 One of our Māori cultural practices is to open our gatherings with an incantation, or as we call it, a karakia, and that really sets the intention for the hui and connects us with the creative forces of our world. Mekarakia tātau. Wai ā, wai ā, wai ā, kiti urutapunui ā tāne, tāne te wai ora, tāne te pukega, tāne te wananga, tāne te whakaputenei, kiti wai ā, kiti ā maranga. Tu te ngāna, tu te maranga te tuhi te rarama, tēne iau e nohomata rana ie rongo, whākeiri āke ki runga, tuturu, whākemaua ki ā tīna, haumi e hui e tāe ki e. And this broadly translates to, may we follow in the great footsteps of the ātua, the Deiti tāne, who traversed the heavens to pursue the baskets of knowledge and let us pursue today clarity and enlightenment, skills and strengths just as tāne did. And with these fruits, may we be able to embrace trial and error, be both cautious and bold, and radiate with energy to bring positive change to our world. May we do it with alertness and energy and strategy just like the ātua or Deiti named Tu, and we also ask the ātua rongo to ensure that we carry out this work under the mantle of calmness and peace. Let that be our commitment and let that set the tone and intention for our session today. Kia ora tato, back to you, Yusuf. Kia ora, Shay. Welcome everybody. Thank you for joining us on this great conversation with Tim Ferriss and Shay Wright on how to raise and catalyze a generation of e-commerce entrepreneurs in Aotearoa, New Zealand. The reason why we wanted to have this conversation at this point in time is because of the massive move to doing business online and the digital movement is being further accelerated by the COVID crisis that we're facing right now and the world is very much connected but also separated through the physical device that we have in this very specific moment. So in the next hour, 25 minutes, we're going to cover a number of topics and themes in this area here. We'd just love to kick off by doing a brief introduction of the people we have here. So many of you might know who Tim Ferriss says. He's the host of the Tim Ferriss Show podcast, which has over 500 million downloads so far and author of five of number one New York Times and Wall Street Journal bestselling books, including the four hour work week. He's a technology investor and advisor. He's also pretty involved in the mental health and well-being space and he's Edmund Hillary Fellow of Cohort Six, a super thrilled to have you, Tim. And if you want to read more about Tim and his work, you can go to tim.blog to check out more. And on the other side, we have Shea Wright from here in Aotearoa, New Zealand. Shea is the co-founder of Te Fare Hukahuka with Travis, which is a social enterprise that is working to improve the lives of 10 million Indigenous people. And they've been running different types of programmes on the ground, specifically in providing e-commerce and online business training programmes, which we'll hear very shortly about. Shea is also part of different government advisory boards, including the Māori Economic Development Advisory Board. And he's also Edmund Hillary Fellow of Cohort Six. So super thrilled to have you guys here to check out Shea's work. You can go to twh.co.nz, as well as Shea Wright.co.nz. So thanks so much for joining here, guys. This is going to be a fun conversation. If we zoom out and really look at the world where we're at right now, historically New Zealand has had what we call the tyranny of distance being so far away, physically removed from where the rest of the world is. And over the last few decades we've seen greater level of connectivity between New Zealand and the world. And COVID is having quite an effect of that. So we'd love just to dive deep into what are the bigger opportunities you see for New Zealand and this climate of change that we're seeing and even looking at the next 10, 20 years ahead of us. Tim, maybe if you could start and Shea share with us from the local lens. Happy to start. Happy to start. Thanks for the kind introduction and I'm honoured to be here. So I'll do my best not to sound like a complete idiot when I answer questions. Zooming out, I'll just provide a little bit of background context, which is since the four-hour work we came out in 2007, I've had the opportunity to observe at this point probably tens of thousands of businesses through not just readers, but the permutations and the development of technology and then my partnerships and investments with various companies that provide a lot of the plumbing or the tools and infrastructure for even tens of thousands of additional companies. And what has been fascinating and horrifying about COVID, among many other things, is how it is both a great disabler and a great enabler. It's accelerated a lot of trends. You mentioned tyranny of distance. The physical isolation of New Zealand, I think, presents many benefits. There's a certain sovereignty and natural defence that New Zealand has, which provides it with great advantages in the time of pandemic. And it also has handicaps, geographically speaking, that you're relying on a pure domestic product. And I see as I'm witnessing the acceleration and convergence of e-commerce trends in the United States and globally speaking, I'm tracking a lot of the data that never before has it been more important for businesses in New Zealand to have the ability to export. And that could be physical product. It could be digital product, but the interconnectedness of New Zealand with the global marketplace and the opportunity to connect with consumers, customers, clients outside of the geographic islands that comprise New Zealand, I think has become ever more important. And this is true not just for New Zealand. And I think that it's easy to lose sight of the fact that although the larger companies say in New Zealand or the larger companies in the United States get the majority of media coverage, the percentage of gross domestic product and employment that is provided by small businesses is enormous. I'll just give you an example outside of the United States because I don't want to make this seem purely US centric, at least from my viewpoint. So, for instance, in the Australian state of Victoria, I'm reading this here, more than 600,000 small businesses, those with fewer than 20 employees represent half of all private sector jobs and more than one third of the state's output in goods and services. And that's an incredibly large percentage of both employment and output and export. So, I think it's incredibly important to focus on educating the small businesses, both existent and potential in New Zealand in an economic recovery and looking forward to an accelerating technological world where e-commerce is going to be of increasing importance. Actually, in New Zealand, 97% of enterprises are small businesses and they employ 29% of the country's workforce and contribute 28% of the GDP. What's also interesting is 70% of them are just business owner run, so they don't hire additional people, so they got to figure out everything by themselves. Yeah, and I'm glad you mentioned this. So, there are many options and technologies that can allow small businesses to scale. And New Zealand, I think, has a very advantageous brand in a global marketplace, right? Because you might say, let's say Lithuania or Estonia and people are like, I don't have any association with these countries and really the association is the brand. What is a brand? It's a consistent association. And with New Zealand, you have safety, serenity, adventure. You have these very well-developed brand associations that I think lend very well to export. So, I think that is a huge advantage that has not been fully capitalised on. Yeah, and when we think about, like you mentioned, 90% of businesses in New Zealand are not just small, we're really quite micro. Zero to five employees. So, when we think about being able to turn on really small businesses, which at the moment have very limited reach, limited revenues, the ability to use e-commerce and online as a mechanism to enable them to grow is huge. And we're certainly seeing that in the businesses that we work with. I think if I was to sort of, you know, sit here in New Zealand's context and reflect back on our economy and where we were pre-COVID, where we are now, you know, we're a very traditional economy, really. We're a land of meat, milk and honey. For a long time that has been about what New Zealand economies represented. And we still have an agricultural sector, which is, you know, the largest industry in our economy was followed by tourism, but of course has now been decimated with COVID. So, I think in relation to that large sector, the opportunity through e-commerce is for us to actually get closer to customers. We are an export nation when we think about the kind of goods that we produce and how small we are as a domestic market. So, we need to be export-facing. And so, with e-commerce, we can actually get closer to that customer. We can be market-facing. And that enables us to then move beyond just