Kiwi digital start-ups have never had it better.
The provision of new technology toolsets by big tech companies, coupled with more accessible venture capital funding in New Zealand, means it is now easier than ever before to fund a digital start-up.
Waikato software development specialist Company-X has worked with start-ups, alongside government agencies and big tech, since it was founded by software specialists David Hallett and Jeremy Hughes in 2012.
“There’s a whole toolset now that enables that,” Hughes said. “There’s a lower bar to entry and a higher chance of success.”
Building a minimum viable product with enough features to be usable by the client has become a popular and efficient way to validate an idea.
“You can completely re-factor what you started with,” Hughes said.
“You don’t have to do these big think waterfall projects. You can start with something and if you do it right, that sets the basis going forward. That completely changed the game.”
Before the advent of cloud services, like Amazon Web Services, start-ups needed to buy a lot of hardware and the costs were huge.
“You had to go and buy or lease all this infrastructure so that you could put your app on it,” Hallett said.
“Now you can build in a serverless environment which is elastic.”
The elasticity of a serverless environment makes projects scalable, with start-ups able to dynamically increase and decrease resources based on requirements.
The introduction of follow the sun servers, delivering minimal lag time, was also a game changer.
“With Amazon Web Services you just click a button and say where your application is housed to move around the globe, so that it’s close to where the users are awake,” Hughes enthused.
“Crazy stuff like that was not available 10 years ago.”
“Amazon is the thought leader in this space, and also the tech leader,” Hallett added. “To think they started building this to provide the infrastructure for their own online book store. They built this because they saw it as necessary for their own e-commerce solutions.”
“Those things have enabled a substantially different approach all the way up. Start-ups can begin without much venture capital because they don’t need big severs and data centres, or have the big costs that come with those things,” Hughes said.
The adoption of app stores means software no longer needs to be shrink-wrapped and shipped to a reseller.
“You used to need a huge marketing campaign, but now you can publish apps in the app store that aren’t advertised but are accessible to users. You can just tap a button on a website and the app is on your device,” Hallett said.
“These are technical things that are way below the radar of investment companies and founders, but they have profoundly changed the game,” Hughes said. “All of that reduces your investment, that increases the number of people that can play, a lot greater catchment of innovators to actually get as far as getting something out there, instead of getting stumped on how to pull that together.”
Better access to funding and new tools meant the creatives of the world could afford to explore their ideas earlier.
“University graduates can get together and just start building an idea and see if it’s going to work because they have got distribution channels and they have got scale from all of these services,” Hallett said.
“In the past you rarely saw graduates able to do this. It’s always they have had a job in Silicon Valley or somewhere else and they have made some money for the company and gone back and done it whereas now, actually, they can come straight out of college, give it a crack, and use the knowledge they’ve obtained in their doctorate.”
The domestic IT skills shortage is amplified by big tech sucking up the talent.
“The likes of Amazon and Google have become talent vacuums of really high level New Zealand graduates,” Hughes said.
“The best ones disappear overseas,” Hallett agreed. “In the last year, with the COVID-19 pandemic, there has been a lot more graduates sticking around in New Zealand. We were augmenting the Company-X team with skilled migrants, whereas now we are hiring more local talent.”
