Monthly Archives: March 2018

Worshipping craft beer at the Abbey

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When you pitch up at Abbey Cellars, in the Bridge Pa Triangle wine district west of Hastings, the first difficult decision to make is whether you’re there for a beer or a wine.

The Haworth family established the Abbey Cellars wine brand in 2002 and a decade later, son Dermot started getting serious about beer. He began selling small-batch brews through the cellar door, leading to the creation of the Fat Monk label.

“We’re still predominantly a winery, which means we focus much of our energy on wine,” Dermot says.

“But we do now have 10 different styles of beer out in the market – probably the largest number for a Hawke’s Bay brewery.”

The Fat Monk brand was retired last year, with the beer now sold under the Abbey Brewery label. Dermot says the change reflects a maturing of the beer side of the business and aligns it with the wine brand. The distinctive monk imagery associated with the previous name has been retained, however.

Dermot describes Abbey’s beer business model as “half brew-pub, half-brewery” because it involves a combination of selling packaged product nationally while also having the cellar as a destination where visitors can enjoy a beer with food and music.

While Abbey Cellars does well attracting patrons – including cruise ship visitors and cyclists taking advantage of the local cycle trails – Dermot says that trade is limited to the summer months.

So in a bid to extend the cellar door’s appeal as a destination from spring right through to autumn, plans are underway to build a 12-metre covered beer garden on site.

The addition of a bottling and labelling line to the on-site brewery in late 2016 – making the brand “self-sufficient” in terms of beer production–had been a significant investment but one that was quickly paying off, he says. Away from the cellar door, like all the region’s craft beers, Abbey Brewery has faced the challenges of growing its brand recognition with local drinkers in a market where almost all Hawke’s Bay bars are tied into supply contracts with the two major brewing companies, Lion and DB.

On the other hand, a number of pubs have recently added ‘independent’ taps for craft beer and interest in Hawke’s Bay-brewed beers has also been enhanced by New World’s supermarkets in Hastings and Havelock North, which both stock local labels among a fairly extensive range of beers.

“Their range is as good as in larger centres such as Wellington, and this has encouraged people to sample different styles of beers,” Dermot says

“And it’s great to see the bars that have started putting some independent taps in over the last couple of years and are noticeably busier and doing well because of their new offering. It meets the current market demand that we haveinNewZealand.”

 

Brewing success on their own patch of God’s Own

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In the heart of wine country on SH50 west of Hastings, Godfrey Quemeneur and Rachel Downes have established GodsOwn Brewery – a rural haven where craft beer enthusiasts can sample product brewed on-site.

The couple bought their 6.5ha property at Maraekakaho in 2010, embarking on a project to establish an environmentally sustainable brewing and hospitality business complete with a hops farm.

Rachel, a kiwi, and Godfrey, who grew up in South Africa, met in England where they discovered they shared a dream of developing some land that “brought people together”.

Godfrey, whose work as a chemical engineer has taken him to several countries, first dabbled in home brew while he and Rachel were living in Nigeria. He and a mate later built a small brewing system he designed in the carport of the couple’s home in Perth.

It was while in Western Australia that the couple observed the concept of breweries establishing themselves as visitor destinations within a wine region, a business idea they pursued when they resettled in New Zealand.

The search that led them to their Maraekakaho property involved a tour of the country in a 1973 caravan.

“We had a few boxes that we needed to tick. We wanted land because we wanted to be more of a destination [business] and we wanted to grow hops and we wanted to have a lifestyle for ourselves as well – we’d always planned to live on the site,” Rachel explains.

“We also wanted to be on a highway. We needed a good water supply, we needed a liveable house and some flat land. This property just ticked a lot of boxes for us. We knew it as soon as we walked in.”

The GodsOwn brand became a reality after a brewery was installed in a shed on the property in 2014 and the couple opened their cellar door (based out of the same 1973 caravan that brought them to the Bay) the following year.

They were fully licensed and operational by January last year and say they have been pleasantly surprised with how the business has grown over the past year.

“A lot of people said to us, you’re too far out of town, it’s not going to work,” Rachel admits, “but we thought, we’ve seen this work before so we were pretty optimistic from the beginning.”