selling commodity goods into many distributors in the process, but actually sell directly to the end customer and to position our products directly to them in the language that they speak in and using the keywords that they use, not what we think that they want to use. And that's been a really interesting journey for ourselves around e-commerce is to see that actually we need to be utilising the things that are top of mind for the customer in a different part of the world and using the words that they will be searching for in order to be able to promote New Zealand products to them. So, I think there's that promotion and accessibility piece for global markets. I think also that applies to tourism and while we are facing a lot of tourism challenges at the moment, by utilising digital marketing in a far more sophisticated way, when we do open our borders back up, we'll be able to be able to utilise some of those value propositions that Tim's talking about. Safety and serenity utilise this highly trusted brand that we have and actually increase the value of our tourism because while it's been one of our largest sectors, in fact for a while it was the largest, it's actually quite a low paying sector and it's seasonal and there's just issues with tourism which can in part be addressed as we move up the value chain of our tourism offerings. And then Tim referenced beyond physical products, there's the opportunity for us to tap into a global market without exporting our knowledge and our IP. And we're seeing some really great examples of New Zealand businesses who are leading at the edge there too. Two well known ones are zero and push pay. And what we're seeing is we can actually grow technology businesses here in New Zealand that can serve the world and I think the legitimacy of doing that is becoming more pronounced as we have great examples and as we start to establish the ecosystem that sits around enabling e-commerce opportunities and online businesses and our ecosystem includes government, yes, it includes investment, particularly if you're looking at tech and it also includes the expertise that's needed to enable these businesses to grow which of course with the return of New Zealanders to our shores through COVID I'm sure that we're going to see a far more knowledge rich community who are able to really turn New Zealand businesses on. And then the last point I just want to make here is around the ability e-commerce as well and a huge opportunity for us to be doing more purchasing from local businesses. A lot of our money traditionally flows offshore when we think about goods and what we're seeing is actually that e-commerce since COVID is driving a lot more local business and New Zealand Post released these findings that showed that online spending was up 83% during our lockdown on last year and since then it's actually been up 30% it's remained at 30% from last year so we are seeing a continuation of that trend and 70% of those sales have actually been domestic online sales. Half a million kiwis have joined the New Zealand Made Products Facebook Group which is now called CHOICE with two O's. So it's just showing that we do care about buying local and I think that that is another really massive opportunity to ensure that we have more of a circulating economy in New Zealand rather than one that just exports profits overseas. It's actually going to be really interesting to hear from you a bit more about the Māori economy and how what frame of mind do you have to understand indigenous-led business and indigenous economy since that's an area and educating a lot of people around but also involved in supporting e-commerce to thrive within the Māori economy. The whole reason that we started to look into e-commerce was because we were working in the Māori economy and we saw the great potential of it to enable better business better outcomes and often the Māori businesses that we work with are actually social enterprises they exist for a social purpose and business is the vehicle through which they enable the they get the resources to enable better social outcomes. Now there's some limitations in the Māori economy you know like and particularly given that a lot of the collectively owned assets of the Māori economy are in those traditional sectors and the commodity businesses and there's this great story and ability for us to really draw on the brand of indigeneity and add that to the sustainability elements and traceability and all these other brilliant things which New Zealand is known for and build world class Māori businesses or indigenous companies that can play at both ends of the market you know that make the stuff but don't just make it that can actually then add value to their product demonstrate the benefits through science and research and then sell that product directly to the end customer I think that was a really key reason why we decided e-commerce was a mechanism and the second reason was because Māori experience a lot worse socioeconomic challenges than the rest of our country you know Māori household incomes are significantly less Māori averaging comes are about 30,000 New Zealand which is 20,000 US per year what we were seeing is if we can add another $250 into the household of Māori families every week just $250 we're actually increasing the household income by 50% so if we do that the leverage effect on that is huge in terms of those families to then be able to provide and live a farm with prosperous lives and that's where e-commerce is a real interesting opportunity to create that extra $250 of extra income in terms of like side hustles so that's kind of where we started with these foundations of going how do we utilize e-commerce to do more value chain Māori business as well as to enable Māori families to set up their own side incomes and then of course COVID came along and what we saw was actually all these small Māori businesses were unable to train they were unable to serve even their local communities physically because there was no place where everyone could gather to buy product and exchange product and if we fast forward to now just this weekend over the last two days we've finished the workshop for our e-commerce program called Kahāwitiaw and we've just had 40 new e-commerce businesses graduate from that program they're set up they're live and they're selling product and what's interesting is there's a broad range of those businesses in terms of what they're selling from traditional jewelry through to art through to clothing products that have the Māori language on there baby blankets there were a lot of healers on there so it's not just our products we're seeing our cultural products it's actually also a lot of our cultural services as well which can be facilitated through technology through digital the language revitalisation courses and I think that that's a really special thing so if it's a vehicle that Māori can actually take their strengths, take their products and take our culture, share it with the world and create stronger more resilient households and economic sovereignty Thanks so much for providing such a frame of the potential and the challenges here on the ground in New Zealand I'd love for us to dive deeper into the mechanics and understand what does it actually mean to build an e-commerce business and what are the principles to follow and one thing I'd like to invite the people who are streaming online here is if there are questions that you have feel free to have it in the chat and my colleagues Anthony is going to help curate a few of those and include them in the conversation so Tim, you've been part of a lot of people in the process of building an online business what are some of the misconceptions and lessons that you'd like to share about one, what does it take to launch an online business and how do you make it successful? Give it a go The first thing I would say is it's helpful I think to for the purposes of dissecting this to separate online business and to think about entrepreneurship first and foremost and building successful differentiated small scale businesses that can grow quickly and using technology as an accelerant if that makes any sense because I think the distinction between retail or traditional and e-commerce is less relevant than the distinction between poor businesses or commodity businesses and value-added differentiated businesses really so first and foremost we're really talking about how to create new categories and to dominate different niches I think effectively and then using technology to deliver those goods or services as far as misconceptions I would say that there are a lot of entrepreneurial misconceptions that apply equally to e-commerce businesses the first would be that you should bet the farm or quit your job and then start a business this is almost universally a terrible idea and if you read the cover stories from magazines although I'm dating myself not many people read magazines these days because they're in an airport which fewer and fewer people are right now but you get the