The next 10 years for The Icehouse
The incubator plans to triple its achievements over the next 10 years
Wednesday, June 02 2010 || News || BY Graeme Kennedy - NZTE
Icehouse Chairman Andrew Hamilton with investors. John Selkirk/Fairfax
Startup incubator and SME business growth centre The Icehouse has an ambitious plan to triple its achievements in the second decade of its existence.
“We have worked hard for 10 years but think we can do more in the future,” CEO Andrew Hamilton said, “and will be hiring more people to work directly with companies
“There is plenty of technological innovation out there and there always will be new ideas, opportunities and gaps in the market.
“It’s the same everywhere as the pace of change continues to accelerate with markets changing in technology, networking and web-based applications. New Zealand is well placed with talent and innovation to take advantage of this environment and has become more aware of the importance of winning business internationally.”
Mr Hamilton said the Icehouse had assisted 65 startups and around 2500 SMEs. Startups have created around 500 jobs while SMEs earnings have grown by 31 percent.
He said building export capabilities was fundamental to Icehouse programmes, resulting in start-ups generating 70 percent of their earnings from offshore while 15 percent of SMEs were exporters.
“We develop a of pipeline of companies and NZTE works with us to help them go global,” Mr Hamilton said.
Icehouse was formed in 2001 by the Auckland University Business School and a core group of corporates including the Bank of New Zealand, Telecom, the Boston Consulting Group, Microsoft and Hewlett Packard.
Others including Gen-i and Ernst and Young have since become partners.
They established the centre with $2 million funding and continue to make annual contributions.
The venture has also been strongly supported by NZTE, the NZ Venture Investment Fund and the Foundation for Research, Science and Technology.
Initially known as the Institute for Entrepreneurship, the name was quickly changed to the International Centre for Entrepreneurship (ICE) for branding reasons.
The importance of SMEs
Its aim, Mr Hamilton said, was to recognise SMEs’ importance to the New Zealand economy and generate jobs and prosperity through growth.
And a major goal was to restore New Zealand to the top half of the OECD’s per capita GDP ratings.
“In the fifties, New Zealand was third but now it is in the bottom third,” Mr Hamilton said, “but we need to be in the top 50 percent and the only way to do that is to make existing companies bigger, launch a raft of new businesses and have more companies winning internationally.
“But Icehouse by itself won’t get New Zealand into the top half. We are as good as we can be and must share our knowledge with other incubators to help launch new businesses – and we have got to give innovators what they need, such as advice, money and networks.”
Its group of angel investors the Ice Angels is New Zealand’s biggest with 100 high net-worth individuals including 20 original members who have invested $27 million in early stage startup companies – “They are the fuel for these businesses,” Mr Hamilton said.
The centre received another $23 million from various sources including private investors outside the Angels.
Global accolade from Forbes magazine
Icehouse was recently named among the world’s top-10 incubators – the only one outside the US – in a survey by influential business magazine Forbes which lavished praise on the agency’s and its Ice Angels’ performance.
“That was very nice recognition to get,” Mr Hamilton said, “and will help open doors for start-ups when they go offshore as it underlines the credibility of the programmes they have been through with us.
“We have developed some really good companies and the award came because of their success and the part we played in it – and it is good for the people who founded Icehouse to get credit for their work.”
Mr Hamilton said business schools worldwide had traditionally failed to engage well with the entrepreneurial sector, a role which had been taken by incubators and growth centres such as the Icehouse.
“Entrepreneurs can be difficult to engage with,” he said. “They are time-poor and not necessarily interested in academic stuff but the Auckland University Business School is turning that around with our activities and their engagement with us.
“They are leading the way and want to work with the SME community.”
Icehouse last year was voted the most outstanding contributor to business in the Education Provider category of the Vero Excellence in Business Support awards while Mr Hamilton was named Outstanding Individual in the same class.
He was also chosen as an Emerging Leader in the Sir Peter Blake Leadership Awards.
Building blocks for businesses
Director of Startups Ken Erskine, who joined Icehouse last year after an executive position with Hewlett Packard, said applications for incubator and business growth continued to increase.
“Startups bring their ideas to the Icehouse and we look at their commercial viability,” he said.
“We start their courses with set building blocks, working through areas such as developing business funding and branding and identifying key markets – we plan a road map for all that needs to be done to get them there faster.
“But no two businesses are the same and we tailor courses to suit individual needs.
“Growth programmes for SMEs include helping them lift their capabilities with stronger leaders, manager and owners, most of whom have not been to a university – what we do makes them become more confident.
“Most programmes have up to 25 people together and they bounce off each other, learning how to do things better.
“One reason we are getting more startup applications is that a lot of major companies let people go during the downturn, and that became a catalyst for them to go out and try their own ideas.”
The Icehouse has 14 fulltime staff including specialist advisers and a network of 500 mentors and investors who work directly with growth SMEs and start-ups.
Mr Hamilton said most companies spent between 12 and 18 months with the Icehouse although many remained involved by becoming paying members of the Icehouse League, an organisation of graduates who want to continue in networking roles.
