Could Christchurch become New Zealand’s Silicon Valley?

With Christchurch’s first Techweek over and done, Jonathan Cotton takes a moment to look back and ask the question seemingly on every tech-conscious Cantabrian’s lips: Could Christchurch become the centre of New Zealand’s burgeoning tech boom?

‘The Next Silicon Valley’ seems to be a term that describes everywhere and nowhere at the same time.

The next Silicon Valley is in Seattle, right? Or was it Austin, Texas? Somewhere in India? The North Shore? Contenders for the title are myriad and we’ve heard it all before – is there a city in the world that doesn’t want to be the centre of the new digital economy?

But you know what they say: You have to break a few eggs … and following the devastation of the 2010/2011 Christchurch earthquakes, many people started thinking about just how to make the most of Christchurch’s scrambled ground zero.

Cue the creation of an innovation precinct in downtown Christchurch. Part of the city’s 2012 blueprint, supported by the Canterbury Development Corporation (CDC) and the Ministry of Business, Innovation & Employment (MBIE) and covering three city blocks, the hub focuses on tech-based companies, from startups to established global organisations. Majors already occupying space include Vodafone, Wynyard Group and Kathmandu.

For (currently) smaller companies looking to make it big, the GreenHouse is one of the co-working spaces on offer, already housing several burgeoning startups – including Property Plot, Debtor Daddy and the great hope of financial education, Banqer.

BANQER CEO KENDALL FLUTEY

Banqer, a simulated online banking platform for classrooms provides a hands-on environment for young people to “get curious, creative, and ultimately, confident” with money. They’ve been winning awards everywhere and are currently expanding into Australia. And they’ve managed it all from the Garden City. Perhaps even more surprising, that’s by design rather than accident.

“We did a big search of New Zealand before we made a move,” says Banqer CEO and relentless achiever Kendall Flutey. “I’m a Cantabrian. I grew up here, so I knew the city. I was away for around eight years but moving back was like moving back to a new city. The quakes had happened of course, and this conservative little city had now become this exciting, risk-seeking place.”

“We had launched in Wellington and some of our team were starting to go full time. We needed office space, so we did a search of the country and we were just attracted to the GreenHouse.”

The GreenHouse is a collaborative hub in the central city focused on supporting and commercialising small business, specifically digital and ICT start-ups. “There’s a spectrum for these sorts of places,” says Flutey. “They’re either completely hands-off, or they’re incubator style. The Greenhouse is great for us because you get a lot of support from the Canterbury Development Corporation (CDC) without the equity investment.”

CDC (PHOTO: CHRIS WILLIAMS)

The purpose of the CDC (the oldest agency of its kind in the country) is to identify sectors in Christchurch with high growth potential and to support businesses in those sectors. And, so far, it’s working.

“The tech scene here is really connected,” says Sheralee MacDonald, client manager at The Agency. “We’re talking about world-class businesses here, businesses that are renowned in their niche tech sectors. There’s a lot of collaboration going on. We’re not doing things in isolation.”

“These are clever people getting on and doing their thing, and there are so many companies here doing astounding things. It’s just that no-one here has heard of them. That’s what Techweek has been about for us – getting those names out there. The unique thing about Christchurch is that there’s a definite vision that’s evolving”.

That vision is producing interesting results. Case in point, the ’gamified’ crossing technology that’s been popping up all over the city.

SmartCross is a New Zealand-born technology that combines traffic signal technology with gaming concepts to produce ‘while-you-wait’ diversions at central road crossings.

In essence, SmartCross promotes road safety via an interactive touchscreen device that allows pedestrians to play Pong with each other while they wait to cross the street. The game is linked to the red pedestrian signal which means the game finishes when the signal turns green. The platform also offer a unique method of advertising for business as well as an opportunity traffic-based notifications.

Similarly, the oversized 1980’s arcade-style game Attack of the Cones, which appeared at a Tuam Street crossing in December last year, hints at the creative possibilities open to a city rebuilding itself, and deciding what that rebuild is going to look like.

Produced by creative urban regeneration initiative Gap Filler, the project, the first of its kind in the world, boasts an oversized joystick, giant buttons and 5 metre-wide screen mounted on the Vodafone Building. The game requires two to three people to operate, forcing pedestrians to make friends with other Cantabrians while they go about their day. (High scores here).

And while diversions such as the above may seem trite for a city building itself in the wake of disaster, the Christchurch tech sector has the numbers to back up its claims as New Zealand’s most exciting innovation hotspot. The tech sector currently contributes $2.4 billion to the city’s gross domestic product annually and employs almost 15,000 people.

While it’s not without its own heavy-hitters (including e-commerce solutions heavyweight SLI Systems) the big names can usually still be found in Auckland, increasing numbers of remotely-based companies are starting to make their mark in New Zealand and on the world stage.

