Kyoder, this has been just popping in at the top to let you know that next week our episode will be a day late. It'll come out on Friday instead of Thursday. So if you get to Thursday and your episode is not in the feed where you expect it, don't panic. Just wait twenty four more hours and you'll find it there. Onto the episode. The all important US market. It's where every key we startup founder dreams of making it big, because everything's bigger in America.
Which is exactly why our featured guest on the podcast this week is squarely focused on the US market and advisors and other founders to also set their sights on the US from day one.
Scales. The problem, kiwis we do a lot of things amazingly well, but we don't understand scale. There's maybe seven hundred thousand businesses in New Zealand and ninety something percent of them are micro businesses. In the US mark of we're focused in there is twenty five million smeak businesses, is a five p five million EMI businesses, half a million new businesses every year that scale.
Welcome to the Business of Tech powered by two Degrees Business.
I'm Ben Moore and I'm Peter Griffin. You just heard there from Nick Lassett, the founder and CEO of Black Pearl Group, an INZX listed tech company with operations in Wellington and Tempe, Arizona.
Black Pearl just reported a revenue increase of one hundred and eighty three percent to four point one million dollars for the year to March, with the vast majority of that growth in the US market.
We'll hear Nick talking about the ups and downs office efforts to crack the US market shortly.
But first, Peter, you've been given a briefing on the new surface devices from Microsoft, which are the first wave of so called Copilot plus PCs. What does that mean.
There are plenty of surface devices that every sort of year micro Soft releasesm Typically I wouldn't pay too much attention to that because it's all very iterative, but there's certainly something different going on with this debut of Microsoft surface devices, the laptops and the more sort of tablets that you can sort of turn into a laptop with the attached keyboard, and the big difference this year is building in a so called neural processing unit into the
ARM based chip architecture in those devices. So they've done a deal with Qualcom to use this ARM architecture, which is really a bit of a slap in the face for Intel and AMD, the big sort of traditional giants in the chip world. ARM, the originally British company, has done a great job of architecting chips, particularly for lightweight
portable devices like smartphones and laptops. And what they've done now is integrate copilot features that Microsoft has developed in conjunction with open AI, actually building that into the device itself, so all the AI workloads are done on the device rather than constantly going to the cloud. So I saw that in Sydney last week. I first look at some of the features, including the controversial recall feature, which got a lot of criticism. Security researchers how to look at
that and found failings in that. Microsoft actually the day I was in Sydney put out a release tightening up how they're dealing with recall to answer some of those security concerns. So you'll hear more about that in the
interview with Tim Meerzak that I did. But this is really the start of the AI PC revolution and we're going to see Dell and HP and everyone else incorporating this copilot stuff into their hardware as well, and I guess yeah, there are lots of benefits to that, such as the security aspect of having everything on the device rather than it constantly going to the cloud.
Yeah, it's the new wave of hardware, isn't it, having just the next level of processing unit on the on the on the hardware itself. I think what we need to think about is actually what is the what is the result of this? So it sounds like the marketing hype of We're putting AI in your computer, and it's like, actually doesn't mean anything. What we need to understand is what is that actually, what are the results of that? What are the uses that people are going to get
from that? And your interviewee, Tim Mirzak, he speaks a little bit to that in the interview. You've got to try and kind of listen between his marketing hype a little bit as you listen to this interview. But there is some interesting gems in there as well.
Yeah, there's the things that Microsoft is doing and the start of it as things like recall and live translation and you know, some of that stuff we've seen elsewhere. But the bit which is is going to be most significant, I think to users is all of these third party app developers. And this is similar to the conversation we had about Apple Intelligence last week where they are also putting AI into their devices, so it's all done natively. And they talked in Sydney about Adobe putting this into
light Room and all of their products. So the speed that you can render things, how you can apply the AI tools that Adobe is rolling out on the device disconnected from the cloud, that's pretty cool. So once we start to see these companies and Microsoft is compatible now I think with three hundred software makers they're developing for this new chipset. Once we start seeing those roll out,
I think that's when people will go wow. You know, so this little app I use for my work on the Windows platform is now suddenly infused with with AI without me having to rely on going to the cloud. That's when I think we'll be interesting.
