From software to electric bikes, serial entrepreneurs Shaun and Grant Ryan are proving that big ideas run in the family. Karyn Scherer reports.
Maybe it's what they don't put in the water that allows Invercargill to lay claim to the world's most fabulous oysters, and one of New Zealand's most famous speedsters.
Our southernmost city is understandably proud of the man who rode the world's fastest Indian, Burt Munro - but one day it may well lay claim to another couple of tinkerers: the terribly clever Ryan brothers.
Chances are you've not yet heard of Grant and Shaun Ryan. New Zealand is not particularly good at venerating our entrepreneurs, despite our constant babble about what we reckon we can do with No 8 wire, and our curious conviction that Kiwis are by nature somehow more ingenious than your average American.
But at some point it's entirely possible that one of Tim Shadbolt's successors will decide to erect a plaque in their honour. That is, if Christchurch doesn't get in first.
In truth, the brothers were actually born at Otautau, in Southland, and moved to Invercargill as toddlers. Study took them to Christchurch, where they have remained.
But between them, the Ryan brothers are firmly focused offshore. While Grant is keen to create a New Zealand brand that is recognised all around the world, Shaun has ambitious international plans for his software company. And despite such lofty goals, they're both well on their way to achieving them.
Although he's the younger of the two, at just 41, Grant has already given birth to five baby companies - a couple of which may even make it to adulthood.
Unusually, Grant had almost instant success with his very first idea - a program which allowed people to search for stuff online. In 2000 GlobalBrain was sold to United States broadcaster NBC for tens of millions of dollars. Unfortunately, he was paid in shares, which became almost worthless in the dotcom crash soon afterwards.
Undeterred, he came up with another clever concept - using the internet to develop social networks. The term "social networking" had not even been coined when he dreamed up a way for professional people to keep in touch online. However, LinkedIn won that particular race.
Meanwhile, Shaun and his team have taken the idea behind GlobalBrain and turned it into a company with more than 400 mostly corporate clients who use its software to ensure their websites have state-of-the-art "intelligent" search facilities. SLI Systems is showing so much potential its founders are considering listing it on the New Zealand Stock Exchange.
Although Grant is a director of SLI, he has continued to develop his own projects, including inventing the "swicki" - a tool that essentially allows internet users to set up their own specialised search engines.
At one stage Google was interested in buying out Grant and his American investors, but the investors decided they wanted to take on the internet giant. No prizes for guessing how that ended.
So on to company No 5. With old mate Pete Higgins, Grant has developed a super-light fold-up electric bicycle, the YikeBike.
After five years of development, the bike was finally launched last year. It made the cover of Time magazine as one of the 50 best inventions of 2009, despite the fact that it had not yet gone into commercial production.
That will happen sometime in the next few weeks, with Kiwi customers first on the distribution list.
Being a true Southern man, Grant can barely bring himself to say something so immodest, but he has high hopes for the YikeBike.
"I do wonder if we could create something that could become the most commonly owned transport device in the world," he told the audience at Morgo, Jenny Morel's annual get-together for our best and brightest entrepreneurs, at Waitangi this month.
Many of those present thought this was an entirely realistic objective.
The few profiles that have already been written of the Ryan brothers inevitably mention that they are the sons of a chicken-plucker.
In fact, the duo are actually a trio. Their youngest sibling, Craig, is a database consultant. And there is no doubt about their genetic inheritance - while their father was indeed a chicken farmer, he was an extraordinarily enterprising one.
He not only invented a chicken-plucking machine, which sold all over the world, he also invented a machine that made plastic covers for newborn lambs.
He got the idea when a fellow farmer kept asking him for the plastic covers he used to wrap the chickens. He discovered the farmer was using them to help lambs survive the freezing spring weather in Southland, and eventually ended up selling them in countries such as China.
"The machine looked like something out of Dr Seuss," Grant recalls. "It had drills that would come down - they'd make these things and send them all around the world."
Shaun also recalls that when his father wanted a spa pool back in the 80s, he got a mate with a fibreglass factory to make him a mould. The factory had to make at least 20 for it to be economic, so his father went into business selling the rest.
