Last week, while touring the Wellington startup ecosystem, the one thing that became glaringly obvious was the forward thinking of the government over there – particularly, the local government. It’s not that New Zealand governments don’t experience the same slow moving bureaucratic processes that other governments around the world experience; it is just that they have a willingness to experiment with changing those stoic processes that many other governments around the world don’t.
Creative HQ is a startup incubator and accelerator space/program based out of Wellington, New Zealand. It was launched back in 2003, which could perhaps be described as the formative years of incubation for the region. Ironically, the space was originally set up by a local politician who thought it would be a great way to stimulate the local early-stage startup ecosystem.
Throughout the years, the space and accelerator program has matured and there are many New Zealand success stories that have been born out of the space like StarNow which has over 3 million users worldwide; SilverStripe, a global content measuring system; and Optimal Usability, which was acquired by PwC.
Stefan Korn heads up Creative HQ and has been with the organisation for around two years. He told Startup Daily that there were some issues early on when they were trying to figure out the ‘model’ that Creative HQ should work off.
“We realised that incubation is a lot harder than it looks and that it requires a lot of effort. This initial idea of trying to make money out of the incubator didn’t quite pan out because there are long timelines involved,” says Korn. “We all know there’s also a lot of fast fails, so spending a lot of money and time on a company that falls over can take its toll on the business model.”
“As a commercial proposition for Wellington council to (sort of) make money with an incubator the government realised that startups are effectively a part of infrastructure that we have to invest in just like school and universities. So then they decided to move Creative HQ into the local economic development agency.”
Because of the cultural differences between government departments and startups, it was realised about four years ago that Creative HQ needed to be its own entity to be successful, so it separated from the government again and moved into an economic development agency called Grow Wellington. Creative HQ still receives about a third of its funding from Grow Wellington and the rest comes from the Callaghan Innovation and revenue generated by Creative HQ itself.
Creative HQ is also the only holder in New Zealand of the Techstars Acceleration License, meaning that it is also part of its global acceleration network. The acceleration program that it runs is called Lightning Lab and it runs these in Wellington, Auckland and Christchurch. Recently, it also announced a new Lightning Lab program in Wellington that would be focusing on manufacturing and the IoT space.
The program works within a similar format to most other accelerators around the world from an investment perspective. Successful applicants give up between six and eight percent of their companies. The funding for the teams is paid for by the investors involved in the program and is traditionally NZ$20,000.
So far, Creative HQ has had 27 teams complete its program with another two programs about to kick-off in the coming weeks, a total of 18 more teams between them, bringing that total to 45.
One of the most interesting initiatives that Creative HQ has been involved in though recently would have to be the accelerator program that it ran for employees of the government.
This is actually one of the first times globally that the government has put departmental projects through a traditional ‘startup accelerator’ format. The program ended up being extremely successful because the incumbents realised they achieved a whole lot more in three months than they usually would in a year on similar projects.
While that is great from an internal efficiency perspective for the government, what also came out of the program was that the solutions created by these government departments ended up being a lot more customer centric, had more buy-in from taxpayers and clients, and the people involved in the program were completely infused in the process.
“People didn’t just see it as doing their day job” says Korn. “They became immersed in what was a hugely transformative and infectious culture, it was a lot of fun and very eye opening accelerating the government”.
The solution that was created is a tool that will be trialled by three councils. During the period of the accelerator, the stakeholders in the project worked out what the actual problem was, worked closely with all the councils, came up with a solution and built and tested that solution. Even by effective government standards, that is something to boast about within that particular timeframe.
Imagine if all levels of local, state and federal government in the region put some of the projects on their plates through a similar program. Not only would they be more effective in their output, they would gain a real-time insight into how startups work and an understanding of the infrastructure required to grow a successful technology ecosystem.