Often mistaken for Jonny Ive or Jason Statham... ;)......Rob Vickery rubbed shoulders with the rich and famous in Hollywood becoming a successful venture capitalist in LA and New Zealand.
He shares openly in this podcast about his journey from "the bullied ugly kid" in rural England to becoming someone who gets to back the most audacious founders who want to take on the world.
We cover sensitive ground in this episode around ruffling feathers in the NZ startup ecosystem as well as talking about Robs passion for the creative technology industries.
You can connect with Rob via LinkedIn or the Hillfarrance Venture Capital website.
Coal Mine Rhythm - Short Version B by Dan Ayalon
Often mistaken for Jonny Ive or Jason Statham... ;)......Rob Vickery rubbed shoulders with the rich and famous in Hollywood becoming a successful venture capitalist in LA and New Zealand.
He shares openly in this podcast about his journey from "the bullied ugly kid" in rural England to becoming someone who gets to back the most audacious founders who want to take on the world.
We cover sensitive ground in this episode around ruffling feathers in the NZ startup ecosystem as well as talking about Robs passion for the creative technology industries.
You can connect with Rob via LinkedIn or the Hillfarrance Venture Capital website.
Coal Mine Rhythm - Short Version B by Dan Ayalon
My guest today is Rob Vickery. I've known Rob now for a number of years, after he arrived in New Zealand, I think about 2019, I'm gonna quickly read a few points on his bio and then I'll get him to introduce himself more fully. He's actually got a very, very impressive bio. He, amongst many things, it was a text textiles mentor. He was the chairman of the Gardena Global Leadership Academy and I was really impressed with this. This was all about educational programs to deliver aspirational dreams of thousands of at-risk students across LA super, super cool. He has been a lead investor and director on multiple startups now and he was a voting member of BAFTA. So we'll dig into that a little bit on the podcast.
Speaker 1:He's got a Bachelor of Arts and Honours degree from the University of Gloucestershire and actually prior to that had a Design and Visual Coms degree from Bridgewater and Taunton College, which will give you a little bit of a clue into the way this man thinks. But most importantly of all, he's a board member on the Devonport Business Association, where I've spent a bit of time in Devonport. Devonport holds a special place in my heart a bit of family history there. But Rob came to New Zealand I think about 2019, and started Hill Farance and, it's fair to say, kind of ruffled a few feathers in the Kiwi Venture marketplace, which I just think is outstanding. Rob, welcome to the podcast. I'd like to hear your words as to how you got to be here.
Speaker 2:Well, yeah, you hit on some things and do you know what? It'd be really cool to talk about some of those things that I don't talk about very often, and maybe there's some interesting segues to. I feel like the most important word in my life has been serendipity, and it always will be, and I think some of the things that I've done in the past have led me to this career that I'm in today by accident, or maybe not.
Speaker 1:Who knows?
Speaker 2:depending on what you believe in right but.
Speaker 1:I'm all for that.
Speaker 2:Yeah, so I grew up in a working-class family in the West country of the UK. I don't know, I have two amazing parents, but I wouldn't say that we were particularly flush with cash. And I went to a particularly bad school. I went to one of the worst performing schools in all of my region and, yeah, it was a school of hard knocks and I was short. I was interested in academia and dinosaurs and video games and, yeah, I got bullied the shit out of school and to a point where it was really bad. It took me down to a pretty dark old place and so I don't know what it was, but it was something like I think I used to have like Harry Potter glasses and I just didn't look very cool. And then when I was 16, I was with my mom and dad in town and I was like, oh, there's contact lenses over there, let's try it. And so I did. And then I I don't know, it was just like this moment where I just found a bit of confidence in myself. I realized that perhaps I wasn't the ugliest guy at school. I was the second ugliest guy at school, but finally I didn't have to worry about knocking my glasses off because I was pretty bad eyesight and so anyway, I went.
Speaker 2:I was really interested in art and design. There's always been an artist, mostly kind of drawing and watercolors and ink, and so you know my brother he was 11 years older than me and my other brother he's nine years older than me Both were quite academic. One of them was a surgeon, the other one was a marine biologist, now a farmer. Like we were very predisposed to go down to science and to go into that path and I was huge fanatic about paleontology, as you can probably see in some of the things I do today.
Speaker 2:But I rebelled against that and I went to study graphic design. I think I originally went to another college to study maths, biology, chemistry and physics my A-levels and the moment I got into that college, like the first thing, one of the professors or lecturers come up to me and said oh, I know your brother, oh, we're really excited to see what you can do. And at that point I'm like, oh no, I don't want that, I don't live in the shadow of anyone else. And so I went to a local community college and studied graphic design and fine art and so.
