It's one thing to have an idea; it's quite another to take it to the world.
Commercialising innovation is a long and expensive process notoriously fraught with failures – so it’s not surprising that only a small percentage of those with a bright idea manage to successfully package it up and sell it.
New Zealand has some glowing examples that have gone global from the acclaimed hero of cloud software, Xero, to Southland’s boat manufacturing innovator Paul Adams of Stabicraft whose highly stable recreational and commercial fishing vessels sail the waters of the United States and Europe through to Australia.
Of course, New Zealand is an exceptionally entrepreneurial place – we take pride in our growing innovation and start-up ecosystem, our resourceful Kiwi attitude, approach to problem solving, small population open to being first adopters and friendly business environment - New Zealand is a great place to do business.
Government is strongly focused on growing that ecosystem to encourage greater diversity in our economy. The 2016 Innovative New Zealand package delivered more than $760M into funding for science and research, education and supporting regional economic development to unlock business opportunities in communities.
New Zealand also has a strong network of business incubators and organisations fostering everything from tech to social and environmental enterprises.
Externally, Government has created immigration pathways to attract top global entrepreneurial talent including the Entrepreneur Work Visa for people who want to work in their own business in New Zealand.
In January, this year, the new Global Impact Visa was launched by Immigration NZ in partnership with the Edmund Hillary Fellowship. The Fellowship will bring up to 400 of the world’s best and brightest entrepreneurs, investors and start-up teams to New Zealand over the next four years, to build high-impact ventures that tackle global problems. They will be issued the new Global Impact Visa providing an open three-year work visa to innovate – and a pathway to residency.
Up to 80 Kiwis will also become Fellows in this inspirational initiative designed to help build New Zealand as a hub of global impact business incubation.
Not all innovation needs to be world-changing or global scale.
SME innovation is a central driver of regional economic growth. And bright ideas and entrepreneurship are changing that in some simple and inspired ways.
For BDO Invercargill’s Managing Partner Tim Ward, who’s seen innovation succeed and fail in all shapes and sizes over 30 years of advising local businesses, transforming personal experience into a business reality is one of the most common forms of innovation.
“There are plenty of people here with bright ideas that are not about rocket science innovations, but rather they are a kernel of a business idea that has sprung from their personal experiences. And these people have developed that kernel to become their business activities.”
Taylor Made Container Homes
One of Tim’s clients, Darryl Taylor, has transformed his own personal need for extra storage space into a thriving new business, Taylor Made Container Homes, attracting major contracts and currently undergoing a growth spurt.
Darryl and his partner Bernice came up with their bright idea around three years ago, investigating options for increasing storage and living space at their Southland home.
A panel beater by trade, Darryl decided he’d use his skills and equipment to convert an old shipping container into two rooms – one with a ranch slider and the other to use as a storage shed.
It was a cheap and effective solution that worked so well for them, they realised it could work for others. So, they put an image of it on TradeMe and things snowballed.
Three years later, Taylor Made Container Homes is a rapidly growing business offering innovative, high-quality small and affordable accommodation for multiple uses.
And, they have done so without any capital injection, a lot of hard work, lean business management and regular business advice.
Point of Difference
As Tim says, whilst there’s nothing new about the idea of container homes, Darryl and Denise have focused on building a strong point of difference – another critical element in success.
All Taylor Made Homes come fully finished, council-approved and are signed off with a code of compliance under the Building Act. They will even help with onsite delivery, foundations and associated consents from local councils.
Darryl says the process of working through all the compliance was a significant challenge – but well worth it given the market edge it provides.
“As far as I know, no one else has managed to achieve what we have and it was hard work. We spent about a year working with an architect and engineers to cover off all the issues and ensure the homes are compliant.”
“That was the hardest part in getting the business up and running, and I nearly gave up, but we kept at it. We’ve done everything right and I’m really happy with what we’ve achieved.”
Sound and Lean Management
As far as business management goes, Darryl and Bernice run a lean ship and have been supported since the outset with regular advice from Tim Ward.
“Tim has been behind us every step of the way, we tell him everything, he gives us a lot of good advice and we do our GST every month and send it off to him.”
