By ADAM GIFFORD
It's not enough for New Zealanders to produce world-class software. To succeed, they must also produce world-class companies.
Craig Brown takes this approach in his new role as chief financial officer of Genie Systems, creator of OrderWare business-to-business electronic procurement software.
Mr Brown was part of the team that got wireless company MAS Technology listed on Nasdaq in 1997, the first New Zealand company to do so. When MAS merged with a US firm, Digital Microwave Corporation, Mr Brown became DMC's financial controller in the fast-growing southern African region.
A recent addition to the family turned his thoughts to home, and he looked for a company needing people with experience in going global.
"Just like buying shares, it's important when picking a job in the internet world that you join a quality company. I saw in Genie a superb product and all the opportunities to go worldwide."
Genie's executive team is divided between Auckland and San Francisco, where chief executive Mike Hendry is completing the sale of OrderWare to "a brand-name Fortune 500 retailer."
With that customer as a reference site, Genie plans to sell its software through large systems integrators and consulting companies, as well as enable it to be rented by smaller companies through application service providers (ASPs). It is using Unisys as an ASP in New Zealand.
Mr Brown said the company needed the certification such partners could give, "so when they take the product to market, they are not selling Genie Systems, they are selling OrderWare."
Genie developed OrderWare three years ago, but has been building up momentum in the past year.
Friends and family supplied an initial round of "angel" funding last September for a 16 per cent stake in the company. Venture capitalists Strathmore bought a further 16 per cent in February for $US1.6 million. The balance of the shares are held by founders and staff.
Mr Brown said one of his jobs would be to oversee the funding cycle, making sure it matched company needs.
"I've seen funding rounds going into New Zealand companies of less than a million dollars, which buys you less than three months' working capital, so you end up with full dilution before you get to market."
Genie generated competition among venture capitalists and avoided their efforts to put a New Zealand valuation on the company. Strathmore was referred to it by Silicon Valley venture capital firm Double Impact, which is now opening doors for Mr Hendry in the US.
Mr Brown said he took a top-down approach.
"It's not going to be a big problem for a company like Genie to show it has value and can raise money from a shareholder. It's more of a problem choosing the right shareholders to ... help build the company faster and with more urgency."
Mr Brown said many New Zealand firms got the opportunity to publicly list their shares when they were not ready, "because they didn't think about it 24 months ago" and did not make plans to lift quarterly sales.
"The analysts want to see a company roll up a smooth slope which keeps increasing. If they don't see you are consistently growing, consistently improving operating expenses against sales and you have consistent growth in the pipeline, there must be a serious level of doubt as to whether you will succeed in future - you might have peaked right at point of listing."
Mr Brown said Genie Systems adopted the 90-day culture required of companies which list on the Nasdaq technology sharemarket.
"If opportunities arise, we try to qualify them in 90 days ... It's that net speed New Zealand companies must adopt to keep up with the Americans."
NZ firms 'must follow global models' to win
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