GodsOwn Brewery is not bottling its beers and while it sells kegs to a few pubs – including Havelock North’s Rose & Shamrock – Godfrey says drawing visitors to the site to enjoy a brew and the food menu is the key focus.

“Our plan was to try and keep everything on-site as much as possible, we’re not looking too much at the distribution side,” says Rachel.

“It’s something we’ll look at in the future but at the moment we’re just trying to create a destination here and make it something you have to come and find.”

High Demand for hi-tech talent

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Hawke’s Bay’s technology sector is on a roll but are there enough skilled staff wanting to work here?

Recruiting the skilled staff needed to grow a business has often been one of the top challenges for both start-ups and established technology companies in the Bay.

But there are signs that’s beginning to change. The skyrocketing cost of living in centres such as Auckland has made Hawke’s Bay a more appealing option for software developers and other technology professionals. The establishment of ‘tech hubs’ and factors including improving broadband speeds have also made the region more enticing.

And of course, there’s the lifestyle. Who wouldn’t want to live here if the numbers added up?

Among the local technology firms feeling confident about attracting more staff to the Bay is Re-Leased, a locally-founded cloud-based property management software company that expects to grow its Hawke’s Bay team of 15 staff over the next six months, as part of a global expansion.

“What’s important to tech companies is being able to attract talent,” says Re-Leased founder and CEO Tom Wallace.

“There’s so much competition so you need to be able to offer potential staff members things that are going to attract them. That’s obviously a competitive salary and a great lifestyle, which Hawke’s Bay can offer. They want somewhere that’s a nice space to work.”

For Re-Leased, its “nice space” is the redeveloped Ahuriri site it shares with Xero, NOW and the Tech Collective, a collaborate environment – complete with on-site Adoro café – that is also home to several smaller technology companies.

In the company’s recent hiring experience, being part of a tech hub is one factor that’s helped Re-Leased sign up former Hawke’s Bay people who are delighted to have the opportunity to return home, says Tom.

“One of them wanted to move back with his children but didn’t think there would be any jobs available, then he went online and was surprised to see that we were advertising a role. He’s a really senior developer whom we’re over the moon to be able to bring back.

“Hawke’s Bay now really has something to offer – we’ve got tech hubs, we’re got an amazing place to live and a great place to work. Now it’s just a matter of really educating New Zealand about the opportunity.”

If Xero and Kiwibank can do it …

Xero founder and Hawke’s Bay resident Rod Drury says his company expects to continue growing its Hawke’s Bay headcount after opening an office at the tech hub last year.

“Our staff are loving it in there. We’ve had quite a few go and work there for a few days and I think this year we’ll start seeing some of our Auckland and Wellington staff migrating there. It’s proving you can do high-quality jobs in the provinces, so that’s all working well.”

Rod says many of the good developers Xero hires are in their 20s and more interested in the “urban lifestyle” rather than setting themselves up in places like Hawke’s Bay.

But there is also an older staff demographic who are attracted to the region, whether for lifestyle, family or economic reasons.

“We’re finding that a lot of our people who are moving are people we’ve had with us for a long time, so they know how the system works, they know the business, and they have the skills to be productive. And we can support them in their changing lifestyle requirements.”

That leads on to a wider opportunity for Hawke’s Bay, he says: pitching the benefits of living here to corporates who could establish a presence in the region for fifty to a few hundred staff.“

You’ve got to tell that message not just to the employers but to the employees in Auckland so that they’re demanding it internally: ‘Hey, why can’t we come to Hawke’s Bay?’.”

Rod says the concept had been proven by Xero and Kiwibank, which opened a 100-person Hastings office in 2015 designed to ensure business continuity if a disaster hit its main facilities in Auckland or Wellington.

“I think we’ve moved from theory to practice. We’re seeing it now with the likes of Kiwibank and Xero – it’s actually really good practice that’s stacked up. We’re always waiting for those examples, but now we’re seeing those so we’re in good shape,” he says.

“Both us and Kiwibank open our doors to show other companies it’s the way. [When we’re talking to government departments] in Wellington or Auckland we talk about our Hawke’s Bay call centre, how it’s working for our team, how we have a good supply of loyal staff, and it gives us good resiliency from Wellington as well.”

