GRAEME FROST • Over 30 years IT, over 20 years developing software
for world markets
• Developer à Designer à IT Manager
• 7 Years Wang New Zealand
• 12 Years Keystone
• 5 Years Cadabra
• Now Brilliant Software
BACKGROUND • MBO of software divisions from Wang in 1990 – 12 staff
and around $1.5m revenues
• Comprised of Travel and Legal Practice management software
• Had major share of NZ legal market (the “big 5”) • Russell McVeagh • Bell Gully • Simpson Grierson • Rudd Watts (now Minter Elision) • Phillips Fox • 50 smaller firms.
BACKGROUND • Legal software based on proprietary Wang VS
hardware
• Evaluated replacement products to represent
• Best was judged to be 40% fit
• Saw opportunity to develop Keystone…
• Needed to solve NZ problem • Realised the NZ legal market management vision was
well ahead of world market • Had a world-class visionary “on staff”
A CLEAR DIFFERENTATION • Targeted large firms
• Top 6 NZ, Top 20 Aus, Top 100 UK, Top 250 US • Global firm ready
• multi currency, multi firm, multi machine. • Design Target: Clifford Chance.
• Vision was to make firms more profitable • A Front Office rather than a back office accounting system
• Online Time Recording • Fee Earner Billing
• Targeted the partners not Finance • High Price tag • Cultural change • They get the profits!
A PLOTTED HISTORY • Started development in early ’93
• Initially funded from income from existing customers and custom development.
• Started showing customers and prospects (NZ, Aus) part finished software in late ’93
• Unsuccessfully tried to raise investment funding
• Sold system to Phillips Fox late ’94
• Lost 2 other NZ deals to US based competitors ‘95ish
• Started “making noise” in UK in ‘95
The Keystone Solution
• What are we? We develop, market and support highly-specialised application software for the professional services market.
• What are we about?
Our products and services are designed to build profits for our customers - through online time capture and billing; improving productivity and client service; and enabling efficient management practices with real time forecasting, budgeting and business intelligence.
A PLOTTED HISTORY • First sale in UK 4 months after first arriving • 4 sales within 12 months • First Australian sale late ‘95 (Mallesons) • First Angel investment ‘96 $400k • Steady flow from Australia over next few years • Rest of New Zealand over next few years • Started looking for VC funding in UK early ‘97
AIM MARKET LISTING • September ‘97
• Reverse Listing
• £4m for 38% of company
• Tech boom just beginning
• Raised over £20m during next 5 years
• Purchased US Subsidiary March 2000
US MARKET STRATEGY • Acquired company had 300 medium sized firms using
old legacy practice management system • 50-100 Keystone Targets
• Acquired Company had 150 larger firms using Business Intelligence system • Firms had already shown themselves to be visionary • Leverage relationship for Keystone • Take BI tools to the rest of world.
• Combine existing sales staff with Keystone Kinghitter (ex Australia/NZ)
• We were beating US based competitors around the world.
US MARKET REALITY • One Keystone sale • No imperative to innovate • Partners wouldn’t engage • Parochial • Kiwi business ethic didn’t wash! • Subsidiary cost too much and didn’t deliver. Our worst decision!
AUSTRALIA
Pros • Travel Cost and Time Low • Time Zone differential
small • Medium sized market • Easy to visit/relocate to • Possible to service from
NZ • Legal and Accounting
similar • Similar Business innovation
Cons
• Australians don’t like buying off Kiwis
• Lesser business ethic • Employments costs high • Really need to employ
Australians to sell • Medium sized market
UNITED STATES
Pros • Huge Market • Time Zone – some
overlap • Tend to be behind in
business innovation • Employ at will makes
employing people easier
• Parochial • Less efficiency imperative • Geographically dispersed • Travel Time medium • Time zone – some overlap • Big travel commitment to
service from NZ • Visa required to work
there.
Cons
UNITED KINGDOM
Pros • Large Market • Like buying off Kiwis • Compact market • Good base for Europe • UK T&I / NZTE very helpful • Strong NZ community • Selling Price higher • Attractive for NZ staff • Behind in innovation • Similar business ethic • A great “validation” market
• Travel Time long, cost a bit higher than US
• Time zone difficult • On ground costs higher • Big travel commitment • Visas required to work there
but many kiwis qualify
Cons
UNITED KINGDOM – RECOMENDATIONS • Commit to the market. • Talk to UK Trade and Investment early • Research kiwi connections (use Kea) • Meet Trade Commissioner in NZ House • Find a consultant to be UK presence • Trade on kiwi innovation and business ethic • Use kiwi novelty value (e.g. all blacks, NZ wine) • Commit to be there often (1 week in 6 min) • Relocate as soon as practical. • Relocate kiwi staff in preference to local staff where
possible
BRILLIANT SOFTWARE ADVERTISEMENT! • Brilliant Software is all about world class custom
software development • Target technology companies • Iterative, prototyping approach • Only super star employees mean quick enterprise
quality product development • Innovative ideas are free!