Absolutely. Well, let's have a listen to your interview with Tim Meerzak.
Yeah, this is Tim. He heads up the Surface business across Australia and New Zealand. Tim, thanks so much for being on the business of tech. Now you head up the surface business for Microsoft in Australia and New Zealand.
Lots of surface laptops and surface pro devices are used in New Zealand and I've just seen the latest iteration off those and huge performance improvements in some cases up to ninety percent based on the previous iteration, which is pretty incredible and interesting your views on what was done to achieve that. But these are the first line of co pilot plus PCs, so called AI PCs, with a new processor in the PC that is dedicated to those
AI processes. Explained to us the difference between that world in the cloud and taking that onto the PC and what that actually means.
YEA, certainly, Peter.
All the current stuff that we've been doing from an AI workload has all been in the cloud and we've integrated it in with our applications to make people more productive than ever. The difference between copilot plus PC is you can do all of that stuff, but then there's so much more. And by that is we're taking amazing AI experiences that run natively on the device itself, and
that is the biggest difference that we have here. We've already started to talk about some of those experiences in Recall Live captioning co Create, for example, which are amazing experiences that are exclusive to Copilot plus PCs. In order to be classed as copilot plus PCs, you need three key things. The first one is RAM sixteen gigs. You need a two five six gig SSD hard drive. And then one of the real key components is a neural
processing unit or as we call it NPU. And what an MPU is designed to do is to do all of that ALI grub work and do it very efficiently. And on these devices, the parameters to be classed as a copilot PC is more than forty trillion operations per second and that's what we're going to be launching in New Zealand on the sixth of August. The way I like to look at it is think of just a processor. You've just got one big chip and on that you have the CPU, the GPU, and now this NPU on
there right. So the CPU and the GPUs not anything new, and they can do a lot of these AI tasks, but they can't do it as efficiently. So with the NPU, this is a leapfrog in terms of the amount of processing power that the NPU can do, which takes off the burden on the CPU and GPU. So this is why not only are you able to to have these incredible AI experiences that you've never been able to have before, but you're starting to see benefits in places like battery life.
For example. I don't mean an extra hour. I'm talking about doubling the battery life. And that's just something that you don't see through different generations of a particular.
Product, some when those users have already been introduced to some aspects of AI. What we saw today was about three features that really draw on that neural processing unit and AI functionality. Quickly take us through some of as. Let's start with recall, which is one that's had most attention. What is recall?
Think of it as a giving everyone a photographic memory.
I have a bad memory.
I'll say it.
I won't beat around the walls.
I have a bad memory, but I can remember certain aspects of things that I've seen. So think if I had seen if got an email or a WhatsApp message on my device and it had a red flower in there, and that's all I remember. I don't know where it came from, but I remember the red flower. I can simply type that in and ll pull up that image and whatever was surrounding that image, So it gives everyone
a photographic memory. Why that's really important is a lot of people spend a lot of time trying to find things. Imagine if you can just put in a natural language, just as I did there talking about a red flower, and then straightaway it comes in and it gives you exactly what you're looking for. And to me, that's what recall is all about.
And what it's doing. It's I think every five or ten seconds, it's taking a snapshot of what's on your screen. Doesn't matter what browser you're in. Everything that's on your screen there has been captured every five to ten seconds. But you have the ability to set the parameters what is recorded and if it's recorded at all. I mean, this is now a opten system, right, it's not switched on by default.
Think of it as, yes, taking a picture every five seconds, but it does a little bit more than that. It takes the picture, takes the visual components, puts that into text so that it is searchable. So think of it as creating an index of your photos that's also fully encrypted so it's safe, and it is also kept on the device, so that's one thing. Now you mentioned opt in, we have made an announcement. It is hot off the
press today. So we have made an update to the recall feature where it will now be part of our Windows Insider program.
What is that?
So Windows Insider program are a group of people that want to trial and test and give feedback on the latest and greatest Microsoft developments within the operating system. You can simply log into Microsoft dot com and you can joining the inside up program should you wish, There is an option to do that. And the reason why it's really important to go into that environment is because we
want more feedback. We're hearing what customers are saying and we're wanting to act and make sure that they've got the very best experience. But more importantly that they're at the center and we're talking to their concerns they may have around recall.
