Tag Archives: #entrepreneurism

Talking Innovation with Dr Kate Cornick, CEO of LaunchVic

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As a nice segue to last week’s blog on Techstars, I was fortunate to hear Dr Kate Cornick speak, just before the latest LaunchVic grants were announced. Organised by Innovation Bay, hosted by Deloitte, and facilitated by Ian Gardiner, the fireside chat plus Q&A was a useful insight on a key part of the Victorian Government’s innovation strategy.

launchviclogo innovationbay-feat-800x500At the outset, Dr Cornick stressed that LaunchVic is not an investment vehicle, and it doesn’t fund individual startups. Rather it seeks to support initiatives that help grow the local startup eco-system. (See also my blog on the consultation process that informed LaunchVic’s formation.)

Commenting on why Victoria (and Australia) has the potential to become a world-class centre for innovation, Dr Cornick pointed to a number of factors:

  • A collaborative culture
  • Positive economic conditions (comparatively speaking)
  • Governments (mostly) open to innovation
  • Strong research base

However, a few of the obstacles in our way include:

  • The notorious tall poppy syndrome, whereby Australians are suspicious, sceptical and even scathing of local success – except when it comes to sport and entertainment!
  • An inability to scale or capitalise on academic research
  • Insufficient entrepreneurial skills and experience to “get scrappy”
  • Lack of exposure for highly successful startups (c.$20m market cap) that can help attract more investment

From a startup perspective, Australia also has the wrong type of risk capital: institutional investors are more attuned to placing large bets on speculative mining assets, typically funded through public listings, and with very different financial profiles. (Or they prefer to invest in things they can see and touch – property, utilities, infrastructure, banks.)

So there is still a huge gap in investor education on startups and their requirements for early-stage funding. Part of LaunchVic’s remit is to market the local startup community, promote the success stories, and foster the right conditions to connect capital with ideas and innovation. After all, Australia does have one of the largest pool of pension fund assets in the world, and that money has to be put to work in creating economic growth opportunities.

As I have blogged before, we still see the “expensive boomerang”: Australian asset managers investing in Silicon Valley VCs, who then invest in Australian startups. Although when I raised a question about the investment preferences of our fund managers, Ian Gardiner did point out that a few enlightened institutions have invested in Australian VC funds such as SquarePeg Capital, H2 Ventures and Reinventure.

Dr Cornick also provided a reality check on startups, and added a note of caution to would-be founders:

First, it tends to be an over-glamourised sector. For one thing, founders under-estimate the relentless grind in making their business a success. And while eating pizza and pot noodles might sound like a lifestyle choice, it’s more of an economic necessity. Thus, it’s not for everyone (and not everyone should or needs to build a startup…), so aspiring entrepreneurs would be well-advised to do their homework.

Second, the success of any startup community will be reflected by industry demand. “Build it and they will come” is not a viable strategy. And I know from talking to those within the Victorian Government that unlike their inter-state counterparts, they are not willing (or able) to fund or invest in specific startups, nor in specific ventures such as a FinTech hub. Their position is that industry needs to put its money where its mouth is, and as and when that happens, the Government will look to see what support it can provide to foster and nurture such initiatives – particularly when it comes to facilitating between parties or filling in any gaps.

Third, don’t expect too many more unicorns, and don’t bank on coming up with simple but unique ideas that will conquer the world – meaning, new businesses like Facebook, Uber and Pinterest will be few and far between. Instead, drawing on her earlier comments about research, Dr Cornick predicts that it will be “back to the 90’s”, where innovation will come from “research-based, deep-tech solutions”.

If that’s the case, then the LaunchVic agenda (for the remaining 3 years of its current 4 year lifespan) will include:

  • Getting Victoria on the map, and positioning it as a global innovation hub
  • Raising the bar by educating startups and investors
  • Bringing more diversity to the startup sector, by providing greater access, striking better gender balance, and building a stronger entrepreneurial culture
  • Introducing a more transparent and interactive consultation process
  • Continuing to support the best accelerator programs that focus on startups
  • Making more frequent and smaller funding rounds, each with a specific focus

Asked what areas of innovation Victoria will be famous for, Dr Cornick’s number one pick was Healthcare, pointing to the strong research base coming out of both the Monash and Melbourne University medical precincts. Also in the running were Agriculture, and possibly Cyber-security. (Separately, there is a list of priority industries where the Government sees growth, employment and investment opportunities.)

