How to create a small business...

...give a New Zealander a large business!

The old Aussie joke is a little mean but I'm afraid it has a lot of truth. Over the past 25 years we have seen all the large NZ industrial companies either fail or reduced to slim shadows of their former selves. Fletcher Challenge, Carter Holt Harvey, Brierley Investments, Telecom, Air NZ, Fisher and Paykel...even Fonterra has not performed as expected following its creation from the dairy companies Kiwi and NZ Dairy Group.

I believe the reason that NZ is number 35 by GDP per capita (2008 purchasing power parity) and Australia is number 4, is that Australians know how to build and sustain big companies. Likewise the US, UK, The Netherlands, Finland, Italy and the other countries in the top 10.

We consistently read surveys rating NZ one of the best countries in the world to do business and we hear our prime ministers raving about our successes like Swazi, Line7, Old Fashioned Foods and Xero and how they are pursuing policies to encourage such innovative start-ups. But it takes a hell of a lot of Swazis to make up for one failed Fletcher Challenge. Our previous government managed to wipe $2B off our largest company, Telecom, in one day through their bumbling management of telecommunications policy. Think of how many Xeros it takes to make that up!

The record shows that NZ is a barren place for big companies. We're too small and too isolated with too high a cost structure, I hear you say. Finland is small and isolated and one of the most expensive countries in the world in which to live and do business and yet they have Nokia (and Kone and Metso and many other world-leading companies). And most of Finland is in darkness for half of the year!

New Zealanders love to see our sports people win and our musicians and film-makers on the podiums at world events, but when it comes to success in business, our petty jealousies come to the fore. This is a country where too often people vandalise expensive cars out of spite. Unfortunately, many New Zealanders do not appreciate that the owners of those cars are probably providing them with jobs.

If this country wants to climb back up the international ladder, the only way we are going to do it is to create and grow some very big companies. Unfortunately that will inevitably mean we'll create some very wealthy people along the way. New Zealanders and our governments need to learn to love and nurture big businesses if they are to earn the standard of living they expect.

The Newspaper Replies

The response to my letter from the General Manager of The Dominion Post:

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You are, of course, entitled to your opinion. Over many years I have found that readers' tastes, preferences and ideas vary greatly and that the daily newspaper finds it impossible to meet everyone's desires and needs.

We are constantly lambasted for positive/violent news on the front page and so purposely leaven the offering with warmer, more empathetic news and pictures when they are available. The picture of the cute dogs in their coats is part of that. It doesn't appeal to you but we know that it resonates with many of our readers. Kids and animals always play well. Similarly, we gave extensive coverage to the Melbourne shooting and subsequent arrests because we believe there is interest in what happens with our closest neighbour. The Korean crisis had already had plenty of coverage for days, similarly the evolving situation in Iran which got strong coverage today. But for trying to vary the offering you accuse us of being something of an English tabloid or gossip magazine. I make no apologies for the paper being seen as populist if the alternative is that we are seen as elitist or only interested in the serious and the mundane. A newspaper that takes such an aloof approach is doomed. A daily paper is a smorgasbord, it delivers a lot to its readers who can choose what they want from the buffet.

I note you think you will be better served by the web. Interesting to note that when you read online the news that you will be looking for in RSS feeds and searches will actually be produced by the Dominion Post and other newspapers and news agencies. Without the papers your internet diet would be thin to say the least. I hope newspapers will still be around to provide you with that.
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More on newspapers...

Here is the letter I sent to the editor of our local newspaper in response to his letter inquiring why I have cancelled my subscription:

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Thank you for your letter of 15th June regarding my cancelled subscription to The Dominion Post. You say you would like to know why I cancelled and I am happy to outline the reasons.

Firstly, I find that the Internet is increasingly my primary source of news. I receive RSS feeds from the BBC, The New Zealand Herald and other sites that I find present the local and international news in a far more accessible and comprehensive format than your newspaper.

But the main reason I have cancelled is because I do not like the direction that The Dominion Post has taken in the last several years. Take today's edition (20-21 June), for example. The front page lead, with a red banner headline, is a story about a minor fraud committed by a Wellington man against a TradeMe executive. Surely a red banner headline signifies a more important story than this? Most of the rest of the front page is taken up with a story about some dogs that people have knitted coats for! The only other story on the front page is a small piece about the weather for tonight's test match.

Then we go to the World news section. The entire front page and most of page two is taken up with background pieces on a Melbourne gang family that is really only of minor interest to New Zealanders. The leading world news story - the evolving situation in Iran - is given two short columns on page 3. If the North Koreans land a missile on Hawaii tomorrow, I dare say you'll tuck it in after the stories about cats and babies and the diets of minor entertainment industry figures!

Simply put, your newspaper has turned into a cross between an English tabloid and an American gossip magazine. You are clearly aiming at the populist market and are no longer interested in being a serious broadsheet that focuses on genuine news. I can't blame you for pursuing this strategy - going by the recent article on your front page about your increasing readership (which, frankly, is another indictment on your use of your front page), it is successful. But if I want gossip and so-called human interest (or puppy interest) stories, I would rather read the Women's Weekly.

If it is any consolation, I no longer watch the television news for the same reasons.

I appreciate you writing to inquire about my cancellation. Perhaps there is hope for your newspaper after all.
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What will I use to wrap the rubbish in?

I've given up newspapers. Finally. For some time now, I've tended to get most of my news online with RSS feeds from BBC, NZ Herald and Stuff, and I've been getting more and more frustrated with the print media. The local newspaper here in Wellington is the Dominion Post, which came into being about five years ago when the morning paper, The Dominion, was merged with the The Evening Post. The editors like to proclaim its success with self-congratulatory articles about its increasing circulation and that may be fact, but they've done it by turning a good broadsheet into a trashy tabloid-like rag. Banner headlines on the front page now proclaim social interest articles interspersed with political commentary rather than heralding genuine news.

I have long since given up on TV news and recently stopped listening to our public radio because it is slightly to the left of Mao Tsedong in its editorial policy, so I'm left with the wonderful, eclectic, catering-to-all Web as my sole source of news.

I don't feel I've lost anything at all.