Advancing technology: why a new public research organisation is so exciting
Plus: Rob Everett to chair Simplicity, Harry Flett on WildHearts and a robo arm for Hugging Face
Happy Thursday!
Anyone else feel like after taking a break, your first week back is more like a month? Well, I’ve aged in dog years for the past few days but we’re nearly to the weekend now and to celebrate we have a free edition of the newsletter available to all subscribers.
We’re kicking off this morning with a very thoughtful op-ed from Tim Wixon over at today’s presenting partner BNZ about the huge potential benefits of the recently announced Public Research Organisation (PRO) for technology.
We are also excited to host a Caffeine Daily & BNZ breakfast on Wednesday 28th May for founders and the wider start up ecosystem. Keep an eye out for more details next week!
And don’t worry, you’re also getting your usual Daily Shot of news.
Here’s what’s brewing:
Rob Everett to chair board of Simplicity
Pod Pick: From burnout to balance: lessons in product, writing and culture with Harry Flett
Event: Manawatū Innovation Showcase TONIGHT
Hugging Face releases a very affordable 3D-printed robotic arm
The bizarre problem of AI being pathetically agreeable
As always, thank you to everyone who has upgraded to a paid subscription or simply recommended Caffeine to friends and whānau. We couldn’t do any of this without you.
Finn and the CAFFEINE team
We’re excited to announce our new partnership with BNZ. As New Zealand's largest business bank, BNZ shares our mission to support the next wave of founders and operators. Over the coming months, we’ll be working together to share insights, tools, and stories that help you grow smarter and faster. Keep an eye out every Thursday for content powered by BNZ.
Advancing technology: new public research organisation could offer valuable insight on both technology and industry.
A new Public Research Organisation (PRO) for technology could be precisely what's needed - not just for advancing technology and adoption in New Zealand, but for understanding the industry itself. If New Zealand’s technology industry (however defined) is to realise its potential, I believe we need to better define it, make it visible and track its economic impact. How else will we know if research, policies and other efforts are working?
At their best, the new PRO and a new intellectual property (IP) policy (announced 24 January 2025) could see New Zealand create more leading-edge technology, as well as see more New Zealand businesses become technology integrated, or enabled. The flow on benefits could be significant, both for productivity and economic growth (beyond our relative reliance on tourism and agriculture). Add to this the chance to better understand the technology industry itself and I believe the overall opportunity of the new PRO is compelling.
Defining the parameters
The technology industry has been described as New Zealand’s third biggest exporter [1], or offshore revenue earner and one that contributes $22.6 billion in GDP [2]. That all sounds good, but are these the best measures to track positive economic benefit for New Zealand? With the expanding global footprint of New Zealand ‘born and bred’ technology businesses, the ever-increasing role of technology across industries and the nature of weightless digital exports - it seems we don’t have the visibility or track the metrics that we should. If we could better define some of the key parameters, we could track the effort it’s going to take to grow the technology industry and monitor effectiveness.
From my vantage point, there are two useful baskets for defining technology businesses (and by proxy the technology industry):
Pure technology: the companies who make and sell technology (e.g. software, biotech, high-tech infrastructure, high-tech/advanced manufacturers)
Integrated technology: companies whose business model centres on proprietary technology (owned or controlled by that business) that is utilised for a competitive advantage and the technology is or technologies are a commercial opportunity in its or their own right.
With these two broad baskets in mind, perhaps the new PRO could support reaching a widely utilised technology industry definition, in conjunction with those organisations within and close to the industry already. It could also track a large cohort of technology businesses and measure the success and economic benefit metrics for those businesses. The New Zealand technology industry could be invited to sign up, self-identify and participate in PRO research to benefit from that but also to share identified metrics. Many would be up for this. From my observation, there is a broadly shared sentiment in the technology industry around growing New Zealand and our economy.
Asking the right questions
A key stated goal of the Government is to double New Zealand exports. A worthy goal. However, with respect to New Zealand’s technology industry, the question I’ve been pondering is whether exports (which have a particular definition) alone are the appropriate metric to track. This challenge has been well documented by the OECD [3] and applies particularly to businesses in the technology industry and those businesses trading digitally.
The majority of exports from New Zealand are tangible and more traditional services, but in the technology industry the offering can be digital and weightless. Technology can also be hardware that may never touch New Zealand, even if the IP, research and development, head office etc. is in New Zealand. This can make the true economic benefit for New Zealand created by the New Zealand technology industry difficult to track.
In my experience, many (perhaps most, over time) New Zealand born technology businesses are global, with an increasing number of registered international entities in their corporate structures and staff employed globally. While they may generate revenues offshore, those may be via an international entity (e.g. subsidiary) and some, or all, of the cash flow generated may not reach New Zealand - until the business sells, or when profits are transferred back. Global tax rules, intellectual property location and transfer pricing are important drivers of what may come back to New Zealand, but there are many others. In short, tracking economic benefit for New Zealand is not as simple as tracking exports or offshore revenue.
As with the issue of defining the technology industry, the problem of tracking economic growth and benefit could also be resolved with an invitation. The data points do exist. Technology businesses have all the relevant information, they know their revenue, tax structures, percentage of revenues that come back to New Zealand (and that are taxable in New Zealand) and jobs/wage numbers, as examples. They could lead and contribute to a bigger, and much more accurate picture of overall value and economic benefit, if we ask them the right questions and there is increased reason to share information with an appropriate organisation for a worthy purpose.