With previous experience operating a business, Darryl is also focused on keeping good cash flow.
“We get people to pay in advance so we’re always in credit with our customers, we invoice as the cash is required and we pay for everything with the cash. And my wife Bernice is very switched on with the accounts.”
The pipeline of work is also very strong – including their biggest contract to date for Fulton Hogan, building three 40ft container homes destined for the Chatham Islands as accommodation for construction site workers.
“We’ve never had to do any marketing; people have come to us and it’s snowballed. Our main marketing channels are now our website, Facebook and word of mouth.”
Last year Darryl and Bernice followed demand, moving from Invercargill to Cromwell where there’s a major accommodation shortage - particularly for builders coming to the area to construct housing.
That said, the logistics of servicing clients all over New Zealand have never been a barrier. Darryl sources the containers from the far north and can also deliver anywhere in New Zealand within short time frames.
The next step is growth – and with an interested party onside, though not as a shareholder, the future priority is to build a factory, with Darryl having so far worked on the containers outside on the property where they live in a large caravan. They’re also looking to take on permanent staff having used contract workers to date.
Taylor Made Container Homes is a snapshot of what innovation in the real-world of New Zealand’s regional economies looks like. It’s nothing to do with developing new technologies and materials but about bright ideas applied to existing products, processes and services to meet consumer needs in new ways.
Reflections Picture Caskets
Likewise, another of Tim’s clients, Anneke Campbell has turned an idea from a personal experience into a commercial reality with her family business, Reflections Picture Caskets.
Officially launched in August 2016 after extensive research and development, Reflections Picture Caskets produces a range of eco-friendly image-wrapped caskets and urns that reflect the deceased’s personal qualities.
The company has also diversified its range to offer other quirky products such as pre-order caskets for the living that are designed to double as storage units, until the time comes.
Anneke’s vision grew out of her own frustration at the generic nature of mainstream caskets during a period of attending multiple funerals after several personal losses in close succession.
“When it came to me having to choose a casket for a loved one, I just realised, no this isn’t right. Caskets should reflect the person they are carrying, they should be embellished with imagery that honours who that person was.”
Anneke undertook extensive research into the feasibility and processes of image-wrapping caskets – including travelling to the United Kingdom to visit a major casket manufacturer which offered image-wrapped as part of its stock.
It has been a journey of two years, requiring investment in manufacturing assets and refining the materials and processes - including achieving an eco-friendly wrapping – a strong point of difference - using paper not vinyl wrapping, with a special coating and Forest Stewardship Council-sourced wood.
It has become a family business, with her partner overseeing the factory production, designer son working from Sydney to support software and website development and her daughter moving back from London, to also come on board.
“When people see these coffins at a funeral, it really makes a difference, it makes people happy to see the person they know and loved being placed in a casket that reflects who they are,” says Anneke.
“People can choose what they would like. We have designers who can help them create their own one-off casket which captures their passions and lifestyle.”
Photographs of a person’s life could be incorporated into the design, as well as written text, including messages from family and friends. Once designed, a casket could be completed within 48 hours and delivered nationally in a matter of days.
Market entry has been one of the biggest challenges so far with the initial model of distribution through local funeral homes and national networks proving unviable. The business is now pursuing a more aggressive direct-to-customer model via online and social media marketing alongside making connections with more alternative funeral home providers.
As Tim says a common challenge for small business owners is implementing change, something that requires resilience and clarity of vision.
“Small business owners have to wear so many different hats that they are often hesitant to implement change to meet business objectives. Change is a gradual process that demands a lot of energy and often new capital injection. That’s when it’s important to be able to come back to the original vision, to stick to the knitting of what they are trying to achieve."
“Our role as adviser is to provide a trusted independent sounding board in that process, to provide regular information, visibility of numbers and solutions and ensure they are aligned and clear with what it is they are trying to achieve and their short and long-term business goals.”
SME innovation is a central driver of regional economic growth. In Southland, an aspirational hub of growth with its new multi-party Southland Regional Development Strategy devoted to boosting the population and diversifying its economy – some inspiring SME innovation is underway.