The second shift is structural. New Zealand’s start-up sector has matured dramatically. It is larger, more confident and supported by a deeper pool of founders, engineers, operators and early-stage capital. For the first time in years, the ingredients for a technology-led recovery are not only present, but aligning.
The sector is having a moment. Still a small portion of the wider economy, IT sits at an inflection point. The real question is whether it can break into a sustained boom. Much suggests it can. Access to early capital, once the perennial complaint, has improved markedly. Policy settings that previously worked at cross purposes are beginning to line up. There is no shortage of world-class ideas, the constraint is how fast and effectively we can execute them.
AI will amplify this divide. It acts as a force multiplier for organisations that deploy it with care and discipline. Caution is warranted, because indiscriminate adoption is being oversold to the point of distortion. We are deep inside a hype bubble. The economic upside depends on thoughtful, pragmatic deployment, and companies are right to hesitate before signing up for promises that feel more like theatre than transformation.
AI, advanced sensing, machine learning and a rapidly expanding ecosystem of tools are opening possibilities that did not exist even three years ago. These are not incremental upgrades. This is the largest technology cycle in a generation, reshaping how companies operate and how value is created. Entrepreneurs are sitting in front of the widest frontier we have seen in decades.
Erica Lloyd
The risk, of course, is that global volatility swamps our fragile recovery. AI markets are swinging wildly. Private credit is showing strain. None of that is within New Zealand’s control, which means what is in our control becomes even more important.
Execution is key
Execution is the lever that drives meaningful impact. Across high-growth companies, I have seen a consistent pattern: attention can gravitate to the wrong signals. Headlines glorifying capital raises and heroic founders are easy to report and emotionally satisfying, but they warp the picture. Capital is a tool, not an outcome. The real indicators, products shipped, customers won, and a team’s capacity to keep moving, are harder, less glamorous, and far more telling.
Execution is what turns small companies into large ones, and large companies into economic engines. Rocket Lab and Xero were once tiny ventures fuelled more by conviction than resources.
Rocket Lab is now a global heavyweight in aerospace. Last year, its Space Systems division accounted for roughly 70% of revenue through component manufacturing, further proof of engineering excellence and scale beyond launch services. Its first government “customer” was regulatory. New Zealand built an orbital licensing and compliance regime from scratch, and at remarkable speed. It remains one of the clearest examples of a government removing friction rather than adding it, demonstrating what co-ordinated public and private action can achieve when urgency is shared.
The evolution of the space sector tells its own story. Once the domain of superpower militaries, it now underpins everything from GPS to weather forecasting to global logistics. New Zealand, improbable as it once seemed and powered by Rocket Lab, has carved out a foothold and spawned a cluster of new space companies.
Xero followed a different trajectory but demonstrated similar fundamentals, disciplined execution, product obsession and a founder unwilling to bend to conventional limits. It is now a major platform exporting beautifully engineered accounting software to the world. It showed that New Zealand can build category-defining software at scale, opening the door for others.
Halter is the newest aspirant to the big leagues. But is no overnight success. Its own cow collar took eight years and multiple hardware generations to get right, a reminder that innovation at the edge of biology and electronics is slow and unforgiving. Chief executive Craig Piggott had the advantage of precedent. He worked for Sir Peter Beck, and visibility shapes ambition. You cannot be what you cannot see.
One under-appreciated truth is that none of these three companies came out of universities. Their common DNA is relentless execution, teams making thousands of smart micro decisions, and founders whose determination borders on unreasonable. That combination, founder intensity and disciplined, data-led teams, often separates a good idea from a globally competitive business.
In his roadmap for a better future, Sir Paul Callaghan captured this succinctly, “One hundred inspired New Zealand entrepreneurs could turn this country around.” Serial entrepreneur Rowan Simpson updated the frame for our times in his recent Callaghan Reboot lecture, we need 10,000 people contributing their expertise to grow these companies.
