Business is Boring is a weekly podcast series presented by The Spinoff in association with Callaghan Innovation. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt.
You might have heard of the PayPal mafia, a term given to people that came through PayPal and then went on to invest in, found, and help grow other tech companies. People like Elon Musk, Peter Theil, Reid Hoffman; companies like Tesla, LinkedIn, Yelp, all trace back to PayPal. Well, in New Zealand I think we have our own version of that, the Trade Me mafia. The people who helped that company start, scale, grow and sell have gone on to use the capital they built up – both in terms of money they made and the social proof of their skill and judgement – to go on and foster a lot of the local industry. It’s a theme of this podcast, and one of the key members of what I’d call that mafia is Lance Wiggs.
You can draw one of those detective show style photo boards with the lines and there’d be lines all over Business is Boring for today’s guest. Lance has been a director, investor or advisor to many of our guests. Wierdly, Onceit, Vend, Populate and Timely to name a few of our guests. Lance has taken his experience and created a vehicle to help fund and propel high-growth companies forward, with Punakaiki Fund, and is a prominent commentator on local hi-tech companies.
We get him on today to find out about his career, his fund and why he keeps doing it when he has probably done well enough to go for a long bike adventure and not be busy as an active director on a number of companies.
Disclosure statement: I work at Vend, hold a tiny number of shares in the Punakaiki Fund and Lance is a semi-distant cousin. #NZ
What was it about Trade Me back then that made it the place to be?
I was always a consultant, I was never an employee. I was only three days a week but I’d often stay late. Another guy, Paul Gold, he and I would stay late but everyone else would go home at 5-5:30pm. I thought that was really strange. But the thing is you’d walk in the door in the morning and everyone was there, and there was a quiet hum. It’s very, very smart people working incredibly efficiently and effectively. There was no goofing around kinda stuff although it was a very nice feeling in the place. Getting stuff done very quickly and very effectively, seeing the results immediately on the site, that was it. It was a very hard place to get into, very to become an employee – clearly I didn’t make the cut – very easy to leave, which is a lesson I pass on to many early stage companies these days: Make it hard to get in and easy to leave.
What does that mean?
To just have very high standards in your recruiting. Don’t settle for ‘she’s good enough, he’s good enough’. And if someone’s not a culture fit in particular, obviously you work through a process and manage that, but really it’s better for everyone when someone’s not performing if that person moves on. Obviously there’s more to it than that. You’ve got to dig into the why, what’s going on outside of the work and so on, but I’ve never really seen a case when someone’s been asked to leave for performance issues and it hasn’t been best for everybody.
Another thing that that company really represented for New Zealand was when it sold, it seemed to be this big number and it was almost like the international tech frothiness had come to visit New Zealand. But as time’s gone on, that $750million figure seems like some pretty amazing value.
It was. My counsel at the time to Sam and Richard was ‘It’s worth much more than this. It’s worth over a billion.’ And they replied ‘sure but there’s $750million here.’ And I completely agree with their philosophy of take the money that’s there. 2001 was still ringing in all of our minds. We had these evaluations that were frothy that disappeared overnight. This was a different business with great foundations but I understand why they did it, they were able to take the money, change their lives immediately, and off you go.