14th February, 2021

Week 07/52

Feb 14, 2021

"What a surgeon does to a patient, if it were done without consent, would be illegal"
— Catherine Mohr

This week I consented to an assault.

A guy I don't really know intentionally sprained my knee, cut it open and inserted a tiny camera and scalpel which he used to remove a torn section of meniscus. He had decided that this was necessary based on a detailed photo of my knee that was taken by a giant magnet at the end of last year. He took some more photos of the inside of the knee while he was poking around in there (see above).

What's more, so that I didn't fight back, his colleague injected me with a concoction that knocked me out, so I was asleep the whole time. I was the perfect victim... annoyingly, I didn't even get to the "counting backwards from 10" bit.

Afterwards they gave me some pills that reduced the swelling and numbed the pain, wrapped it up and a few hours later sent me on my way.

I limped away delighted. All in the name of ... healing.

It's a good reminder that not all progress is a straight line progression.

But also that I live in amazing times, when these sort of technologies and procedures are not only available but absolute routine and mostly unremarkable (present situation not withstanding). It's not very long ago that the solution to this sort of situation would have been a couple of concrete pills and instructions to quietly get on with it.

We don't know how lucky we are eh!

🏷 Define (part 2)

Image: @uniqueton on Unsplash - Kiwifruit (or Chinese Gooseberries?)

Let's return to our series on building an ecosystem of innovative technology startups in New Zealand.

A couple of weeks ago we started, appropriately, with "start-ups" and found that while there are actually different types of young companies that get grouped under that generic heading, it's maybe better to define them more specifically.

The exact same thing could be said when we turn our attention to what we mean by "in New Zealand".

One of the terms we hear used a lot is "NZ Inc". I reckon that most people who regularly use this label have never stopped to think what it actually means (and definitely without questioning why a grouping of NZ companies would use a US naming convention).

Again, there is a seemingly obvious meaning: a New Zealand company is one based in New Zealand. Duh!

But, what does it mean to be based in New Zealand?

It's actually surprisingly difficult, when you think about it, to nail down the aspects of a business that might make it distinctly "New Zealand".

Some of the things that we might consider:

Where is the company registered?
Where do the shareholders live?
Where are the team located? (i.e. "where do they have offices or premises?")
Where does the company pay tax? (it's tempting, but simplistic, to assume this is just the same as "where do they have customers?")

What else am I missing from this list?

As Nat Torkington has noted, perhaps if the answer to all of those is "New Zealand" then we can say the company is a New Zealand company. But as soon as one or more of the answers is something other than "New Zealand" then it gets complicated.

Maybe once upon a time there was a cleaner distinction between businesses that were local (those that were entirely based in one country - owners, staff, customers etc) and those that were, so called, multi-national. But now it's not at all unusual for a very small company to be spread far and wide from the beginning.

This is especially true of a successful high-growth start-up. As they expand they will likely hire people based offshore, to better serve an international customer base, at which point they will be paying tax in multiple places. And, when they raise capital they will find investors all around the world who will be interested in becoming part owners.

Are they still a New Zealand company then?

What about if they do all of those things: re-incorporate as a US company, now have most of their team based elsewhere and are no longer majority owned by New Zealanders (because of how much capital they have raised to fuel their growth)?

It gets even weirder when we start to consider provenance. Was the company started here? Or, was one of the founders Kiwi? I think it's a stretch, but we do love to claim ownership of any big success (cough, Allbirds)!

Who cares? Why does this even matter?

It comes back to why we talk about “building an ecosystem of innovative technology startups in New Zealand” in the first place. It's because there are significant collective benefits, if we're successful. But, because of that, there are also costs we choose to share (for example, through public funding). And that opens up the question of who gets supported, how much they get and when.

Consider the debate that gets crystallised whenever a company that we consider to be a New Zealand company is sold outright to a buyer overseas. Is it a good thing? Or a bad thing? How do we compare the current value of the company to all of us versus the long-term value of the capital the sellers receive, re-invested in as-yet unimagined things in the future? What are we optimising for? If your answer is: retaining 100% ownership by New Zealanders then I think you're going to be underwhelmed by the results.

Unless we actually understand what the benefits are and how we realise them, then how do we know how to share the costs appropriately?

This is the question we'll continue to come back to over and over in this series:

Q: What do we want?

Note: I'm writing this from New Zealand, with a local lens, but obviously this same thinking could equally be applied to any other world class country that punches above its weight (on a per capita basis). So if you're reading this in Australia, Norway or Singapore just substitute as necessary. Equally, if your interest is less national and more regional the exact same logic applies to trying to encourage start-ups specifically in your place.

📗 Remember

Image: @bekkybekks on Unsplash

Cleaning up some old files this week I found this note I made to myself, in 2016...

CONTENT Irregular newsletter containing three ideas that I think are worth sharing. Could be my own writing/thinking could be a link to somebody else.
FREQUENCY Sent each time I have three. So could be two in one day (unlikely but possible) or could be weeks between issues.
FORMAT Email newsletter. Each person invited to subscribe can recommend three others who then also get invited to subscribe (I’ll start by inviting three). So readership only grows if viral coefficient stays above one.

I really wish I'd found this eight weeks ago. That's actually a kind of more interesting format than what I've started with this Substack (don't worry - I'm committed now, 45 weeks to go!)

But the best bit imho - the name I put on the note: Nuggets.

The lesson, obviously, is to review old notes more often so they stay in mind.

Top Three, by Rowan Simpson

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