Speaker 2:I did lots of life drawing and bought some new models that are incredible, pretty hard to do but really fun, and I learned a lot about visual language, around communication and around how to do things in a more creative way, and I loved it. But after about a year my brain was also. The reptilian side of my brain was then starting to go right. I need to get back into some numbers and into some statistics and stuff. So while I was finishing off my two-year diploma in communication design, I started my A-levels again and so I did all the business A-levels that I needed to do to get my to start my degree at uni.
Speaker 1:I mean, there's so many threads we can pull on here. I'm interested to know, after you finished, I guess, your tertiary studies, where did you go from there? What was the path from there?
Speaker 2:Tertiary studies. What tertiary studies?
Speaker 1:So after you did your I guess your design and visual comms degree, you got into the workplace. Now, what was that early on Like, did you know, ok, I want to be a venture capitalist, or did you go off and do some other things first?
Speaker 2:Not all. I had no idea. I left uni so I got my degree in business and marketing and then I kind of my lecturer at the time. He was a really cool guy. He used to be a part of Nintendo, so there's all these things that all seem to come together and he mentored me extensively when I was at university, when I was 19,. I was struggling with concentrating and so I went to the doctors and they, you know, were psychiatrists and whatnot, and I got diagnosed with, you know, pretty advanced attention to the hyperactivity disorder, ADHD.
Speaker 1:Right, the super power that is needed in this industry. You had exactly what it took them to become successful.
Speaker 2:Yeah, and it has been my superpower. It was a super villain for a while, but I worked that out, but yeah.
Speaker 1:And so yeah.
Speaker 2:So he told me look you know your brain and the way you move is you've got to just do little things for a little while, get some skills, some experience and then try and then focus. So I did three or four different kind of graduate jobs in the business and marketing space.
Speaker 2:I worked for a very niche insurance company that focused on providing insurance to some of UK's oldest, to most prestigious buildings, including palaces and cathedrals. I was in their online marketing team. I was the first online marketing person, so we were turning this literally 500-year-old business into a digital business. That was really cool. Then went to work for Scruffix Direct, which was a large e-commerce platform in the UK, and I launched their very first ever trade counter, their first retail unit, and they've now got thousands of them and that was a real accolade. I was really I'm actually quite, quite proud of that. And then there was an advertising agency approached me. They're like do you want to come work for us and learn? The other side of the table, I was always the client to become the salesperson, and so I went to work for an ad agency which was a division of HHC Saachi and worked on some really cool client work there, mostly on business strategy and creative execution, tv commercials, stuff like that.
Speaker 2:And then, finally, it was time to settle down. It was time to build a career, as I was being told, and so I went to join Lloyd's Bank, and so I went from really eclectic, creative roles to working for another hundreds and hundreds of years old institution but focused on insurance and banking. And so, yeah, so I joined there as 25. And I was part of a very, very small, brand new division that came up with a new idea of how to revolutionize Lloyd's and to expand our reach. With a business that's 400 years old thereabouts, you're not going to get any new customers Like you're in the lane. So we wanted to find new ways to increase our customer base, and so we came up with the idea of white labeling Lloyd's and allowing third party brands to become a quasi-insurance company or a quasi-bank or lender or stuff like that.
Speaker 1:So it kind of led.
Speaker 2:It was definitely my creative side to it, but still a lot more around business development, around strategy, around all the stuff that I'm very grateful for today. And yeah, the biz dev side was really fun because we were going out into this market where there's brand new products, and it was almost like an order line in some ways, and so I wasn't going to have to sell hard.
Speaker 2:I had to sell hard internally because no one could think we could do this, and so I used to go around to all these directors like this is a great deal, please sign off on it. I need eight of your FTEs and managed customer service Please. And they would be like don't know, a bit risky, and I'd be like come on, please. And then it happened, and so, yeah, our little skunkworks became big and very successful.
Speaker 1:And ultimately you moved to LA. Was that with Lloyds?
Speaker 2:It was yeah. So when I was still working through all the GFC just happened, and at that point the UK banking sector was in a real pickle. We had Northern Rock had just collapsed and people were lining up outside banks trying to pull their money out. We had Halifax Bank Scotland 40% of the UK's mortgages literally on life edge of collapse. And so I believe our CEO at the time had a chat with Gordon Brown a prime minister at the time and was like you're gonna buy these guys. That's so Lloyd's bought HBoss and then I got given this really cool project that was to join one of the big four who was managing the acquisition and the process and to merge two divisions together.
Speaker 1:And so I was young, I was 28.
Speaker 2:And it was a stressful time. People were losing their jobs, we were cutting jobs and it was difficult. I remember being media trained in case I got stopped by the media about what we were doing and all this kind of stuff.