"So in the weekends we were out putting spa pools into people's houses. But he sold more than 20, so he kept doing that until someone serious came along. We had a very entrepreneurial upbringing, I think."
It was perhaps inevitable the brothers each decided to do an engineering degree at Canterbury University - although Grant chose mechanical engineering and Shaun chose electrical.
Both ended up doing a PhD. Shaun did his doctorate in artificial intelligence, while Grant chose ecological economics, which involved examining long-term economic growth theory and learning systems.
Grant's first "real job" was at Crown research institute Industrial Research, where he studied barriers to innovation. While being familiar with the theory was useful, he concedes that practice has taught him that luck also has a lot to do with success.
"Looking back, in hindsight, anyone who says there is not luck in business is wrong. But you have to be in the game to get lucky, too."
As legend has it, a hangover was to blame for his first business. He was lying on the couch - a place where he recommends budding entrepreneurs spend more of their time - and figured out a way to make searching for stuff on the net much more intuitive.
To his and his friends' astonishment, no one seemed to have already thought of it, so he and Shaun - who at the time was working for wheelchair technology company Dynamic Controls - set about turning the concept into reality in their spare time.
Grant eventually became consumed by the idea and used all his annual leave to work on it.
"I was lucky enough - and a lot of people don't have this - that when it got to the crunch bit, Dad was very supportive and said: 'That looks kind of interesting. You may as well take a punt and I'll make sure your mortgage is covered'. I just kind of leapt into it."
Within two years the pair had struck a multimillion-dollar deal with NBCi, the digital arm of NBC. What was not so lucky was their timing - right before the dotcom crash. NBCi collapsed and the fortune they had been promised almost vanished.
"Fortunately, we never mentally spent it. Some people say: 'That must be so disappointing'. But we still ended up with a lot more than we started with, and more importantly learned a lot and got a lot of confidence in our ability to play on the world stage.
"We were also very, very lucky in the fact that the first business we did we had relative success relatively quickly and that enabled us to do a few things going forward."
Shaun and five others decided to buy back GlobalBrain's intellectual property from NBC, and set about creating SLI Systems. But Grant was keen to move on. For the next 18 months he and some friends played around with the idea of online social networks.
"Our big execution flaw on that one was we thought people would care more about privacy than it turns out they do. We had all these advanced privacy things which meant it didn't grow anywhere near as fast as things like Facebook have.
"We started on that more around the social side, then one that was more around jobs like LinkedIn. But then we saw LinkedIn take off, and then they raised US$20 million [$27.3 million] from Sequoia, and we thought: 'There's fights you can win, and fights you can't'. So I guess that was part of the learning process.
"But we still have some patents around that technology and we think we may yet get a consolation prize out of those."
Next came Eurekster, the company behind the swicki - a search engine that can be customised to the needs of a like-minded group of users. A swicki can ensure, for example, that when you search for "Pinetree" you find the former All Black, rather than radiata.
Within a year the technology had more traffic than Trade Me, mostly from overseas, and it was tipped by top US technology analyst Red Herring as one to watch.
At one point rumours swept New Zealand that Google executives were in town to make Eurekster an offer it couldn't refuse. The rumours were false - but only the bit about the executives flying out here. In fact, they had already approached Eurekster's US investors, who had turned them down.
"They thought this was big enough to go head to head with Google. So we raised a bunch more money and did the proper US thing with a US CEO, and then basically spent it in about 15 months. I kind of mentally checked out a little bit after that because Google are a very, very good company. I was kind of excited for the guys having a Google offer in Christchurch, which we would have had. But again, it was a pretty interesting learning experience."
The technology was eventually sold to some small-time investors no one in New Zealand is likely to have heard of. "All that seems so long ago," he muses.
In fact, it was only a few years ago, but since then he and a team of about a dozen others have been working on the YikeBike, and it is clear Grant is in his element.
Like most brilliant products, the bike was not the result of a Eureka moment, but was based on a hunch that took years of tweaking and testing - and various combinations of skate wheels, power drill parts and motorcycle batteries - before it evolved into its current form.
"I guess I'd describe my overall business philosophy as: 'You have a hunch, give it a nudge, and it's driven by lashings of delusion'."