A place where talent wants to live

Another Hawke’s Bay technology start- up looking for more employees is cloud- based industrial data monitoring company DataNow.

Also based at the Ahuriri tech hub, DataNow is planning to raise capital this year and increase staff numbers from four to fourteen within the next three years.

The company was founded by electrical engineer Erik van den Hout and its customers include WineWorks, Ravensdown and Analytical Research Laboratories (ARL).

Erik says this year’s capital raising will enable DataNow to bring new talent into the team, allowing it to continue to develop its product and service.

Business consultant Ben Deller, the former head of marketing at NOW, has been working with DataNow and says while the expanding technology sector is encouraging more skilled people to consider moving to Hawke’s Bay, the talent pool in the region remains small.

“The late, great scientist Sir Paul Callaghan talked about how New Zealand needed to be a place where talent wants to live. You want to offer all the qualities you can to attract the talent you know you’re going to need – in the case of DataNow, 10 more people over the next three years, which we know is going to be a challenge,” Ben says.

He and Erik say being part of the tech hub had provided invaluable opportunities to bounce ideas off like-minded people as they developed the business’s growth strategy. The location would also be a plus for attracting new staff, they say.

Show Me The Money

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After a long period of low inflation and low wage and salary rises pressure is building in the remuneration market. There are a number of factors having an impact, most of which have featured prominently in the media.

The new Government’s pledge to increase the minimum wage will be good news for those on low wages and will undoubtedly also have a ripple effect to workers on rates above the minimum, where previous margins between the rates of different groups of employees will be eroded.

Shortages of skilled workers are being experienced now and in certain occupations are predicted to accelerate as digital transformation occurs across industries and occupations. Employers are having to pay more to recruit and then may also need to address internal relativity issues with existing employees whose pay has not kept pace with the market.

The cost of housing in Auckland is putting pressure on wages and salaries and also contributing to labour shortages. Employers struggle to recruit in occupations with national public sector salary scales that do not reflect the cost of living in Auckland and we are seeing Aucklanders relocate to the regions (for many good reasons as we know).

The Government pay equity settlement for 55,000 care and support workers is likely to have far reaching effects as those costs come to bear on large numbers of low paid workers over the next five years. They certainly deserve better remuneration but their supervisors and colleagues who now see their pay relativity diminished and wages compressed will very likely be seeking a consequential adjustment.

All of these factors are driving up expectations that potentially will hit businesses hard if they are not in a position to pass wage rises on through price increases to consumers. These factors will impact differently depending on whether you are in the private sector, not-for-profit or public sector and whether you are in Auckland or the ‘rest of New Zealand’ and the extent to which skill shortages may affect your business.

There is plenty of research to show that for most people salary is not the primary motivator of performance or retention. Other factors drive employee engagement which in turn is linked to performance and retention, including:

  • Learning and development
  • Career opportunities
  • Work that has purpose and meaning
  • Work life balance
  • Quality of leadership and people management

However, feeling valued is very important and may become the thing that tips the balance for existing staff to look elsewhere if your remuneration gets too far behind the market. Likewise it can be the deciding factor in which job a candidate chooses if all other things are equal.

You don’t have to be the best payer to recruit and retain staff but it certainly helps if you can manage remuneration well. There are a range of factors to consider that can make a positive difference to your remuneration and recognition practices:

• Aim to keep in reasonable touch with the market for your industry and/or location. Use remuneration surveys or your networks to regularly check what’s happening.

• Have a clear remuneration structure and process. Make sure people understand how pay levels are set, how it links to performance, how they can progress.

• When people reach a ceiling at the maximum salary the job is worth or don’t have career progression available, be transparent and creative about how to keep them challenged and rewarded. Consider one-off payments instead of base salary increases or other non-monetary benefits. Try to assign interesting projects or extra responsibility that provides development and satisfaction.

• Keep your promises – do salary reviews when they are due and communicate well about the reasons for pay rises or the lack of them.

