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NZ centric – we believe the rest of the world is like us. Edit

Because we have an NZ-centric view of the world and think our customers overseas are like us we fail to take their specific tastes and requirements into account when developing products for export. 

Because we think others are like us we believe they also make the inventions we make therefore there is little for us to gain from exploiting the intellectual property in our applied ideas and developing our products for the rest of the world.

In 2007, NZTE conducted surveys and interviews with businesses in Australia, India, South Korea, China, Japan, the US and UK in 2007 to find out how New Zealand businesses were perceived in overseas markets.  A strong theme among responses was that New Zealand businesses exhibit a “lack of preparation and research into a country’s culture and specific market characteristics e.g., a ‘what can we sell’ approach rather than asking ‘what does the market want”. Specific findings included that: in China “lack of consumer understanding…lets New Zeland businesses down”; in India, respondents commented on the lack of NZ engagement with makets at trade shows, conferences, and networking events; in Japan, NZ businesses don’t often well understand market emphasis on aesthetics and quality; and in Korea, “many New Zealand companies show little concern about Korean consumer preferences".  

New Zealand investors from angel groups and those responsible for making funding decisions for business assistance support programmes have also noted that the “product push” approach taken by many New Zealand startups, particularly those that grow out of a scientific innovation, hamper their success.  They see hundreds of proposals where an entrepreneur or scientist has developed a “product” but has done no research to confirm whether or not there is a market for that product.  Some scientist-founders of start-ups try to either blind potential customers with science (“all these research papers say it is great so it must be a good product”) or think that because they think it is a fantastic innovation that the value will be self-evident to customers.  

What does this mean?Edit

Products developed in isolation of interaction with consumers and market validation are often in fact unwanted by consumers, with the time and resource spent in developing and refining these “products’ wasted.

The tendency of many New Zealand start-ups to develop products without talking to markets alsolengthens the time that it takes for innovations to reach market from New Zealand, because the real “development” begins to take place when the start-ups do start talking to markets, and often lots of time has elapsed before that process begins.

The lack of market research that entrepreneurs of innovation undertake can lead to naiveté about the value of innovations; potential purchasers of New Zealand scientific innovations have noted that promising ideas are often so overvalued by the innovators that promising New Zealand IP gets “left on the shelf”, and purchasers go elsewhere to source new innovations.    

How do we not do this?Edit

Don't use NZ as a substituteEdit

Because of distance from large markets, it can be harder work in NZ than in other countries to talk to consumers offshore. Because offshore markets are difficult to reach, it's tempting to instead look to domestic markets to test products.  But that's a poor substitute for testing products offshore directly, because of NZ's fairly small and homogenous domestic market.  Offshore consumers may have very different tastes and requirements, and this can put start-ups wrong in their product development.  See these comments from the NZTE survey in Korea: “Sometimes New Zealand companies persist in their opinions too much.  They do not understand I have a different standard and that Korean consumers are so much different from New Zealand consumers.” “Koreans prefer meat with marbling so we prefer to buy from the US or Australia, they meet our needs more.  Tasmania puts great effort into suiting Korean tastes…they take it seriously.”

Even where the appropriate “market” is an industry rather than retail consumers, NZ industry base is also small, which reduces the ability of domestic industry to absorb and develop innovation.  


Other suggestions heard and overheardEdit

  • Go to partnering models more often as a route to market. Find established in-market partners. 
  • Focus on international collaborations across the board as this is where the markets are, international partners at every level as they bring networks and expertise, and sources of capital.
  • Institutions trying to help entrepreneurs -- biz schools, TTOs, NZTE, etc. -- use $ and effort on getting information and connections to researchers/innovators/scientists/entrepreneurs about what markets want
    • In-market incubators 
    • Getting overseas VCs and entrepreneurs giving input to NZ market more often 
    • Keep funding things like the International Student Fee Waiver so that innovative researchers are connected to international research 
    • Capture and leverage New Zealanders overseas.  E.g. Australia's CRI-equivalents take end-career world leaders and inserts them into existing institutes and pays them international rates.  
  • Find and leverage kiwi expats in market

 

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