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Monday 1st October 2001 |
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When they semi-retire, most people start to slow down, enjoy the money they've made, play a few more rounds of golf, take longer lunches, spend winters holidaying overseas, that kind of thing. Not Stephen Tindall. The 50-year-old complains he is busier now than he ever was as managing director of The Warehouse.
Busy doing what?
Consider this for a workload. Tindall remains on The Warehouse board, still works two days a week there and flies across the ditch every three weeks to help with its Australian expansion. The rest of the time he's a director of around 20 companies, helps mentor many others, is chairman of the New Zealand Business Council for Sustainable Development, is on the Zero Waste Trust, is a key member of government think-tank the Science and Innovation Advisory Council, is on the Independent Biotechnology Advisory Council and is in demand as a speaker at various conferences and business events. On top of all that, he spends millions of dollar each year investing in emerging businesses and donating to charities, the money coming from his own pocket and from the Tindall Foundation, set up by him and his wife Margaret in 1994. Amazingly, the father of five still keeps weekends sacrosanct to spend with his number one priority - his family - and has a weekly date playing golf with his father each Friday morning.
See? Busy.
It's no wonder, really. Life "post-Warehouse" means Tindall is focusing on a much bigger project: New Zealand, Inc. "My whole raison d'être is just to do something. I want to do something to help New Zealand," Tindall says.
Tindall's help comes in a variety of forms. It might be paying over $50,000 to have Harvard economist Michael Porter fly in for eight hours to attend the Knowledge Wave conference. It might be doling out hundreds of black T-shirts with red "I love New Zealand" lettering at the same event. It might be investing around $100 million in innovative New Zealand-based companies and acting as mentor to many of them. He is expected to invest another $100 million in the next five years - all his own money - and is currently hiring staff to help manage his portfolio.
Tindall's old-fashioned fervour for his country is winning him some old-fashioned praise. Research, Science and Technology Minister Pete Hodgson calls Tindall a patriot. "That's an old-fashioned word, but he's the sort of guy who can bring it back into fashion."
Jerry Balter, the New York-based chief executive of the New Zealand Seed Fund (in which Tindall has invested) goes even further. When we talk about creating a knowledge economy in New Zealand, Tindall is "da man", he says. Tindall had the chequebook out when no one else was willing to take a bet on New Zealand technology - and some of those bets may prove to be very smart, says Balter. "A lot of jobs have been created, a lot of technology that would have moved offshore has stayed and a lot is being financed in New Zealand. It is a matter of time to find out if they are very successful or not, from a business perspective."
What's driving the patriot? Well, like he says, he wants to do something. Specifically, he wants to help create that one really big New Zealand business success story that will lift the country's economy, create more wealth for all, and return New Zealand to top of the OECD table - like Nokia has done for Finland, for example. And that's what keeps him at his desk rather than on the golf course. Like him or hate him (and isn't it amazing how few people hate him?), Tindall could prove to be the best thing since, well, The Warehouse.
Stress worker
Few could hack the pace of it. Tindall does, but even he is feeling the pinch. It would seem "Saint Stephen", as he's dubbed by some media, has only one fault, if you can call it that: taking on too much.
When he stepped down as managing director of The Warehouse in late January Tindall said, "One way or another I'm sure I will be kept busy." He now admits he just can't do any more without starting to fail physically. He's cutting back on speaking engagements, and is busy building a team of professionals with the necessary business acumen to act in his stead as directors and mentors of the technology companies he invests in. He already has a team of three helping him deal with the investment applications that pour in at the rate of about 12 a week.
It's a place he has been before. While running The Warehouse, his health began to suffer thanks to the company's spectacular growth. "I had to get people to help and so I did. I had to get fit again so I started going to the gym. After a six-month period I felt better about myself and more confident in appointing more people to delegate to," Tindall says. This time around he has recognised the warning signs sooner and, arguably, is more comfortable about delegation.
Nevertheless, Tindall remains involved in those companies where there is more complexity, where he's put a lot of money in, and where he may be required to put in a lot more. And, say those around him, he makes every key meeting of the organisations he's connected to. Anyway, now there's email. Friends and colleagues say they receive electronic missives at all times of the day and night, full of positive ideas and strategic suggestions.
Answering critics
If there is a brickbat reserved for Tindall it's about the damaging effect The Warehouse has had on the main street of New Zealand - its reputation for screwing down suppliers, the impact of its tonnes of plasticwares on the environment. In short, critics mutter over their Chardonnays (and never to journalists), it's hypocritical for him to promote New Zealand, Inc when his Big Red Barns are filled to the gunnels with cheap imported Asian goods.
Ironically, Tindall agrees with his critics - insofar as he says New Zealand's future has to be in selling high-value, low-volume items, rather than what New Zealand has historically churned out. When it comes to success stories worth emulating, he points to the Tatua Co-operative Dairy Company. In the late 1970s the Waikato-based dairy company could see it was not going to survive against the big players by just making basic products like milk powder. Instead, it developed a range of valuable extracted milk proteins used as ingredients in goods such as sport drinks and infant formula.