• Consider the total package you offer employees – are there benefits aside from salary that are cost-effective to provide and attractive to employees? Make sure these are visible and not taken for granted. When communicating about remuneration remind people about the extras they receive (such as funding for study, phones, health insurance, car parking, extra leave)

• Be active and deliberate about non- monetary recognition for good work and commitment. Thank people often, show appreciation with a small gift or morning tea. Acknowledge birthdays, length of service, passing exams and other milestones.

• Celebrate success and recognise achievements in front of peers with awards, a certificate, commendations at team meetings or in newsletters.

Pay attention to the drivers of engagement noted above to promote retention and engagement of existing staff and make sure you tell the story of your culture and work environment to prospective employees to support your market reputation and to ensure you attract the attention of desirable candidates.

Expect the best, plan for the worst and prepare to be surprised

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It is important for every business to have formal Terms of Trade. When comparing large businesses to small, it’s fair to say the larger the business the more likely it will have written Terms of Trade.

While there may be some who have operated for a substantial amount of time without written Terms of Trade and have never had cause to require them, every business should “expect the best, plan for the worst and prepare to be surprised.”

Terms of Trade should set out the conditions and agreements that the business and the customer have made at the commencement of a transaction including the obligations of the business and the customer (if any). This benefits both the business and the customer – the customer enters the relationship with realistic expectations and the business has defined the standards it intends to meet.

Benefits

Well drafted Terms of Trade should assist a business in resolving issues with a customer. For example, the terms can help a business to collect debts, should the need arise, and should also specify:

  • How the price will be determined (if a quote is not given);
  • When and how payment is to be made;
  • Consequence of non-payment, such as penalty interest on unpaid amounts and the ability for the business to recover its costs in collecting the debt from the customer.By recording these matters at the outset, the customer cannot refute them or argue that they do not apply, or they did not agree to them.Tailor-madeWhile it’s possible to download a template form of Terms of Trade, it is advisable for each business to tailor their Terms of Trade to their specific circumstances and requirements.For example, the question of liability should be included in Terms of Trade and “one size” may not fit all. The question of liability will first be dependent on whether it is a “business to business” or a “business to consumer” sale.

Business to Business

The Consumer Guarantees Act 1993 (CGA) will not apply and it is therefore important to specify the businesses potential liability and the extent that liability is to be excluded. For example, a business may wish to exclude liability for losses suffered by a customer that could not be reasonably foreseen. A business may also wish to limit its liability to a specified dollar amount or to exclude liability completely.

Business to Consumer

The CGA will apply where a business (acting in trade) supplies goods or services to a consumer. Where the CGA applies various warranties will automatically be implied into the contract between the business and the customer. Importantly a business cannot contract out of the CGA when dealing with a consumer.

Notwithstanding that the CGA may apply a business may still want to limit its liability for example for “indirect” or “unforeseen losses”. However, if a business does this it must then be determined whether the Terms of Trade are considered a “standard form consumer contract” and whether any of the terms are “unfair contract terms”.

Acceptance of Terms

It is important to be able to evidence that a customer accepted the Terms of Trade. A business may have well drafted Terms of Trade that provide them with all the protections required however this will be of no use if it is unable to show that the customer had agreed to the terms.

For example, a business that prints its terms on the back of an invoice may have difficulty proving that the customer accepted them. The obvious issue here is that a customer may claim that the first time they saw the terms was on receipt of the invoice, after the transaction had essentially been completed and may argue therefore that they never accepted the terms.

Where a business provides quotes, good practice would be to specify that accepting the quote constitutes acceptance of the businesses Terms of Trade, which should be provided with the quote.

The obvious way to evidence acceptance of the Terms of Trade would be to have the customer physically sign those terms prior to commencing work. It is accepted however that this may not always be appropriate however emailed confirmation from the customer accepting the Terms of Trade would also suffice.

Stick to what you know

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The topic of how difficult it is to find a tradie with capacity is a popular one at the moment, which leads me to believe that accounting, paperwork and tax will not be top priority for those in the industry.

Now is a great time to look forward and decide what direction you want your business to go in 2018. For those in the building and construction industry, it seems that an increase in profitability features high on the wish list.

Here are five tips to help make 2018 the most profitable year yet.

Tackle compliance

Tradies all say that dealing with paperwork and compliance is one of the toughest, most time- consuming parts of the job. Invoicing, payroll and GST is not everyone’s forte. Falling short in any of these areas can have significant and costly consequences.