He was initially inspired by the Segway, and figured out early on that there was nothing natural about the basic bike design of hanging over the handlebars that has barely changed in more than a century.
The result was a mini-farthing that is built for practicality rather than speed, and more suited to the urban environments most of us live in these days. The fact that it can be folded up into something no bigger than your average city backpack is also a key selling point.
The bike was officially launched in Germany, securing enough deposits to kick off manufacturing. So far, more than 15,000 people have registered an interest.
Although Grant and his team have identified Western Europe as the best place to start selling the bikes, word of mouth and intense media interest have so far led to most of the queries coming from elsewhere.
When the bikes got a London outing in Trafalgar Square, they were mobbed.
"There were three of us and we literally just couldn't get out of there," says Grant. "People would come up to you and say: 'What is it?' And we'd fold it and unfold it, and then someone else would ask. The only way we could get out was by being rude."
The bike has featured on the Discovery Channel, as well as the cover of Time. But his favourite story is from Sydney. One of the company's directors was riding the bike recently when a young woman called out and asked if he was from "the future".
Fortunately, the Christchurch earthquake and its aftershocks did very little damage to YikeBike's Sydenham headquarters, or to the homes of most of its staff.
Grant is slightly miffed the media have not made it clear that most of Christchurch remains unscathed by the quake.
"I'm too much of an engineer, I guess. It really is a triumph of engineering and planning, the fact that no one died.
"When it happened I have to admit my mind flashed back to my varsity course where we talked about wooden buildings, where a giant could pick it up and shake it and it wouldn't fall down. The other thing they don't really let on is that aftershocks are always about 10 times less strength than the main one, so you don't really need to worry too much."
He also admits to being somewhat distracted, given that all the efforts of the YikeBike team are finally coming to fruition, as they assemble the componentry arriving from around the world.
"We're just making our very first ones, which is very exciting. So it's like Christmas at the moment. We've got couriers arriving three or four times a day with all these beautiful shiny bits. It's kind of fun - it's more fun than software."
For Shaun, the quake was a much more terrifying experience - initially, anyway.
He was in the Bay of Islands with his wife, looking forward to a romantic weekend after two days at Morgo, when the phone rang particularly early on the Saturday morning.
It was his chief technology officer, checking that Shaun's family was okay.
Shaun didn't know what the guy was talking about, but panic soon set in.
The couple had left their children behind with their grandparents, and were extremely relieved when they found out everyone was okay.
They managed to get a flight to Nelson, and together with another couple from Christchurch took the last available rental car down to Timaru - because the rental company would not allow them to take it one-way to Christchurch. It was a memorable road trip.
Amazingly, both their home and SLI's headquarters in Cathedral Square were fine, apart from the mess created at the office by bookshelves that toppled over. Apart from a brief email outage, SLI's customers barely noticed a blip in service.
However, Shaun acknowledges the aftershocks have deeply unsettled some staff, and he has organised counselling for them.
Many are immigrants, who don't have local support from extended family, so he has tried to be as understanding as possible of those who have asked to remain at home.
"All our core servers are overseas, and they are distributed around an architecture to handle disasters like this. So a lot of it is through good management, but the fact that the office wasn't uninhabitable was just luck, really. The office we were in two years ago has got a red sticker, so they can't even get in there to get their files."
SLI's main customers are online retailers such as Tupperware and Qantas, although its software-as-a-service is also used on sites such as Dilbert.com, the Travel Channel, and by the New England Journal of Medicine. Almost all its revenue is from overseas, mostly in the US. But even during the recession, revenue grew by 20 per cent, while some of its rivals folded.
At Morgo, Shaun couldn't resist taking a playful swipe at tech hero Rod Drury and his latest venture, accounting software firm Xero. SLI already had much higher revenue than Xero, and was expecting that to increase by more than a third over the next year, he noted. It was already profitable, had needed very little capital so far, and had already conquered America.
"When you look at how we compare to Xero, and the valuation they've got, I think we've got a compelling story."
The company already has offices in Britain, Australia and the United States, and if it decides to go ahead with an initial public offering, or raise more cash privately, it will use the money to expand into more markets or in other services.
