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Customers provide capital in tight times

Tighter market conditions mean businesses will need to source their growth through customers rather than investors, says MIT Entrepreneurship Center director Ken Morse.

Morse was in New Zealand to deliver the workshop Global Sales Strategies for Kiwi Entrepreneurs.

He presented to chief executives, sales and business managers from 50 local companies.

“The funding for ambitious Kiwi start-ups will come more from customers than from investors,” he says.

“That means everyone in the company has to sell and everyone has to be ambitious in front of the customer.

“But [they must] accept a modest salary until the company achieves sustainable global growth: which will take a while.”

Morse says big companies also have a crucial role to play in keeping New Zealand’s start-ups ticking over.

“The most important thing that large companies can do to support the entrepreneurial ecosystem is to be customers for small companies.”

Morse says big companies in Malaysia already understand this.

“The eight largest companies in Malaysia are directed by Khazanah [the investment holding arm of the Malaysian government] to buy from start-ups.”

“They’re getting help to think about what it takes to go global.

“They’re also getting a boost to their ambition and vision.

“And they’re getting access to like-minded contacts and networks,” says Morse.

Sidhe Interactive managing director Mario Wynands says the workshop provided different perspectives on approaches to sales.

“It’s as much about what you’re doing right – a sort of day of validation – as it is about finding out about how others are doing it.”

Magritek business development manager John Trail also attended the workshop.

His company is about to launch into a new product development phase that will involve selling into large, international oil refineries.

“The workshop provides a good general understanding of how to develop relationships with bigger clients, and a refresher on things like setting up initial meetings and negotiation,” he says.

The workshop uses a blend of cases studies, discussions led by Morse and practical exercises.

They build up to one-on-one elevator pitches to a panel of judges.

The judges included No 8 Ventures managing partner Jenny Morel; Healtheries managing director Sarah Kennedy; Glidepath managing director Ken Stevens; Icehouse chief executive Andrew Hamilton; and MBA candidates from MIT.

Morse has been delivering the global sales workshops in New Zealand for 10 years.

PricewaterhouseCoopers, New Zealand Trade and Enterprise, and the Foundation for Research, Science and Technology, among others, sponsor the workshop.

The two-day course will be held again in January 2010.

This article originally appeared in Bright magazine on February / March 2009. Issue 32.