A good accountant with knowledge of cloud- based applications is a great asset. They can recommend the best online accounting systems and job management software that best suits your business. Accounting software such as Xero, Reckon and MYOB give you details of your financial performance in real time, eliminating the need for spreadsheets which remain static and error prone. These platforms also offer integrated payroll systems, which can take the stress out of each pay period. GST is automatically calculated and ready for filing directly with IRD. Customised invoice templates can be set up to save you time at the end of a job, which look professional and are easy to read.

Job costing

Even though you may be charging big bucks for a job, it often turns out that you are only just

breaking even, or worse, are costing you money. This is where job management applications are hugely advantageous.

Workflow Max or trade industry specific apps such as Fergus, Tradify and Service M8 will guide you from job costing and quoting through to invoicing and payment. Each job is made up of various tasks and costs with estimated dollar values applied. Labour cost is calculated based on employee pay rates and hours required. At any given time, a jobs progress can be viewed to ensure all costs are being captured and billed. Knowing how much money your jobs are likely to make you, will help you avoid work that would dig you into a hole, and allows you to pick winners right from the start.

Get paid sooner

Invoices for trade/construction work tend to be on the larger side, which clients can often put off paying. Whether you are a subcontractor on a big job site, or a sole trader doing residential one-off jobs, you should be getting paid regularly and on time. Online invoicing from cloud-based applications mentioned above means that you can send all invoices via email instantly. Customers can then view their invoice online and you can see the exact date and time they opened it – no claiming the invoice was not received! You can even connect online payment services like PayPal or Stripe so that clients can pay on the spot. Enforcing strict payment policies is a good idea too, a 7-day payment term is perfectly reasonable. For high value projects, it may pay to agree on a payment schedule throughout the life of the project with your client. An early payment incentive can also work a treat!

Minimise bad debts

Debtor management in any business can be tough and the construction and trade industry is no

exception. Chasing bad debt is never a pleasant task. Fortunately, there is an easy way to automate the pain away. Xero and most other apps will send late payment reminders automatically to allow you to chase bad debt without lifting a finger. Xero integrated app Debtor Daddy even provides you with a receivables manager that will call your clients on your behalf if they do not respond to reminders. Minimising bad debt levels makes a huge improvement to your business, and really lifts profitability.

Stick to what you know

Many business owners take care of the books themselves, when in fact it is far more efficient and cost effective to pay someone else to do it. Information can be sent seamlessly to an accountant via cloud apps, which will enable them to take care of compliance and provide you with meaningful financial reports without having to chase you. Invoices from suppliers can be scanned or snapped by a smart phone and filed directly into Xero ready for your accountant to process. Employees can prepare their own timesheets using job management software on their own devices and submit for payroll processing. HubDoc or Receipt Bank apps can be used to extract key information from supplier invoices that have been scanned or emailed directly to the app for automatic data entry into Xero.

The value of a registered valuer

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Late last year Napier City Council updated the Rating Valuations (RV) for properties within its Territorial Authority (TA). Also known as Government Valuations (GVs) these property valuations are undertaken every three years and are based on mass appraisal techniques.

The values are used primarily for assessing local authority rates and in many cases the subject property has not been inspected.

However, often property buyers use Rating Valuations as a guide to value when making an offer or considering the purchase of a house. Rating Valuations are carried out every three years, and may be out of date after only a few months. Some assessments are carried out several months prior to the published date and may even be out of date by the time of public release. In most cases there is significant change to values in a three-year period. Consequently, there could be enormous discrepancies in the assessments. This is a concern for a lender basing any loan on a Rating Valuation’s ‘value’ or a vendor/ purchaser negotiating a contract for sale or purchase and relying on this ‘free’ assessment. As independent Registered Valuers, our reports are of a much higher standard and comply with both International Valuation Standards (IVS) and those set by the banks themselves and our reports are deemed out of date if they are more than three months old. Of note, confusion often occurs about the term RV. Is it a report from a Registered Valuer, or is it a computer-generated report from your local TA, a Rating Value?