He admits it can be a challenge running the company from the bottom of the world.
"It's not easy but I think I would have had problems managing it from anywhere. One of the advantages of managing it from here is we potentially think more globally than a US company would do."
As kids, Shaun and Grant shared a bedroom, and to this day the three brothers remain close. They live within cooee of each other in Christchurch, and share a bach at Akaroa.
Although Grant betrays a bit of a competitive edge - he notes that as a kid, his own Lego creations were "much cooler" than Shaun's - he also gives his "placid" older brother credit for allowing him to "hang around".
According to Grant, Shaun is a gifted manager who - unlike himself - is well suited to running a large company.
"The most successful [company] in terms of revenue and size is the one Shaun's running ... To be perfectly clear, the reason SLI is so successful has got virtually nothing to do with me.
"I'm a director and I put some money in, which I'm very thankful for now, but Shaun and the founders have done a wonderful job with that," he stresses.
"He's now got 70 people spread out all over the country and it takes an awful lot to organise and corral all of that.
"We've got plans to turn that into a large, valuable New Zealand company and he's put a team around him who think they can do that. So he's a very talented manager."
As it happens, Shaun agrees about the Lego, and admits he was incredibly impressed when, as a kid, Grant made his own remote-controlled car.
But he disagrees about SLI's success.
"A lot of it is Grant's fault. He was the one that was driven. He had the idea and saw it all happen.
"Grant got consumed by it and then he got us wrapped up in it."
The brothers are also keen to give credit to the people they work with, some of whom have been lifelong mates and members of their extended family.
Venture capitalists Randal Barrett and Matthew Houtman, through their firm Pioneer Capital, have invested in both SLI and the YikeBike.
And Grant cannot praise highly enough another key investor who has backed three of his projects so far - Warehouse founder Sir Stephen Tindall.
"Stephen Tindall is a big part of the reason that we have a way more active technology sector now," he says. "It's hard to overestimate how much impact he personally has had.
"He's fantastic because he's in just about any deal worth doing. And he's doing it with an NZ Inc hat on.
"He's taken such punts on a whole bunch of us and I've got such a huge amount of respect for him."
Another crucial player has been Australian entrepreneur Paul Dyson, who now lives in Auckland and is a director of YikeBike.
Dyson has spent 25 years in the medical device industry in Australia, France, Britain and New Zealand, and among other things was CEO of an electric bike company in India. He also manages the Middle East business for F&P Healthcare's main competitor.
Dyson is a part of the group of private investors known as the Ice Angels, and is also involved in Rex Bionics, the North Shore company that is developing robotic legs that enable crippled people to walk.
Jenny Morel's No 8 Ventures is backing Rex, and it was at Morgo that Shaun first met Dyson, and passed on his name to Grant.
Grant recalls that he could almost hear Dyson rolling his eyes when Grant mentioned his own plans for a new type of electric bike.
"He kind of sighed - but he's been fantastic. He's a very good person to be landing in New Zealand."
Dyson, for his part, is convinced the YikeBike is the real deal. But although Grant is realistic about how much work they still have to do - there are plans for many more versions, including a much more basic model that could one day be even cheaper than a "normal" bike - he is determined it won't be his last great idea.
"I am actually seriously a beginner at this business stuff, so hopefully I'll get better at it. I'm lucky that I've found something I love doing, which is start-up businesses. This is my fifth one now, and I think I'm getting better."
Needless to say, he still has a long list of projects he is keen to pursue.
"I've worked out you need to spend four or five years on each one. I'm only a couple of years into the Yike and loving it, so I'm in no great hurry to move on."
Nor are the brothers in any great hurry to leave New Zealand, although they admit it's mostly their wives who have made that call.
"There are some advantages to being here. You can certainly do things a lot cheaper and sometimes a lot better," says Grant.
"There's less competition for talented people, and people are more loyal. There are certain niches where we can actually compete."
That said, he has no doubt they would have been even more successful overseas.
"But the ideal scenario that I'm trying to work on is the model that we can live in the best place in the world, but earn overseas dollars for everyone else here. It feels pretty good to do that."