idea the sort of lionized romanticized stories of like these swashbuckling entrepreneurs who risk it all and then hit a home run is actually a very small slice of the most successful entrepreneurs the most successful serial entrepreneurs are very good at mitigating risk meaning decreasing risk they're first and foremost risk mitigators not risk takers and one way that that can apply to solo printers meaning one person entrepreneurs who decide they want to start a business of some type is starting a business while you still have a job honestly so the misconception is you should quit your job and burn your ships and then start a company I think that's very dangerous and unnecessary so starting a side hustle as Shea put it some type of experimental real world laboratory for yourself in the world of entrepreneurship while you still have a safety net of some type of income and that income could be from a job that income could be from unemployment that income could come in very different forms that's number one is that good entrepreneurs are risk mitigators not risk takers and risk for me is the likelihood of an irreversible negative outcome so you are going to be taking systematic actions that are uncomfortable for you because they're new but that does not make them risky as I define it does that make sense secondly misconceptions would be that you need to be a technologist to use technology this isn't true for social media you know how many people who use Facebook know how to code almost nobody how many people use YouTube know how to you know in code video almost nobody you don't have to know how the microwave works these microwaves similarly particularly since 2007 the technology has evolved tremendously to the point where non technologists can use tools very effectively whether those tools are I'll give a few examples those tools might be say word press for building content sites or even e-commerce sites you have companies like Shopify which I know very very well because that's one of the first advisors if not the first advisor to Shopify when they had 10 employees or so for e-commerce and really soup to nuts A to Z as a suite of technologies you have fresh books for invoicing if you are say billing for services and time you have any number of payment processors like striped so the ability to put these things together and to learn from organizations like Shays that exist to provide information and tools has never been easier I would say also that and I'm going to zoom out that was kind of on the micro independent player perspective or level but if we zoom out I think it's worthwhile as a framework to and this will apply to any conversation we might have about government as well and their role in fostering this that you can think of possibly three ingredients that are necessary to really cultivate a fast growing environmental of excuse me entrepreneurial culture one is information you need you need the right instruction you need the right tools number two is inspiration and that sounds like a very hand wavy abstract term but what I mean by that is you need to have role models and examples so you can showcase to demonstrate what is possible and for some people that might be a Richard Branson but for other people of a different demographic a different age it might be someone else right so really showcasing different faces different forms of innovation and when we talk about diversity for instance it's not just skin color or gender it could be showing introverts who are really successful entrepreneurs and innovators because the extroverts are those who tend to get the most press you do not need to be an extrovert to be a successful e-commerce entrepreneur and then the third so you have information inspiration the third would be incentives and I think that's more conversation of structural incentives that can be put in place because the incentive to make money is obvious right the incentive to add let's just say in a week to income which boosts household annual income by 50% that intrinsic motivation is going to be there but the there are things that the government can do to make it attractive and more attractive for people to begin to kick the tires and at least take the first few steps to testing the entrepreneurial waters and there's going to be a lot of fallout there's a big funnel at the top but if you can get a large number of people into the game onto the playing field for say a few weeks or a month you might start out with 10,000 you might lose 9,000 but that's okay because you might end up at the very bottom with 10 companies that each employ thousands of people and we've seen that over and over again with the collaborations that I've worked on in other places in the world so there's no reason that I can identify to think that it wouldn't work in New Zealand but it's going to be incentivised in a bunch of systematic ways so there's the information, the inspiration, the incentives so those are a few of the lenses through which I look at these things you don't need a lot of money to make money that's another BS mantra that has no basis in reality the vast majority of successful entrepreneurs of every colour and creed bootstrapped they started with next to nothing and if you can't build a business with very little or no money you're going to have you would have even more trouble if you had money because you would spend it poorly and I remember I was an early investor in Alibaba way back in the day and pre-IPO and Jack Ma I'm going to paraphrase this quote but he said in the beginning we had huge advantages we had no experience we had no plan and we had no money and that made him and his team focus on being creative within these constraints so I think that the constraints are a gift that is the truth and having a lack of experience or a lack of capital can actually be a huge advantage in creating something unique and not just something that is a copy and imitation of something that already exists if I'm hearing you well you're saying you basically can start an e-commerce business while having a job just manage you should so everyone should have a side hustle building an e-commerce business manage what's going to kill you so manage the existential risks that you have and start with little the less you have the more creative you're going to be to work within the boundaries that you have I would also say that we hear these things that we sometimes don't question that are common knowledge but they're actually not accurate we only use 10% of our brains there's no basis in science for that you need to drink 8 glasses of water a day it's completely made up I don't know where it came from there's no basis anywhere for that we also hear things like 90% of startups fail within the first year or whatever it might be but a lot of businesses do fail but I will say that if you go through a handful of exercises and practices in the beginning if you ask a handful of good questions and I can talk about resources that can help with these things if the businesses go through a couple of very simple steps in the beginning or I should say the entrepreneurs before they spend a bunch of money and buy a bunch of inventory and so on but I would say 90% of them survive I think it's completely the opposite you can really stack the deck in your favor if you do a few things in the beginning and if it doesn't work let's just say and I've had plenty of things don't work that don't work I've had plenty of things fail what you're doing in the very beginning is you're capping your downside we think of Richard Branson who I've had on my podcast this crazy maverick risk-tigger he is actually first and foremost really good at capping his downside if you look at how he started Virgin Atlantic and so on with the planes and negotiating the leases so they could be bought back he was very good at hedging and making sure that he would not lose excessively if it failed and you can do that with small businesses in the beginning particularly when the infrastructure the tools that you might use are very expensive there's no need to bet the farm and you really shouldn't I think beyond that there's also the potential to be really data-driven with e-commerce because you can do things like what you preach around A B split testing but you can also really look at how big is a market how many people are actually searching for those kind of keywords and that ability to be more data-driven I think means less assumptions which does in a sense mitigate risk going into whatever that business is and you can start small test learn iterate and then build up from there Yep, totally agree Why don't we just go down a little bit and what he touched upon Tim you know what are the business principles but also entrepreneurial principles if you call it that that one should be thinking about if they're looking to start an e-commerce business or even if they've already started how to make it successful Well, let's start with required reading and I'm not going to mention my book people want to read read one of those that's fine but