mbie master of business innovation & entrepreneurship 1 new myths for a very new world: the...

MBIE Master of business innovation & entrepreneurship 1

New myths for a very new world:the “heroic journey” of a kiwi high

technology enterprise

Peter J Mellalieu

Director: MBIE Master of business

innovation & entrepreneurshipUNITEC Faculty of Business, Auckland


Prologue

In early 2001, Ilion Technologies will raise almost $NZ 300 million from its initial listing on the NASDAQ high technology stock exchange.

Ilion, formerly Pacific Lithium, was established in Auckland in 1994 drawing on the funds of 26

foundation investors.


My job: Unitec’s MBIE programme director

To create the most valued masters programme in business innovation and entrepreneurship in

the Asia Pacific region


Key question

How do we learn from New Zealand’s best entrepreneurs and innovators so we can

improve our success in growing new business ventures?


Key question - academic style

How does a young, peripheral country develop the ‘cultural infrastructure’ - the myths and legends - it needs to inspire creation of the

heroic forces for creating successful business enterprises in a hypercompetitive, globalising

world?


Overview

The mythic heroic journey

The story of Cinderella as a heroic journey

Lessons from the Cinderella story

The case of Pacific Lithium

Lessons from the Pacific Lithium case

Creating masters of enterprise

Conclusions


The mythic heroic journey/1

Heroes are introduced in the ORDINARY WORLD where they receive the

CALL TO ADVENTURE.

They are RELUCTANT at first, or REFUSE THE CALL, but are encouraged by a MENTOR to

CROSS THE FIRST THRESHOLD and enter the Special World where they encounter

TESTS, ALLIES and ENEMIES.


The mythic heroic journey/2

They APPROACH THE INMOST CAVE, crossing a second threshold where they endure

the ORDEAL. They take possession of their REWARD and are pursued on THE ROAD

BACK to the Ordinary World.

They cross the third threshold, experience a RESURRECTION, and are transformed by the

experience. They RETURN WITH THE ELIXIR, a boon or treasure to benefit the Ordinary World.


Cinderella’s heroic journey/1

C enjoys happy family - ORDINARY WORLD

C’s mother dies - THE CALL

Stepmother’s family takes over

Fairy godmother - MENTOR

FG helps C to get to the ball

The ball - SPECIAL WORLD

C meets the prince


Cinderella’s heroic journey/2

C runs home late, loses slipper

Prince searches for C.

C kept hidden by stepsisters - ORDEAL

Prince finds C - REWARD

C forgives step family

All live happily ever after - THE ‘TREASURE’


Lessons from Cinderella

Goodness and virtue - even in times of trial - eventually bring prosperity and happiness -

even to those who don’t really deserve it!


Pacific Lithium’s heroic journey: the ordinary world /1

Auckland 1970’s - Robin leaves school aged 16 to join family clothing business.

After several business successes he makes substantial losses following the 1987

sharemarket crash.


Robin’s call to adventure /2

Inventor John Broome seeks finance from Robin to develop a prototype process for

extracting lithium from seawater.


Investor’s are reluctant at first /3

Robin “walks the streets” for nine months, eventually raising money from 26 investors to

construct a lithium extraction plant.


Robin is encouraged by mentors /4

Robin recruits a board of investor directors including several well-known business leaders


Pacific Lithium crosses the first threshold /5

August 1995: PL raises $NZ 7.5 million from shareholders.

Secures $26 million forward contract with Japanese trading company.


PL encounters tests, allies… /6

After 8000 experiments, PL’s seawater extraction process fails to achieve optimum

results.

A commercial project manager, and a research engineer join the company - Mennolt Regtien

and Dr Paul Pickering.

Sony approves the company’s product.


… and enemies! /7

Three new companies enter the industry, and existing player FMC doubles its capacity.

The price of lithium carbonate falls from $ US 2.00 to $1.40.

Planned world capacity is twice world demand.


80000

70000

60000

50000

40000

30000

20000

10000

0

Capacity

tonnes

PLL Gwalia Minsal Cyprus Foote FMC All Demand All Supply

Figure 1: World Lithium Supply and Demand

Planned

Existing


The ordeal of long nights /8

PL shelves construction of the seawater extraction plant.

The PL team assess the achievements of the company and realise they need a new vehicle

to pursue their quest:

‘to provide lithium-based energy storage systems that will generate environmental

benefits across the globe’.


PL takes possession of its reward /9

PL uses its purification process to convert low grade lithium-containing feedstock into very high purity lithium carbonate required by the

Japanese lithium battery industry.

PL secures feedstock from Toxco, one of the new entrants, who bought up a US government

stockpile of lithium material.


The pursuit /10

By 1997, PL has built an ultra high grade lithium carbonate refining plant focussed on the lithium

battery manufacturing industry.

Accumulated losses $NZ 3.8 million.

Lithium battery market now $US 140 million/month, up from $US 10 million/month in

January 1995. Five fold growth expected between 1997 and 2004.


Forecast Battery Cell Demand For Major Portable Applications Only

0

200

400

600

800

1000

1200

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Cell

Dem

and

(mill

ions

cel

ls

per a

nnum

)

Camcorder

PHS/PCS

Cellular

Notebook PC


Resurrection and transformation /11

PL begins seeking strategic relationships to maximise the return from its proprietary

technologies.

MIT collaborates with PL to produce solid lithium-polymer battery cells - the cheapest, lightest and

safest batteries possible.

In 1997, Robin visits China, and a year later signs an agreement to carry out a five year exploration

of the world’s richest lithium resources.


The treasure /12

October 1999: PL effects a reverse take-over of NASDAQ bulletin-board listed Lithium

Technology Corporation - which was facing serious cash flow problems. PL now has 600

shareholders, and their $US 25 million investment is now valued at $US 90 million by a

US investment house. The merged company, renamed Ilion Corporation, expects to list on the

NASDAQ in early 2001.


Lessons learned so far

1. Think global! Act global!

2. The unpredictable happens

3. Management team > technology > game plan


Creating masters of enterprise

Unitec’s MBIE

Target participants

Project-based learning

Enterprise MasterWorkS

On-line learning support

International academics

Part time


Conclusions /1“As a technology company, Pacific Lithium has to operate on different rules. These include the

ability to change and capture a marketplace very quickly...People misunderstand [the

importance of building management]. They think venture capitalists invest in technology.

They don’t. They invest in the management team, then they look at your technology, and

then your game plan.”

Robin Johannink


Conclusions /2

“As a scalable, replicable piece of social code, [the heroic journey] could be a profound as the

biological code Watson and Crick found in DNA”

Piet de Jong

mbie master of business innovation & entrepreneurship 1 new myths for a very new world: the...

Documents

new world

heroic journeylessons

heroic forces

globalising world

business innovation

family clothing business

business successes

cinderellas heroic journey1c