Vendors and Purchasers alike should be aware of the following points:

  • Rating Valuations do not include a chattels allowance which would normally form part of a purchase price. Chattels generally include removable appliances, drapes, light fittings and floor coverings. The value of chattels can be as high as 10% of the property’s value.
  • Rating Valuations are typically computer generated using previous values and increasing these by the average rise indicated by recent sales. These are then checked, sometimes by a roadside inspection. Very seldom do the Valuers make an internal inspection.
  • As there is often no internal inspection, a property may have been altered or refurbished since the Rating Valuation was assessed and this would not reflect the property in its upgraded state – or deteriorated state such as a leaky building.

Also, be aware of how the value conclusions for a property are generated using an e-Value/computer generated reports used by some retail banks and even Quotable Value. There is no actual property inspection and therefore very limited understanding of what the property’s attributes truly are. Unlike a report from a Registered Valuer, some of the differences between a registered valuation and an E-Value report include:

  • Floor areas are sourced from Core Logic, not physically inspected or measured.
  • Value is benched off the Rating Value.
  • Of the nearby sales looked at the value conclusions do not make comparisons back to the subject property and do not state whether they are inferior, comparable or superior to the subject property.
  • Sales offered as comparisons are not always relevant to the subject in question and do not compare apples with apples and therefore over or under value the property.
  • Computer generation does not take into consideration factors such as views, aspect, house presentation, neighbouring properties. For example, in Havelock North and Napier streets can include sites that are more elevated or in a gully some sides of the streets shaded other sides are not.
  • A property might front a busy road versus a quiet cul-de-sac, furthermore unless a property is inspected it is impossible to tell its true condition.

In fact, if you read the small print of these reports – you will find the same or similar: “X provides this material for information only. You should seek professional advice relevant to your individual circumstances. While X has taken care to ensure that this information is from reliable sources, it cannot warrant its accuracy, completeness or suitability for your intended use. To the extent allowed by law, X does not accept any responsibility or liability arising from your use of this information. accepts no liability or responsibility….”

Fundamentally, no property can be accurately assessed without a site visit by someone who is in full knowledge of the property and location’s characteristics. If you do require the best indication of price, engage the services of a Registered Valuer so that you can be sure of the true value of your property.

Lightbulb Moment – An alternative to Wifi, that’s worth considering?

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The summer holiday season is here! It’s been good to have a few days off over Christmas and enjoy this little piece of paradise with friends and family.

It’s been great to keep in touch and there haven’t been many places I haven’t been able to get access to Wifi to check emails and generally carry on with business. Wifi is such a flexible and useful technology and I struggle to remember what it was like without it (although its less than 20 years old).

There are a lot of options for Wifi connectivity throughout the country including free Wifi hotspots. This means the holiday can have almost seamless connectivity. But what is the future of our internet connectivity, is Wifi still the best technology and what about LiFi?

Lifi was coined by Professor Haas in 2011 and stands for Light Fidelity. Essentially Lifi is delivered via a common household LED light that transmits data by a very fast flickering light (undetectable by the human eye). Every LED lamp is powered through an LED driver and this LED driver gets information from an Internet server that encodes the data. It is then picked up by a Photo Detector on the other end which is able to read all the flickering. It then decodes the data after Amplification and Processing (see diagram)

And as light travels faster than radio frequencies (WiFi), then the obvious advantage of this technology is the increase in speed that LiFi can transmit data at, about ten thousand times faster than radio waves. Indeed speeds are indicated to be up to 28 Gigabytes per second versus 7 Gigabytes for optimal Wifi speeds.

Practically however there are some disadvantages to Lifi, the most obvious is the bulb must be on to transmit data. This won’t please anyone who enjoys checking social media or news in bed at night. Also the range is limited; it is around 10 metres vs 30 metres for Wifi. And each light handles multiple connections so the more connected the slower the speed will become.

On the positive side it does mean it can have commercial appeal for industries where RF waves aren’t suitable. Think power stations and hospitals for example. And as light can travel through water this can be beneficial for underwater industries too.

Regardless of the limitations, the technology is certainly worth developing. What we have seen since its initial discovery is others looking at how to enhance it.

So, enter the introduction of infrared light LiFI. Still not commercialised but already we are seeing some examples at this year’s CES in Las Vegas which indicates it may not be far away.