Everyone can see the utility off this recall, the convenience that it brings to your computing environment, but will be a honeypop for hackers and that as well, so security has to be central to that. There's been some criticism which led to this decision. I think to do Windows Insiders so that you can make sure this is water tight before everyone gets their hands on it. It's also Windows Hello, which is the main security interface for your devices.
It has to go through that as well, which is pretty robust.
There's a few secure elements that we are making sort of mandatory on Copilot plus pieces, which I think is probably important to mention. Firstly, we have secure boot, which is often just afforded to scenarios where there's a high amount of customer sensitive data, so think finance institutions, think medical practices, etc. So that is on by default on
Copilot plus PCs. We then have the biometrics piece that you talked about, and that is a requirement for recall because we don't want to just give access to people that say they are who they are. We need to be one hundred percent sure. And then the last piece is around the Pluton process, where we're working very very closely with our silicon providers to make sure that we
have an additional layer. And all of this sort of stuff is usually afforded to highly sensitive data devices and we've brought that into our consumer space with Copilot plus PC. The one last thing I'll mention on recall is all of that work, all of that functionality is on the device, and this is really important. Recall is always on the device. The user is at the center. They decide what they want Recall to take images of. They can go back in time and say I don't want that image recorded.
I don't want that record and so on and so forth. You can pause it, you can stop it because at the end of the day, Microsoft's built on trust and we want our consumers to trust us as well.
A couple of other features, what's this co create? How is that drawing on AI? And what does it do?
I get asked all the time the question around will why buy a surface? And I actually use co create as my example. I can draw a stick person and that's about it. But co create turns me into an artist. And by that I mean I can put in a little prompt, say a castle on a hill with a tree, and then I can just start drawing with my slim pen and then I can decide, well, how realistic do I want it to look or do I want it to look closer to how I'm inputting it. You can
have that experience on co pilot through the cloud. But the real key difference here is the speed you get near zero latency when you do that, because nothing goes off your device has to be processed in the cloud and then comes back to the device. It is all managed on the device itself and it is unlocked by that NPU that on the new Qualcom chips can deliver forty five trillion operations per second.
We also saw live translation. You know, we've seen a lot of this and various guys is typically it's usually in the cloud, so you might go to Microsoft Translator or a Google translator, whatever and does a reasonable Job's got for good these services, but that there's a bit of lag there. While it goes to the cloud, it thinks about it and it sends it back. What we saw today is live translation Spanish to English and back,
all on the device. None of that dialogue goes anywhere else, stays encrypted on the device.
It comes down to latency, which creates a better experience, so you're not waiting to catch up with what someone's saying. So I only unfortunately speak one language, and when when we saw today a colleague of my speaking Spanish and then another colleague speaking French, it was just incredible that they could just speak in a conversational tone at pace and immediately I saw it translated in English, so I wasn't missing part of the conversation, and I feel that that's really inclusive.
It is a real fundamental shift, isn't it. We've heard so much in the last couple of years about large language models chat GPT made by open Ai, which is a big partner of Microsoft, and this whole narrative around the capacity required to train those large language models and service all of those people typing queries and prompts into chat GPT and stable diffusion and all the others. It's
a big load. But fundamentally, once there are hundreds of millions of these types of devices out there, a lot of that load is going to be done on the device because all your software partners will create their software to work with that NPU on a copilot plus PC. So that's going to be a massive shift, isn't it. At the moment, it's very cloud centric. This is taking it ultimately right into the heart of the consumer's device, doing it there instead of doing it into cloud.
And that's great. We've talked a little bit about latency today, but it's also very resource hungry. It's not as efficient as being able to do it on the device itself, so when you bring it over there, there's also a sustainability angle here, so it's not just an amazing customer experience and a unique experience, but it's also better for the environment. So yes, you're one hundred percent right. We've
been on a journey here. We started with open AI and chat GPT, and then we started bringing through co Pilot all of that AI stuff into our applications, and then this is the next iteration.
It's not as say you're paying a massive price premium for instance, the Copilot plus, the NPU and all that sort of thing. It's basically similarly priced to what the you know, these surface pro and surface laptops were in the last iteration, Peter.
