After seeing the Chills, led by lead singer Martin Phillipps, and the Verlaines perform at the Gladstone Hotel in Durham Street, Central Christchurch,[2][3][4] Shepherd wanted to compile an album of Dunedin's up-and-coming bands, in the vein of Factory Records and their founder Tony Wilson.

[5] Meanwhile, Chris Knox became actively involved on the album after leaving Christchurch for Auckland; he had initially desired to move to Australia but had stubbornly changed his mind.

On a contemporary Flying Nun poster Knox had drawn, he had encouraged listeners to "discover REAL GOOD New Zealand (NO, repeat, NO relation to Australia – diametrically opposed, in fact) music".

[8] Shepherd would later describe Knox's role as "[pointing] out any mistakes or potential improvements with the actual playing: tuning, timing and the like, as well as act as cheerleader, keeping everything going and to schedule", as opposed to monitoring the admittedly rudimentary recording equipment.

Many of the label's top groups came from Dunedin, and established that southern city's music scene as the leading source of guitar-based bands in New Zealand throughout much of the decade.