I'll just mention a few things because I did guest lecture in high-tech entrepreneurship for a long time at Princeton twice a year from 2003 to 2013 or so and there were a few essays and books that were always on the required reading list that did not fall off a lot of things came in and fell off but there were a few that were constant the first one is 1000 True Fans by Kevin Kelly you can find it at KK.org that's my dog drinking water in the background one of the joys of doing things during COVID it's always the family together so thank you Molly for drinking so loudly 1000 1000 True Fans by Kevin Kelly KK.org is required reading and I'm going to come back to why that's important in a moment the second is really short there is a book called the 22 immutable laws of marketing and there is a chapter in that book called the law of category and that law of category chapter is incredibly important so 1000 True Fans and the law of category combine to teach is number one identifying your smallest viable audience with a product that is very specific in general what that means is you are going to be playing in an area you know very well you'll be scratching your own itch so how did I start my first business part of my preparation and research was really simple I went through my credit card statement and I looked at what I spent money on I looked at where I spent stupid amounts of money as a percentage of my income so it's like alright where am I priced insensitive where am I kind of spending a stupid amount of money and I looked at these are areas that clearly I'm willing to pay for and I also know a lot about them because I am the market I am one of the customers and if you are one of your own possible customers it makes it much easier to understand how to reach those people for instance with the four hour work week I knew in the beginning in the beginning and this is very it's important to recognize that your initial target market is not the total market is really important to grasp because in the very beginning of our work week my goal was to sell 20,000 copies of this book each week for the first two weeks and there's a whole backstory behind that that we don't have to necessarily get into but with those numbers in mind if everyone is your customer no one is your customer that is a mantra worth memorising if everyone is your customer no one is your customer you will run out of money before you succeed very expensive to sell to everybody but if you have to choose and ask yourself what if I could only have a thousand customers who would they be and you can actually start with that question before you even figure out what your product is like which markets which demographics which psychographics do you know extremely well because you are a part of them and then you can determine what you sell most people start with some kind of half cocked idea for a product and then they run out trying to find people to sell to you things in the case of the four hour work week I knew that I was going to go after initially 20 to 35 year old tech savvy males in San Francisco to New York, Chicago LA in a few cities that was it and I knew that if I hit that domino it would then bleed over into the same the same demographics for women and then the age ranges bleed out and so on and that's how it ended up being as broadly accepted 40 plus languages as it was but I started with writing the book two friends and then targeting a very specific group of in my case 20,000 or so people and I knew that they were going to read five or six outlets tech crunch tech meme gizmodo a few things so I could advertise in such a way that I appeared ubiquitous I appeared to be a large player but in reality I was a big fish in a very small pond a very very precise product and what 1000 truth fans will teach you is a if you really play the game well and you think about if you kind of measure twice and cut once with your thinking about your audience and your product and the smallest possible you know minimal viable audience that you can double triple 10x your income with a thousand people with a thousand people it makes it much seem much more attainable and that's where you should start like Shopify I just mentioned it again because it's a company I know so well or when I advised Uber in the very early days they did not start out by trying to appeal to a hundred million people they started with a very small subset tiny tiny subset a tiny fraction of the population in San Francisco and solving a problem with cabs that's it and that's the law of category that I mentioned which is this chapter within the 22 immutable laws of marketing teaches you how to think about differentiation how you can be a first or an only you can do that with price right so for instance there are million tequila brands out there I'm in Austin Texas right now Patron tequila came out and decided to dominate the highest end of tequila and where you can get a shot of another tequila for $6 in the United States Patron came in they said okay we're going to make it $32 that seems crazy and yet there was a market for it and they became the ultra premium tequila as just as one example right which was founded by the way by the one of the co-founders of Paul Mitchell hair hair hair systems which was a huge hair care brand in the US completely unrelated but similarly designed to be the dominating force in a category right so can you be the best can you be the most expensive could you be the first of acts in the same way as one example in the 22 immutable laws of marketing was looking at all my examples are alcohol right now I haven't had anything to drink in a month I have to stick jonesing for the last one but at the time that this book was written because this was written a few decades ago there was light beer and there was an imported beer and the light beer was the first of its kind it dominated that category because it created it and then there was there was imported beer there was no imported light beer there was no imported light beer and Amstel light created that category and because they created it they dominated it they were able to own it and you can do that for very small things in some cases that entails creating a new label often does just like the 4 hour work week had lifestyle design as a concept and because it was the first to plant a flag in that real estate of the mindscape of readers I was able to not own it forever because I wanted to release a new title but to really have a first mover advantage with that for a long time so what I'm describing right now are principles because the tools change if you look at what was written about in 2007 and then in the revised edition 2009 most of the tools are out of date it but the principles are not and it's important to learn the principles first and foremost because if you learn the principles you can find the right tools and you can start with the tools but don't understand the principles you're going to make a lot of expensive mistakes so one last thing I'll say is everyone should read the effective executive by Peter Drucker the effective executive was written decades ago and it is the best book on productivity that I've ever read and what it underscores is what you do is more important than how you do anything because it is possible to do lots of stupid colonial things quickly that does not make you productive it is about choosing your targets really well and that book more than really almost any other I would say the other book is the 80-20 principle by Richard Kosh K-O-C-H if you combine the effective executive with Richard Kosh the 80-20 principle if you just read what I just mentioned you are ready to begin testing you'll be ready you don't have to read 100 books you don't have to do 17 MBA programs there are resources that you should avail yourself of but really it's about getting on the playing field and starting to kick some soccer balls if you're trying to play soccer with books you're going to get your face ripped off as soon as you get out there you got to just start screwing around and kicking the balls anyway I've been talking for a while so I'll stop but those are a few of the things that I want to do and read and really absorb to put on the proper set of lenses to look at entrepreneurship as a game that you can win I just want to pick up on one of those things when we think about those those two books you mentioned at the beginning 1000 true fans and 22 immutable laws and we consider the size of the market in New Zealand so where we may only have in a particular niche a couple of hundred or thousand customers which doesn't necessarily sustain a business the ability with e-commerce to then stay in that same niche but go to a global audience where you could have millions of customers and therefore be a viable business I think that is that's the power of what the e-commerce tools can do because you're absolutely right about the principle it's about how do we then apply the principle in the context of our small economy and so that's where those tools can be so good and we