Speaker 2:But in the end we did it and we brought together two banking institutions who were structurally very similar but culturally like entirely different. And so the clash of those two cultures where one was really very much focused on top line growth, on revenue, on like. I remember when I first went to the HBoss office, I went to their division and there was like a couple of cut out at David Hasselhoff on the wall. There was like streamers everywhere and like people were having fun. And then I looked back at my old place and it looked like a scene from some sort of white-esque sci-fi drama.
Speaker 2:Yeah, like a rabbit like just very very. It's very clean and hygienic and stuff, and so trying to bring those two cultures together was fun, difficult, emotional but ultimately very stimulating and satisfying.
Speaker 1:It's really interesting to see if you look at the kind of if you like, the breadcrumbs, the breadcrumb trails that have followed you, from a creative background clearly somebody with attention deficit disorder, the ability to look at things really creatively graphic design, the creative industries with this very sterile world of banking and finance and then you look at what you're doing now in venture capital and the financial mechanics and fund mechanics of that sort of married up with the industry that you've really gone into and we'll dig into that shortly around gaming and the creative industries. But how did you make the way, the path into venture? Was that while you were in the US or was that a fresh entry into New Zealand?
Speaker 2:Yeah, so Lloyd sent me to LA. They sent me on an assignment it was initially meant to be an 18 month assignment to go over and assess and turn around the division international banking mostly, and some other different asset classes, and it was a really fun experience.
Speaker 2:It was cool like I was living in the UK. I was paid about 35,000 pounds, no matter what I did. No any real equity. It was just kind of like you just muck along with it right and live a lower middle class life. I got sent to LA and we had to start getting paid an American equivalent salary, which was different, and it was amazing.
Speaker 2:And then I just kind of while I was there a lot of our clients were offshore brits who now lived in LA, a lot of them in the entertainment business, a lot of different areas and I just started to hang out with them and learn from them. And at the time also, the LA tech community was very much in its infancy and we were still known as the good looking cousin of the big one up the road. Five hours drive up the road and a bit of joke. It's like what are you guys really gonna do? You're gonna do stuff for our content and all that kind of thing. And then, lo and behold, my space emerged from Los Angeles and sold to Rupert Murdoch at the time.
Speaker 2:And then the advent of YouTube, and then the advent of influencers and things like Maker Studios, who were one of these things called multi-channel networks. They were all about building the very first generation of influencers and doing deals for them and creating brand activations and stuff. So, yeah, la just started to become its own thing. And then we saw people from Silicon Valley coming down as the weather was nicer beaches are good, they're kind of different and cool down. Here in LA they were able to go meet with their favorite movie stars if they wanted to, and so it became more diversified but it became very much like certain cities, because there's 80 cities in the city in the region of the County of Los Angeles and certain cities became certain hubs, like the downtown LA hub was all about creative industries and some of the and Culver City and stuff, and then Burbank was all about film and VFX. And then we had Santa Monica. That was SAS kind of borderline AI, pasadena Space Tech.
Speaker 2:It was just really awesome to see all these different kind of little pockets pop up and made it really good as a VC, because you could literally go to Pasadena right, I need some deal flow on space and frontier technology I suppose we call it deep tech today, right, but maybe I just go and spend a week in Pasadena. We'll find some stuff for the accelerators over there and that was just really good way to grow a business. But it was very few VC funds and so I left Lloyd's and then went to did a bit of consulting while I was kind of working out what I wanted to do, and then I managed to go and work with a very large rock music family office and so I kind of threw myself back into creative finance, investing and doing all sorts of random stuff, and so it was a really awesome experience and from there I got the taste, for I saw there was an opportunity here. The market was still very junior, and so you went out there to raise first VC fund In.
Speaker 1:LA.
Speaker 2:In LA yeah.
Speaker 1:Well, and did it help that you look like Johnny Ive and that people thought you were Johnny Ive from back home fame and that you were British?
Speaker 2:Back then I looked more like Jason Statham. Today I look like I can speak that. I was a bit more into that point. I think, bobby, I don't know what I look like. Do they look tired as well? I look like I've got two toddlers. No, but yeah and so it did help. It did help because British people were quite rare in California, not here in New Zealand.
Speaker 1:I'm one of hundreds of thousands.
Speaker 2:It's me, especially in demo right. It's all British people here, so yeah, so it was different.
Speaker 1:But it was an amazing experience. Some of the things I got to do within the rock music space. I won't even tell you, because involved.
Speaker 2:Name dropping and tour poppy in this country is bad enough.
Speaker 1:Oh, go on, do it. Drop some names. Drop some names. But who are you hanging out with? Going to parties with people that were up there? Go on.
