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Aaron Birkby discusses the gaps in the Australian startup ecosystem

Aaron Birkby is the co-founder of The Unconventional Group, and has over two decades experience working as a founder, advisor, board member, investor and facilitator in the Australian startup ecosystem. He has worked in a variety of roles building and supporting technology startups to grow into global companies, including as CEO of Startup Catalyst, and Entrepreneur In Residence at Queensland University of Technology, James Cook University and Split Spaces. In his conversation with Adam, Aaron discusses how the Queensland startup ecosystem has evolved over the past couple of decades, and what he sees as gaps in the Australian startup ecosystem.

Mentioned

The Unconventional Group: https://theunconventionalgroup.com/ 

Startup Catalyst: https://startupcatalyst.acs.org.au/ 

Aaron on Twitter: https://twitter.com/AaronBirkby

Transcript

Aaron Birkby: Hi, I’m Aaron Birkby co-founder of the Unconventional Group. 

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Aaron Birkby: The Unconventional Group is a new brand to something that Peta Ellis and I co-founded a few years ago. It comprises peak persona, which is a program to get you impact fit. So for entrepreneurs, it deals with psychology mindset and leadership. We also run corporate innovation. So really looking at developing the dynamic capability of corporates and large organizations, because we actually see that as one of the biggest gaps in the Australian ecosystem right now.

Adam Spencer: What was that biggest gap that you think is in the Australian ecosystem right now? 

Aaron Birkby: So when I compare us globally, what really lack here is a good solid foundation of enterprise and corporate customers who are doing innovation correctly and what I mean by that is I look at the business learned from Israel or London, Berlin, Silicon Valley. Where corporates invest in, be a customer of, or acquire startups and Aussie corporates still don’t actually understand the opportunity that early stage tech startups and ventures actually represent. And there’s a lot of innovation theater happening, but there’s very little true open innovation or true engagement with the startup ecosystem. 

Aaron Birkby: And part of that the poor understanding on the corporate side. And part of it is also, I think partly, not necessarily bad actors in the sense of wrong intent, but I think there’s been a lot of people selling corporate innovation programs that have failed to deliver on them. Which is, poisoned the well as such. And I think it’s a natural cycle too. I think we just have to go through that evolution. 

Adam Spencer: Can you tell me a bit about your, you mentioned Muru-D, you’ve been involved with those guys in the past. 

Aaron Birkby: Yes. 

Adam Spencer: And that probably helped you a lot with what you’re doing now as well with the Corporate? 

Aaron Birkby: So I was uh, the entrepreneur in-residence for Telstra muru-D program here in Brisbane. So I helped bring the muru-D programming to Queensland. Before that I’d known Mick Liubinskas, who was the EIR in Sydney for a fair while and in Annie Parker. And I just love what they were doing. I mean, Annie, had come from way out of the UK to lead the muru-D program. And she bought in that mindset of this isn’t about Telstra, this is about the entrepreneurs and backing the entrepreneurs. And I think she did that led that incredibly well. And so I was, yeah, I was quite proud to be part of that and exactly because it was at arms length as much as possible from Telstra, as a company, you know, fast forward to today and funnily enough, I was just actually having coffee with the head of innovation at Telstra and talking about their plans for muru-D going forward.

Aaron Birkby: And it’s actually all being wound up. So they’re just in portfolio, caretaker mode and going through what the reasoning of, why was it shut? And it was like it was a financial decision because we weren’t getting a direct economic return to Telstra. We were investing all these things that didn’t have a direct value back, which I think just highlights, when roles change within corporates, which happens quite quickly in Australia that narrative around the why is often lost, why initiatives were created. And so the metrics of success get changed and therefore you’re measuring against something that was never intended to be the metric of success.

Aaron Birkby: So I think it’s a natural challenge. When employees within an organization, typically in Australia in those innovation roles tend to change every two years, they tend to, they’re only mechanism of promotion is to go and get engaged at another company once they become a head of innovation. And I think there’s so much loss of cultural narrative, around purpose of programs that were created and then new individuals wanted to create their own stamps. So I think it’s bit of a shame that Telstra closed that down and rather than evolve it, but which I think would have been smarter. 

Adam Spencer: That’s really interesting. When would you first say you got involved in startup land? 

