This post is the second in a three-part series covering the ‘NZ Day of Hardware Innovation’ which saw Lightning Lab Manufacturing and Callaghan Innovation’s C-PRIZE UAV challenge come together to pitch their products to a room full of potential investors. Check out part one here.
NZ inventor behind the Martin Jetpack, Glenn Martin, has been contributing to the New Zealand startup ecosystem for over 30 years and was the keynote speaker at last week’s Lightning Lab Manufacturing Demo Day. The New Zealand entrepreneur shared insights from his experiences, about what it takes to be an innovator, and the challenges New Zealand startups and innovators face.
Photography by Samantha HaeHae / Lightning Lab Manufacturing
Everybody is born an innovator, we just need to allow them to do it, says Martin. “The current education system teaches us not to think but to stop innovating. To maintain your innovation you’ve got to be a bit bloody minded. You’ve got to say ‘I’m going to carry on innovating…even if people tell me that I shouldn’t do it or that I’m no good at it. Even then I’m going to carry on’.”
According to Martin, New Zealand understands how to create great sportspeople and we need to apply the same principles to foster innovation thinking and support NZ entrepreneurs. We have to learn to learn from our mistakes. We need to learn that failing isn’t always a bad thing; we can learn from that failure. You just pick yourself up and do it all over again.
New Zealand startups have many advantages; we’re a small country, have a modern western education, live in a society with good business morals and integrity, and people like dealing with us Kiwis – we have a good reputation overseas.
“The disadvantage here is we have the ‘valley of death’. It’s a huge problem; you have a great idea and a working prototype but in New Zealand it can be difficult to get investment to advance to the next stage.
“Young entrepreneurs are really struggling to get money. I’m not saying the government should just give them money; rather it’s actually the people of New Zealand who need to understand that it’s a good thing to put a little bit of your money into an innovative young company while keeping in mind that not every one of those companies you invest in will be successful. So maybe you put aside a certain amount of money and you invest it into five or six different companies.
“Clearly the early investors in my company did quite well, right?” He comments, speaking of the early investors in Martin Aircraft Company who invested an average of $116,000 with an average return of $1.86 million. “So it can work, but it can also fail.”
“You talk to an American, in their 20s, and [they’ve already got an investment portfolio] they understand a balanced portfolio of investments. New Zealanders don’t tend to do that. Australians are a bit better – mainly because of the minerals boom over the years [they’ve got more] used to risk. But New Zealand has been very poor at doing that – I hope we get better, it would do more for our economy.”
So what is does the NZ inventor of the Martin Jetpack suggest for how to raise money for a startup?
“There’s an old saying ‘friends, family, and fools. The three Fs. Obviously stick to those for a start. Fund it yourself much as possible; the more you fund it yourself the less you owe to other people. And always make sure there’s a milestone, e.g. ‘I will get this prototype finished and then I will raise enough money to do the next thing’. Create value for everyone involved. And focus on what’s really important – you don’t need an office, a nice leather chair, or a big fancy desk. I go to see a lot of startups and have invested in a few of them. It’s not whether they have a nice office that is important.”
Five takeaways for startups
Have a clear vision; it can’t be about wanting to be rich or own an island in the Caribbean – it needs to be about a product.
- Physics, math, science
You can’t change the rules of physics so you have to work within them. 2+2 will always equal 4 rather than 5. If you’re trying to invent a time machine, well good luck to you but I wouldn’t invest.
Another Glenn Martin; an American aviation pioneer said ‘raise heaven and earth and never stop.’ Commitment is needed to do something that is difficult, you’ve got to be a bit bloody minded, and be prepared to fail and do things over and over again.
Stand on the shoulders of everyone else – all entrepreneurs need to learn how to leverage and bargain.