The NZ ScaleUp story — an ending & new beginnings
By: Mahesh Muralidhar
Tags: Startup New Zealand, New Zealand, Startup, Venture Capital, Venture

Kia Ora,

This is the NZSU story. Our story. How we started, how we’ve changed and where we are going.

The NZSU story

New Zealand ScaleUp (NZSU) was founded to help New Zealand become an even happier place by transforming the NZ startup ecosystem. We believe that New Zealand can produce many high growth, incredibly valuable, global businesses. We have top universities (a critical mass of top engineering faculties is the leading determinant to create significant startup hubs), punch above our weight when we want to and have an innate “problem solving” culture. As a former founder, early operator and Exec at some of Australia’s biggest startup success stories (including Canva and Airtasker), I wanted to give back to the NZ startup ecosystem, giving back to Aotearoa.

When I returned home in February, I wrote up a ragtag strategy document and shared it with a bunch of startup_nz people who were kind enough to give me their feedback. Then I just started to speak to early stage founders, sharing thoughts, experiences and stories to help them with key decisions around product, growth, people, business models etc. Simon Bathula came on board as an NZSU co-founder and I am forever grateful to him for doing that. A wonderful human being and a top operator, he helped grow and accelerate NZSU’s impact.

We were helping early stage startups and founders pro bono and scaling revenue positive startups through strategic pieces of work such as OKR rollouts, leadership restructures, helping set up operating models for scale etc. We knew the value of staying lean and profitable, but the latter was not easy to scale and accelerate and I really just wanted to do the former and help NZ’s next generation of great tech (early stage) founders go big. It became clear that we needed to discover profitable, easy to scale and easy to manage businesses that would free up time to spend with early stage founders.

It has been a valuable lesson on how focusing on building a business is a powerful first step in building high growth tech companies. A focus on cash flow forces you to address customer problems (it is one of the key things Phase One helps founders with: navigating the tension between solving today’s customer problems in pursuit of a world changing vision — this is really hard). Startups kept asking for help with hiring and with levelling up their teams to deal with more and more complex problems. We decided to separate our service offerings to facilitate this, and thus LevelUp ,HireLyte and Phase One came into being.

To deal with the problem of startup levelling up, we ran our first LevelUp manager training session with some luminaries from the Aussie tech scene as the first group of trainers. We were stunned when the second set of training sessions sold out before the first set had started. We realised that there was potential product market fit with this approach. Four months (and more than a few late nights) later we have run 12 training programmes for 100 attendees from 50+ organisations across Australia & New Zealand, involving 44 epic trainers from leading ANZ startups!

One of the key goals for NZSU was to help build powerful, valuable businesses. Given the traction so far, and my own experience in startup land, I genuinely believe LevelUp is addressing a problem that startups and businesses face all over the world. Consequently Shay Webster has joined Simon in pursuing LevelUp as its own venture — exciting! Their mission is to ensure every startup, scaleup, and their people, have access to the knowledge they need to be successful, and give today’s leaders the opportunity to share their expertise with the next generation.

We will be converting the NZSU LinkedIn to LevelUp going forward, so you can stay up to date with LevelUp here. You can also find more information on their new website: LevelUpLearn.co.

We identified that hiring was a major issue for startups. The demands on talent acquisition are increasing given the tightness of the market and increased value of top talent. It struck us that setting up a startup-focused talent business would fill a gap in the market. Having built quite a few top performing talent acquisition teams globally, I was also sure that to nail high performance TA, a strong sense of commerciality, curiosity around business and a desire to solve problems for the customer were key.

We identified a group of top graduates and trained them up in talent acquisition. We also identified a “win win” business model of offering talent acquisition services on contract as opposed to on placement. Essentially, a niche talent consulting business. There was instant buy in from customers and the initial team are now Directors of the business. They are now building this business as a standalone venture. The HireLyte Directors have agreed to sponsor and support my pursuit of working with early stage founders in New Zealand. Yeah!

The HireLyte Directors are excited about growing a vibrant business which makes a difference to ANZ startups and also makes startups more accessible to other graduates who they hire to be part of the business. They will set aside some of their profits to support a small team to help grow NZ’s next great set of founders. Which brings us to the final business to come out of NZSU.

As I mentioned — the thing I want to do the most is to spend time developing early stage startups. Whilst helping to set up LevelUp and HireLyte, we worked steadily with more and more early stage founders and built a community. I also had the opportunity to grow this community through my ongoing role as a mentor and investor in Startmate, where I was humbled to be recently recognised as one of the most valuable mentors in 2021.

The organic growth of the community and the feedback from founders gave us confidence that we are — and can — genuinely make a difference to early stage startups in New Zealand. And thus Phase One was born. Phase One is a Y Combinator style community that connects operators who have ‘been there, done that’ with early stage founders. I have seen the difference that successful operators with global unicorn experience made to the Australian startup ecosystem. That experience helped many of us in asking the right strategic questions and provided us with frameworks to execute detail immaculately. That expertise helped us understand what to prioritise and when.

I can already see the benefit of injecting that know-how into our local startups. We believe that it is critical that founders start off solving a well crafted, evidenced problem statement, show traction in relation to that problem and have a big vision that they’re passionate about pursuing. Startups that are able to achieve all of this are truly investable. We help them achieve all of this — at no costs and caveats. We will be raising a pre-seed fund that will invest into some of these startups.

So it’s been a busy six months! Natasha (thanks Nat for being the first one), Ashley, Charizze, Doris, Mohammed, Athena, Callum, Julia, Kevin, Bradley, Ahmed and Shay have each played a critical part in the success we’ve had so far. It has been wonderful to see the growth of all of these amazing people as they grow their professional careers. These guys are the future of New Zealand and it has been a tremendous privilege to work with them and help them think through and execute on strategic and tactical issues. In my opinion you would be lucky to work with any of them — they are all stars. Again a special call out to Simon.

It has been one helluva shift getting all of this up and running. I am really excited about the future of all three businesses. The foundations are solid and the ambitions are big! I hope we can have your continued support — after all our mission is to make New Zealand an even happier place by transforming the New Zealand startup ecosystem.

Cheers,

Mahesh

CEO — Phase One

Board — HireLyte, LevelUp

ex-NZSU :)