notice so often when we talk to business owners who are starting to walk the journey of digital marketing or e-commerce that actually they are so confused and almost prevented from moving forward and knowing what to do because there's just so much knowledge out there conflicting knowledge sometimes you know there's more than 7000 Martek tools it's like which ones do we use which combinations going to work for our business and I think that people can feel a little incapacitated by information overload so you've brought us back to some really good principles that can be used and then when we have capability development programs that help to just focus on the few things the 80 to any rule what are the few things that are actually going to work and then it enables those business owners who are looking at it to just go okay here's my pathway this actually doesn't need to be complicated it can be just a matter of applying these things which are proven and we're just seeing that that has a massive cut through here in New Zealand Yeah totally and so let me comment you just brought up a number of important things and I want to add to that so I'll say two things one is very technology dependent and that is in a post COVID world where there may be future waves there will be future pandemics I hate to say that but it's true and in this changing world even if you intend to focus on retail if we look at a kind of post game analysis of for instance the restaurants in the United States that were able to pivot and do well during COVID they were the restaurants that had some form of communicating with their customers most restaurants most retail establishments have no direct relationship with their customers so even if you never intend to sell via e-commerce it is worth becoming familiar with some of the tools so that you're able to communicate with your customers and your prospective customers without that you're lost without that you're a ship without so e-commerce and the tools of e-commerce can be used not just to grow businesses but to build resilience into businesses and into the economy this is really really important so it's not just a launch pad for a rocket chip it's also a safety net this is really really really important I did a podcast with Nick Kokonis who is the co-founder of Alinia States and they had their most successful weeks ever in terms of revenue after COVID and the way they did that is described in the podcast and it's available for free so I won't get into it right now Kokonis K-O-K-O-N-A-S but the point is this technology provides a safety net and in addition to being a launch pad the second thing I'll say is coming back to what I mentioned about separating consumers from business and thinking about business first to underscore what you said Shea about making it easy before you touch the technology I mean you can do your due diligence and your research and your market analysis online but keep it simple if you're a 22 year old guy maybe you shouldn't sell strollers if you don't have a kid this may not be your ideal market come up with something that you think your friends would buy and then try to sell it to them don't build a huge website don't do anything come up with what it is and try to sell it to your friends and say if I built this or if I offered this service would you buy it for this price and if they say yes ask them to pay in advance and if they don't and that seems primitive it's so uncool it's not using the slick new artificial intelligence blah blah blah blah blah and it is so much more reliable as a predictor of success than almost anything else and there's an expression that that you hear in Silicon Valley a lot which is no product survives its first contact with customers and you got to get out of the academic theoretical planning and onto the playing field as quickly as possible it doesn't mean you are sloppy but it means that as soon as you have an inkling of a market you understand the 1000 true fans you could rely on for sustainable income the product that scratches your own itch a problem that you have had or still have or a dream you want to pursue that does not currently have a good solution perhaps it's something you're cobbling together a bunch of things to address once you have that and you think it's something you could sell to people you know you don't have to build a website sketch out your pitch talk about the product features whether it's a service or otherwise and try to sell it that would be my advice do that and if it doesn't work try try again iterate try something else don't be so weirded to the product that it's like your baby right it's a concept which is also why it's helpful to do that early because if you think you've got the best ideas and sliced bread and you haven't told anyone and you build a website and you print business cards and you make t-shirts and such sunk cost that it will be difficult for you psychologically to pivot and that's a dangerous place to be that's like a gambler who's gone into debt in the casino and is just going to keep betting because they're like I'm going to make it back that is not where you want to end up so those are another maybe primitive caveman entrepreneurship recommendations that translate really well yeah just to add on something you mentioned around having a relationship with the product or knowing having an intimate understanding of what you're trying to do there you know one of the things that I see a lot of entrepreneurs doing is looking or searching for an idea as opposed to looking for what they can actually be invested into or become invested in long term because the more time you spend on it the deeper your relationship is going to be with that vertical with that problem area so you got to be really excited about it and want to be an expert in that space at some point the deeper you go down the road yeah and also if you're just looking at market size which is another mistake that a lot of entrepreneurs make and maybe we can talk about this later there's a lot of fetishising of Silicon Valley venture backed startups forget about that the venture capital backed startup environment can be a very zero some game where there are a few winners and a lot of losers that is not what we're talking about I've played that game but it's like going to the casino I don't want you guys to go to the casino I don't want anyone to go to the casino I want you to have a methodical almost military like operation where rule number one is don't lose rule number one is don't lose don't lose your money and you can be very successful that way and the other thing is that later become huge when they approach it that way and so that's kind of point number one point number two is that you can borrow from some of these Silicon Valley learnings with books like the lean startup by Eric Rees or the four steps to the epiphany when you're thinking about products but the vast majority of successful businesses are those that you have never heard of that's really important to remember and you can with a very small market still build massively successful sustainable businesses and if you want to be successful for the long term to come back to your point Yosef if you know a market and it is solving a problem that you had or have you are going to be excited and you will have the necessary enthusiasm and endurance to get through the setbacks that you will face you're going to have long nights you're going to have challenges you're going to have disappointments you may have to hire and fire people there are going to be bumps along the way and if it's not something you really care about you're going to quit so it needs to be something that on some level you care about or believe it if you want to stock the deck in your favor if you want to throw a Hail Mary that's just not how I recommend doing things and I think is one of the things we've noticed around having those strong foundations and in fact some of the misconceptions around e-commerce is like if we just have a website and we put it up there we're going to make sales I think that that is definitely an old story that does not work and in terms of building those really strong foundation businesses whether they're e-commerce focused or not really solid business would involve that a system that we think needs to be in place of three parts that first part is how do I get traffic into my site into my store whether that's online traffic ideally or even if it's footfall physical traffic a real understanding of how to drive traffic and bring people in and then the second thing is not just the traffic but actually how do you ensure that you're converting that traffic really well that you're messaging appropriately and that you're convincing them that they need to go from looking at your stuff to actually buying your stuff so that's the second part of the system and then the third part is ensuring that continued conversation with them the email autoresponder, the database so that that group of customers who have brought from you before or who haven't yet brought because