My hypothesis is that once the PRO is established, it could attract significant numbers of businesses to sign on (say, a few thousand to offer a meaningful proxy), and it would be in a unique position to establish the key goals and metrics to track. I, for one, would put my hand up to help establish what they might be.
As a final thought, consider this: for the first time in the history of the technology industry, we could have a defined group and an engaged member base, sharing meaningful economic growth data to help inform research needs, policy decisions and return on effort. Armed with that we would have the key ingredients for a ‘business case’ to take the industry from one with the all the potential to help reshape New Zealand’s economy for better, to a pathway that ensures that it is.
Tim Wixon is Head of Technology Industries at BNZ. Tim leads BNZ's technology industry growth strategy, portfolio and community across New Zealand. He has a background in research, financing, law, due diligence and capital markets.
This article is solely for information purposes. It’s not financial or other professional advice. For help, please contact BNZ or your professional adviser. No party, including BNZ, is liable for direct or indirect loss or damage resulting from the content of this article. Tim’s opinions in this article are not necessarily shared by BNZ.
Rob Everett to chair board of Simplicity: While ‘former financial regulator to chair non profit Kiwisaver provider Simplicity’ might sound like relatively dry news for a founder, it’s important to pay attention to what’s happening in this space because it could have some pretty interesting implications for the broader capital environment for startups.
Rob Everett headed the Financial Markets Authority for seven years before leaving in 2021 to lead the VC group NZ Capital Growth Partners. HIs appointment is effective from today, replacing Joy Marslin who has been in the role since 2016.
The Simplicity Private Equity Fund holds 4% of Icehouse Ventures Limited and invests in their VC funds, with a longer term goal of $100m invested in local startups. Government has also floated changing Kiwisaver rules to remove some of the barriers to private investment and consultation is underway on those proposals.
If these massive funds (carefully) move towards opening up to more private investment, could be an immense boon for innovation across the country. RNZ has a good quick wrap here.
Pod Pick - From burnout to balance: lessons in product, writing and culture with Harry Flett: Our friends over at Blackbird were back at it last week while we were off but didn’t want to miss the chance to shout out their latest episode of Wild Hearts featuring a great company pretty close to home here at Caffeine.
What makes a team thrive? According to Harry Flett, it's not just strategy or shipping speed; it’s how you make people feel. In the latest Operator episode of Wild Hearts, Harry, VP of Product, goes behind the scenes at Tracksuit, where high-output product culture meets silliness, storytelling, and some surprisingly heartfelt moments.
In the episode they cover:
💬 The power of the say-do ratio and how reputation is built through consistent follow-through
🧠 Why burnout often stems from being “too helpful”—and how Harry’s learning to step back
🌳 The leaf-branch-trunk-root framework that’s helping Harry delegate and build ownership
⚖️ Why great product leadership requires balancing 10,000-foot thinking with shipping the next feature
✍️ How writing is Harry’s superpower—and why it’s essential for clarity in teams, strategy, and scaling
🏆 The hiring philosophy that helped Tracksuit hire the best people
Listen to the full episode here.
Event: Manawatū Innovation Showcase TONIGHT: Last chance for anyone in the region to clear your calendar this evening to head along The annual Manawatu innovation showcase. It’ll be a great evening highlighting start-ups, technologies and cutting-edge innovations within the region. Hear from some of the best innovations and technologies that have been founded in the Manawatū. Network with an audience of leaders, founders and innovators from Manawatū and outside of the region. Check out all the details here.
📅 Thursday, 1st May 2025⏰ 5:30pm – 7:30pm
📍 Palmy Conference + Function Centre
Hugging Face releases a very affordable 3D-printed robotic arm: We like to check in what’s happening internationally on Thursdays and this one is a great intersection between startup success and the wider AI/robotics revolution. Hugging Face, the makers of the AI development platform, have released a cheap ($100 USD) 3D-printed robotic arm which can be programmed to pick up and place objects or perform basic chores.
It might not seem as mind blowing as watching one of Figure’s Robots walk onto a automotive manufacturing line but I found watching these arms simply fold a shirt almost as exciting for a couple reasons. A) Because good lord imagine never having to fold any laundry again and B) Democratising access to basic robotics with products like this could have really profound knock on effects across the industry. I don’t necessarily need an entire humanoid robot building my car but a cheap arm that does the laundry? Sign me up.
The bizarre problem of AI being pathetically agreeable: Anyone who has read the newsletter for a while knows I am an optimist when it comes to AI but we’re starting to run into a problem that I really hadn’t expected - AI being too nice to us.
OpenAI had to scramble an update this week to address AI ‘sycophancy’, once users started realising the chat bot would basically gas them up and agree with them no matter how deranged their prompts were. Social media is full of funny/strange cases of the chat bot telling people their IQ is ‘clearly over 150’ or praising them for losing their temper or offering unhinged solutions to thought experiments.
Of course there’s a more dangerous side of an AI that always agrees with you, as one Reddit user described an interaction where the bot celebrated their decision to stop taking medication. Particularly as these tools grow in power, we need to know they can have a backbone.
If someone starts suggesting something truly dangerous in a chat and a bot is just there telling them how correct they are, isn’t hard to see where it could end up. Read OpenAIs full blog addressing the issue here.
That’s it for today, thanks for reading. Want to get in touch with a news tip, bit of feedback or just to chat? Email hello@caffeinedaily.co