Speaker 2:I was backstage at the Hollywood Bowl playing boncos with Andy Garcia. That was really cool. That's quite a cool. That was awesome. Got to hang out with people like Ridley Scott, hang out with big A-list actors and people who are actually one particular A-list actor who may or may not have been in a ship. A movie about a ship that sank.
Speaker 1:Okay, he and I. He's got an Italian name. Something like that yeah.
Speaker 2:He and I collected at a Golden Globes event and it was weird. I think he expected me to come up to him and talk to him about his thing. He was smoking this. This was when vapes were this big and he wasn't smoking tobacco. In the corner of the room at the Beverly Hilton top high-end hotel, he sat there. There's some not-so-nice people from Hollywood hanging around him and he just looked bored. I was like, right, I'm going to talk to you.
Speaker 2:I walked up to him and I said I know that you've got a thing for dinosaurs. He's like how do you know that? I said I've read about it. I know which skull you have in your lobby of your house. It's a T-Rex skull with bite marks in it from another T-Rex. I think it's really, really cool. And then literally all those hangers around big movie mogul types. I just said let's talk. And so 20 minutes we were just talking about paleontology and around the importance of I was winding up. I was like that skull should like Indiana Jones, that skull should be in a museum. And he was like, yeah, I should do that, but I don't think he ever did. But little things like that.
Speaker 2:So yeah, it's like that I'll probably never forget, but it's a very surreal experience, yeah, and I guess this kid from rural England who had experience bullying.
Speaker 1:You're suddenly finding yourself just hanging out with A-listers. Did that completely change how you viewed yourself or what you viewed as possible in the world?
Speaker 2:Yeah.
Speaker 1:Tell us about that.
Speaker 2:Well, the thing that didn't change was that when I went home to the UK, I didn't tell anyone what I did, because if I did, the UK invented talk poppy syndrome. So I just go back to the village pub, sit down, have a drink and we just talk about what's going on around locally. So nothing changed at home For me. When I got back on the plane and landed back in LAX, my audacity was big. I had the vision, the courage, the case points, the hutzpah, I suppose, of being able to do anything that I can put my mind to. And so I did.
Speaker 2:But you mentioned about the entrepreneurship stuff. Right, and the Gardiner and I created another academy at a school just outside of Compton as well, and it was like I was doing cool things. I was raising a VC fund, very, very small VC fund. The first fund was well under a million US dollars. It earned me nothing, I got paid nothing, but it did allow me to get my first exit and also to prove that we could do this, and so, anyway, while all that was going on.
Speaker 2:I wanted to make sure I was giving back to kids who were not like me, because I was nowhere near like them, but kids who were in a difficult situation. And so I went to a couple of these schools with really low graduation rates, much like my old school, and I went there and I spoke to the children and they didn't even know where England was on the map or they were given this curriculum that was just so dry and important, like economics, just in time, manufacturing all these really good stuff, but it was just so dry and I was like how do we do something about that? So I came to the board of the charity that was created, the academy there, and I was like hey, can I bring some cool people to come and talk to these kids and bring these things to life in an exciting way? And I did. When we did economics I brought the British Consul General.
Speaker 1:She came, yeah, come talk to kids.
Speaker 2:I would be talking about the logistics and how we ship products from one place to another. We brought the CEO of UPS, stuff like that, and these kids some of them were parents already at the age of 15, or some of which who don't have a dad or they had no parents or were homeless were given a different viewpoint. And so the net result from the academy I had I still haven't printed out because it was just like it's so important to me the graduation rate of the kids in my academy jumped from 62% to 85% Fantastic. And we had kids going to top universities so rewarding, so I have that print out.
Speaker 2:I've got to hang it somewhere at home actually, but yeah, that's probably the biggest achievement I'll ever make.
Speaker 1:Yeah, it's one of those things that just your soul is glowing and feeling like. It's a sense of meaning and purpose that's deeper than anything else that we can do in the commercial world. So you land on the shores of New Zealand, Aotearoa in 2019, is that right?
Speaker 2:Well, we officially came in 2018. But actually, no, no, sorry, no, we did come in 2019. Yes, 2019.
Speaker 1:Yeah, okay, and a young family in tow.
Speaker 2:No, no, deanna and I, my wife and I, came on a holiday, as most people do. We started off in Auckland. Sadly, we didn't even see Auckland, we just drove straight to Hobbiton, which was a big mistake, but we fixed it now. And then, yeah, while I was there, when I was in Wellington, I did say to Deanna I was like can I have 24 hours just to suss out the start-up market here? Like what's going on? How interesting is it? And so I had a couple meetings, entered. Te connected me with a couple of folks and it was really nice. I wasn't even investing at the time in New Zealand, I had no intention, it was just me coming in to learn and to enrich my mind, I suppose. And I just saw something. I could feel something in the air, in the water, whatever it was. I thought there was some excitement here and I just sat on it for a while. What was?
