Where the rubber meets the road

This year alone, the government is expected to rake in close to $1 billion in RUC. If Eroad was to achieve just a 10% market share, it would mean big business, and that’s just at home.

But there are problems dealing with such a sensitive government revenue earner, says Newman. Eroad had to have its products right, or the government would never allow it to link up to its systems.

To get it right, Newman tapped into the network of ex-Navman people now spread throughout New Zealand’s technology sector. Although only three of Eroad’s 14 staff are ex-Navman — “I wanted a different experience,” explains Newman — there are several employed by Navman’s contractors. One of them, R&D firm Total Mobile Power, is headed by Navman’s former chief engineer, Chris Fotherby.

Navman made the mistake of employing too many people, says Newman, people whose skills were only needed for a short time. “We actually made them less valuable.” By using contractors, Eroad has been able to tap the best expertise without the ongoing overheads.

In May, a little over 18 months after Newman joined and one month after completing a trial involving 104 trucks, the government gave Eroad the go-ahead to launch its online RUC service. A few months earlier, the company raised $1.8 million from investors to commercialise the product, a capital raising more than twice over-subscribed. Newman found 70% of the money through his own networks.

Does he have another Navman on his hands? “I think we do,” he says.

Newman's tips from the top

1 Modelling, modelling, modelling — make sure you have a sound financial model and keep testing it.

2 Good management — the people at the top should know what they are doing or bring someone in who does.

3 Use contractors, where possible, to avoid unnecessarily increasing head count or hiring skilled staff you won’t need long term.