Aaron Birkby: So look, I started my first software business when I was 16. So that’s back in like ’92, I don’t know, ’92, ’93 as a kid but in terms of actually entering the ecosystem that would have been 2012 after selling my main software company. And I was actually based on the Gold Coast at that time in Queensland. And I hadn’t, to be honest, I hadn’t really heard of the startup ecosystem.

Aaron Birkby: I’d been head down in my own company for nine years and came out of that and started looking around at, what’s happening. And I reached out to as many people as I could and learned that there was a very, like in Queensland, a bit of a nascent, like very intangible startup community.

Aaron Birkby: And yes, I decided to start a startup hub, as you do hunt down the Gold Coast called Silicon Lakes. And then that really took me on a journey with, from that I got connected nationally into what the few people who were around as a community, I would say, cause there was actually a fair few groups doing things for much longer.

Aaron Birkby: And then connected internationally and saw the startup hubs like Silicon Valley and elsewhere overseas. And it’s like, wow we have a lot to do here in Australia. But yeah, 2012 is the short answer. 

Adam Spencer: That seems to be about the time where a lot of stuff was starting to happen anyway, 2012. So would you say it existed before that? 

Aaron Birkby: I don’t think we had a real sense of community before that, but definitely in Queensland. The iLab accelerator out of UQ had been running for possibly close to a decade prior to that. At Griffith University, there was the innovation center there that had been running for quite some time prior.

Aaron Birkby: There’s guys like Rick Anstey and Laurie Hammond who were running Incubate and the IQ venture funds in Queensland for a good, probably 10 years by that point. So there were lots of like accelerator programs, lots of innovation programs. It just didn’t have the labeling that it does now. And the other thing it didn’t have was that sense of community, whereas much more now there’s you have a very, you have a very clear startup community that didn’t exist back then. 

Adam Spencer: Fast forward to today, what does the landscape look like today? If you had to, yeah say, name a bunch of organizations that were the main kind of movers and shakers in Queensland, who would they be?

Aaron Birkby: Yeah, so look, Queensland’s gone through an interesting evolution. We went from a very grassroots up community driven ecosystem with almost no government support. Like it was very much led by entrepreneurs and that gave us an amazing culture. And so I saw that grow and then we, there are a number of us on a startup working group that was putting forward recommendations to government and snap election and surprise election results. We ended up with a government that didn’t have an agenda for innovation. They didn’t expect to take office. They took that and ran with it. And what ended up happening is $750 million got injected into the ecosystem. And very quickly, a lot of new players began operation and moved from other states purely because that funding was available.

Aaron Birkby: And it, my view now is that money’s run out and a lot of those weren’t sustainable and they’ve all collapsed. So, what we have left right now is an interesting ecosystem where River City Labs still exists. So it went through its acquisition from the Australian Computer Society. It still operates here in Brisbane.

Aaron Birkby: We still have UQ a running iLab. We have QUT entrepreneurship that have closed their venture creation arms. So Blue Chilli and CEA have been wound up, but they’ve pivoted to a bigger focus on entrepreneurial education. Then we have, things like ARC Hub, which is more hardware focused. We have things like ubstation 33 down at Logan that’s running like recycling IT goods, but actually treating it as an incubator.

Aaron Birkby: We have places like Gold Coast tech space down on the Gold Coast that GC Hub down on the Gold Coast. And then we have a lot of regional. The other thing is unique about Queensland is we have 13 regional centers. So most of our population is outside of Brisbane and every one of those towns has an innovation hub.

Aaron Birkby: So, whether it’s Cairns, Mackay, Rockhampton, they all actually have these little micro innovation hubs running as well. So what I would say is that the ones that were in this back in sort of 2015, that were in it for the right reasons, they are still here now, but all the ones that were the flash in the pan, they came to Queensland because there was money on the table, they’ve all wound up shop and left again. 

Adam Spencer: You kind of touched on this lightly, but what makes Queensland unique in terms of startups, what are the big strong draw cards or advantages that Queensland has? 

Aaron Birkby: Yeah. So I would say number one is our culture. So I spent, most of my life grew up in Sydney and what I would say that Sydney is, it’s a very transactional relationship and I know I’m being very broad here.

Aaron Birkby: I risk offending people, but that was at least my experience. And even when I traveled back to the ecosystem there now. Yeah, commercial agreements even ecosystem relationships, they’re very transactional, exchange of value. In Queensland it’s very much it’s about people and relationships it’s just a completely different culture.

