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Rachel Lebihan has written a piece in the Australian Financial Review covering my submission to the Australian Federal Government’s review of the state of entrepreneurship and venture capital.
It’s been a really interesting week in Sydney. On Friday afternoon the latest cohort of Startmate startups strutted their stuff in a demo day to a capacity crowd at DLA Piper’s offices in the city.
Yesterday, Eric Ries spoke to another, much larger, audience on his Lean Startup theories. The auditorium at the Australian Technology Park hasn’t buzzed like that since the heady days of 1999!
Eric’s thesis that we should be measuring and managing startups in a much more sophisticated way totally resonates with me. I have been calling for a science of startups for a while now and in fact included this as one of my main points in a submission I put forward to the Australian Federal Government earlier this week. They had put out an Issues Paper calling for submissions (I understand this was targeted at certain people and organisations) on the state of entrepreneurship and venture capital in the country.
My submission (you can read the entire thing here) spoke to the establishment of an Australian Centre for Entrepreneurship & Venture Capital (ACEVC). This Centre will include an Entrepreneurship Conservatory that is focused on developing a results-based set of training programs for upskilling entrepreneurs using a real time, interactive pedagogy that will form the basis for a ‘science of startups’.
I also call for a VC College that can provide real life experiential training on the job for successive generations of Australian venture capitalists – an initiative designed to build up a true venture capital industry.
I believe that ACEVC is transportable to many other geographies so for all metarand readers from other parts of the world than Australia: feel free to adopt these ideas for your own country.
Besides Eric’s push for lean startups another great evangelist for the science of startups is Steve Blank with his recently released book, The Startup Owner’s Manual. I highly recommend both books for entrepreneurs.
Should/when ACEVC gets up and running, it will draw heavily on the the great work Eric and Steve have done so far to codify the science of startups.
Asher Moses has written a wonderfully inspirational piece in the Sydney Morning Herald regarding the rise and rise of Australian entrepreneurial talent. In it he explores how well some of the Internet-focused startups born in Australia are doing in sourcing Silicon Valley venture capital.
It is a great story and touches on much of my experience over the past 15 years. Australia and, closer to home – Sydney, has an incredible wealth of entrepreneurs. But in Asher’s story there is also a hint at the dark side. Let me paint the picture in three ways:
1. Financial arrogance
While I was living in Silicon Valley I assisted a startup to raise its first round of funding from a tier one VC firm, in two weeks and right in the middle of the GFC. Fast forward to today and as Asher has eruditely pointed out, tier one VC’s from Sandhill Road are currently falling over themselves to get the attention of Australia web startups.
Against this backdrop, picture me meeting with a senior executive at one of Australia’s most successful investment banks in the past fortnight. In that meeting I was told how incredibly hard it is to find funding for technology businesses, how no-one is investing in this space in Australia and blah blah. Can you see the disconnect here?
I personally believe Australian ‘investors’ have a heightened level of financial arrogance driven by an absolute ignorance of technology and also tainted in their financial risk profiling by resource-based investing (mining etc).
As long as this position remains I can fully understand why Australian entrepreneurs are US-centric. For Australia though this amounts to a major loss as we are not only losing talent in droves, but also access to ROI as our entrepreneurs grow great businesses with other people’s money!
2. Technological bias
For as long as I can remember Australian government granting schemes and venture firms have had a bias against Internet-related companies. They have preferred to back biotech businesses and other science-heavy companies that are notoriously hard to scale globally and which usually have a hard time getting international attention due to the tyranny of distance.
It is heartening to see this position starting to shift and that web-focused ventures are in fact now getting more access to schemes like Commercialisation Australia.
3. Web-centrism
While I am ecstatic about Australia’s well deserved recognition (finally) for great entrepreneurial talent, I am somewhat concerned that we get seen as only producing web-centric talent and intellectual property.
The Australian Federal government pours some $9.8 billion into public research and there is incredible technology floating around within the countries 43 universities and even more public research institutes (by contrast the US only has 41 universities). However, most of this never sees the light of day. It gets locked up in over-protective tech transfer quagmires and/or stuck in the valley of death between research proof of principle and commercial proof of concept due to a massive lack of funding for this gap.
In contrast, in the UK companies like Imperial Innovations and the IP Group, and Allied Minds in the US, are absolutely going gangbusters building businesses around research intensive technologies and assisting IP through the valley of death.
Australia desperately needs a similar business and it is on my to do list for 2012 to see that one forms. We need to not only continue to support our web-centric entrepreneurs, but also inspire generations of Australians to become tech entrepreneurs in areas that can have major global impact such as energy and health!
I’ve been tracking Utah’s meteoric rise up the technology commercialisation charts for some time now. In 2010 Utah State University reached the number 1 spot in terms of tech startups created. MIT came in at 2nd spot.
But it’s not all a numbers game. According to Robert Behunin, their VP of Commercialization & Regional Development, their focus is “fewer, deeper“.
Full-scale commercialisation efforts at USU may result in fewer companies spun-off from university- developed technologies, but those companies to come out of USU have industry support, by way of partnerships, and capital raised.
He says they seek good science and good solutions that have a relevant place in the market. It’s a program in which everybody wins…
They are currently pursuing close to 60 active commercialisation projects and have a pipeline of 40 earlier stage projects.
Very impressive!
The key take out for me is that they are focused. Rather than working on a myriad of low impact activities in a process heavy, reactively-driven way, they are focused on fewer, higher impact projects that can link them much closer together with the demands of industry in a symbiotic partnership from which all players can create and extract maximum value.
Tags: USU, Utah State University