The entrepreneurial ecosystem

In Kenya, if you see a large buffalo it will probably have a small oxpecker bird perched on its back. The oxpecker lives on the buffalo’s ticks, a relationship that benefits both creatures. In the natural world, only the fittest survive... and smaller creatures sometimes do so by cleverly developing a mutually beneficial relationship with larger ones. 

The same is true in business. Despite the worldwide recession, some of New Zealand’s smart small companies are thriving as they partner with large firms. What are their secrets?

“Being highly specialised and clear about what you can offer,” says director of BookIt, Ryan Baker.

BookIt emerged in 2004 from the stable of Dunedin-based Taylormade, best known for its innovative America’s Cup graphics, to provide on-line booking systems for travel and tourism.

Its ‘out-of-the-box’ system plugs seamlessly into existing websites, and has big business clients that include Tourism Holdings, Yellow Pages Group, Intercity Group and Trojan Holdings.

With only six staff including two part-time, BookIt already processes $1.5 million in bookings a month, and has been averaging year-on-year growth of 200 percent for the past six months.

Baker says the secret to his company’s rapid rise is knowing how they can fit in with the strategic plans of larger companies.

“Big businesses like a specialised service they don’t have in-house that complements what they do. Big companies are clear about their own business, so it’s up to the smaller partner to work out what you can offer that fits with that,” says Baker.

BookIt has been used extensively by umbrella tourism company Tourism Holdings Ltd for online bookings of everything from hotels and activities to bus tours, motorhomes and ski passes.

THL’s various tourism operations all had their own websites using different systems. BookIt offered them a way to move to one simple platform.

“The team at BookIt have a wonderful knack of surpassing expectations!” says Kate Meldrum, marketing and customer experience manager for Tourism Holdings.

“Our customers want a hassle-free experience – as do we and our business partners”.

Clarity and uniqueness

Being crystal clear about what you can offer and what makes you unique is also something Dana Mitchell, chief executive of Stages Food, sees as vital before any successful partnership can be forged.

Stages Food produces frozen organic baby food. It came about when Mitchell had her first baby, and was disappointed with the baby foods on offer. Stages Food was launched in 2005, and within a year had won a SIAL prize in France – one of the most prestigious food awards in the world.

The company, which only employs two people full-time, is working on a large partnership in manufacturing and retail with a North American company, due to hit the markets there next year. 

Commercial sensitivity means Mitchell can’t yet say who that partner is, but she will say that the preparatory work involves plant trials requiring over 12 tons of raw material to be tested for market-readiness. Overall, the cost of trials could top $1 million, she says.

Mitchell believes that effective partnering can provide strategic advantages not possible by going it alone. But she warns not to assume partnerships last forever. 

“Even those that last can certainly change over time, for good or bad. So a good strategy is to not only consider the pros and cons of entering, but also to ask yourself  ‘what if’ in the case of partnership dissolution or change.”

“We’re clear that our point of difference is product innovation, and we’ve always seen ourselves as export-led. So, with the help of New Zealand Trade and Enterprise, we decided to focus on North America and started investigating possible retailers.”