News reached me in Barcelona yesterday that Wynyard, the much-flaunted crime fighting software vendor that listed on the NZX to great fanfare last year has gone into voluntary administration. There has, of course, been much wailing and gnashing of teeth – those on the traditional investment side of the house suggest that it is an indication of the volatility, risk, and imprudence of tech investment while those on the tech end of the spectrum suggest that it is simply a case of a bad product that promised too much and delivered too little at too great a cost.
There have been the usual pot shots at Sam Morgan, the TradeMe founder, and one-time, sometimes Twitter commentator. Morgan was a big investor in Wynyard and the critiques have centered around two factors: 1) That he’s not such a good investor after all and that, 2) his not piling more cash into Wynyard in these troubled times is an indication of just how much of a dead duck Wynyard actually is.
Lance Wiggs, Punakaiki investments founder has written a piece saying that the blame lies fairly and squarely with the board for not cutting costs early enough. Others criticize the large Kiwi fund managers who jumped into Wynyard seeing it as the next Xero.
All of which is, sadly, a reflection on the immaturity of the tech ecosystem in New Zealand. it’s not that any of these commentators are wrong, it’s that they’re all looking through a single lens.
The bottom line is that tech startups are hard, take a huge amount of luck, good timing, and precise execution. Yes, the Wynyard board, both past, and present, made some pretty big blunders. That is a reflection of (in my view) the lack of a good pool of technology board members in New Zealand. Yes, it seems the product was buggy and needed far more support than it should have – a reflection on a poor foundation and a perhaps imprudent spinning out of the original entity from Jade. Sales didn’t meet initial expectations: show me a technology vendor that accurately predicts and delivers on sales and I’ll show you several dozen who do not.
And all of that “the next Xero” stuff – is pure bunkum. Even Rod Drury, in his more reflective moments, would admit that Xero had its fair share of luck. Getting its IPO away before the GFC hit was the epitome of luck, without it we’d have been gnashing our teeth about Xero’s failure back in the day. And as for its predictions – don’t get me wrong, Xero is a shining light for technology in New Zealand and has, arguably more than any other player, created a modern technology ecosystem, but is hasn’t all been plain sailing and anyone who has a copy of the IPO prospectus (I can lend you one if you need) will chuckle at the initial predictions and projections. This isn’t a criticism of Xero or a comment on their lack of professionalism, rather it’s a reflection of just how hard it is to do this stuff.
Yeah, there were some stupid things – Wynyard signed a lease on a ridiculously opulent building in Christchurch. only a few weeks ago I took a picture of the sign on their new office building and suggested it would never see its spotlights lit – I was sadly accurate in that estimate. There was plenty of Hubris to go around and the management and board certainly seemed to believe their own story. But, again, Hubris is, sadly, something of a prerequisite for success. If you don’t exude confidence, staff won’t sign on, investors won’t come on board and customers won’t spend.
Wynyard is bad, and a huge shame for the ecosystem. but it’s part and parcel of a technology industry and we need to get used to it. there are several more vendors about ready to end up in the same place. My own experience tells me this is the case – I’ve been a founder or co-founder of half a dozen startups – two blew into smithereens, a couple are still ambling along and another couple are doing great (and, hey, if anyone needs some workwear or backpacks – you know where to look). If you can’t hand;e the heat, as they say, get out of the kitchen.