An Australian Entrepreneur in Auckland

Part 1 – Doing business in Australia – a Rock’n’roll Tale

A lot of people ask me what it’s like living in New Zealand and setting up a business here having come from Australia. Considering most people usually run the other way, I figure it’s a fair enough question. I guess you’d need to know a little more about me first though. I’m into everything digital. I can remember the day I first joined hotmail back in 1996 as a young and impressionable University student weeks away from graduation. This was my first real foray into the “Internet”. I sat there, thinking to myself, man, this is going to change everything. It was at that time that I realised everything I had done up until that point was completely off-track and that I had better start learning as much as I can about this internet thing. But I was just about to graduate and wanted to travel and get a job. My friends were either travelling or getting good jobs off the backs of their university degrees and I couldn’t deny the part of me that felt this is what I should sensibly be doing. So I went travelling instead. This lasted about 6 years and took me to New Zealand (funnily enough) and then through the UK, USA, Africa, Europe, India and South East Asia before landing back in Australia with absolutely no money and no idea what to do next. But man, what a journey!

I needed work. I wanted to know about the Internet, but I got offered a job in Pharmaceutical Sales earning more than what most of my mates who had been working for years were on. So I thought this must be the way forward. This was around 2003. I was playing music in Brisbane and mixing it with other muso’s discussing the human condition, the state of the nation, the environment and all those things that muso’s discuss. Then I met my first business partner and decided to chuck it all in and chase my dream of working in and around the net. By this time iTunes had been around for a bit but nobody really used it yet. We were still going to iPod parties and stealing each other’s music collections. MySpace had just launched and we were learning about Web 2.0. I had this (I thought) genius idea to combine digital distribution and MySpace. We found some financial backers and started building a Social Networking website that also had an inbuilt player where you could stream music that people had uploaded to their profiles, and download it. The uploader could set the price per track and we took a small percentage of each download. They could also promote their band, talk to fans, add their shows etc, just like on MySpace. We got this thing working (at www.keytone.com which no longer exists) and a few people got really interested in it. Facebook launched and we saw that Social Networking was the big thing and we thought we were onto a winner. Unfortunately, none of us truly understood how bad the music industry revenues really were. It seemed those ‘innocent’ iPod parties we had been going to were killing the industry and major artists were being hamstrung by ‘exclusive distribution agreements’ with content providers who were trying desperately to keep the value in their catalogues up by preventing the artists from using services like ours. So we struggled until the GFC finally wiped us out. The worst thing about it all was watching years later as streaming services (which we had essentially built) like Spotify take huge chunks of the market and iTunes using the weight of Apple to rob the artists of more than 70% of the revenues from their music.

After Keytone was dissolving, I launched a web development company called Blah Blah Creative to try and salvage our situation.  We started building Drupal websites for SME’s. We grew fast and within a few months were already turning a profit. I had plotted our forecasts in the business plan but we were absolutely killing those! That’s when our investors broke the news. They had to close up a number of ventures because the GFC had wiped out their net worth. Blah Blah Creative got swept up in that. I watched one of my ‘mates’ sweep in as the businesses were being wound up and grab all the Blah Blah Creative customers, taking them to some business he had made overnight. I didn’t realise what was happening and suddenly I was left with nothing. The whole process taught me a lot about business. Some lessons you gotta learn the hard way.

Part 2 coming soon! Story by Trevor Topfer CEO of Topcatt