In his latest interview for Techboard Robin Block from MitchelLake sat down with Dr. Elaine Stead to understand the role she sees Blue Sky and herself playing in the future of Australian business. Elaine is a builder of businesses and Head of Venture Capital at Blue Sky — a venture fund that is at the forefront of Australian Capital Investment. Last year, Blue Sky secured the management of a $50 million venture fund for the South Australian government. The firm manages over $3 billion in investment across a number of industries. Elaine is one of many high profile presenters who spoke at the Startup Investing Conference series which was brought to you by our friends at Capital Pitch in Sydney on 12 September and in Melbourne on 12 October 2017
Elaine: I think that high-growth industries, the tech-industry and the development of whole new sectors are the ways that we are going to keep Australia both economically stable and economically competitive. Our firm is part of making that happen — creating jobs and re-invigorating an excitement about the future. From a sector perspective, the things that turn me on are areas that I think are going to make positive contributions to people’s lives — healthcare, food supply, job creation.
Robin: What do you see as Blue Sky’s role in the venture capital community and how does that feed back into the Australian start-up ecosystem?
Elaine: Our venture capital strategy is a little different than most funds — we tend to focus on the later end of the VC spectrum. I like to say that we are scale up experts — not start-up experts. Our team’s skillset is focused on helping companies grow their business. This is different to most firms that prioritise technical expertise that can help new companies build products from scratch. Most companies we work with already have a product in the market, they have a business strategy and model that has already been validated. Our speciality is looking at how companies can scale, either through commanding a greater market-share domestically or through transitioning into a global business.
This is a crucial aspect of business in the Australian market. We have great founders here, but one of the biggest areas of shortage in the Australian talent pool are people that can take a company from $10 million to $100 million in revenue — whether that is a CEO, CFO, marketing talent, etc. We don’t have a lot of industry here, and that is typically where you would source that talent in other markets. The second challenge that comes along with that is retention — if someone is really good, others will always be looking to poach. It is one of those things that as a country we will eventually solve as companies mature and ex-pats come back after building experience. As long as there are jobs, people will want to move to Australia — hopefully the immigration policies are structured to support a high-growth economy. But, at the moment, it can be an issue and isn’t something that is going to change until the supply and demand dynamic balances out.
As a VC, I think that our core skill is being able to identify talent and bring together the right founders with people who are able to support and scale their operations. We need to be someone a founder can trust. That kind of collaboration is the only way you are going to solve problems and improve. People are critical — if not central to that process. I think we back good talent as much, if not more, than good ideas.
Robin: Diversity is a topic of significant interest in the tech-industry — how much have you thought about your position as a female leader?
Elaine: For the first half of my career and life, it wasn’t something I spent a lot of time thinking about. I was an entrepreneur and worked in VC and happened to be a woman. I had wonderful parents that never made a big deal out of my gender. In the last ten years, I have come to see with greater clarity the degree to which things like gender impact how you are perceived by others and the differences in the challenges that female and male leaders come up against — whether that is conscious or unconscious. I also think, broadly speaking, that there are different skill-sets that female leaders bring to the equation when compared to men. Neither is better, but I have personally found an ability to grow as a leader and a professional through working with men, and have been told by male colleagues that my presence has enabled them to think about their own skill-sets in a different way.
I am never going to say that I think being a woman doesn’t make a difference, because I think it does. I think women leaders face unconscious biases that they need to combat all of the time. That is changing, but it hasn’t gone away. On the other hand, I think I get asked to speak at a lot of events solely because of my gender. Because there are fewer women in the industry than men, it can be a differentiator. That brings disadvantages, but it also clearly brings advantages. Wherever there is scarcity, there is value. I choose to focus on the value and my ability to bring something different to the table.
Robin: You are very open on social media — many people in your position would be more cloistered. Does the outrage culture online ever give you pause in how you present yourself?
Elaine: The relatively high-profile nature of my job means I worry about it all the time. I know that I walk a fine-line and there have been a few situations in the last year in which people have not been happy with things I have said from a personal or professional standpoint. Those events certainly make me question the utility of engaging publicly at all. I also don’t want to act selfishly. I always try and ask if it is something that might hurt other people, or put the livelihoods of others at risk.
At the end of the day, however, I ask the entrepreneurs and founders that we work with to be open. I feel like I have to walk the walk on that to be taken seriously. I think that the caged and often false nature of modern business culture is damaging and can only really be opposed through acting differently. On the other hand, when I was a kid, I was one of those completely repressed individuals — never showing weakness or letting anyone know how I was feeling. At some point during my 20s, that changed — the flood-gates opened and now I can’t stop it. I view the benefits to be amazing — people know me for me, not a persona. For all the disadvantages that can bring, that continuity between my personal-self and professional-self frees up a whole part of my mind that would otherwise be wrapped up in retaining a mask that shouldn’t even be there in the first place.
Robin: How do you feel about start-up culture and the amount of hype that surrounds the industry — where do you want to see the industry go and what is your role in making that happen?
Elaine: Whatever criticism I have, it comes from a position of great admiration for the start-up ecosystem that exists in Australia — 95% of it is amazing. I have worked with great people that are collaborative and supportive. There are, however, outliers. If pressed to criticise, I think that anything with a lot of hype tends to fail to live up to that hype. At the moment, there are a lot of expectations. I fear that if we don’t deliver it will lead to public disappointment. I also think that the hype can lead to a sense of entitlement, or attract people with that attitude — I think this applies to other sectors as well. I do see a degree to which some people almost expect to be funded — that it is something they deserve, not something they need to earn. This may be a millennial thing, rather than a start-up thing — I don’t know. But, it is something that I have noticed creeping in on occasion. It is something I try and immediately knock on the head whenever I can.
What I am doing now, and the role Blue Sky plays in contributing to society is one of growing businesses, and doing it responsibly. I am fully aware that I currently manage over $200 million of regular Australian’s life-savings. Losing that money is not an option — I owe those people a good return on their investment. The trust they have put in our firm to be a responsible custodian of their money is never far from my mind. When looking at investing in a company, I always look at who the founders are — are they good humans? Do they have good values and ethics? Can I see myself working with this person for the next five years? We generally don’t just give companies money — it’s about forging a partnership in which we can put to use the growth expertise we possess. I think that it is hard to break new ground when you are working with people that you don’t like or do not align with your priorities. Every founder we have been lucky enough to work with falls into this category of ‘good human.’ We also look for people that have a relentlessness — a vision they are intent of creating come hell-or-high-water. I think a high level of determination is a major separating factor between mediocre entrepreneurs and the truly great founders. It’s not a straight line from where an entrepreneur starts and ends up — having the ability to withstand those ups and downs, and carry on regardless is essential.
In ten years, I would love to be able to say that I gave something back and made a positive contribution. However, I would be lying if I said I had a plan all along. I followed my nose through the education process and tried to focus on things that I enjoyed learning about. That continued to evolve. Twenty years later, here I am as a VC. I have only ever just continued to do things that I thought were interesting and aligned with my values framework. I am very much someone who wants to make sure that I am constantly doing stuff that is challenging me and making a contribution.