Grow

Young companies call the first capital they raise the “seed round”. That makes sense. The goal is to grow a big strong tree. That starts with a seed. But where do seeds come from?

We often talk about incubating and accelerating startups, but planting and harvesting are much better metaphors.

This is one of those rare situations where money does actually grow on trees!

The night before the Trade Me sale was announced the exec team - Sam, Jessi, Jon MacDonald, Stewart Robinson, MOD and myself - met at the Trade Me offices, which in those days were still located on the too-small top floor of Anvil House on Wakefield Street in Wellington. We divided up the list of team members so we could call each of them in turn and share the news, including the fact that shareholders had set up a scheme for employees that would result in generous cash bonuses for everybody.

Their reactions were all over the spectrum. Some just wanted reassurance that nothing would change with their jobs or the team culture. Some were stoked with the payouts - more than one mentioned that it would be enough to clear their student loan. My favourite was Brendon Skipper, who we had recently hired from Stuff (then owned by Fairfax) to head up Trade Me Property. He was in the middle of a long notice period they had enforced before he could start with us. We had good news (“You can finally start on Monday”) and bad news (“You work for Fairfax again!”)

The pile of turtles

There were 53 people working at Trade Me by the time of the sale. So many of them have gone on to start and work on other ventures.

Nigel started StarNow, along with Cameron Mehlhopt and Jamie Howell. Many of the original Trade Me team went on to work with them, including Sarah Pennell, Rowena Maguire, Tim James, Olivia Worthington, Alan Howard and Meghna Hall. StarNow was itself acquired in 2021.

Nigel also started Rubber Monkey, and with Phil Cox and Craig Herring started Rubber Monkey Software. He’s showing no signs of slowing down yet!

Natasha Lampard started Webstock. which may have had a bigger second-order impact on the ecosystem than any of the other examples in this list. The booking platform called Lil Regie was also a direct spinoff from this.

Amnon Ben-Or was a partner of mine at Southgate Labs, which was the seed investor in Vend and also helped to start ThisData and Atomic.

Toni Cox started and still runs Beauty Bliss. Richard Humphries started Trade Tested. Erin King started Boho Pets. Marshall Jones started Very Good Security. Lance Wiggs started the Punakaiki Fund.

Others stuck around and continued to work on Trade Me itself. For example, Jon MacDonald took over from Sam as CEO and was in that role for many years, and Allister Maguire was still Head of Infrastructure until 2022.

It’s not just businesses. After a decade running operations at Trade Me, Jessi went on to be the CEO at Predator Free New Zealand.

We could also include ventures that were started and funded by former Trade Me investors.

The Trade Me seed round was funded by some of Sam’s former colleagues from consulting profits.

(Our pile of turtles stands on a foundation of “time and materials”.)

The returns on that investment were significant. But what happened to those gains?

Phil McCaw, Richard Abbott, Sharon Weaver and Mark Richter started Movac, which has gone on to fund a number of successful ventures, including Power By Proxi and Aroa Biosurgery, and later Vend and Timely.

Colin Bevan started Parts Trader. Again there are Trade Me alumni involved, including Carl Dickson.

Martin Kay started started Crema Capital and later Adminis.

The list goes on…

Branching out

We can expand this to also include ventures started by people who worked at Trade Me after the sale.

For example, just considering my own individual branch…

Rod Drury was on the Trade Me board at the time of the sale. Sam was on the Xero board and many of the original Trade Me team invested in the Xero IPO. Some of them were also subsequently employees at Xero.

I first worked with Vaughan Rowsell, who started Vend, when I was still at Trade Me and he was at Vianet (which originally powered the Travel Bug site we built). Again, several original Trade Me team members worked at Vend, including Sophie Melchior and Alex Fala, who took over from Vaughan as CEO in 2016.

Ryan Baker, Andrew Schofield and Will Berger, who together started Timely, all worked at Trade Me after it acquired their first venture, BookIt. Over the years Timely employed a long list of people who had previously worked at Trade Me, including MOD who was chairman of the board.

Repeating this exercise for others from the original Trade Me team would reveal a dense forest of subsequent ventures.

The sale to Fairfax wasn’t the end of the Trade Me story, and as it continued to grow it created huge opportunities for those who worked there to learn and take those lessons to many other places. The $750 million that Fairfax paid for Trade Me in 2006 has been multiplied many many times over in subsequent generations of ventures. Every new success is another branch, creating a new set of opportunities.

This is how we create an ecosystem. We plant a seed and let it grow!

This list is based just on things I’m aware of and can recall of the top of my head and some lightweight LinkedIn stalking, so I’m sure it’s incomplete. Apologies to anybody that I’ve missed. Please help me correct the record and I’ll treat this essay as an open draft.

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