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I love seeing Kiwi entrepreneurs succeed and enjoy the fruits of their efforts.
Although we like to think that we are a nation that boxes above its weight, the truth is that we're not really special at all if you use the number of successful entrepreneurs per capita as a metric -- in fact some would say we're lagging behind many other Western nations in this regard.
However, when our clever people do get a break, we love to celebrate it -- and I'm all for that.
A wonderful example of this are the Handley brothers Derek and Geoffrey.
Never heard of them? Neither had I until yesterday.
These are the guys who built the Hyperfactory, a company focusing on new media marketing through mobile phones.
To be honest, some of the copy from their website sounds like a bunch of buzzwords strung together with a bit of whitespace.
Take this for example:
"Strategic planning and technology roadmaps for today and their future. Creative user-interface design, wire-framing for mobile portals and integrated programs. Technical design and platform architecture. Convergence of mobile portal with interactive capabilities; (click to call, IVR, SMS and MMS, video, downloads, image recognition, m-commerce and augmented reality)."
Oh yeah... website copy like that has to appeal to someone -- and it clearly did because this week the boys sold the Hyperfactory to US media giant Meredith Corporation for a sum rumoured to be about $70 million.
Woohoo... I bet the buzz extends beyond website copy today.
Clearly, the brothers have built a very valuable business here and that value has been acknowledged in this sale. Good on them. I hope others take heart at their success and it provides the inspiration for even more Kiwi entrepreneurs to "give it a go".
However, there is one rather sad aspect to their success.
If the Hyperfactory was as valuable as clearly seems the case, New Zealand has once again suffered a loss.
It happened when NavMan was sold, it happened when TradeMe was sold, it's now happened with the sale of the Hyperfactory.
What could have been a 100% Kiwi success story is now a foreign-owned company and we've lost most of the potential it represents.
Sure, most of the Kiwi jobs involved will remain safe but the profits will ultimately be repatriated to somewhere overseas and we must now remove this jewel from our entrepreneurial crown in order to hand it over to its new owner.
It's so unfortunate that so many of NZ's entrepreneurs seem to get so far, only to sell out and hand over the long-term profits to an offshore entity. I doubt we'll ever become a rich nation if this trend continues.
Hey, I'm not blaming the Handleys for one minute. They have no obligation to look after the best interests of the 4 million other Kiwis in this country, they deserve to look after their own interests and (if the rumoured sums are correct) I challenge anyone to turn down such a massive amount of money when it's offered.
Perhaps they'll go on to reinvest their earnings in new ventures that will create new value for the nation (that's what's been hinted) and that's great. However, I often wonder how much wealthier we'd be as a nation if we kept ahold of our businesses once they'd become successful enough to attract these handsome offers.
If you'd built a business to the stage that the Hyperfactory is at, would you have accepted the $70m and run? Or would you have stuck with it and (with at least a little altruism), tried to keep it a successful NZ-owned business?
What can we (NZ) do to encourage our successful business people to retain ownership of the properties the develop and turn into money-makers? How can we stop this all-too-common exit strategy which sees national wealth swapped for personal wealth?
Congrats Derek and Geoffrey.
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