I’ve received a bit of feedback since my post the other day regarding the Government’s role in helping to grow enterprise in New Zealand. Jim in particular strongly feels that help should be given to medium size businesses instead of small ones.
Here are some more thoughts from me….
The way I see it, business development is a pyramid. You need to feed in lots of startups at the bottom to be popping out a Trademe or 42Below every few months (which we need to do in this country to grow).
Research has shown that the main reason that entrants to the pyramid don’t get much higher, is due to a lack of core business skills, that is they’re good at making whatever widgets they choose to, but bad at all the other stuff, admin, marketing, IP, planning etc etc. Now Jim’s take on it is that we should be waiting till businesses get half way up the growth pyramid before giving them help. By this time some will have dropped out and selection will be easier.
To my mind this is daft (to quote Jim’s term). How many sterling business ideas will be sacrificed for reasons other than the lack of viability of the core business idea? It could be argued that without his Deloitte experience and advice, and his Dad’s help, that Sam Morgan would have pulled the pin on TradeMe long before getting to the magical mid-pyramid level.
From my own experience I can think of a Web startup that I was part of a decade or so ago – we created what was very close to current day blogging – but without the advice, help, vision and cash to keep on plugging, it all got a little hard and we let it fold.
I do think however that when assessing businesses for funding – much thought needs to be given to the growth potential of the enterprise. It seems counter productive to spend large amounts of tax payer funded advisory time on a business that will only ever reap “sole trader” rewards for the country.
So Jim I have to defend my earlier position – if help is to be given – it should start at rung one of the ladder and continue until a business has the momentum and stamina to do it for itself.
As to the attitude that there is no place to spend taxpayers funds on business development – as part of an Economic Development Agency with real world experience of some of the benefits of enterprise training and the like, I am still sold on the concept – sure it could be tighter, more focussed and targeted but all things being equal we have a good model.