Kiwi startup king steps back
The man behind The Icehouse incubator hopes his successor will be nothing like him. Anuja Nadkarni reports.
Investment guru Andy Hamilton once made $50,000 in 18 months in what he says was his best investment. The media logistics company, eBUS, started by Carmine Masiello, has since been sold to a UKbased firm.
‘‘The founder now lives on a yacht in Europe. Happy days,’’ Hamilton said.
This is just one of several success stories The Icehouse founder had helped engineer. Another well-known example is wireless charging business PowerbyProxi which was snapped up by US tech giant Apple in 2017 for more than $100 million.
PowerbyProxi allows devices such as smartphones to be charged by placing them on a pad rather than directly plugging in a power cord.
‘‘All companies either become big in their own right or have to sell to or through larger organisations,’’ Hamilton said.
In July he announced he was stepping back after 18 years at the helm of what had grown to become one of the country’s biggest incubators of small-to-medium (SME) businessess.
Run by a not-for-profit trust, The Icehouse works with businesses at various stages of growth – from entrepreneurs launching new ventures, through to successful owner-managers.
Earlier this year the business accelerator set up Icehouse Ventures.
Between them Simplicity, Jarden and Sir Stephen Tindall’s K1W1 said they would invest $3m into getting Icehouse Ventures off the ground, with a further $1m coming from interests associated with The Icehouse.
‘‘That was a pretty momentous occasion in my life and the single biggest transactions at The Icehouse. That got me thinking about whether I had the energy in me to go through the next five years,’’ Hamilton said.
The hardest part of his job had been convincing people The Icehouse could help them.
‘‘One of the things that holds Kiwis back is a lack of confidence and not recognising there are others out there who could help make better decisions,’’ he said.
Since 2001, The Icehouse had worked with more than 5000 businesses which have collectively created more than 27,000 jobs and generated more than $15.5 billion in revenue. The accelerator aimed for its businesses to make up 10 per cent of New Zealand’s GDP by 2021.
Icehouse Ventures partner Jason Wang (who also ran the country’s first Chinese-only investment fund, Zino Ventures) said Hamilton was a ‘‘relentless hustler’’.
‘‘I don’t think the [startup] ecosystem would be what it is today without him,’’ Wang said.
He said Hamilton’s ability to uplift early stage businesses on the global stage had led to several successfully attracting foreign investment.
Simplicity founder Sam Stubbs called him the de facto grandfather of venture capital in New Zealand.
‘‘It’s hard to fathom the magnitude of his impact, but it’s very large. Simplicity invested in Icehouse because Andy and many others he recruited built it up into the formidable venture it now is.
‘‘He has a long roll-call of fans and a few
‘‘One of the things that holds Kiwis back is a lack of confidence and not recognising there are others out there who could help make better decisions.’’ Andy Hamilton, above
detractors, but that’s to be expected in an industry full of ambitious and opinionated entrepreneurs.’’ And he has been behind some big names. Hamilton said he invested in companies with chief executives who had expertise in their industry, like Xero’s founder Rod Drury who set up the cloud-accounting software after 14 years working in IT.
‘‘I personally love technical founders. In the early days we saw the suits, the salespeople with their pitch coming in but now we prefer entrepreneurs who can build product and can learn business over time.
‘‘Products alone do not drive top performance. You have to have a good product, but to really smoke it you need more than that. You have to be adaptive and recognise the world around you changes and you have to hustle.’’
A good example was Brianne West, founder of eco-friendly cosmetics company Ethique, who used her background as a biochemist to create shampoo and conditioner bars to rid the world of plastic bottles.
‘‘Some people are just ahead of the curve. I truly admire people who see a trend, act on it and shape the future,’’ Hamilton said.
But most small business owners and entrepreneurs who were ahead of the curve often found it lonely at the top.
‘‘Small business owners are doing everything on their own. They live inside their head.’’
Although there had been some major success stories, there had been more failures.
‘‘Failure is materially greater when investing in startups. It’s extremely challenging to start a business, it’s way easier to grow an established SME.’’
Statistics from 2017 compiled by the Ministry for Business, Innovation and Employment found 45 per cent of businesses with fewer than 20 employees failed within six years. But 63 per cent of businesses with one employee ceased to exist in six years.
Hamilton said the statistics for startups were grim.
‘‘Less than 1 per cent of startups can keep up with demand in the first three years of their life. Of those only 10 per cent will go on to see success.’’
One of his recent investment failures was virtual musical world venture Big Little Bang.
It had a game where children could collaborate to mix new music live.
But about four years ago the business ran out of money because of promises that it could not deliver on.
As he walks away from the job, Hamilton said he hoped his successor was nothing like him.
‘‘I think it’s time for someone else to come in and do it differently,’’ he said.
He had been toying with the idea of moving on for the past year.
‘‘I would stay here forever if I could, but the time’s right to move on.
‘‘Let’s go into the unknown after knowing everything.’’
Although he wasn’t someone who looked back and reflected on life, he was playing with the idea of writing a book.
‘‘The idea I have for a book is related to a recurring dream I had as a child where I would get lost and try to find my way back. That’s something I’ve come to live through business because you get lost and don’t know which door to go through and sometimes you just need someone to show you the way.’’