It's even better than that. In fact, our devices spect for spec twenty to twenty five percent cheaper with the launch of these Copilot plus pieces.
And that's going to be reflected in the New Zealand pre reflected in New Zealand pricing as well.
I have had many meetings with the biggest retail partners over there in New Zealand as well. They're just as excited as we are.
Well, can't wait to get my hands on one to have a play as well, So Tim, we'll see where it goes. Thanks so much for being on the show.
Thank you, Peter.
So as Tim said, they're the surface range of co Pilot plus PC's debut here on August sixth, many other Copilot plus PCs are now heading the market from the likes of Aser, Dell, HP and Lenovo. So that's what you will pretty much be presented with now if you're buying a sort of a higher end new Windows PC, a device with a neural processing unit built into it that does the AI workloads on the device.
And we will report back once we've spent a bit of time playing with these new devices trying out recall and other AI features.
Moving on, Ben to your interview with Black pearls Nick Lassett. Now, Black Pearl is listed on the Interdex with a market capitalization of around thirty seven million as we record this, but because it's primarily focused on the US market, it doesn't have much of for a profile here. What does Black Pearl actually do well?
Like you said, it's an nz X listed tech company and it mainly supplies software for marketing and lead generation and their flagship product is called Pearl Diver, which unearth's data about website visitors for sales and marketing, which has traditionally been done using cookies, which you'll probably be familiar with at this point. But Black Pearl claim to be prepared for the impending cookie apocalypse, which is when browsers will no longer support kind of standardized cross site collection
of user data by default. It's been coming for some time. It's been delayed, but we've been promised cookies are on the way out now. From what I understand, Black Pearl use their own bespoke tracking software code which links with data that has shared among partners in a data cooperative.
So if you filled out a form with Company A, they can link your data with Black Pearls tracker, and if that track is used by Company B and you visit Company b's website, then they will know that you've been there and maybe get a bit of information about you. I believe that's how it works. They also have some clever kind of AI algorithm stuff there to help with getting more of that information and confirming people who they say they are and all those kinds of things as well.
Nick is definitely a go big or go home kind of guy, as you'll realize that you listen to the interview. So here it is Ben's interview with Black Pearl Groups Nick Lissett.
Hi, Nick, welcome to the Business of Tech podcast. Thanks for joining us.
Thank you very much for having me be.
So you are the head of Black Pearl Group, a company that listed in late twenty twenty two on the z X and has since gone on to realize a bit of success. You want to give us a brief intro about yourself.
Well, I'm definitely the ugly head. We've got much better looking aheads here. So unfortunately I was nominated as the face, the founder and CEO here at Blackbild Group. And just for those that don't know who we are or what we do, we're a data technology company and we specialise in building data, lead sales and marketing solutions, specifically for the US smaller medium sized business market.
So you are obviously US focused. But you're based in New Zealand, you're listed on the zat X and being in business in New Zealand for a while now, you've noticed that there are some challenges to starting a business in New Zealand that you know is aiming to become a big global success or a unicorn, as like to call them.
Yes, scale scales the problem right, and kiwis we do a lot of things amazingly well, but we don't understand scale typically. So you know, if you look at even the fact you mentioned before, we're focused on the US market. Why are we focused on the US market? Because I think there's maybe seven hundred thousand businesses in New Zealand
and ninety something percent of them are micro businesses. In the US market we're focused in there is twenty five million SMI businesses and five point five million emy businesses and half half a million new businesses every year. That's scale, you know.
To be able to dig into that US market. There are a lot of boundaries barriers, I should say, for New Zealand companies. So you know, like you say, a lot of the QWI companies are very small companies, just a few heads. So if you're planning to scale, the only real way is to raise capital, right, to go to a venture or to have something that's just so massively successful immediately that revenue starts pouring in, which is almost impossible.
That's definitely the preferable way of I cracked that one I'll leave, you.
Know, So what so what do we do, like how do we get New Zealand businesses to find this success? New Zealander is by nature small, BC is hard to come by. It's complicated. So it's a big one question.