Aaron Birkby: And I think that’s much more like Boulder in Colorado. I think it’s much more like certain ecosystems around the world. I actually think that’s a positive. The other thing we have is amazing talent pool. And relatively cheap cost of living compared to many other places, relatively cheap talent pool for a world-class talent pool.

Aaron Birkby: I also think we have lifestyle and where that plays a role is people live here because they want to, and because they prioritize a certain type of existence rather than somewhere like Silicon Valley, where they moved there because of purely the commercial gain that can be made from it.

Aaron Birkby: But I think there’s a lot of other things that go under the radar. We’ve had amazing entrepreneurs here and I don’t just mean the likes of, Steve Baxter or Glen Richards, but we actually have a history. If you go back pre 2012, the decade before that, probably two decades before that.

Aaron Birkby: But we had a really strong gaming development community here for a very long time. We also had lots of the tech that ran the porn, online porn industry was actually, south-east Queenland not talked about a lot, but we actually have a track record of some pretty amazing innovation. And that ties into my last point, which is, you know, out of everywhere I know in the world Queensland entrepreneurs are just heads down, getting it done. 

Aaron Birkby: We don’t big note ourselves and I don’t want to pick on Sydney again, but I definitely notice like an inverse relationship, like lots of noise, not much substance. Whereas up here, I feel like there’s heaps of substance and hardly any noise, which is also a detriment to our ecosystem as well, in terms of attracting inbound investment. 

Adam Spencer: Do you think we’re on the right track and if so, why? And if not, what do we need to change?

Aaron Birkby: So are we on the right track? Yes, but I’m always incredibly frustrated by how slow the track is. And when we, when I start saying things, like if we’re all rowing in the same direction, I feel much better, but try that does something tangible. What I see in Australia is we’re constantly inventing things that don’t need to be reinvented.

Aaron Birkby: Because I’ve spent a lot of time in overseas innovation hubs, which are all 5 to 10 years ahead of us. There’s so many things that we can just pick up and bring here. And instead we tend to try and invent new programs from scratch. And this is such like it’s such a slow way of doing it because then we’ve got to go through all the laps of learning, as opposed from here’s what worked in this jurisdiction, how about we adapt it locally and run with it.

Aaron Birkby:  The other thing, I think that really is holding us back, so it’s not necessarily that we’re on the wrong track, but I think our behavior isn’t helping us get there faster is all of the operators tend to suffer from having unsustainable business models and part of the reason for that is everyone’s fighting over the same pieces, like the same crumbs on the table. 

Aaron Birkby: And it was interesting. I’ve taken several groups, over to meet David Cohen and Brad Feld at Techstars over the years. And they’ve both spent time here in the Australian ecosystem and they make the same observation in that in Australia, everyone pitches for every government grant where every piece of funding that’s up, we’re all running to the same doors to get funding, to do the same things.

Aaron Birkby: And anytime there’s a new funding bucket, we all spin up a new program to do it. And we, lack the collaboration piece. And so David Cohen’s comment was you guys need to stop fighting over pieces of the pie and being the business of building pie factories. And the way you need to do that is to have the intellectual honesty, to know what you’re good at and know what you’re not good at.

Aaron Birkby: And instead of when funding comes up for something spinning up your own program, go and work with those that are the best at that. So they can be sustainable and they can develop the world best practice. And I think that was, I think it’s something we haven’t got to yet as a national ecosystem. We still are all doing our own thing, even though we’re connected.

Aaron Birkby: We know each other, it made so many different iterations of school program and different parts. And it’s if we just could double down on, on the best and achieve sustainability and achieve some really good knowledge that we could compete globally would be I think something aspirational to achieve.

Adam Spencer: Yeah, when you said you’d be happier if we were all rowing in the same direction, what is that direction? What’s that right direction that we all need to be rowing towards? 

Aaron Birkby: I think it comes back to how are we measuring success? And look, I understand that we all have different; each program has its own nuances of what we’re trying to achieve. I think a lot of the government funding is focused on jobs growth. But jobs growth, it biases what we’re building for. For me, I think our north, if we’re talking about as an ecosystem, then I think a north star has to be one of the north stars has to be more exits because if you look at the data of globally of ecosystems. 

Aaron Birkby: If we’re achieving exits for founders, first of all, there’s more likelihood those founders will recycle back and they’ll become investors and they’ll become mentors. And so we ended up with this, self propelling machine but as a leading indicator, if we’re getting that we’re getting lots of other things, so I would like to see us as that’s like something we are all rowing towards is getting more exits for founders.