Speaker 1:your initial impression and, honestly, was it like? You just come from the epicenter of creative industries and tech. La is not too far down the 101 from Silicon Valley, but you arrive in a little old New. Zealand. What was your impression and what was that experience like in the early days of making the decision to be here?
Speaker 2:My initial. I'll be honest, I was intimidated by the scale of what we needed to do here. I was like there needs to be some change to make this market grow and to really accelerate.
Speaker 1:Here's the impression I got when I first met you. I was so excited by what you could do in the industry. Yet I could also see, in a way, the resistance coming from the incumbency. Ironically, in an industry that is all about disruption and is all about fueling disruption, there was, I think, a bit of a feeling of don't disrupt what we have here. Is that accurate or right?
Speaker 2:Totally, and it was brutal. Okay, manifest is physically, emotionally, but I'm made from tough stuff. I love that, I love that and I don't give up, yeah.
Speaker 1:And I just love the fact that we have got you in the ecosystem in New Zealand, because we are a little set of rocks at the bottom of the Pacific. We've got a certain way, not entirely dissimilar to an English viewpoint on things, and we need to change that attitude if we're really going to knock some big successes out of the park.
Speaker 2:We are. We need to dial up the audacity, Because there should be more than one or two companies per year that make it big here in New Zealand or at least make it big.
Speaker 1:We haven't really had any big exits for a long time.
Speaker 2:Well, I mean, there was one company, obviously down in Christchurch a sequence right but I'm not sure if they look like a typical startup. I don't know enough about their business, but they obviously exited for a big number. But aside from that, we've had some big rounds raised. We've had lots of noise. I mean, look, some of my portfolio companies have raised big rounds, big numbers.
Speaker 1:This is awesome.
Speaker 2:But what we need here and this is what LA had, and this is the difference. La had measurable big exits where founders and senior employees had meaningful chunks of equity in that company. Yeah, I'm sorry.
Speaker 2:And it was so important because those guys became VCs, they became angel investors, they became second time founders who are able to raise more money from bigger name funds, and it was that catalyst. We really need that here because we don't have it We've got. Obviously, peter Beck is doing cool things and investing into startups practically, but still running a giant business.
Speaker 2:We've got obviously your former colleague from over at Zero. He's obviously doing things, but we need more. We need a critical mass of way more than what we have and of more recent, like Zero sold quite a long time ago, trade me quite a long time ago.
Speaker 1:We're talking about being almost 20 years ago now.
Speaker 2:So we need more moderate exits as well as you know, as well as giant ones to create more people, to turn this thing around and to keep it going. But you know the market right now is tough.
Speaker 1:But to get these incredible exits and exits where the founding team have still got a really meaningful, you know, chunk of the cap table. There's a few things tied up in that around early dilution and we can dig into why you take a probably a slightly different view around that to a lot of early stage investors. But what other factors do we need to drive big exits? Because to get big exits we've got to get big performing companies. Why are we not doing that here in New Zealand? What is it the size of our market? Is it our limitation on where we see our TAM? Is it the founding teams? Is it audacity? Is it the ecosystem? You know what sort of what are the number one, two and three factors in that?
Speaker 2:I think number one is audacity, like you won't it's. I'm going to go out there and say I'm sure someone's going to tell me I'm wrong. But bloody hard to build a billion-dollar business in this country. It's just too small. There's not enough customers.
Speaker 2:You know, maybe, but I mean, I think it's pretty hard. You need to sell internationally and to do that that requires a certain skill set and that genuinely means selling into the United States. It could mean, obviously, china and India as well, and other markets like that, but the US is probably your most obvious place to go and people need the audacity, the courage, the bulletproof armor and you know the, the abilities to do that. And it's really hard because you're going up against. You know, trust me, I had thousands of pitches in the US. The entrepreneurs there really know their stuff, like you know. You could get a pitch done in 30 minutes and you could say to them that's okay, it's not for me, thank you, and no worries, I'm going to the VC next door. Cool, good luck with that. Yeah, and I have no problem with doing this.
Speaker 1:I've spent a lot of time explaining why no. Because they're feeling you can see the look in their eyes that they really the rejection is killing them, or they're just they're not To the rejection, or they don't have many other options. What's there?
Speaker 2:Maybe all of those. Yeah, like you know, we gotta get better at no, we're gonna get better at giving no and we're gonna get better at taking it and not taking it as a no. But as they're not right, now.