Yeah, you know, I mean, well, you know, we're talking about scale and it's interesting. Why just take a step back and talk about ourselves for a second, because of course that's what we like talking about. But like with this, like maybe twenty five million dollars in our core technology platform and everyone's like, wow, you know, there's a huge amount of money and wow, it's a lot of investment.
Well to put that on context, that's fifteen million dollars US right over the lifetime of our company that we've put into it. In the US are typical in like Silicon Valley, which is a little distorted, but you know, Technology Hub, their seed rounds are three million US, their A rounds are ten million US, their B rounds are one hundred million US. That is the kind of capital
that you're competing against. And if you are after a New Zealand company trying to take on a global market, you're after people that are ten x in or twenty eggs in the amount of capital that you have to compete. That capital does not exist in New Zealand. That thinking does not exist in New Zealand. So if we want to have companies that succeed, then we have to invest on them to get off shore and get a sugar
money quickly. And if you do like what we've done in Black Pearl, bring that back into New Zealand, which obviously is hugely beneficial for the economy. So the secret what we did is we took existing all the small amounts of capital we raised up front and we just shot off to America and I didn't leave until I got value add investment capital from there. And it's tough, but we wouldn't be where we are today as a company if we didn't deploy those tactics.
You said that we don't have the capital, that's reasonably easy to understand. That makes sense. It was only five and a half million of us after all. Then you also said we don't have the thinking. What do you mean by that?
So I started my first company at twenty four because I was too ugly and stupid to actually get a proper job, so to do my own thing and so I'm no stranger to raise in capital, which typically you need to do to grow. And the traditional thinking here is simply I'll get a few New Zealand customers or then go to Australia. Well, again you're engineering at that point, your thinking is already wrong. You're engineering a product for a micro market again, so small seven hundred thousand businesses,
and then you're burning time and capital. And then you're getting to Australia, which is, you know, still small comparative to the USC. You actually burn a lot of capital by burning time, by just not making an immediate decision to go, okay, well we've just got to go off after the bigger market. So that thinking every investor kind of they want to put it in the bear amount, which is normal, like they're trying to mistigate risk. You put in the beer amount and send a few KPIs
which are achievable with your small amount of money. But those KPIs are typically out of alignment with what you need to actually create a unicorn, to create a true international company. They're just different things.
So where is the thinking wrong here? Is it with the founders or is it with the investment? Are we do we have investors in New Zealand who are wanting to replicate what they do in the US but actually not realizing that there needs to be a significant difference if you're investing in New Zealand, and that difference is getting out first.
Yeah, I think it's always going to I mean it's a bit of both, is your answer. So, and reflecting on that question as you ask me that, you know, one of the things I wish i'd done is actually stuck to my guns a little bit more in earlier on in Black Pearl and said no, this is what we're doing. And typically what you're doing is you're trying
to get money and you make compromises. You go, you've got a plan as an entrepreneur and you're going to do all this, and you need X amount of capital to do it, and then you only get half that capital or a quarter of their capital. That typically the capital doesn't come in one time, it's dragged out over a period of time an early startup, and so you're always compromising on your business plan and then things don't
work out. You think, ah, maybe it could work if this and this and this, then I can still hurt my targets. But you set yourself up to fail. So the entrepreneurs are blame through not communicating the market opportunity and properly to investors and sticking to your guns. And
so that's on that side. And on the other side you often see investors and they're really trying to de risk it and they go half it and a getting caught in the middle of the road is nowhere to be unless you feel Collins he did well in the middle of the road. Everyone else you don't want to
be there. And so I kind of would say from an investor point of view, when you're going in, then going going properly back to the company, back and back that person and really get them behind them and don't yeah, don't do things by half measures and try and de risk yourself because you're actually setting yourself up for failure by doing that.
One of the things that I've heard quite a lot about the appeal of New Zealand businesses is that they are able to do more with less and that makes them a really attractive investment for vcs or other investors in New Zealand and internationally. Is what you're saying that that view of New Zealanders is kind of a limiting view or do you think that that is a useful thing that we should say, well, yes, we can do more with less, but we can also do more than more with more. Yeah, excuse that.