If one of the biggest hurdles is commercializing research, Dr Cornick suggested that Universities have to re-think current IP practices, including ownership and licensing models, developing better career options in research, and doing more to re-calibrate the effort/reward equation in building research assets compared to building companies and commercial assets.

Finally, Dr Cornick offered an interesting metaphor to describe the current state of Victoria’s innovation potential:

“We have everything we need for baking a cake, but the missing ingredient is the baking powder to make it rise.”

Next week: Gigster is coming to town….

 

 

 

 

 

 

 

Field report from Melbourne #Startup Week

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The third Melbourne #Startup Week has confirmed Startup Victoria‘s pivotal role in supporting local entrepreneurs, founders, startups and anyone interested in innovation and disruption. Over the next few posts, I will be commenting on some of the events I attended. Meanwhile, here is a brief summary of the key themes that emerged.

Screen Shot 2016-06-26 at 1.43.16 PMFirst, there is a continued shift from B2C and 2-sided markets, to B2B and enterprise solutions among the startup pitches I saw. Medtech is also getting some renewed attention, as are XaaS business models. And of course, there has to be scale in the idea.

Second, nearly all of the feedback from the judges at the pitch events centred on “why you?” –  What makes your idea different to the competition? What is the problem statement? Where are the solution proof points?

Third, there was an interesting session on “innovation from within” and the rise of intrapreneurship. There were also discussions on whether (and how) aspiring founders should leave an existing job to embark on a startup project, and how to navigate an entrepreneurial career. (More on this to follow.)

Fourth, the notion of “disruption for disruption’s sake” is being challenged – it’s not enough to be disruptive, there has to be substance (and purpose) to back it up.

Fifth, the use of design thinking, human-centred design and CX mapping in fostering creativity is breaking through to large corporations, but it is just one of many available innovation techniques – without context and framing, it can simply become a process.

Finally, I heard very little (in fact, absolutely nothing) about the role of government(s) in fostering innovation and entrepreneurship, and in supporting startup founders – notwithstanding LaunchVic, and the National Innovation & Science Agenda. Maybe there is so much election campaign fatigue that the startup community has already discounted the impact politicians (of any persuasion) can have on their business aspirations. Certainly, the numbers of Gen X and Gen Y attending some of last week’s events is testament to how engaged younger citizens are in finding purpose through the type of work they do (and what sort of organisations they work for), that they are less focussed on securing a “job”, and more concerned about building a career.

Next week: Level 3’s Enterprise Pitch night

Health Warning: Entrepreneurship is not all Plain Sailing

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Last month’s gathering of Lean Startup Melbourne was devoted to the emotional and psychological downsides to being an entrepreneur. Whether building a startup or managing a successful corporate career, we are accustomed to reading about business success stories; but while we do learn something about corporate failures, we don’t hear much about the personal cost when things don’t go as planned.

But first, given the seriousness of this topic, if anyone reading this feels in need of help then there are some excellent information and support resources available listed here. There are also some useful reference articles such as this.

The evening’s panel Q&A discussion was preceded by a very moving account from Tom Howard, co-founder of Adioso on his own challenges in building a startup, about which he has written here. Tom’s frank and honest story about dealing with personal struggles while trying to manage investor expectations was neatly summed up in this observation: “Writing essays on our struggle was some of the best marketing.”

The panel members were drawn from a mix of startup, entrepreneurial and corporate backgrounds, and their stories revealed episodes of depression, near-bankruptcy and burn-out – tales possibly all too familiar to some experienced startup veterans in the audience, or merely spectres of what the future may hold for other budding entrepreneurs eager to learn from their peers. One of the panel, Andre Obradovic is now a public speaker on mental health issues, and has channeled his own experiences into advocacy and raising awareness.

If there was one recurring theme that ran through the discussion, it was the surprise at what happened to them – seemingly successful individuals who suddenly encountered severe setbacks (personal, financial, emotional, psychological), that came close to derailing their ability to function in their roles (as people, partners, parents or employers). The positive conclusion was that in recognising what was happening, and doing something about it, these individuals have managed to rebuild their lives and their careers, and are probably all the stronger and more resilient as a result.

Meanwhile, a number of hopeful startups were brave enough on the night to showcase their projects in the evening’s Startup Alley: Influx (outsourced customer support for online businesses), Cloakr (mobile device solution for coat check services), Jutsu (personal goal-setting app), Followus (social media site management for small business) and Brakeboard (braking systems for skateboards).