Speaker 2:There's not a no, it's just not right now, and so you know, let's talk again and the no is, you know, I find, like it in the US is it's a more defined asset class. It's people have been investing in to VC for you know, 50 or 60 years. Like family offices. They already have their 5% or 2 to 5% Allocated to venture capital. They know this is part of their mix. This is their asset allocation. They have to do it.
Speaker 2:This is what we do to get alpha, you know, and so you know there's just more. This is more comfort and experience and Resistant and bullet, bullet proof armor around the process, and I think that's what we we need more of here. You know, I've I've seen, I've seen the investors selling out of companies way too early because they want to see a 2x return. That doesn't kind of like give the entrepreneurs the confidence to keep doing this. It's like stick in it. This is what make. You'll make 100x if this goes really well in in seven years time. Yes, it might mean that you can't put that pagoda on the back of the house, but I mean shit, why not? I mean that's what we're in it, right, you know we're in this to make big.
Speaker 1:And are you? Are you seeing, therefore, that a lot of the people that you're meeting early, that you where you really love them as founders? They've got the resilience, they've got the ability to fight hard for a decade. I just not thinking big enough and probably just need to go straight to the bigger markets, need to go straight to the US or straight to the UK. I mean, what's your? What's your thinking there?
Speaker 2:Yeah, that's what they have to do.
Speaker 1:They.
Speaker 2:I mean you could look at yeah, it's getting on fire and it's it's getting on fire and it's. It's getting on fire and it's it's getting on fire and it's Raising enough money to be able to do that. I mean, don't you know? I think people underestimate how expensive international travel is today. Flights, combination, food, higher cut, yeah, rental cars, all these things.
Speaker 2:It's like it's not cheap. I mean, a good US trip for a couple weeks could be, you know, it could not out at 20k, you know, and if you've raised a seed, you know, a pre seed round of 250 000 bucks, that's almost 10% of your runway gone on one trip, yeah, yeah. So it's hard and I think, I think, that that's one of these but yeah so.
Speaker 2:I think audacity is a thing, that I was back, I think, um, the, the BMW Batch on a boat mentality is cool and and and all that, and I admire people who do achieve that, but it does stem and cut off the head of the of the flower, right, you know, it means that you're just aiming for something smaller and uh and so, yeah, I mean the common factor between all you know, I believe, the founders we've backed and the companies that are doing well in our portfolio, is that just like dogged determination to go big now?
Speaker 1:yeah, and so tell us a bit about how you like to invest at Hill Firenze. Then are you? You're a first check writer, you're a you know what's your typical check size. What stage do you come in? What are you? What are you looking to see? What industries, uh, particularly are you, are you investing into?
Speaker 2:Yeah, so yeah, I mean, I got taught my. My VC career was built on being first check, so I'm a pre-seed investor. That was. The other thing that no one quite understood here in New Zealand was why are you VC doing pre-seed Like? What's that about? I'm not well, that's all I know. I don't know series A investments and equally, the other thing that pissed people off here was that I I I couldn't buy into what New Zealand called a series A. That was basically a small pre-seed round in in the US, and if we're looking to back people who want to go to the US, we're going to get them on the right time zone.
Speaker 2:Yeah, they're the right, but it's, you know, it's, it's not imperialism anymore. This is the metric system, this is, you know, this is what the goals are like and I think, and so, yeah, so we're typically pre-seed. We may do see, but we, you know, like you know, partly was a pre-seed check. It was, you know, barely. The company wasn't even fully registered at the point. They were another company at the time, and so, yeah, so we kind of do very early stage checks. The first checks that we started off writing here I was quite cautious and you know we were doing kind of two $300,000 checks. And then, when we started to Understand the market a little bit more and really hone our thesis, we were writing bigger checks, kind of a million to million and a half, to really keep this thing off and to supercharge growth, and Profitable growth is there, and that's what that's where we typically stand.
Speaker 1:But yeah.
Speaker 2:Keep, keep up. Yeah, so our process was we were, we were, we were really building our investment thesis around the audacity of the idea, the hopeful lack or zero competition in the in the market. That's targeting, and then just the the ability of the founders to be able to do the hard thing about hard things.
Speaker 1:And what are you particularly focused on? I think of of you, and and he'll Farron's, as being deep into into the, the gaming industry, um, but what do you like to invest in? What? Do you have a mandate as such, or can you just invest in whatever it is that you really like?
Speaker 2:Um, yeah, we don't have a mandate. Um, I've promised I'll invest well, so I, I, um I had the pleasure of going to um charlie munger and and warren buffett's annual shareholders meeting in in um Omaha, yeah for Berkshire hathaway.
Speaker 1:Omaha Nebraska as opposed to Omaha Northland.