The expector of Kiwi's on doing being really innovative and doing lots with little is one of out is one of our war our best attribute. And like so you see example of like I'm not into into yachting at all, but like I've always fascinated by so the Americas carpan on that. So twenty and seventeen we're up against you know, it was an oracle. You know, I had all about that money in behind them, like huge, unlike open checkbook
on building a boat, and we did not. We had very little amount of money, but we innovated and there's that cycle technology that was put in and we ended up cleaning up and you go, wow, it doesn't matter if we don't have much money. We can win the day with our innovation. But if you're relying on that day, andy it up to compete. There's an unrealistic expectation of our superpower and so the advance. So what you've got to do is kind of balance the two. You want
to keep that superpower. You want to run lean, you want to you know, I had that speed and ability of changing and innovating and thinking. But you still also have to have the capital to support some more traditional ways of winning as well. And so it's getting that right blend. And to come back to your question in New Zealand, this is a very attractive country for offshore investment,
especially from America. In New Zealand actually done a really good job of making investment relatively simple for offshore vestors and a state or economy and you understand the legal system. So it's actually really attractive option given your other options, which are Europe you know, UK at the moment, which is not that stable, or Australia you know which why would you want to do that? Sorry, I.
Mean that's all good, you know, it's all good and well to say that that the US has this massive opportunity. We know it has a massive opportunity, but one of the difficulties is tapping into that opportunity. And we've seen multiple companies in New Zealand try and butt their head up against the wall and even zero right. New Zealand's biggest success story arguably have struggled in that US market
as well. So is it just a matter of capital, Is it just that you need more money to be able to get into the US or what is it?
Well, firstly, they like from Zero's interview, of which I know expert and whatsoever, are obviously a huge fanboy of what they've done, being you know, the shining example of the SaaS company going off shore. But their initial product was not engineered for the US market, right, it was engineered for here and then maybe Australia and UK or whatever the batting order was, and then the US. Well you go look at accounting in the US. It's not one country, right, It's like it is one country, it's
a republic. There's a whole lot of states with all their own laws and their own tax laws and everything. Right then, like if you not just have that ingrained in the cultural difference, well, of course it's going to be hard from our point of view. Yeah, it was really really hard breaking into America. You know the story.
I give you the whole story because because it's my best story and it's too long, But essentially I knew we had to get offshore, like an American value add investor, there's American money, and there's American money that is going to help you win over there, and that's rare thing. So I took off over the States right I was literally I booked. I had to book a return trip because you know s Divisa only last three months. But I will promise you I had no intention of returning.
I would have overstayed. I was not leaving until I got a value out investor. I got zero help from New Zealand Trade and Enterprise. They didn't want to introduce me to anyone. I had zero assistance from literally anyone. I think one person gave me one introduction to someone in San Francisco and I flew over and I took that meeting and they were no assistants, and then I asked for introductions. I was there. I was eating rubbish foods, staying in dodgy like I had a two year old son.
I hadn't you know, my wife's at home. That is what you have to do to win. So my made mistake. No one is going to give you money if you
don't put in the effort. And the reason I got backed from the guy it's down by business partner, it's in Crown after all this, after almost three months of just taking a beat down, homesick and not socializing anyone, I got introduced to a guy that turned out to be the founder and current chairman of Insight Enterprises, which is a Fortune five hundred company on the Nasdaq technology company. And this guy is like the business partner you dream
of getting, and everyone goes, oh, you're lucky to get him. Man, that's what happens when preparation meets opportunity. I just put myself through hell and my family and you know what, and I hadn't got home, still wasn't coming home. So you got to put yourself in there to win.
What year was that you were over.
In the US five six years ago?
So I guess like one thing that you might, you know, need to consider is that the the US tech scene is a very different place post post COVID, right, Like they're not just the tech scene, but San Francisco is a different place. Like there's still opportunity, but it's it's it can be more difficult to find those centers of networking, the hubs. It's less physical in person. This is what I've been hearing. So is that is that accurate? Is that making things more challenging now than it was then.
