'Tech' offers Dunedin golden opportunity

Holger Regenbrecht believes Dunedin and the wider Otago region have the potential to enter a modern-day gold rush.

To do that, the University of Otago head of information science says, the city must focus on growing small- to medium-size enterprises into high-value companies making cutting-edge technology, and nurture its systems for supporting start-ups.

The technology sector globally was "booming" and Dunedin could play a very big part in that, having an opportunity to market itself as a high value niche technology city, Prof Regenbrecht said.

The city should not worry about losing companies to Auckland and other larger centres, because leaving could be a natural progression in their growth.

"After 10 years, if a business decides to move on to Auckland or Sydney, that is fine because Dunedin still had a part to play.

"Some might stay, but some might grow so rapidly they need to move on.

"We have the talent and facilities with the university and polytech to pave the way for the innovation and we need the industry partners to get in behind," he said.

Alongside being a good city to start businesses in, Dunedin was an attractive place to live, which was also a factor for people.

There was also an opportunity to market itself in the gaming sector, "but not pretend to become the next California".

"We could create indie games [independent video games] or serious games with a purpose. This is the right place to be," Prof Regenbrecht said.

Being at the bottom of the world did not disadvantage Dunedin, as long as it marketed itself right.

"It is probably more the proximity to the investors and the decision makers than the actual work because that is all done over the internet now," he said.

In May, cloud-based appointment management system Timely sold to Denver platform EverCommerce in a $135 million deal.

It was started by Andrew Schofield, Will Berger and Ryan Baker in 2011 and has grown to serve more than 50,000 service professionals in 90 countries, allowing them to book more than 30 million appointments a year.

Mr Baker did not believe the city could claim it had a successful start-up ecosystem yet, saying it had yet "won the game".

"The important thing is it that it can have one and we have seen recent proof of that," he said.

The key was to to think not of a Dunedin ecosystem, but more of a global ecosystem the city could be a part of.

That had become more possible in the last 18 months after Covid-19 forced people to work from home, Mr Baker said.

From its inception, Timely staff had been able to work remotely - and the world had to learn how to do that "very quickly" last year.

"People have realised that there were some good parts to it and that they are going to keep doing it," he said.

Mr Baker believed there used to be a trade-off between living somewhere and where the good jobs were.

For example, people would have to choose to work in Auckland, where the good jobs were, or live in Dunedin with a good lifestyle, but could not have both.

"What we are seeing now is a global market where staff could live in Dunedin but work for an Australian company, or vice versa.

"I think that is really exciting for cities like Dunedin," he said.

Mr Baker believed Timely was proof of how a company could have staff working remotely and compete on the world stage.

"Timely had experience in doing that and got some financial returns from it so that could show people that they can build businesses and know that they can do it from here," he said.

Last month, Education Perfect announced global investment firm Kohlberg Kravis Roberts (KKR) would take a majority stake in the company. That deal valued the Dunedin education technology company at $455 million.

The company was started in 2013 as a spinoff from Language Perfect, which was launched in 2007.

It was founded by University of Otago graduates and brothers Craig and Shane Smith and Scott Cardwell with a opening bank account of $200.

It now has offices in Australia, New Zealand, Singapore and Dubai, and is used by onemillion pupils and 50,000 teachers in 3000 schools across 50 countries.

Language Perfect was an alumni of the Audacious student start-up business programme, run by Startup Dunedin.

Startup Dunedin general manager Rachel Butler believed Dunedin’s long-term commitment to entrepreneurship was key to its success.

In the entrepreneurship ecosystem, there were four pillars to success: founders leading the community, long-term commitment, inclusiveness and activities for each start-up to participate in, no matter the size or stage.

Ms Butler believed Dunedin had all of them.

In the first half of this year, Startup Dunedin had met 56 potential business founders looking to turn their ideas into businesses.

"Entrepreneurship is a long-term game and everyone here gets that," she said.

Hearing the city’s success stories, a recent Dunedin tech start-up was feeling "hugely inspired", co-founder Tom Brownlie said.

Heybarn was started eight months ago by veterinarians Tom and Keara Brownlie and Jaimie Hunnam who created software for a platform similar to Air BnB for rural shed space.

"You start off with things without necessarily having a long-term figure in mind, we are always wanting to be conservative with estimations.

"But if some can build a booking company for the cosmetic industry and sell it for that price [Timely], I believe playing in a new market space we could potentially get to that figure.

"It validates the path we are on," Mr Brownlie said.

The start-up ecosystem in Dunedin was supporting Heybarn.

"They are wrapping legal help, accounting help and marketing help around us.

"I’m only new to this, I’ve only just discovered it all but it is a very encouraging space to be in," he said.

There was also a lifestyle shift back towards the regions, and Ms Butler said that was making Dunedin a more attractive place to start a business.

Previously, people with business ideas had to go to the main centres to get the support and grow, but not now.

"There is enough infrastructure and connections here now that you can build it and retain your talent and your staff.

"It is a lifestyle choice. We have seen it post-Covid, people have been thinking where they want to be," she said.

Dunedin entrepreneurs were also happy to give advice to those just starting out.

"Those people who have been invested in are very happy to have the coffee with the people who have just had their first idea in the shower," Ms Butler said.

"It is a give first culture that helps people in the ecosystem."

Enterprise Dunedin director John Christie said the city had grown and invested in a successful ecosystem for those with good ideas to get away to a good start.

That, coupled with strong mentoring programmes, was what Dunedin was really good at, Mr Christie said.

"We have a great talent base as well, with the university and polytech producing quality graduate students.

"We are good as a city in getting people interested in entrepreneurship and business."

Mr Christie said good investors would always look for good ideas.

The fastest area of growth in Dunedin was in the "weightless economies" - services rather than goods - and services were becoming an important part of Dunedin’s global reach.

Having some of the fastest broadband in the country was also making it easier to connect with the world, Mr Christie said.

With its great ideas, great support and promising cultural and technological shifts, he believed Dunedin’s economy might be entering "an exciting new era".

Recent deals

May 2021: Timely sells to US firm EverCommerce for a deal that could be worth more than $100 million.

June 2021: Global investment firm Kohlberg Kravis Roberts takes a majority stake in Education Perfect that values the company at $455 million.
 

riley.kennedy@odt.co.nz