Adam Spencer: Who was some of the people that come before you, that you looked up to as entrepreneurs, as founders? 

Aaron Birkby: So look, people who come to mind, definitely guys like Rick Anstey and the late, Laurie Hammond, I have so much respect for them and their thought leadership around supporting entrepreneurship in Australia.

Aaron Birkby: Here in Queensland. I love Mark Sowerby. So the first Queensland chief entrepreneur, founder of Blue Sky. I think as a leader, he’s one of the most, he’s one of the most impactful leaders to bring others up, like lifting other leaders to go on lead. And I really do miss Missy’s leadership in the ecosystem. 

Aaron Birkby: Steve Baxter, I think has had a massive impact. So Steve never described himself as a charitable person in the sense of giving. But that guy has given so much capital, so much time, so much everything to build an ecosystem when he doesn’t have to like, he doesn’t have to do any of it. And he does, he goes into battle every single time for it. I have a ton of respect for him.

Aaron Birkby: But I think nationally, I love what Annie Parker did with muru-D. I love what Michael Pincus, everything Mick touches. I look at guys like Phil Moore. I look at the StartMate team and Niki and the whole team there and what they’ve built. I think we have some amazing humans that are self sacrificing and give a lot for a greater purpose. And they’re the ones that I look up to and respect. 

Adam Spencer: A bunch of those names that I’ve lined up for interviews, but I know that Mick is next Monday, I’m pretty sure. If there’s one question that you would like me to ask him, what would that be?

Aaron Birkby: Yeah. So I think, Mick is known as Mr. Focus because of his Pollenizer days. And he constantly talks about entrepreneurs need to focus but he spent time in Silicon Valley living there recently. And I’m curious to ask the question what do we need to stop doing? As an ecosystem what do we need to stop doing? Which ties back to that focus question, yeah, I’d love his perspective on that. 

Adam Spencer: If a brand new founder comes to you, if you could give them one piece of advice that would just slightly increase the chances of their success, what would you tell them? 

Aaron Birkby: So I might sound a bit left-field, but be true to self. And what I mean by that is don’t feel a need to conform to the expectations of anyone else. I think we have a lot of rah-rah in our ecosystem. Everyone tells you that there’s this bias towards everyone needs to be able to unicorn.

Aaron Birkby: And I couldn’t disagree more. I think there’s nothing wrong with building an amazing e-commerce business or whatever if it’s in line with your purpose. If you don’t have that alignment, it’ll all come unraveled when shit hits the fan and things get real. So I think just be true to self. 

Aaron Birkby: I think, so I’m speaking as an ecosystem rather than as founders. I think founders should just go and do. But as an ecosystem I think the leadership layer should stop competing and stop annihilating each other and collaborate more. So let’s not keep reinventing the wheel. If you’re spinning up something new before you do that, go and ask the 15 people already doing it, how you can partner with them, that would be my idea.

Adam Spencer: What’s something really important that you want to get off your chest, that’s always top of mind about the Australian startup ecosystem or the Queensland ecosystem that you think is really important that needs to go into this series.

Aaron Birkby: So I, I think, it’s where all of us need to be spending more time is as the humble cheerleaders to every other founder out there. And what I mean by that is, you know, we, we have tall poppy syndrome here in Australia. We can’t big note ourselves. It’s not part of our DNA. It’s not part of our culture. We’re very different to the US in that sense. So we need to do it for each other. We need to stand up and say, hey check this person out, look at the amazing business she’s built. Look at this company and we need to make that relatable to the punters, to the mums and dads, to the voters.

Aaron Birkby: This there’s so much focus, I was on the board of StartupAus for a while and I got frustrated in how much time was spent lobbying the government. And I think that’s completely backwards that the pollies will do what the voters understand and vote for. And I think we’ve failed as an ecosystem to sell it to the mums and dads.

Aaron Birkby: And I still hear comments, parents telling their kids don’t study IT and be a programmer because all those jobs are outsourced to India. And here we have this massive deficit of talent where startups can’t recruit. So I think we need to change the entire narrative and I’d love to get to the point where we talk about our founders, the way we talk about our sports players, and that’s only going to happen when we make it relatable and human, and tell those stories with a megaphone on every rooftop on every billboard on every TV screen. So that’s why I love what you’re doing. I think anything that gives a voice to founders is absolutely critical in our economy right now.

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