By Adam Gifford
Some of the world's smartest investors have told New Zealand's technology sector that people rather than ideas or technologies are the critical factors for success.
Netscape founder Jim Clark, venture capitalist Tom Perkins and former Apple chief executive John Sculley were guest speakers at a dinner in the American Express America's Cup Village - capping the first Trade Development Board IT investment forum.
They were joined in a panel discussion by Bill Koch, the legendary US backer of America's Cup syndicates.
Jim Clark started Silicon Graphics in 1982 after an academic career at Stanford University.
His current business ventures include health services portal Healtheon and myCFO.com which aims to look after the financial service needs of the rich.
"Like any entrepreneur with no contacts, I found it hard to raise money. I managed to raise $800,000, but I gave away 40 per cent of the company to do that. I highly recommend you do not do that," Mr Clark said.
"That was something I lived with for 13 years until I left and started Netscape."
Mr Clark funded Netscape with $5 million of his own plus cash and support from Mr Perkins' legendary venture capital firm Kleiner Perkins Caulfield & Byers.
"I was being told by a lot of people you couldn't make money on the internet, it was anarchy and chaos, but I had this basic instinct that the internet was going to be a big opportunity."
He said that as the venture capitalist for Netscape "my attitude was, I should treat employees more fairly than I thought I had been in Silicon Graphics."
As a "human" venture capitalist, "my rule is to divide companies into a 50-50 deal, so the investors get half and employees get half."
"The only thing I ever do is invest in the people. When a person comes to me [who] I know and I trust and I think they have integrity, and they are fair, balanced and centred and ready to move forward in a radical way to make the company successful, then I will invest.
"I figure if someone has all the other things, they probably have a good idea."
Tom Perkins, the 70-year-old founder of Kleiner Perkins Caulfield & Byers, said that one reason for the company's phenomenal success was knowing what to look for in an entrepreneur.
"Jim Clark and others like him have a tremendous sense of urgency. They want to succeed and succeed quickly. We look for that," Mr Perkins said.
He said that the internet was just starting, which was why companies were spending millions trying to get market share.
"There's not enough in the venture capital pool to see all these companies through the second and third trips to the well, so there will be a lot of consolidation.
"It doesn't mean the total value of internet companies will decline - it probably won't, it will probably increase - but which ones do you back?"
Asked what role government has in the new economy, Bill Koch said it didn't have any.
"Government screws up everything it gets involved in. What this conference shows is you have a lot if interest in entrepreneurship. Don't tall poppy it, let them go, let them do their thing and keep out of it." Mr Koch said.
The Government was represented by Research, Science and Technology Minister Pete Hodgson, who reaffirmed Labour's election promise to double spending in industry development by the end of its first term.
He said that to stimulate world-class innovation, infrastructure and skills development, the Government would allow more favourable tax treatment of research and development costs and review the depreciation regime to encourage investment in new plant and equipment.
A spokesman for Mr Hodgson said that these moves should be in the first Budget, along with an increase in the Graduates in Industry Fund.
Mr Hodgson said that more "incubators" would be established in tertiary institutions so graduate students and staff whose work has commercial relevance can prepare it for transfer to the marketplace.
Top investors say people are the key to the gates of success
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