I think it's the reverse, but like San Francisco, absolutely, it's not what it was. Yeah, And I didn't actually enjoy it very much when I was there, for all the hype I found, you know that when I got some meetings with vcs and stuff over there, I didn't like the way they thought about things at all. Like it didn't gel with me that my business partners from Arizona they're like, you know, that's a cowboys state, baby, They're like they're way more aligned with Kiwis and the
kind of that pioneering spirit so different. You know, like there are a whole lot of Every state's got its own flavor and you got to find one that I think works for you a little bit. Yeah that I mean, I got some stats the other day I reckon that the technology sector is going to go from all trillion to twenty trillion valuation, and I want to say by twenty thirty. So, like you want to know about growth
an opportunity over there right now? I don't think there's ever been more like now is the time to go.
So how do you convince an investor in New Zealand? Then that that is the right thing. Say you've got a startup, you've got seed funding, and now you're saying like, I want to go big in the US. I want to spend this money that you've given me on spending my time in the US selling there rather than put on product.
And he's going wherever you do, don't do it the way I did it. Well. The answer is every investor, if you actually put out a very like, well thought through kind of battle plan for how you're going to go around things, then you're giving your communicating. So communication, come back to communication. Every time there's been like with me an investor and like they haven't been on board
with something, that's my fault for not communicating properly. And if you actually communicate accurately, then you know the chance of them being on board with you're a lot higher. But the one thing I'd say is like the revenue, like revenue really does make life a lot easier for you. And there lies the.
Catch twenty two.
Yeah, that's the catch twenty two is that you kind of everyone wants to see that revenue and so the cheapest revenue to getters from News Zealand. But that's the wrong revenue to get so again, you know, you've got to stick to your gums, put out your plan, show the size of the market. How are you going to do it? On by the way, if the answer is you don't know, then be clearer and understand that you're investing to learn over there and try and get the
investor over the line. That way, transparency, good communication.
What else you think is not being done right in New Zealand When we're looking at these tech companies that are maybe have solid product, have good founders, but are failing to scale, I guess in the way that they should.
Yeah, tech seems pretty limited at the moment, like there's not a huge layers, just not really the flavor of the month, is it at the moment? Like you look at successful tech companies and everyone says zero and then you go, oh, then what.
I mean, we've just got to We've just had gen Track has become.
Doing super well. But you have to think, you know, like but the average New Zealand though they don't know gin Track you know, or Diligence or anyone why you know, just those names like who are they? You know? But again we're still very centered you know on land and property, and no matter what we've done with rule changes and mortgage changes, the average key with psychology is around owning as much land as possible. The trouble around that is then is that that there is is very low risk
and typically safe return. So you know, like why would you not don't hate the player, hate the game. And the challenge for New Zealand is then we're not actually really adding value bringing in external money into the country, just passing money around ourselves and that doesn't help the country as a whole. So I don't know, I don't know. You know, it's funny asking me these questions. And it's so interesting because no matter what is happening in government
or in the world or anything, I don't care. Like that is what it is. I just got to get on and regardless of what the conditions are in the market. It's like it's like sports, It's like, yeah, they're all black, so I'm going to go, oh, it's rainy today, and you know we're not going to do well, Like who cares, get out there and whatever it is, you got to do it. You know, me, long enough, I'd rather die than lose a black earl, because I'd never want to look at myself in the mirror and think, ah, you
know what a for eyes. I'm lucky because there's no excuses. I don't care. I'm just there to win. And if you don't have that psychology, I don't know how you're going to win in this And you know.
In business, Yeah, it's interesting so because you know, on one hand, you're saying that, like, it really is all about mindset. It's about founder mindset, entrepreneurial mindset, that and
that drive and that is the most important thing. But then on the other hand you're saying, well, we also do have all these disincentives in New Zealand that work against it, you know, So how do we reconcile that, Like do we need fundamental policy shifts in order to create that mindset or do we just need to like do any cultural shift.
So I would say this, my job has been a lot easier because of Zero. So if I look back at some of the challenges that zero must have had with getting people to even understand forward revenues like and your recurring revenue even now for me, some people are a bit like, oh, how does that work? You know? What about next month sales? Was like they're already banked. Baby, that's recurring, you know, but like they just were trying
to ship a whole mindset. And then to a degree, you know, other technology companies like Black Pearl and the others there with recurring revenue SaaS models get to stand on you know, Rodgery's shoulders and the wider zero team, And the more success you get, the more people that port it and understand it, and then you get to tipping point, you become undeniable. It's not up to the government to make changes on things. I'm sure they could, and if you wait around for that, you'll go broke.