Finally, the evening’s event was sponsored by a clutch of generous supporters: Mondelēz International, InnovAction, Zendesk, Bluechilli, The X Gene and hosts Inspire9.

 

 

Focus, Focus, Focus: from great idea to MVP in one (not so) easy lesson

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Last week’s Lean Startup Melbourne session explored what it takes to turn your great startup idea into a minimum viable product (MVP) before launching in the market. And as the entrepreneurs pitching their product ideas soon found out, it’s all about focus: on the problem you are solving, on the solution you are offering, and on connecting with your target customer.

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The evening’s event was once again hosted by Inspire9, and generously sponsored by BlueChilli, and the ever-entertaining and animated Kussowski Brothers, along with newcomers Startup Victoria and Xero.

As well as a panel comprising 4 of Melbourne’s leading startup experts, there were a couple of lightning talks from Sidekicker and Attendly on how to find a tech co-founder, and how to identify your customer respectively.

On to the evening’s brave pitchers:

First up was ClassWired, a platform for helping ESL classes go digital. Building on personal and professional experience, the product aims to make ESL lesson content more social and the student experience more personal. The challenge is that the ESL market is divided between a handful of major players (who are easy to identify, but could leverage their scale to deploy their own solutions), and a large pool of independent teachers (who are harder to reach). While a need may exist for more interactive ESL content, the panel felt the revenue model lacked clarity, and as yet there was no compelling reason for customer adoption. ClassWired could establish some differentiation through superior instructional design, or by building content development tools for use by tutors.

Next came a presentation by Reflow, which entertained and baffled in equal measure. The product is designed to handle high-volume messaging traffic, from sensory, mobile and web sources across logistics, apps and environmental monitoring. Although the pitch was deep on technical domain knowledge, and again drew heavily on personal and professional experience, the panel was unclear as to the precise problem being addressed, and the solution being offered. Talk of “virtual hair dryers” and “sensory message overload” only helped to confuse the audience. Maybe there are opportunities in outsourcing, or in data analytics – but with cheap and plentiful hosting capacity out there, Reflow needs to find some focus.

Changing tone and gears came StillReel, which streams digital art to an LCD monitor near you. With the idea of bringing limited-edition digital artworks to a wider audience, StillReel offers a monthly subscription model, and is exploring the consumer, commercial and corporate markets. Leaving aside the concept of scarcity value in digital art, the overall feedback suggested that the market needs to be clearly defined, and the offering made more explicit. Is it simply art? Is it entertainment? Is it pandering to the elite? From my perspective, Brian Eno has created a different model via 77 Million Paintings, and no doubt social media is already “liberating” digital art and video from the galleries and museums.

Curated shopping service, YourGrocer offered the best and most succinct presentation on the night, and told a great story about how the experience of “validation in Brunswick” has helped them build a viable business connecting local grocery outlets with time-poor customers. With several options for revenue streams, supplier partnerships and even a franchise model, YourGrocer could be spoilt for choice – but like everyone else, they need to focus (and decide whether they are a community service, a social enterprise or a commercial venture).

Finally, MeetLinkShare offers virtual data rooms – a service somewhat clumsily describing itself as “The Swiss Army Knife of Mobile Collaboration”. Having built a proven platform for secure team-based document and content sharing (including annotations, tags, custom fields, multimedia and version control etc.) the team is now contemplating two significant (but quite separate) market segments: 1) Virtual Data Rooms for SME’s and 2) Private Tutors. They are also seeking a new round of funding. Again, the panel’s recommendation was to find their customer focus, although with some smart and distinct branding, it’s possible that MeetLinkShare could service both markets.

Conclusion

Having a great idea is not enough – as I learned very early on in product development, there may be an opportunity in the market, but is there a market in the opportunity? A couple of things missing from most of these presentations were:

  • a clear definition of both the upstream and downstream markets;
  • an understanding of the customer value chain (and how to monetize it); and
  • the specific contribution that each product, service or solution brings to their chosen domain.

It was also apparent that each of the pitches have opportunities across indirect applications, or within adjacent markets – so part of the challenge is knowing how to gain sufficient traction in one segment that will provide momentum (and relevance) to move into the next growth phase.

Disclosure: The author is not affiliated with any of the businesses mentioned in this blog, although he does acknowledge the receipt of 2 free beers and a couple of slices of pizza from the organisers.