Tatua's acting chief executive Barry Richardson says the value-added products improve returns up to five times the commodity price. One nutraceutical product fetches as much as $US300,000 per tonne, compared with milk powder at $US2000 per tonne. As a result, year after year, Tatua has rewarded its farmer shareholders with top industry payouts.
New Zealand is to the world what Tatua is to the global dairy industry, says Tindall. It is better to have a small piece of a large pie than 100% of a small one, the argument goes. "Tatua has proven that if you get it right, the price can be very big. If New Zealand only gets half-a-dozen big ones, it could turn our whole country around very quickly."
Big spender
Tindall's new business investments are following this model. He won't say exactly how much money he has put in so far, in case he's seen to be "grandstanding". Nor is he saying much about where he is putting his money. (But we've made some well-researched calls: see "How to spend $100 million".)
This much we do know: seven years ago he and Margaret decided to slice a 23% shareholding in The Warehouse into the Tindall Foundation, a charitable trust aimed at improving the lot of New Zealanders. Initially, the foundation made some technology investments and still funds a couple of inventors' institutes. Today, it is more focused on social entrepreneurism and Tindall handles the high-risk technology investment separately, funded by dividends from his remaining 28% stake in The Warehouse. These dividends have been substantial - amounting to around $18 million last year alone (see table). The capital base is left intact to pass on to the foundation when he dies.
So far he's never put more than $10 million into one investment but says he would consider more if something "huge" came along. Borrowing or selling current assets would mean a change in philosophy. "If you needed a lot of capital quickly and you had enough confidence in it you would probably do that. The horsepower is there if we need it," he says.
Like any prudent investor, his risks are spread. He sank $4 million into the New Zealand Seed Fund, the country's first venture capital seed fund established by Auckland's UniServices. One of its investments, computer software company JSD, has gone from the verge of bankruptcy to the verge of launching its anti-hacking software worldwide. JSD was about to sign a lucrative deal with a major telecommunications company as Unlimited went to press.
Tindall has also placed money with Telecom's technology, media and telecommunications (TMT) venture capital fund and has invested through Caltech Capital Partners, another venture capital funds manager. Through Caltech, the Tindall Foundation made a $2 million loan on very favourable terms to allow e-centre, Massey University's high technology incubator, to get off the ground.
Tindall is a key investor in the venture capital fund No 8 Ventures. "One of the reasons he put money with us was he had already made a lot of direct investments and was disappointed with some of them. He wanted to see if this was a better way of doing it," says No 8 Ventures' director Jenny Morel.
He's also taking part in the business "angel" programme, sponsored by crown-owned Industrial Research (IRL). The IRL programme, known as Mentor Investor Network Events (MINE), offers more than just money. The business angels give time, know-how and international contacts.
The good thing about his fund investments is they take up less time. Where Tindall invests directly he has to involve himself - or one of his helpers - quite a lot. He now has a lot of capital at risk but argues that unless someone does, New Zealand is not going to get the winners it needs to lift its overall standard of living.
There will always be failures. To date, Tindall has put two projects on ice because they weren't going anywhere - either the timing was wrong or the people were (he won't name the businesses at this time). "I've made investments thinking, 'if this actually happens, it is going to be huge,' but there may only be a 20% chance it is going to happen. It's a calculated high risk. It's better odds than the horses or winning Lotto," he grins.
The popularity
The other moniker he's been given by the media is "Mr Nice Guy". And it is easy to see why. The day he's interviewed for this article, Tindall has to urgently sign some papers for the Warehouse executives lurking next door before we can begin to talk. He is genuinely apologetic for the delay.
He treats people, even journalists, as having value and they respond. He topped Unlimited's inaugural readers poll as best business person, and has done so in many other media for years. He also made the Sunday Star Times list of New Zealand's 25 most powerful people this year. People vote for him because of his business acumen and his commitment to staff and sustainability.
When Tindall attended a workshop on the West Coast for the Great New Zealand Business Venture (which he also supported financially), 300 people braved hailstones the size of golf balls to come to the Greymouth meeting.
Bridget Wickham, who headed the venture programme, aimed at providing innovators with mentoring help, says many people brought along the products they had made because they wanted to see if Tindall thought they were a good idea. "He spent time with each person, asking what had led them to create their product and what they were trying to achieve. He has a very human touch and is genuinely interested in people, when a lot of others just go through the motions," Wickham says.
On the sustainability front, Tindall has been involved with the New Zealand Business Council for Sustainable Development since its inception in May 1999. The Warehouse is one of only 150 companies worldwide invited onto the world council; Tindall is The Warehouse's representative.
There are dangers in speaking out on environmental and social issues. "If you put your head above the parapet, people at the extreme end of the scale will always say you're not doing enough yourself. You can attract more criticism than companies that are doing nothing."
Tindall himself has largely escaped the tall poppy syndrome high-profile figures often suffer here. When asked why this is so, Tindall looks contemplative, gazing out the window at the traffic streaming along Auckland's northern motorway, as the window reflects his image back at him. "Because I'm putting back, I hope," he says almost hesitantly. And then, more strongly, "I think everyone knows the money is not being kept for me. It is being reinvested in this country." It's hard to dislike a patriot.
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