they haven't built a relationship with your brand enough to buy again to Tim's point around the restaurants as well businesses that have the three parts of that system are likely to have a really solid foundation to continue to interact with their customers, bring more customers in and know what kind of outcomes that that's going to bring into their business absolutely and I would also just reiterate that it's very important I think for governments and this is not limited to New Zealand, this is true everywhere to realize that digitally enabling and educating entrepreneurs in your country is not just important for growth, it is important for resilience and disaster preparedness it provides options to to keep currency and capital circulating in your country in the case of disasters whether those are pandemics whether those are natural disasters whether those are infrastructure disasters there is I think an imperative for governments and this is I think all the more relevant for New Zealand because of its geographically isolated nature to build resilience into the economy and anti-fragility anti-fragility into the economy by digitally enabling as many people as possible I think that's a survival imperative and also a an incredibly potent cocktail for economic growth and you've seen a lot of that Shay, right? We've seen it on the ground but we've also seen it in the government advisory conversations that I've been involved in and you know Tim, what we're finding is it sometimes takes a pandemic or a disaster just to shake the government to go wow we need to do something here because 97% of New Zealand businesses small businesses 90% 0-5 kind of employees so micro really and like in a lockdown most of them can't trade so as a government you go wow this is a blind spot we've never looked at before and with COVID it has really accelerated the government's response to supporting small businesses here in New Zealand and in fact our Minister for Small Business Stuart Nash came out and said okay his vision for New Zealand is to have the most digitally enabled small businesses in the world now when we set the goalposts that high and an aspiration like that we're going to be looking at some really revolutionary strategies around how do we turn on businesses right throughout our country who are not big you know who are these micro enterprises that are going to need a real range of interesting support and I think then it becomes a question of okay what kind of infrastructure do we need to build as a country digital infrastructure, physical infrastructure to enable e-commerce to be a norm and to be able to be taken up by so many businesses so I think our government's responding really well to that and we've just got to build the ecosystem build the infrastructure now and COVID is really not a worst case scenario COVID has really been a warning shot this is a flesh wound it is not nearly as lethal or scary as many other viruses that exist we just happen to be very lucky I mean it was a virus in some ways perfectly perfectly designed to confuse very smart people and despite the atrocious economic impact as you said Shea it really just served to illustrate the fragility and weaknesses in a lot of systems and it's great to hear about Stuart Nash that's extremely heartening to hear and there are role models for this you can look at say Estonia with digital literacy and coding you can look at Singapore as a fantastic example of what can be done in terms of absorbing and applying best principles also a great example of how to attract and retain top talent within government so there are many examples of how this can be fostered I think that throwing money at the problem is also another way to do it I mean there are ways to collaborate with with different companies and just as an example and I know I've mentioned this a few times but the Shopify has partnered with New York State they've partnered with the Government of Canada they've partnered with the UK to provide immediate relief to merchants and the Victoria example the 600,000 small businesses representing half of all private sector jobs that was part of an announcement related to a collaboration with the State of Victoria in Australia which was a $20 million initiative by the Victoria State Government so they bring capital to the table and then you have partners it could be a Shopify it could be zero it could be any number of different private sector players who agree to provide infrastructure or memberships or tools that reduced cost or no cost for a period of time and that type of collaboration between public sector and private sector can drive a lot of entrepreneurial activity and I mentioned earlier that you need information inspiration and incentives the incentives are really important if you want people to figure out entrepreneurship throw $20 million at it and see what happens people will wake up if there are financial incentives there could be potential tax rebates for people who form businesses and employ at least X number of people you have to guard against perverse incentives and the respect that you want to be aware of how that might be gained or abused but overall the vast majority of people are going to be good actors and the return on investment for providing financial incentives I think especially in the form of competitions can be unbelievably high in terms of job creation and company creation another something you've been very much involved in the Shopify for a while Tim today you adopted that into New Zealand the build a business competition what have been some of the lessons that you've learned in terms of how to make them successful and the broader impact that has created in those environments and we'd love to hear from you share as well in terms of what are the aspects you've adopted culturally to fit New Zealand well and how is the programme going well sounds like you just finished this Sunday right yesterday yeah Tim so what are the things that you've learned from it I believe it's been almost 10 years since it started yeah just this context so the Shopify build a business competition I suppose in some respect co-created with Toby and Harley respectively both co-founders of Shopify it started in 2010 with a $100,000 grand prize and ran for seven years so I want people to keep in mind this starting number so the grand prize was $100,000 which to Shopify at the time was extremely expensive they couldn't really afford it but it wasn't betting the farm also because it was going to be paid out later after the entire competition ran so it wasn't risky per se but it was very intimidating to them started in 2010 ran for seven years created more than 100,000 new businesses so for every dollar that they put into the programme in the beginning in the terms of prize money they created more than one business I want that to sink in because the scope of it is just absurd I mean the internal investment is incredible those businesses have sold more than one billion dollars in that period of time more than one billion dollars USD so one billion US dollars in gross monthly value not total in GMV and it's produced a lot of companies that have had later large scale and exited and there's a company called Movement Watches MVMT which started in 2013 five years later in 2018 and they've sold more than 100 million dollars to Movado Group and there are many many examples of this to give you an example of some of the companies that have won these competitions so you might think it's going to be some huge thing it's the next Uber, it's the next Airbnb there have been companies that made artisanal leather bound hand made iPad cases so expensive hand made old fashioned iPad cases Barack Obama ended up buying one was photographed with it and these types of niche products can create extremely powerful resilient consistent cash flow positive businesses and I mean everything you can possibly imagine in terms of product have been sold in these build a business competitions and just to come back again to the initial commitment and prize money $100,000 created more than 100,000 new businesses over seven years that at one point totaled $1 billion USD in gross monthly volume these are huge numbers so that can be that type of incentive can be put in place with some structure especially in partnership with private sector businesses that have the staff and technology and know how to help implement such a competition with the financial support of governments and the endorsement of governments Tim what was the anticipated kind of return that they were wanting from that challenge when they set out to commit their $100,000 you know there wasn't a large financial target that was made concrete I simply knew this is going to sound funny but just given all of my experience in the world of entrepreneurship I knew that $100,000 would be a drop in the bucket compared to the ROI because I understood the business model of Shopify of course it's in their best interest if they have merchants on the platform who are paying fees to Shopify to have as many