The bars and cafes on University Ave in Palo Alto, California are typically packed with entrepreneurs and investors. All around, you can hear the excited chatter of the clientele exploring ideas, pitching their latest start-up, and sharing experiences. This is the well from which house-hold names of the tech industry such as Google, LinkedIn, YouTube and SnapChat sprang.

There is a great saying here that broadly goes, “knowledge travels at the speed of beer”. I love this phrase as it recognizes the vital importance of conversation, and community to successful idea generation. In New Zealand we have a strong start-up instinct. However, to maximize the chances of these ventures being successful, we must not overlook the need for community supporting these companies to maximize the chance of turning their ideas into billion-dollar ventures.

The good news is that this Silicon Valley-style community can be found in the middle of the cafes, and high-end furniture shops of Parnell, Auckland.

Outset Ventures is not only a deep-tech incubator with purpose-built facilities where start-up ventures can locate their companies, but also a campus. A gathering place where aspiring deep tech entrepreneurs can learn from each other over coffee, lunch, or a beer. It is also a stone’s throw from Icehouse Ventures with its own entrepreneurial spirt and campus.

Outset is housed within the aptly named Future House at 40 Kenwyn St. This building was the birthplace of some of New Zealand’s most successful start-up companies. The alumni of the building includes hashtag#rocketlab Lab, Listed on the NASDAQ in August 2021 for US$5.2bn and hashtag#LanzaTech Listed on the NASDAQ in Feb, 2023 for US$2.2bn. The founding ethos of these companies was the inspiration for Outset, and with this pedigree alone, the campus could probably lay claim to being the most successful incubator in the Southern Hemisphere.

Outset’s focus is to grow successful entrepreneur-led companies out of innovative “deep-technology” (or deep-tech) ideas. Deep-tech refers to inventions to make things, but perhaps it is better defined by what it is not, specifically it is not software-based innovation.

Deep tech innovation results in new and improved manufacturing or process technologies and industries. Examples are as diverse as new technology to produce food (Daisy Lab and NewFish), store energy (EnergyBank), recycle electronics or plastics (Mint Innovation or NILO) power satellites (Astrix Astonautics).

These companies each represent highly paid jobs in a diversity of technical fields across entirely new industrial sectors. They represent the best chance we have of diversifying our economy and driving per capita GDP growth. Long story short…the whole country benefits as each one becomes a commercial success, and Outset is entirely geared to maximizing the number that succeed.

Why do we need an incubator like Outset? Firstly, Tech-incubators are common in every developed nation. But in New Zealand, their role is particularly critical. This country is unusual in terms of where entrepreneurial activity happens.

In the US, my observation is that entrepreneur-led start-up companies primarily spill out of universities, where professors and students are actively encouraged by their institutions to independently pursue the commercial applications of their research. Almost every campus has a well-established entrepreneur-focused program and incubators. These provide, guidance, connections to financing and a ready-made community for company founders. In the US, many companies are literally birthed into a ready-made support infrastructure.

Things are different here. This is not the US, and their model doesn’t fit. For example, in New Zealand, we see a very high proportion of entrepreneurs starting ventures with little or no affiliation to a university. They are self-starting private individuals with a concept, enthusiasm, and a plan. What they don’t have is a “community”. They not only struggle to find appropriate facilities when they outgrow their garage, they lack the community of others who have walked in their shoes to guide them on the first steps of turning an idea into an innovation, an innovation into a company, and a company into a profitable business.

Outset fills their need for both premises and community. Their campus spans four floors and boasts multiple Laboratory and process development spaces to host almost any technology. Currently the campus host companies covering the entire spectrum from development of a processes that accelerate the aging process for whiskey from years to weeks (Reactory), to technologies that reduce the cost of gathering solar power in space (Astrix Astronautics).

However, perhaps even more valuable is the role that Outset plays in providing entrepreneurs with community. This is a regular gathering place for, budding company founders, resident start-ups, and veterans’ entrepreneurs to meet, chat, test strategies, lament failure, and celebrate success…each a learning opportunity for those walking the entrepreneurial path.

The learnings from these interactions can’t be taught or read about. The journey to success for any start-up is via a forest of thousands of decisions. Through conversations within the community at the outset campus the quality of each decision can be improved, and as a result the potential for success greatly increased.

Outset is where both ideas and enterprises can be subtly polished, the validation and confidence to pivot, or chase a technical insight to a commercial outcome that can be gained. This is where introductions to investors are sourced and where experience can be translated into community knowledge.

While the facilities are the cake, the community is the icing, and together they are a potent recipe that time and again has been successful in launching exciting new technology businesses into our community.

The recipe works! The fly wheel effect from co-locating like-minded start-ups that was started by Rocket Lab and LanzaTech has a proven record of success. The Outset campus has been the springboard for sector defining companies like Mint Innovations and Dotterel Technologies.

Mint have successfully converted some cutting-edge biology and chemistry into a commercial process that recycles e-waste (think everything form TV’s, to Phones to Tesla batteries) to recover precious metals. Today they are starting their first commercial plant in Sydney.

Dotterel, has developed and launched Konos, a groundbreaking microphone technology that is bringing advanced audio capability to sectors as diverse as cinematography, sports broadcasting and security. Dotterel’s Konos microphones are starting to pick up sales globally, and recently won the 2023 NAB Show Product of the Year award.

Both companies were scrappy start-ups within the Outset Campus in the mid-2010’s. Both successfully turned their ideas into disruptive physical technology, raised multiple millions of dollars from local and international investors, and have graduated from the Campus to become part of the local high-tech industrial ecosystem.

Mint and Dotterel are the tip of an iceberg of Deep-Tech ventures emerging from the Outset Campus. We could also talk about current members of the Campus, Vertus Energy (who have technology to put Biogas production on steroids) and Energy Bank (create battery storage in deep oceans) or Dennisson Technologies (light-activated materials that can lift objects… think light activated muscles!).

However, perhaps more remarkable, is that this undeniably impressive track record has been built in the absence of any material New Zealand Government funding. This is unprecedented both locally or internationally and speaks to the success of the incubator model that the Outset founders learned through the journey of LanzaTech and Rocket Lab, the two early unicorns out of this stable. This proven model is now applied to all the Deep Tech ventures that they incubate.

The absolute norm globally is for incubators to receive material support from either Government or aligned institutions, to maximize the effectiveness of precious investor dollars.

Examples include Main Sequence, who were started as effectively the investor for commercial technologies coming out of CSIRO, the Australian equivalent of our Crown Research Organizations. Main Sequence now has a broader mandate but were founded with the support of hundreds of millions of dollars in financing from CSIRO.

We could also look at an equivalent deep tech incubator in New York, New Lab, which is expanding its successful model from that City to help catalyze the re-industrialization of Detroit thanks to a nearly a billion dollars of investment from Ford Motor Company.

Outset is a proven model that combines world class physical facilities within a community focused campus environment to both house and educate early-stage technology entrepreneurs. It has an unrivaled track record locally in terms successfully launching new technology companies that are making a material impact on the New Zealand economy. Many that have successfully grown deep-tech businesses out of this facility including Peter Beck founder of Rocket Lab, Will Barker founder of Mint Innovation and myself (LanzaTech), are excited to be deeply involved in Outset to help more Kiwi entrepreneurs realize their dreams.

So, while we often hear about the reticence of Government funding agencies to be seen to pick winners, perhaps in the case of Outset, some valuable funding for this facility could rather be viewed as backing a proven winner. A smart investment in a smart community to build more industrial success stories for New Zealand.