Execution is operational excellence. It is unglamorous and a demanding team sport. It is funded by revenue or investment. And it beats hype every time. Simpson makes this case plainly in How to Be Wrong. And he is right. I have tried and failed to disagree with him for 20 years! Lone wolf energy while appealing to our national mythology has never aligned with reality.
New Zealand is and should be proud of our scientists and inventors, but intellectual property alone does not create a business. Winning in business requires spending more time interrogating the problem than polishing the solution. Build, test, break, learn and move. If no one wants it, the brilliance of the science does not matter.
Start-up realities
Start-ups exist to attack large markets quickly, using data and relentless time in front of customers. Wellington fintech Marloo shows how this works. Before writing code, the team interviewed 800 target customers, mapping pain points with forensic intensity. Only then did they build an AI assistant that removes friction from financial advisers’ workflows. The founders brought discipline honed at Sharesies, and it shows.
Auror is another standout. It started with university entrepreneurship support and is now helping retailers track and prevent theft at global scale, serving tens of thousands of stores and thousands of law enforcement agencies.
The principle is consistent, find the genuine pain point and solve it better than anyone else. Alimetry does this by removing pain entirely. The med tech company makes a product called Gastric Alimetry – this is a wearable, non-invasive device that records the electrical activity of the stomach from the skin surface. It is FDA-cleared, elegant and a leap forward in gut health diagnosis. There is now a sector-agnostic wealth of brilliant local SaaS and deep tech companies like these.
One area that still causes cultural discomfort is sales. Selling – exchanging a product for cash – is the clearest form of validation a start-up can get. Yet sales and marketing remain undervalued in New Zealand’s business culture. We revere invention, but selling sometimes gives us the ick, even though it is how impact and scale are created.
In the public sector, the shift from grants to the R&D tax incentive prompted loud debate. I was there early, and the latest data is encouraging. Since launch, 1,752 firms have claimed around $1billion in tax credits. On average, firms spent more on R&D each year than they otherwise would have, producing $1.83b in additional activity. The challenge now is converting that investment into genuine commercial outcomes.
There are high hopes and some reasonable trepidation for NZIAT, the new publicly funded New Zealand research institute designed to fast-track advanced technologies like AI, quantum, and synthetic biology into real-world things. We need it to fire.
More structural reform is underway. New Zealand has rewritten the rules for commercialising innovation. University researchers now hold the first right to commercialise inventions funded through the Science, Innovation and Technology portfolio. The aim is to empower researchers and spark more ventures. The detail will matter. Universities will still benefit from spinning out companies, regardless of equity positions.
Start-up exits matter enormously, this is how the ecosystem grows. Exits seed the next generation, founders with experience, scars and capital. Improving the ESOP tax regime is part of that puzzle. Changes now before a select committee, letting employees defer tax and raising exempt scheme thresholds, would make equity meaningful and help attract and retain scarce talent. Government grants matter too, but not that much and not always. I’ve seen that firms that chase grants instead of market momentum tend to build muscle in the wrong places.
Culturally, the sector needs to grow up. We do not yet have a female equivalent of “tech bro” because we do not yet have enough women in the ecosystem to generate a stereotype. Fixing that is not cosmetic, it is economic. Community matters too. Care, support, good collisions and warm connections fuel start-up growth faster than anything. Our insular tendencies can sometimes hold us back.
Personal motivation
My motivation is personal. I want Aotearoa New Zealand to be a place where opportunity is abundant. Most of my whānau now live offshore – not on OE but settled, because Europe, the United States and Australia offer more, more dynamism, more meaningful work. They have left in the past five years, alongside so many of our best and brightest.
If any of the above is to matter, if the current momentum is to hold, the outflow of our people needs to reverse, and fast.
Erica Lloyd works with ambitious companies in New Zealand and the United States and has previously held roles at Zenno Astronautics, Soul Machines, BNZ, Datacom and Callaghan Innovation. She does not work with any of the businesses referenced in the article.