Our friend and regular contributor Robin Block of the MitchelLake Group has recently advised us he is soon to be departing our shores and heading back to not so sunny London. The Techboard team would like to say a great big thanks to Robin for his friendship and support of Techboard over the last 4 months and for the great interviews that he has conducted for us. We have published eleven interviews from Robin which have showcased some of Australia's top and up and coming Startups (many of whom are performing well in the Techboard Rankings) as well as investors who are helping to power Australia's future including with new approaches to investing, under Australia's new Equity Crowdfunding legislation. Robin may be leaving but rest assured we will have plenty more interviews and other great content to bring to you in the coming months.
There are some great lessons in these interviews for startup founders and investors alike. Some gems from these interviews are set out below:
"To be an entrepreneur, you need a real radar sense of people — the ability to sense-check and understand innately the pulse of the business. You also need to be strategically driven and clear. Your message and vision needs to be communicated throughout the organisation without getting muffled. I think I was born with an innate drive to build businesses — but, I think you also need to have experiences that create resilience and tenacity. This comes through confronting difficulty and challenges. These two factors are what come together to create a person that ultimately becomes a successful entrepreneur. There are a lot of people with great ideas who fold after getting knocked back once, twice or three times. The trait that I have seen defining successful entrepreneurs around the world is an incredible drive. They aren’t necessarily the brightest people or those with the best ideas — they simply get back up and keep moving forward. Beyond that, it is simply important to cultivate an almost paranoid attitude regarding the market and competition — an obsession about the quality of your product."
There are certain ‘one-way’ decisions that you take as a business. Which market do you pursue? Who do you take investment from? Who do you employ? These are hard decisions to reverse. We try and put these things on a higher pedestal. I think there are actually three answers to every question: yes, no and hell yeah. For core cultural decisions, we try and get a hell yeah. Yes, I reckon, is your analytical mind. Hell yeah is when you bring emotions into it as well. For big things, you have to bring your full self to the decision making. On paper, you can think something looks like a good idea. But, if your emotional brain — which is actually much better at spotting patterns and things that might be wrong — remains unconvinced, you shouldn’t move forward. The best ideas come from discussion out in the open. I think it is simply good business sense, and common sense to identify the things that really matter and make sure that you have done your due diligence.
Mark Maloney, investor, advisor and entrepreneur
I strongly believe that 80% of success comes from mindset. Having skills in marketing, finance or engineering are all important — but, they aren’t that hard to come by. What really makes the difference is being able to chart the ups and downs of that journey. I think where I can make a big difference for people is in coaching and mentoring.Most businesses fail. Getting the emotional psychology right gives you a much better chance.
I think that Australia is a dangerously big market. People think that they can build a great business only in Australia. What some people don't understand is that you are competing with the rest of the world whether you are targeting 20 countries or only one. I think the best advice I can give someone who is looking to start a business is to find a bigger problem. People often get excited by ‘great ideas’ — ideas are meaningless. Find a big problem and figure out how to solve it. That will create a business that makes an impact.
I think that having high standards is quite important — especially when you are a start-up. There is sometimes a pull to sacrifice quality for speed to market. I think you can combine both. Our white papers, for example, cost us a lot of resources and time — but this goes with everything we do — we want to do everything at its best. That hasn’t really changed since day one.
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.’
I think that everyone’s role in the start-up/tech-industry shifts every 6 months, sometimes every 3 months. It means being prepared and adaptive — it’s challenging. There is a Sergey Brin quote — “if you aren’t breaking things, you aren’t moving fast enough.” I think it’s something you just have to get used to. However, you do need to check yourself every now and then — take stock and ask yourself if you are okay. Change and ambiguity should be expected in the start-up world. I live for it, but those aren’t natural human states. I think people want stability, certainty, continuity — those are natural and comfortable.
The biggest single challenge for the business is coping with growth. It’s a good problem to have, but it’s a hard one. We could grow faster but have deliberately taken the foot off a little. Many companies outgrow their capabilities and that can lead to all kinds of issues. Meeting capital requirements makes this particularly true for us, and we always have to work to secure new sources of funding. It is essential we grow within our means and accelerate growth at the right time. For us, that is typically a 6-month cycle. Right now, we are in a stabilisation period which will last until the end of the year. We have 146 people and 26 open roles. We will need to put those people into teams to prepare for expansion.
“If you want to create a marketplace, you are going to need a platform. My line is, if you are going to write a book you don’t create Microsoft Word, you fill it up with a good story. What we provide people is that capability to write an amazing story. When we were putting BikeExchange together in 2006, we had no choice — we had to build the technology. But, if we could have bought it, we would have. The rate at which we sell it today is less than a programmer a month. We want it to be affordable because we want people to succeed. We have the technology, systems, and ten years of experience running marketplaces.”
I think that our biggest disruptive contribution will come in the long-term through making the market more efficient. This will impact inherently inefficient entities like brokers who do a lot of their work manually. Being able to publish on a platform that sends a request to 30 thousand people and then leaves the initiative to invest with them — rather than picking up the phone and doing everything by hand — is a method of conducting business that will come to impact a lot of actors within the industry. To do crowdfunding successfully, you have to be able to do it at scale, and close a lot of transactions quickly. You can’t do that if onboarding takes a long time. We have invested heavily in automating those systems. Everyone goes through an onboarding questionnaire before we will even spend five minutes with them on the phone. That filter generally cuts through about 95% of applicants by assessing them on criteria that we know they need to hit in order for crowdfunding to be successful.
The ecosystem needs to go through a degree of consolidation. People talk about a shortage of talent, particularly in the tech and cyber industries. However, there is a lot of overlap in what businesses do. We need more businesses to combine early on — taking out redundant processes and investments to allow the investment capital and human capital that exists to do the needed jobs. The fragmentation of the market is great and spurs innovation — but it is inefficient. I think this is something the whole market will see more of and is something we encourage in some of the businesses in which we invest.
Read the interviews in full here: