His idea, Virtuoso Online, an online music theory course, was also the $40K Business Plan Challenge runner-up in 2008. In regard to the Incubator versus the Distiller, Novak feels that “You can get advice from anyone and you have to choose the right advice that is most applicable to you. I am in both, and each has their strengths. The client has to evolve to the environment.”

The other services offered by Upstart that are perhaps more relevant to students include the Entrepreneur Development Programme. If you know you want to start a business, but haven't developed all the skills, made the contacts, or found the money, or if you do not yet have a business idea, you can apply for a scholarship worth $30 000 a year over two years at Upstart. It involves working almost full time with the clients of Upstart. It is quite hands-on, and within a year, successful applicants should be starting to know what their business needs will be and how to get it off the ground. It is an intense recruitment process to go though, and it is not that easy to secure a place. The ideal candidate would have spent six months to a year after graduating university getting some working experience. In some cases, they would have had a go at starting up a business while at university, and Upstart looks at those candidates more favourably, as it shows initiative and passion.

Another programme run by Upstart is the Startup Network. Anyone with an interest in starting up a business is invited to go along to their monthly evening meetings, at which they can listen to guest speakers, meet other people looking to start up businesses, and network. This service is also free, and its end goal is to recruit students to the scholarship programme. Manager of Entrepreneurship and Marketing at Upstart Lisa McCarthy says “Whoever has got any inkling that they would like to start a business of reasonable size, we will get them in.”

Alternatively, one can undertake a Masters in Entrepreneurship. The course is taught in three-day blocks every six weeks, so students can work while doing the course. It is a less restrictive programme, though a lot of emphasis is still placed on evidence of “entrepreneurial talent,” which means that you should have either had a crack at starting up a business, or worked in an entrepreneurial company. So, university results are not the only factor in determining admission. The course doesn't assume any prior business knowledge, as it covers all the core business skills required. The course is also extremely helpful if you are working on your idea while completing it.

Previous successful Audacious winner Dr. Kim Chilman Blair launched Medikidz after completing a Masters of Entrepreneurship. Medikidz is designed to provide medical information to children with various conditions to help them understand what is happening to their bodies, through a variety of media including picture books. The Masters programme helped give Dr. Blair the business knowledge required to get going, and she has since launched her business internationally to great success.

For those with even less of a business background but great ideas, there are a few more options available. For students with more design-focused ideas the Evolver, situated down at the Polytechnic in the Product Development Centre, could be a better option. The Centre has $22 million worth of advanced prototype equipment, including a type of 3D printer which takes a digital design and creates it. The Evolver is more focused on meeting the needs of design entrepreneurship. It works closely with Upstart and is available to anyone with a good idea or concept who wants to present it to them. Its initial funding is $1.5m from the government, and its resources can be used in areas of design, branding, creating the business model, intellectual property – whatever an idea needs to get off the ground.

Two calls are put out each year for applicants. If you have an idea, it is best to talk to the Director, Pat Maguire, to make sure your idea is feasible, as the application is quite comprehensive with elements around the applicant, their background and experience, the product, concept, revenues, business model, resources, and support. The next stage is the application: going in front of an advisory board of seven people (including Norman Evans), after which a shortlist of three or four applicants will do a Dragon's Den-style presentation/pitch. Generally, one will be picked from that last group.

A predicted outcome will be negotiated, and the Evolver will invest a certain amount of capital, and in return when the successful applicant commercialises their idea and receives revenue they pay a percentage back to the Polytechnic. “If it doesn't happen, it doesn't matter, that's our risk” says Pat Maguire. Negotiation is on a case by case basis, as is involvement – if you merely have an idea but no business knowledge (or of how to produce your product), you can still be accepted and take a cut as it is your intellectual property that will be being used.

For third-year Applied Sciences students, there is a Summer School programme called Partnering For Innovation available. Students in this programme talk to researchers on campus about their ideas, get information on how things work, look up what the market and competition is like, and research the intellectual property issues around their idea. Students then generate a two-page document to hand in to the Entrepreneur in Residence, who looks at considering funding for developing it. Applied Sciences student Logan Elliot, who completed the programme over last summer, says it “gave me a hard-core taste for the business side of science.” He has also completed DESI 419, a Strategic Design paper for which an Audacious entry makes up thirty percent of the marks.

Glass ceiling? What glass ceiling?

But is it all a boys’ club? While investigating all these opportunities, I noticed an overwhelming difference between the amount of men and women getting involved in all aspects of student entrepreneurship and other business initiatives at the University.

Former student Sam Leslie suggests that “It's because they don't have penises, and girls don't really understand business.” Serious suggestions as to why there are fewer women getting involved include that men are more likely to “get out there” and take risks, thinking less about the consequences, while women tend to think through their ideas a lot more, preferring to wait and make sure they have a really good idea, as they are more self-doubting.

Sure, business entrepreneurship is a more male-dominated territory, but it is certainly not an exclusive boys’ club. OCOM President Scott Cardwell says “Don't let the boys show you up, get out there and do it!” Women certainly are welcome everywhere, and many of the people interviewed would love to see more, particularly at the Distiller, where they would really like a third woman on board!

If you want to start up a business, Dunedin is a great place to do it. With so much help available at very little actual cost, why not give it a go? Sure, it can take up a fair bit of your drinking or studying time, but you could find the career you want and have a lot of fun along the way. Having a project and being successful can also be very rewarding, and why not capitalise on your talents and passions?

Richard Branson, who has a net worth of which we are all jealous, says “Ideally, since eighty percent of your life is spent working, you should start your business around something that is a passion of yours... If you can indulge in your passion, life will be far more interesting than if you're just working.”

Jaroslav Novak, an Honours student in Music, was led to Virtuoso Online through his background in piano. Logan Elliot certainly knows how to capitalise on fun – his business “Highly Flammable” is a fire and stilt performance group that recently worked at the All Blacks vs. France match at Carisbrook.

If you have an idea or passion that you think could make you a bit of money, contact Ryan Priemus on 0800 542 578, or email ryan@audacious.co.nz. Or, if you have any more questions/would like contact details for the services mentioned, email commerce@ousa.org.nz.