The difference between LED LiFi and IR LiFI is a passive antenna located in the centre of the bulb/light that allocates a single beam to a connected device and then using optical light to transmit the data. One of the key advantages over the early Lifi is each light beam is allocated to individual devices (multiple connected devices slow down the speed).

It’s still early days but at the moment Lifi is still limited from a practical perspective, both Infrared and LED LiFi can’t transmit through walls, so while this could be an advantage from a security perspective, it’s a hard ask for your average user.

The mouth-watering speeds are exciting and further development is bound to push through the existing barriers.

The prototype of Infrared Lifi on show at CES has a lamp and a dongle that attaches to the PC (as our devices aren’t set up for this technology yet). The lamp is connected via an Ethernet cable and the dongle allows the PC to pick up the light.

The initial reports are it seems clunky, a bit of a hassle and costly. But plans are in place to allow this to be expanded to a room sized area.

The speeds though were very encouraging (currently beyond standard PC capability)

I think the take out from this, is a real push to commercialise this technology and already we are seeing some products hit the market and a number of new companies started around LiFi.

So it’s probably going to be some time before we have these awesome speeds where we need them and anywhere comparable to what Wifi offers us at the moment.

Our businesses perhaps will see the benefits first and I can certainly see some advantages to any light based data transfer technology, particularly when it comes to the Internet of Things and I suspect that is where the technology may be commercialised first.

So at this stage I think Wifi is still going to be the technology of choice and as it is flexible and very useful, so when working remotely while on holiday during the year, I hope your Wifi will do just enough to keep you in touch.

Do you want tulips with your bitcoin?

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The cryptocurrency bitcoin continues to make the news. What many New Zealanders don’t realise is that if they hold loyalty cards like Fly Buys or an air points card, they already own digital currencies.

However, when we read in December of a Wellington waterfront property for sale in bitcoin, and that bitcoin futures recently debuted on Wall Street, the subject of bitcoin and cryptocurrencies warrant consideration as a potential investment option.

What is a cryptocurrency?

Cryptocurrencies are digital currencies which use encryption techniques to regulate the generation of funds and the transfer of funds independently of a central bank.

What is bitcoin?

Bitcoin is one type of cryptocurrency that is produced and stored electronically. It has no intrinsic value – it cannot be redeemed for other commodities like gold – and it has no physical form because it exists only on a network of computers.

Bitcoin is not backed by any government or central bank, it is not regulated by any laws, and it is not universally accepted.

Bitcoin has a high profile because it was the first cryptocurrency. However, because they can be created with ease, as of writing there were more than 1,3001 other cryptocurrencies (including ethereum, ripple and litecoin) available on the internet.

Why is bitcoin valuable?

There is a cap on the number of bitcoins that can be created, limiting how much the currency can devalue through inflation. It can be seamlessly transferred between countries. A growing number of people are willing to accept it and to trade with it.

On a more sinister note, Bitcoin also enables crime and terrorist’s networks2, like ISIS, because it can be used for transactions that regular banks and governments would not allow.

How does bitcoin stack up as an investment?

Volatile is one of the first characteristics of bitcoin that comes to mind. The US Commodity Futures Trading Commission said in December that investors need to be cautious of an investment that surged more than 1,700% in 20173. Since the high of December 17, 2017, bitcoin was valued at $27,769 New Zealand Dollars. At the writing of this article (January 11, 2018), bitcoin devalued some 37% to $17,418 NZD on 22 December before going on to ‘recover’ to the current valuation of $20,776 NZD (9 Jan 2018) – still some 25% down on the earlier high4.

Dr Shane Oliver, AMP Capital’s Head of Investment Strategy and Chief Economist, labels bitcoin a bubble.

“To me, bitcoin has all the classic hallmarks of a bubble. It started off with some fundamental development, which is favourable, potentially revolutionising the payment system slashing the price of shipping money from around the world.

“But as the price goes higher and higher, investors are buying into it not because of the development but because it’s gone up… so it’s become very much a speculative bandwagon.”

Other financial speculators are now also drawing parallels to the Tulip Mania that gripped the Netherlands in the 17th Century, when some tulips sold for more than ten times the annual income of a skilled crafts worker, before dramatically collapsing.