You know, it's up to you as the entrepreneur to understand that whatever the conditions are or the conditions, and then over time, if there's more Zeros, more gen tracks, more Black Pearls out there winning, then it just creates momentum and then then you get over the tipping points and then people actually go, well, I could buy my third investment property, or I could put some money into some tech stock because they seem to have a higher return. Sure, more risk, but you know, it could be a game
changer for us. So the more you win, the more people get behind you. The easiest way to change is by winning.
So Nicholas that, as you can tell, the guy is a hustler in the way that he was speaking, He's got some big ideas and I think the key message that he repeated a few times and there was that you need to be hitting the biggest market or one of the biggest markets in the world hard and fast and early if you want to be if you want to be able to scale big. What's your thought on that, Deake.
I totally agree with what he's saying. And in the current economic climate, I think a lot of New Zealand companies, early stage companies will be looking around going, oh my god, this is tough going here. Maybe we need to accelerate up, not try and find a proof of concepts sort of user here, who's going to champion us. Let's maybe knock on some doors overseas. And as next said, you know he didn't get much joy out of Nzte when he
went on that mission himself to the US. He had to do it himself, do the hard yard, sleeping in cheap motels and all of that stuff. I love that sort of storytelling from founders, so good on him for doing it. The breakthrough really seemed to be coming across Tim Crown from Insight Enterprise is a very well established tech company. Tim is now the chair of Black Pearl Group and very successful entrepreneur and very well connected in Arizona and around the US. So I think that has been,
as Nick pointed out, a real strength. And if you just look at the numbers, as Nick was saying, seven hundred thousand businesses in New Zealand, most of them smeeths, sme small medium sized enterprises, twenty five million in the US. So if you can set up there, establish a beachhead, develop a great product, your chance of getting hold with it is going to be that much greater.
Yeah, And I thought it was fascinating when I said to him, well, you know what about Zero, for example, and he was like, well, Zero didn't start with it. They didn't start at the US. They built something that worked for New Zealand, Australia and even Europe to a certain extent, but they weren't. It's almost like he would have had to start in a state in the US, go really strong in there and then build momentum out
from there. So which is what he, I guess, is trying to do with as doing with Black Pearl as well. And I think it's something that, like you said, it's going to have to be a real thinker for founders, especially of software at the moment. Where are they going to start? How long are they going to spend in the New Zealand market before they just go after those bigger markets.
Yeah, it's interesting how Zero did it because you do have all of that complexity of different regulation and everything. In the US, it's a much more complex market to try and serve as a small company. What would have happened if Zero had put all its early capital and resources into California and built a bridgehead there and then spread to other states. Who knows, in hindsight, maybe in some way have been on the radar off into it the big competitor a lot earlier and would have been squashed,
so they may not have been a Zero. So look, I don't know. It is our most successful software startup continues to be has a pretty successful global footprint. But I think Nick's sort of approach is ultimately the numbers bear it out. The right approach is get to the US as quickly as you can, particularly for these software as a service type plays where you are going to have a lot of businesses that are looking for a
competitive edge. So if they can use Black Pearls tools to convert leads into actual business customers, you know that that is something that's going to happen more in the US than anywhere else.
As much as I advocate for New Zealand and I think that it is a fantastic place, and I think that we have a lot to offer. At the end of the day, if you want to be a software business, you have to have scale. It's just so important. It's the thing you hear over and over again when you talk to software founders. It's the importance of scale. So yeah, there's nowhere else to scale quite like the US.
Absolutely all right.
Thank you so much to Nicholae black Pearl for coming on the show to talk about gaining a foothold in the US.
And thanks also to Tim Muzak from Microsoft for inviting me to Sydney to check out the new range of Copilot Plus surface devices from Microsoft. Show notes in the Tech section at Businessdesk dot Co dot Nz with more info about Black Pearl Group and Copilot Plus PCs.
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X very occasionally. For me, I'm afraid, but I do check innicapable. We'll be back next Thursday with another dose of the Business I'll tech Delanne.
Have a great week.