Speaker 2:Yes, indeed, yes, I like, I like them. I'll be just very nice Uh but Omaha, nebraska is not quite like Omaha Beach, sadly, but um yeah so.
Speaker 2:I got. I kind of took a real shine to um charlie munger and god rest his soul um and his obsession with only investing in stuff that you know, love and understand deeply, and so that's what's followed me around, um, believe it or not. Back in my early days at Lloyd's, we were kind of building a i-mobiles back then to predict what things might, which which white labeling deals might work out better than others and very, very rudimentary, like this was done on excel. But, like you know, we're doing that and um, and so I just invest in stuff that I know and understand. So most of my career in the us Was actually investing in advanced ai, machine learning, um, and aerospace and defense and e-commerce. That's where I and software enabled hardware, so robotics and things like that.
Speaker 2:Um, I discovered my natural strength is in machine learning and ai, and so you know the good portion of our portfolio is machine learning and ai frontier focused companies. So you know the challenge with today is that the ai market has Is fundamentally changed and investing in ai has fundamentally changed. You know back. You know I was really interested in proprietary data models that were using proprietary data sets to create predictions that were really hard to, really expensive for people to buy. You know the large language models that are now have now commoditized a good portion of ai. You know stable diffusion, open ai chat, gpt, all those things. Um, I've made it much more difficult to invest into machine learning and ai and so we now, like yamble was doing Next level stuff with virtual audiences for market research, like next level and that I love and I still like Really hard mathematical problems being solved by machine learning, and so we still look into that.
Speaker 2:That is like, uh, the, the one leg of the table of the yeah, um, the. The other leg, then, is the future of media content and gaming, and so, in particular, visual effects companies like flooding, rock, dynamic in wellington, um and um, and then also the gaming studios that we funded, like hashbane and riffraff and the others, um. You know, they're all kind of at this, really interesting conversions of the two forms coming together yeah, like the number one, um. The number one driver of box office revenue this year was video game related ip.
Speaker 1:Mario, things like that right.
Speaker 2:So, um, excuse me, it's gonna hit, just hit. Pause there. I'm gonna go upstairs because, um, why yeah? My children about to walk in the talk.
Speaker 1:Bring them on the podcast they will.
Speaker 2:My son's got really he's. He's unfortunately heard wife and I using the word shit, um, and so he keeps. He keeps coming in shining oh, shit, oh that's awesome.
Speaker 1:He's gonna do well in the startup world. Then let's come back to this in a minute.
Speaker 2:Yeah, so that convergence of media and gaming is really shaking up Hollywood. The biggest drivers of box office revenue are video game related IP like Super Mario Brothers, Netflix number one shows like Netflix the Witcher All these things are all just coming together. If you've seen open AI Sora, you're seeing AI now coming into creating photo realistic video. I mean it's a really interesting time where, basically, the two things that I love are coming together.
Speaker 2:And I was one of my fun two companies, Zero King. They are the epitome of this. They are building games using AI technology and so, like one of the things that, if you think about games like Power World that had a huge launch a couple of weeks ago, you know Fortnite it's all about customization. It's about people creating characters that they want and to feel like they own, and so, you know, Zero King is using some really exciting large language models, both third party and proprietary, to allow people to create their own spaceship that is infinitely changeable and upgradeable and visually, as well as performance and all this kind of stuff, and so so, yeah, so that's kind of where we sit. We sit at both ends of that spectrum and in the middle, and and I follow you know that follows Charlie Munger's advice. I just invest in stuff that I know, love, understand deeply, and I literally spend, you know, my personal life as well as my professional life reading about it.
Speaker 1:I love that because you are absolutely in the swim lane, if you like, on all the things that you love. So who you are in your personal world and who you are in your business and your venture world is just it's one person doing what it is that you love. Give us a little bit of an overview of how we're going in the global scene around gaming and the gaming industry. Are we a tiny player? Have we got, you know, a chance in this industry to perhaps punch above our weight a little bit? So what's your assessment on that regard?
Speaker 2:Yeah, sorry, I mean to shut the window is a bit of background noise there actually. Yeah, so Gaming industry, how we're stacking up. I mean, according to the NZGDC, you know, we can generate somewhere around 400 million in revenue from New Zealand Gaming Studios last, last year. I suspect that's going to go up this year. Compare that to the global market. I mean it's a drop in the ocean, right? You know, the global gaming market, I believe, is somewhere around 180 billion markets, you know, seven or eight times larger than Hollywood. Like, we've got a lot of room to grow, which is great, and so I think that we have some secret source here that we really enjoy here that I don't think people know enough about, which is that, you know, actually, our biggest exit ever in this country is never talked about, it's never referenced, and it is in the visual effects space. It was the acquisition of Weta Digital by Unity.
