Queenstown needs to call on its invisible army

Iwas lucky enough to spend last week down in the Cardrona Valley, midway between Queenstown and Wanaka. There’s a harsh beauty, drawn by a gentle hand that’s the signature of this region. It’s truly a privilege to walk around the tops with my English pointer Cactus in search of quail and the odd red deer.

As you approach the snow line, there’s an edgy quality to the air, something that throws your larger life into sharp relief as you clomp your way over tussocks.

I popped into Queenstown a few times to pick up supplies and catch up with old friends. It’s impossible not to notice the impact of the global pandemic on a town that was 60% dependent on the tourism dollar.

Cafes are empty or working reduced hours. Many tourism businesses remain shuttered and some have just plain vanished.

Talking with mates, there were many stories of marriages breaking down as businesses go under, and mortgage rates have ramped up – something that’s not helped by house prices dropping.

Real Estate Institute figures in May showed a 22% decrease in Queenstown median house prices and a whopping 43% drop in Wanaka. The pandemic has brutally demonstrated to towns like Queenstown the risk of having all your eggs in one tourism basket.

Some local technology entrepreneurs are trying to change that.

Historically, the tech scene in Queenstown has been muted, generating just under 2% of the town’s GDP, while tourism and hospitality deliver 60%-plus. That’s way below the national contribution of tech, which is 9% and growing.

In a healthy tech ecosystem, you’d expect to see a mix of startups, scale-ups, multinational tech companies and remote workers, with a university feeding in talent. But that’s not what I saw last week.

Queenstown doesn’t have a university, large tech companies don’t call it home, and its tech startups and scale-up crowd is small.

Pitchbook data shows just four tech companies from Queenstown raising venture capital in the past five years – most through seed rounds. It’s not clear how many of these four companies progressed to series A or B funding rounds.

What Queenstown does have is an invisible army of remote workers who have set up there since the pandemic – an important source of talent. I was delighted to find that the town is keen to capitalise on this. Members of the local community have formed a not-for-profit called Whakatipu Hangarau Trust (meaning ‘‘Queenstown technology’’ in te reo). The trust is working on a long-term strategy for the district’s tech sector. Backers include QLDC, the University of Otago, MBIE and a group of private sector techies, including my old mate and seasoned tech investor Roger Sharp.

The group came on to my radar because it has just completed a month-long road trip through a dozen American mountain towns that diversified their economies from lumber and tourism into technology. This included a former hometown of mine, Bozeman Montana, as well as Boulder Colorado, Hillsboro Oregon and others.

The group has sought to learn how these towns swung away from skiing and holidaying to embrace AI and SaaS.

What the group found was fascinating. Firstly, the nature of the technologists drawn to mountain towns are different. They like playing outside, so when they sit down to work, they really work.

Next, housing is crucial. If the startup companies are going to attract the workers, they need somewhere to put them, which leads into joint ventures with property developers and education campuses.

A further insight is the importance of early seeding by government. Boulder was just a sleepy ski town 20 years ago. Today, it’s one of the top five tech hubs in the world. But it all started with state government seeding in the early 2000s.

A final insight was the ability to draw on the input of tech titans who had chosen to retire or relocate away from cities to the mountain towns. The insights they can share and the networks they can leverage for their new hometowns are considerable.

Local pundits say these four raw ingredients are all present in Queenstown. In positive early signs, Queenstown Resort College (a hospitality school) pivoted recently by launching six-month machine learning coding courses for schoolleavers and people wanting to retrain. Apparently, QRC’s phone is ringing off the hook.

Meanwhile, the number of stillyoung tech titans who have retired from the likes of Xero, Timely and Fairfax Digital provide a pretty grunty resource to leverage.

One other thing I think they have in their favour is the clarifying air of the mountains. Just as I find clamouring around on the Cardrona tops a great way to get perspective on my life, so I reckon the mountain air has a clarifying effect on technologists’ thinking.

To be free of the distractions of metropolitan life can only sharpen thinking. And that – as Sir Ernest Rutherford once noted – can be worth more than any money.