fast growing businesses as possible and it's in their best interest to have merchants that are doing well on the platform as you know and I'd love to hear more about your experience so in this case this is a good example of what I was talking about earlier with respect to risk mitigation I knew that even if it failed it would not fail completely and let's just say hypothetically it was a complete disaster and Shopify lost $20,000 they would be able to recover from that and learn so much in the process and that would be the first competition that a second competition would almost certainly be successful so that would be an example of affordable downside establishing an ambitious project because this comes back to the law of category this was the largest entrepreneurial competition that had ever been held $100,000 six figures symbolically very important made it the largest that had ever been held that got a lot of PR a lot of attention which improved the value of the equity in Shopify itself it drove merchants to the platform who didn't necessarily participate in the competition and then you had all the ROI on top of that that was attributed to the competition so from my perspective it was the opportunity to do it first to get a lot of PR and then to test a bunch of assumptions that could be corrected if we iterated later but I knew that the downside was very minimal and was affordable the economics and the probabilities were really attractive so that's how we approached it as far as I can tell no expectations of a multi-million return even though ultimately I mean look at them now so just on that point you say 100,000 businesses in seven years did you see an exponential type of curve in terms of the business that were created or was it pretty proportional to the number of years that this program was running that would be a better question for the team at Shopify because they have all the access to the data but if I had to I mean this is informed I would guess that it was a non-linear curve because the first year as it is with anything it was a struggle to create the mass awareness of the competition the competition's got bigger and bigger and bigger because every time it worked Shopify was willing to put a little more capital a little more or a lot more hours for a company into investing and pushing the envelope so each year they did that the bigger the partnerships got they had media partnerships they had all sorts of company partnerships the prizes, the trips everything became so much bigger so I would anticipate that increased willingness to invest because the Shopify guys are very smart was reflective of a non-linear curve of growth because I just want to highlight the value of repetition when you build programs like this you don't see the value right away and it might not be as a parent up front but you just keep reinvesting if you actually stop too early you don't last long enough to see the value of it and we see a lot of these patterns you also don't have the opportunity to iterate and so the as with many things if we're talking about say a possible governmental collaboration with let's just say Stuart Nash as an example wanted to partner with private sector companies to create incentives to really galvanize the creation of many companies which would be intended to then have an effect on economic growth economic resilience and employment just as a few examples also gross export product I think it would be very very important to commit to at least three years of doing that in some fashion so choosing a format if it's intended to have many iterations to have a multi-year commitment of some type and that might mean that the incentives up front are lower or the decision might be made we are post COVID we build period therefore we want to have a balloon payment up front so we want to have this larger curve of adoption in the beginning with a larger financial incentive and then to continue with that for a period of time as we iterate because here's the great thing about this is as you learn best practices that apply specifically within the New Zealand ecosystem it becomes more and more cost effective to execute these types of competitions in the beginning there will be some waste because you're going to be making mistakes and that's part of the process of experimentation and finding best practices for this particular type of collaboration yeah awesome Shay we'll be great to hear from you in terms of the application of that in New Zealand how the program has gone yeah yeah so you know when we were looking at okay this is a really important time for us to have an e-commerce course we've been running our own e-commerce business selling products into the US and so we had a sense of the power of it and then it came time to actually build something that was going to help Māori businesses and Māori individuals go from no base of understanding e-commerce the tools, the strategies through to actually having a business ideally accelerating the speed that that can happen over so we just took the typical copy and pimp model so we set out and we looked at what was out there and we landed on the Shopify programs and work that had been done and so we had a conversation with Shopify and they were quite keen on looking at how can we develop something really focused on indigenous people that would have the same kind of outcomes that Tim just mentioned so they partnered with us and I mean that was great credibility for ourselves just to realise that here we are the small little business in New Zealand that's serving a small little market of Māori business owners and actually Shopify this global company that's got reach right around the world is keen to partner to not just work but actually to take that program global and then we went okay what were the things that Shopify was doing in those kinds of programs and so we looked at the comfort challenge series that Tim had done and we went okay we're going to drop that and so we started on the program off with five comfort challenges and why that was is to build people's mindset and to ensure that we were working with a group who were comfortable with the uncomfortable were comfortable with growth were comfortable with putting themselves out there and that became the funnel if you like we had hundreds of applications from Māori in a matter of really only a couple of weeks you know or like about a month four weeks or so we had hundreds of applications and the comfort challenges was a great way to figure out who was really going to be able to commit to this and then we just developed a 12 month sorry a 12 to 13 week program journey utilising Shopify a lot of the Shopify resources and expertise but our approach was a little bit different Yosef and one thing that we did innovate on and this comes from our innate understanding of how to work well with Māori from having you know worked with Māori for years is that we made sure there was a lot of intensive wraparound support and pastoral care around the Māori entrepreneurs and I think that that was contextually really important because we are talking about overcoming a lot of mindset challenges even around I can't have a business you know that's not something that people in my community have or I can't sell my product and make money off it you know there's all sorts of limiting beliefs that we're having to continuously overcome when we're working with our people as well as that we're starting from a very low base of understanding so around technology and around how business even works so we wanted to make sure we were really wrapping some good resources around them so that kind of wraparound support meant that we had multiple coaches and experts that would come in from Shopify as well as from other parts of the ecosystem right around the world and we had coaches on standby to be the 24-7 we had our program team who'd regularly review the work and the websites we had a whole lot of templates and tools that could accelerate people through the process so rather than them just kind of have to learn everything it's like here's a template, bang implement that and you know you could be online a lot quicker so I think that helped when we were working at over 12 weeks at quite an intensive group based program meant that everyone was learning together sharing together helping each other out and I think that you know the way that Māori learn is really in a group that approach to feeling connected with each other is really important and that's made a huge difference and I'm not short on whether Shopify has done stuff in the program since but that's one particular approach that we use which has made a phenomenal difference in ensuring the cohort feel well supported by each other, feel part of something bigger than themselves and it also helps with that future pathway so we don't always have to be there because they can rely on one another as they continue to grow their businesses from here. Yeah I think that's super important the building of cohorts and groups when you have that peer support I think is