“Christchurch is beginning to attract attention as a place where you can really do great business,” says MacDonald. “We’ve got a lot of very, very good companies doing amazing things here and overseas, and it’s not just about the opportunities available to CEOs. The people in these companies are finding themselves in really good positions. The people who have come up through these companies – the initial dev people for instance – some of them are now heading up really big teams, here and internationally.”

Employers in Christchurch report that the region is becoming more attractive for staff weary of the economic burdens of other areas. “Christchurch has got it all for us,” says Gwyn Edwards, CTO of game development studio CerebralFix.

Having worked with some of the biggest names in the gaming industry (including The Walt Disney Company and DreamWorks) and with roots firmly in the mobile and casual gaming markets, CerebralFix forms part of a rapidly-growing game development scene in Christchurch including Digital Confectioners, who also occupy a space at EPIC (Enterprise Precinct and Innovation Campus).

“It’s got talented people, a good work/lifestyle balance and an unbeatable cost of living,” Edwards says. “It’s about affordability. We’re a smallish company and were we paying Auckland wages we simply wouldn’t be sustainable. If we were in Auckland the salaries would be probably 50% higher and our staff still wouldn’t have the opportunities they have here in Christchurch.”

With soaring house prices in Auckland and an unenviable cost of living, Christchurch is increasingly attracting both employers and staff who want to achieve great things and not go bankrupt doing it. “It’s really useful to be able pay wages that allow staff to actually buy houses,” says Sam Evans, director at Digital Confectioners. “Especially when you compare here to Auckland, where that’s just not possible. Sure, there is a positive network effect of being in a larger city, you have a bigger talent pool to pull from, but I have no temptation to move there just because of that. Your staff being able to buy houses, that’s important, and now that we’re growing a bit factors like that are becoming more and more important to us.”

So does Christchurch offer the big city experience comparable to the big city, without the big city price tag?

“If you’re used to living in a small centre it’s great,” says MacDonald. “There is a real convenience to Christchurch and that’s attracting people to the area.”

“You see out the tech people out on the mountain bike tracks every weekend. It’s easy to live here, it’s easy to find a park and when you do it’s only $10 a day. The cost of living is better and you’re able to buy a house. I’ve heard companies say there’s so much interest from dev people outside of Christchurch wanting to buy a house and not being able to do that anywhere else.”

“Oh, it’s all about lifestyle,’ says Edwards. “For me personally, I fish, I mountainbike, roadbike, ski, and all these things are on my doorstep. Christchurch has a big city feel – there are decent restaurants, things to do, and there’s plenty to make you want to stay here.”

And these days the commute to those things – whether it’s Auckland’s bar scene or your product’s target market – can be a perfectly acceptable time commitment. “I still spend a lot of time in Auckland,” says Flutey. “It is the heart of New Zealand corporate business after all. When we meet with our partners, launching new features, Auckland is usually a part of that. It has the economies of scale. But the great thing is Auckland is very accessible from Christchurch. And these days you can really conduct business anywhere.”

Edwards agrees. “You can 100 percent work from anywhere. For this business, it doesn’t matter where we are, we just need strong infrastructure – strong IT pipes – to get data into and out of the country easily. We’re a completely cloud-based organisation, so that’s important. We’ve even got an office in Westport and even there we’ve got decent upload and download speeds.”

When teams and founders move it’s often for the purpose of being close to their markets – If your customer base is in Auckland it might make a lot of sense to be there. “There are companies here that might set up an Auckland office or travel a couple of times a week,” says MacDonald, “but for a lot of the businesses we work with, Christchurch isn’t the market they’re targeting. And neither is Auckland.”

In fact many of the companies occupying Biz Dojo, the GreenHouse and EPIC in the innovation hub have their sights set firmly on the international market.

“Most of these started off here and the founders live here and can quite easily do the job from here,” says MacDonald. Modlar is a good example. The platform connecting architects and building product manufacturers and with a network of over 179,000 architects, designers and construction professionals was founded in Christchurch and most of their product and development them are still here.

“The manufacturing is not New Zealand-based however and the sales and marketing team are in the States,” he says. “They didn’t need go to the international market via Auckland.”

The elephant in the room of course is that Christchurch lies on some very active fault lines. But for these entrepreneurs, the quakes are more about resilience and opportunity than of disruption or loss.

“We were hit hard in the quakes but we still consider ourselves very lucky,” says Evans. “When the quake hit, our office was in the red-zone but we managed to save our equipment. We effectively got a short period where we could get into the office and get our computers out and we just worked from [partner] James’s [Tan, director at Digital Confectioners] living room for the next couple of months. And here we are.”

“There are so many stories like that,” says MacDonald. “Stories of our people being able to say ‘no problem’ and work out of garages and living rooms and just getting on and making it happen. I think in part that’s thanks to Christchurch having such a cool, connected community in the tech sector and that’s only become more so after the quake.”


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