Stefan Korn
A blueprint for the next WhatsApp - sold to Facebook for a cool US$19 billion ($22.6 million) last month - would be a good start. A business plan for another Trade Me or Xero might be a beginning.
But according to entrepreneur-turned-investor Stefan Korn, a tech startup won't get very far on an idea alone, however innovative that idea might be.
"Ideas are overrated," he says. "Yes, you need a point of difference, but what you are really looking for is talent."
Korn has been in the business of picking winning tech investments for a while now. Before taking over as chief executive of Wellington-based tech incubator Creative HQ last September, he founded several startups through WebFund, a private incubator he set up in 2007.
Incubators such as Creative HQ and WebFund provide startups with all the ingredients they need to grow - finance, expertise, contacts and resources - in exchange for a stake in the business and, less often, some heavily reduced advisory fees.
Increasingly popular, however, are accelerators, which work on a similar principle but over a far, far shorter timeframe and normally have a gaggle of angel, or early stage, investors who co-invest alongside the organisation once the startup's been put through its paces and graduates.
New Zealand has one - Creative HQ's Lightning Lab, which provides up to $18,000 in seed funding and aims to get a startup functioning and off on its own within three months in return for a stake of about 8 per cent.
The country needs incubators, accelerators, angel investors and venture capital firms to work together because that's how the world's tech hotspots such as Silicon Valley got where they are today, Korn says.
"They reinvest funds from earlier projects into new start-ups. Eventually it becomes a self-feeding mechanism, but it might take place over several decades. You have to take a long-term view."
Since it was established in 2003, Creative HQ has helped more than 100 ventures, Korn says, but it turns away a lot more applicants than it takes on.
Potential candidates are assessed against an "evaluation matrix" with more than 20 different criteria. Innovation or the strength of the idea is just one aspect, Korn says.
"What's more important are the background skills a team has. What insights into their business area or industry they bring, what networks they belong to and whether they can sell."
The strength of the team is vital because at some point every startup will reach a critical point where it has to choose a way forward, change direction or focus on a particular area, Korn says.
"The team has to be able to make that decision when it happens. Otherwise all you're left with is a great idea but not a viable business."
According to Korn the investment climate in New Zealand compares well with other countries but sometimes the vision of local investors leaves something to be desired.
"New Zealand investors have usually made their money with traditional business models. They tend to have come from primary industries or property development so they don't often 'get' how tech startups work.
"Traditional investors tend to look for indicators which make sense in their world. They might focus on the startup's location or physical assets for example, which are irrelevant in our world."
While New Zealand's incubators and Lightening Lab accelerator educate eager startups, Korn hopes Creative HQ's new investor boot camps, which are expected to start this year, will go a long way towards educating investors.
"The bootcamps will explain to investors what to look for in digital startups.
"We'll cover things like what is involved in the due diligence process of early stage, high-growth ventures and what happens after the investment has been made; how to find out how the startup is doing, for example."
• Produced in conjunction with the Angel Association of New Zealand.