incredibly important because anything worth doing is going to have its challenges and the entrepreneurship is no exception they're going to be growing pains so having that peer support is really important Agreed? Because you're touching upon a theme around more collaborative approaches to actually building e-commerce businesses as opposed to what you explained earlier Tim around the zero sum game all or nothing grow at all cost type of models that we see come in from the likes of Silicon Valley especially if you're just building software technology and raising VC capital it's quite a different landscape in which you're building new e-commerce businesses here Yeah and Shay to your point of mindset this is really important and there are a lot of assumptions that can stymie or inhibit drink in the water super loudly again thanks Molly just for a little background music for everybody can you guys hear that or is it just behind me in any case You hear it a little bit I'm trying to talk over there we go so OK, Mohammed can hear he can hear Molly but I was going to say these mindset challenges are not minor if you believe you cannot do something you are not going to have the confidence to iterate over time and experiment and you will view mistakes as failure as opposed to feedback so one thing that I would love to do if I get on the ground in New Zealand at some point is to look at highlighting innovators and entrepreneurs via the podcast and other things that are best done on the ground in person to show different exemplars case studies of people who represent a broad spectrum of possibilities and it's so critically important because if we use the US as one example, if every magazine cover you see with an entrepreneurial case study is Mark Zuckerberg, you don't look like or sound like the educational background or the computer science background of Zuckerberg you are going to perhaps assume that the entrepreneurial path is only accessible to that type of person and that would be an incorrect assumption so to have localized examples of entrepreneurial achievement and not just entrepreneurial achievement but different paths and approaches to entrepreneurship because you don't need to be an extraverted computer science major swashbuckling risk taker to be an entrepreneur that's nonsense that's one archetype and there are a thousand others and guess what one of them is going to be pretty similar to you and will inspire you so hopefully at some point I'll get a chance to showcase some folks on the ground. Yeah and I think we're in the early stage of building those undercover leaders of the movement e-commerce is still in a pretty fledgling state in New Zealand so it's about uncovering who these people are and demonstrating that regardless of what community and what they look like there's someone like you doing something like this and for us because we don't have that many Māori case studies on our program we were actually showcasing and having guest speakers from other indigenous nations around the world from Canada from Hawaii from America and other parts of the world who could tell the story of their business growing but it was a story that was relatable because it was based on the same kind of foundation of principles and the same kind of background of historical challenges being indigenous that Māori do so I think that made a huge difference around the mindset piece as well yeah it was awesome. And you two spoke quite a bit about the challenge, the business competition and the global one and the New Zealand one we're very interested to see what would be possible especially during this time to create more repetition and provide more education, more access to local aspiring entrepreneurs in this space here because a lot of jobs are being displaced at the moment and certain industries are really struggling and the digital divide is also growing so I think there's more of a need to do a lot of programs like that right now so I'd just be curious to hear what would be the level just even in this conversation to get involved in something like that yeah I mean I would I would love to sort of help match make and participate in in building or at least implementing some type of competition it's just such low hanging fruit and it's a proven model we've already seen at work in multiple geographies with 100,000 plus businesses we see Shea and his team implementing really effectively already right on a on a small scale within New Zealand so we have a proof of concept we have pilot studies that are already being executed and I think that I should add a fourth thing a fourth pillar right to the table of entrepreneurship we talked about information inspiration incentives the most important one of all is hope you need hope you need to have some hope that things can improve and if if the government any government really wants to turn things around and build resilience anti fragility and growth people need to first and foremost believe that things can get better and one way to galvanize and build morale and support hope is through the excitement of a competition and that kind of promise of a possibly better future that that provides I think it's not necessarily through Shopify it could be with Shopify but just partnering private and public interests for the common good in the form of some type of competition provides this electricity to the air much like a you know Willy Wonka golden ticket I mean it really it really galvanizes a lot of excitement and I've seen that now you know over the span of seven years and beyond yeah I think you know looking at the idea of the competition having being able to prove that works here is a great starting point because then we know like to Tim's point what do we need to test learn and what we need to iterate differently next time to to be able to scale it and have it so that more people can then participate in that challenge and I think this is where the ecosystem comes into it like we've been able to start to engage the broader ecosystem in our in our program to showcase that to some ecosystem players in the business community what the possibilities are I think that's really important because we haven't had an ecosystem traditionally that has much of an understanding and appreciation of e-commerce and yet it's such a solid ecosystem so if the more that everyone can be a little more fluent in the concepts of it the more we can understand what roles we each play here in New Zealand in helping spawn an entrepreneurial movement and e-commerce movement and then I think the potential for doing this stuff at real scale is huge you know we look across at our cousins in the Pacific Islands who in many cases have had dramatic reduction in their tourism numbers which has decimated their economies and so while there are other barriers that we need to be mindful of around e-commerce where we can look to support other countries and other Indigenous peoples through a similar kind of challenge approach where we can have different Indigenous communities kind of competing against each other to have the best e-commerce businesses everybody is going to be growing through that journey everyone's going to be learning together and we can start to look at what is a better way to doing business as well because if we were to judge those kind of things based off metrics that are not purely around revenue or profitability but are actually factoring in there the contributions that those businesses are made to more holistic outcomes, social outcomes environmental outcomes and basing the competition of the challenges around that then we really are showing and demonstrating that business a better business is possible. Yeah well thanks very much we've very much run out of time the conversation has gone really fast so I want to say a massive thank you to you Shay and Tim for this dialogue I think you've given a lot for all of us to digest and think about and especially a lot of local entrepreneurs who are thinking of jumping into the e-commerce bandwagon or looking to scale their businesses and a lot of resources we're going to be posting this video online as well so you can come back and watch it later before we finish off my colleague Paula is going to send a very short poll here just to get a sense around how useful it's been if you can just fill it up shortly now that it'd be super helpful and I'll pass it over to you Shay to help us with the closing karakia Yeah sure I guess our closing karakia for today will be about clearing our space and providing our safe passage into whatever activity we're about to go off and do after this call it asks that our restrictions that we're facing be moved and we can return to our everyday activities feeling enriched, feeling unified and feeling blessed kia whakaeria te tapu kia waatea eaiteara kia turuki whakatahae kia turuki whakatahae haumi e hui e tai kia tai kia Well thanks so much and we're super thrilled to have you both in EHF and contributing to New Zealand in this way so thank you Cheers Joseph Thanks, bye bye everyone See you, ka kite