Virtual mall opening March

Mike Hodges shows off the new Mall Plus virtual shopping mall website he hopes will be online again next month. Photo by Jane Dawber.
Mike Hodges shows off the new Mall Plus virtual shopping mall website he hopes will be online again next month. Photo by Jane Dawber.
An online virtual shopping mall being developed in Dunedin, which collapsed after receiving ratepayers' funds last year, finally looks set for a rebirth.

The Mall Plus website is scheduled to relaunch with a "soft opening" next month, following an extensive 10-month redevelopment effort, developer Mike Hodges, of Dunedin, confirmed yesterday.

The new website would replace an earlier version which disappeared from the internet last year, months after being developed by Dunedin start-up company The Street, with funds from the Dunedin City Council.

The council, through its company Dunedin City Holdings Ltd, bought 1.2 million shares in The Street for $700,000 in 2006. The money helped pay for several projects being developed by The Street, including the website.

The Mall Plus was briefly online last year, but disappeared, soon after to be replaced with a "reopening soon" sign on its homepage.

The sign now reads "reopening March 09", and Mr Hodges has high hopes, once the virtual doors are thrown open.

The initial rollout of the new Mall Plus website would provide a remodelled three-dimensional online environment for users to browse through virtual stores, buying a mixture of real and virtual products, he said.

However, stage two would include more recent social networking concepts, such as allowing users to create and control their own avatars - three-dimensional models of themselves - to use while navigating the mall and interacting with other users, he said.

It was hoped those features could be rolled out within months, although the timing could slip, Mr Hodges said.

The mall was being developed in Dunedin but would be international in scope, potentially attracting users from around the world, he said.

It was hoped franchise agreements with developers in other countries could eventually result in other online malls being developed, which would be linked.

This would allow users to wander from one mall to the next, he said.

The project aimed to bring repeat Trade Me users into the Mall Plus space, with users paying "inconsequential" amounts of real-life money to buy and open small virtual stores to sell their real-life products, he said.

It was expected transactions within the mall would be a "half and half" split between real and virtual products, he said.

When stage two features were included, users could spend their real money to buy virtual features to update their stores, virtual homes with furniture, or gym equipment to upgrade their avatars (characters), he said.

It was hoped the transactions would eventually add to "very serious" revenue, with an audience eventually growing into the millions as other malls were linked to the first project, he said.

Mr Hodges bought the Mall Plus from The Street after its collapse, but a revenue-sharing agreement meant The Street would get royalties until an agreed cap was reached, allowing them to cover costs originally invested in the website's development last year, Mr Hodges said.

- chris.morris@odt.co.nz

 

VC investing

A Venture Capital fund could well lose money. Especially when public money is being invested in companies because private sector entrepreneurs have assessed them as being too risky.

VC Investing

Relax folks, the $700,000 investment by Dunedin City Holdings Ltd for 1.2 million shares in "The Street" is a good investment. DCHL chair Paul Hudson has said so on more than one occasion.
The fact that "The Street" went belly up seems of no consequence, it is still a good investment.
It is hard enough now to find the investment in DCHL's accounts. Soon it will be well nigh impossible.
Still not to worry, as it doesn't start to compare with the $107 million DCHL will be investing in the stadium if it gets built.
We should all be nervous at being the stakeholders in this enterprise as it gets raped and pillaged by the DCC.
You can see what happens when you start to play fast and loose with other peoples' money.

VC investing

I actually think it's very important - we need to keep creating new companies in Dunedin. 

We need to replace companies like F&P that leave so that our kids will have somewhere to work.

On the other hand I agree that a startup doesn't want the city council watching it's every move - one of the things a new startup should expect from a good Venture Capital (VC) investor is help with hiring good management and some help getting a good business plan on track. That was why I was suggesting that partnering with existing VCs might be a good way to do this.  You want to encourage them to put their money into Dunedin companies rather than say Christchurch ones - but no so much that they might make bad choices.

A well diversified and well managed city venture fund would make money in the long term and would create jobs and bring new wealth into the community - but harassing the council because a single investment fails is counter productive - as I mentioned above most startups fail - you diversify and make lots of investments so that some do succeed.

Bureaucracy not compatible with startups

When the DCC invested in this venture, they claimed that it was low risk, which was nonsense.
I don't think that public bodies should be involved in Venture Capital investing. The entrepreneurial culture required by successful startups is just not compatible with the culture of bureaucrats and politicians.

startup companies ...

I know nothing about the current state of this particular venture - but in general angel/VC investing in startup companies is risky - in the wider world something like 70% of startup companies fail, 20% muddle along and 10% succeed beyond everyone's wildest dreams. It's that last 10% where you make your money - but equally you do expect most companies to fail and it shouldn't be surprising.
The trick is to choose wisely and to diversify your money over a wide range of companies - not just one or two or chances are you will fail
We need a viable local economy, which means we need to keep creating new companies to replace the ones that fail. I believe the council should be angel investing in 10-20 companies a year, perhaps matching funds from private angel investors who have their their own money at risk.

Online mall

The delay in re-opening is not a good sign. Ratepayers shouldn't hold their breath waiting for a return on this investment. They will be lucky to get their money back.
On-line retailing is a tough business as shown by the failure of Telecom's Ferrit site.

April Fools?

The banner on the site still reads "Re-opening March 09". What is really happening with this development?

ODT/directory - Local Businesses

CompanyLocationBusiness Type
Affordable Design ServicesArchitects & Architectural Designers
Wanaka Veterinary CentreWanakaVeterinarians
Leadlights and Lamps LtdDunedinDecorating Specialists
Red Lemon Contemporary Catering RanfurlyCatering