What defines a good asset?

Before committing to bitcoin, or any other investment, ensure that it matches the definition of a good asset class. Ask yourself:

  1. Does it consistently earn on your behalf? e.g. interest bearing.
  2. Is it predictable? e.g. stable, not volatile.
  3. Is it widely accepted and in demand?
  4. Is it safe? For example, protected by regulation.
  5. Is it easy to buy or sell?

If the answer is no to some or all of these questions, talk first to an experienced financial adviser about what investments are best suited to your circumstances.

While investments that don’t have the above characteristics may provide opportunity for positive return, by and large, when dealing with peoples total combined wealth and financial goals, such investments fall more into the speculative and chance category, rather than forming the basis of considered and planned financial planning to meet one’s ultimate goals.

Tulips anyone?

Sources:
  1. https://fma.govt.nz/investors/ways-to-invest/cryptocurrencies/
  2. https://www.coindesk.com/u-s-think-tank-finds-rising-bitcoin-price-linked-terrorist- interest/
  3. http://fortune.com/2017/12/11/bitcoin-futures-contracts/
  4. https://www.cnbc.com/2018/01/08/cryptocurrency-ripple-crashes-30-percent-in-24- hours-bitcoin-also-dropping.html
  5. http://www.ampcapital.com.au/article-detail?alias=/site-assets/articles/insights- papers/2017/2017-11/all-aboard-the-bitcoin-bandwagon&audience=2

Steaming ahead for success

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When the Newton team took to online capital-raising platform Kickstarter in September seeking seed funding, it took them just 23 minutes to secure the $10,000 they were after.

Production of a unique Hawke’s Bay eco-friendly coffee machine is underway after the team behind the award-winning project took just 23 minutes to raise the required start-up funding online.

Designing and manufacturing the Newton Espresso maker has been a labour of love for two EIT staff members – 63-year-old Alan Neilson and Hayden Maunsell, 31 – who say their differing “old school, new school” approaches have enabled a best-of- both-worlds outcome.

The project began with a conversation about making a new coffee machine, one that would produce a great crema without compromising on design or the environment.

Design sketches drawn up by Hayden were adapted into working prototypes by Alan and the ensuing collaborative design process of testing ideas and materials, developing and refining, has evolved the Newton into a quality functional apparatus.

The Newton – a modern take on the lever- press machine that calls on established principles of coffee extracting – is described as offering the perfect balance between a “sculptural art piece” and a “domestic tool”.

The simple-to-use device only requires boiling water and fresh coffee grinds and,

unlike many espresso machines on the market, creates zero waste and does not use electricity.

The Newton’s minimalist design, considered aesthetics and pop of metallic burnt-orange colour are features that have seen it honoured in recent design awards. It was named winning design in the HOME New Zealand Design Awards from Fisher & Paykel and was recognised at the Designers Institute of New Zealand Best Design Awards, picking up silver and bronze awards in the Designed Product and Colour categories, respectively.

The Newton in action

When the Newton team took to online capital-raising platform Kickstarter in September seeking seed funding, it took them just 23 minutes to secure the $10,000 they were after.

At the same time, the Newton was put to the test and received “rave reviews” at a Kickstarter launch event attended by about 120 people at the Hawke’s Bay Business Hub in Ahuriri.

Craftsman Alan completed an apprenticeship in toolmaking at a cycle and lawnmower manufacturing company and went on to do prototype research and development in that field.

His diverse skills in crafting and engineering also saw him working with exceptional accuracy restoring medical and scientific antiques in London. He is a self-taught wood turner, winning many awards and accolades both in New Zealand and overseas.

His other achievements include restoring his 100-year-old home and making furniture, cabinetry, fittings, jewellery and toys for his home and for his family.

Hayden completed an apprenticeship in refrigeration engineering after finishing school, working in that field for eight years before completing a Bachelor of Visual Arts and Design followed by a Masters of Art and Design.

Demand for the Newton has now seen the team expanded to include professional photographers and videographers Josh Neilson (Alan’s son) and Steph Everson, along with graphic designer Tara Cooney.

www.newtonespresso.co.nz