Speaker 1:Yeah, tell us a bit about that, because a lot of people don't know about that deal. So what?
Speaker 2:happened there? Yeah, I don't. I mean I just noticed that from the media, you know, from you know from your heart who finance? But basically, yeah, unity, one of the largest game rendering you know game kind of game engines I suppose in the world, alongside Epic and Unreal 5 and 4 and the other iterations were looking at, unreal has always been the leader in terms of visual fidelity really good looking games, events, crafts and I think that that may have been a driver behind the acquisition from you know, from a Weta by Unity was to absorb some of that talent from the visual effects space.
Speaker 2:I mean, you know that studio is one of the finest visual effects studio in the world. You know we make the fantastic become alive in New Zealand. Yeah, planet the Apes, avatar, incredible stuff, and the people who work there are super gifted. These are people that now had to work with three different software packages, four or five, whatever. You know like smart people, like technically smart but creatively very, very deep and rich as well, and so so I imagine that's why I would drive the acquisition was the blending of those two together to create an engine that was even more beautiful than before and hopefully, to you know, maybe there's some, some cross pollination into the film industry for Unity, like Unreal 5, unreal 4 even was used to create the special effects for the Mandalorian.
Speaker 1:Yeah, I guess, I guess there's a lot of people that are listening to this that only really touch on gaming from the periphery. Maybe they are a gamer, maybe they're broadly aware of some of the cool things that are happening across the content marketplace, around the Netflixes of this world and streaming platforms, and the competitive nature of some of the issues going on with the big players there. You're you're knee deep in this industry and you're talking to some really amazing innovators. What are you most excited about when you look, even globally, at what's happening in the broader creative industries?
Speaker 2:Yeah, I'm loving the fact that IP that was once deemed, yeah, unpopular mostly. Mostly, maybe it was I don't know what the reason for it was but gaming IP can now be turned into beautiful live action shows, which is still expensive, but not as expensive as they once were, and with the convergence of AI coming into this space, it's still a tool. I'm never going to pay to watch an AI generated film. It's crap, like it's not an artist. Right, ai is always about inputs that are trained from somebody else's hard work, but we can use AI now to speed up, cheapen the process, and that's what has been happening in the gaming space.
Speaker 2:And you can see you know a lot of layoffs all around the world. Sony laid off 900 people, sadly, this week. Yeah, and when you read their statement, they're just talking about there's now different ways to make games, and that they're basically saying you know, ai tools are a lot cheaper ways to make games and TV shows and movies, and so I'm just super pumped to see how we can give you know, even like aspiring filmmakers, people like Gareth Edwards, who British guy who did a small indie film and then got the gig to do Godzilla and then did a new movie recently called the Creator, and now he signed up for Jurassic World. Like giving more people like that, at the beginning of their filmmaking career, the chance to create amazing visual effects that would stand up, you know, on an IMAX screen, and giving them a chance to do that without needing, you know, $50 million.
Speaker 2:Really exciting to me and I'm pumped to see how much that can grow. But we always have to remember that we need the creative, the storyteller, the artist to make it pop, like no one will want to watch AI created stuff and they won't pay for it. So we still need the artist and so I think that you know our community here in New Zealand is going back full circle. In your question is that we could be we can own this whole damn space.
Speaker 2:Why not? We have the people who created the facial mapping technology for Planet the Apes. Yeah, that looks amazing. You see the trailer for the new film. Oh shit, it's incredible, like we've got all this talent here, and creative, creatively rich talent alongside technically brilliant people, and there's absolutely no reason why we should not own this next wave of content creation.
Speaker 1:Rob, that is a beautiful sort of way to end this podcast. I'm truly thankful that you are here in New Zealand, because we need you in this ecosystem. We need to be more audacious and I think that's the theme I've really picked up from you is you know shit, just be, just be out there. Think big. You know, if you're a founder in New Zealand or in Australia, you're at this at this end of the world. Think far bigger. Be audacious. It's amazing. You know what we can achieve.
Speaker 1:If anybody is interested in catching up with you and pitching their idea to you, I'll include ways to link with you in the show notes. If people are walking around the beautiful Devonport in Auckland, new Zealand, look out for a guy that looks quite a lot like Jason Statham and tap him on the shoulder. If it's not him, it'll be another English guy that looks like him, but chances are it'll be Rob. Rob. Honestly, mate, it's. It is a real honor to be able to talk to you today and, as I say, we are genuinely really fortunate to have you in the ecosystem. So keep doing what you're doing. I absolutely love it and I know we are much better off as a result. So really appreciate your time here today.