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Colin Kinner discusses the key missteps first time founders often make

Colin Kinner is founder and CEO of Startup Onramp, a training and mentoring program for first time startup founders. With a long history of entrepreneurship, Colin has supported countless startups in a variety of roles, including as Entrepeneur-In-Residence at both Slingshot and The Studio Au, and as an Advisory Board Member at Surepact, Hoops CRM and Explorate. In his conversation with Adam, Colin discusses some of the key missteps that first time founders often make, and the advice he would give to someone considering embarking on a startup. 

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Mentioned

Startup Onramp: https://www.startuponramp.com/

Colin’s website: https://www.colinkinner.com/#home

Colin on Twitter: https://twitter.com/colinkinner

Transcript

Colin Kinner: I’m Colin Kinner, founder and CEO of Startup Onramp. Startup Onramp is a national training and mentoring program for early stage startup founders. We started about five years ago having recognized that most startups fail. And often they fail because the founders inadvertently do things that are actually really unhelpful. And at the same time we saw that there are relatively few founders who have access to the sorts of experience that can give them really good guidance.

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Colin Kinner: So the programs that we’ve created are all about giving first time startup founders a good insight into what behaviors are likely to be helpful in making their company succeed and what things they’re likely to be able to avoid that could lead to failure of their company. 

Adam Spencer: What are some of those key missteps that you see founders make?

Colin Kinner: Missteps, there are lots of those. The most common one I think is that startup founders build a product based on their vision of, you know, a problem that they want to solve, but without adequately testing their assumptions around, whether their customers firstly, exist and secondly, whether those customers genuinely have the problem that they think they want to solve and thirdly, whether those customers are sufficiently motivated to go and pay for a solution. 

Colin Kinner: And these are basic customer development questions, but I still see startup founders coming to us having spent lots of time and lots of money building things that really the world doesn’t need. And I find that really sad because I think, people genuinely have a one shot to build a really good company. And so I really want to make sure that they don’t make those mistakes early on. 

Adam Spencer: That’s quite a statement that you genuinely believe that people only have one shot to create a great company. Can you tell me more about that?

Colin Kinner: Yeah, we should unpack that because I think it’s actually misunderstood. Most founders are non-technical. I’ve certainly seen that in the work that we do at Startup Onramp and also in some of the analysis done by Startup Muster and StartupAus. We have a very large number of non-technical startup founders in Australia.

Colin Kinner: That’s a tough place to start from, but it’s not a deal breaker. It just means that these are people who have to generally speaking, pay somebody else early on to build their product. If they were a technical founder, then it’s their time that they’re investing. But we’re seeing people who have to invest often between 50 and a hundred thousand dollars of their own money to hire somebody to build their product.

Colin Kinner: And there are very few people that have the financial resources to be able to say, I’ll do that twice or three times, and I’ll have a number of shots on goal. So I think, technical founders the fantastic luxury of being able to tinker on a bunch of things without spending a lot of cash. But that’s not the case with non-tech founders. 

Adam Spencer: So when would you say you first got involved in the startup ecosystem?

Colin Kinner: I’ve been involved in the startup ecosystem in Australia since the early 1990s, initially taking deep tech companies out of the university sector and helping to turn them into spin out companies. I spent some time at the University of Queensland doing that. UQ has a pretty strong history of spinning out companies.

Colin Kinner: One of them I helped to get started, ended up raising $26 million in VC funding, incidentally then went on to fail because it turned out that it probably needed about a hundred million dollars. Then spent some time in the UK investing in deep tech companies, running a seed fund that was part of Imperial College in London.

Colin Kinner: And then came back to Australia, ran an early stage fund here that invested in creative tech. And since then really just been involved in the ecosystem probably from two perspectives, one, looking at building the ecosystem nationally. And we can talk some more about that. And the second is working with individual founders, helping them to maximise their chances of succeeding.

Adam Spencer: Wow, 1990s. Can you identify one event, a few events working together that you saw as a catalyst for kicking the ecosystem off as we know it today?

Colin Kinner: Sure, I think Australia didn’t really have any kind of coordinated startup ecosystem until about 2010. Maybe even 2014, which was the first StartupAus Crossroads report. I remember back in, must’ve been late 2013, about 50 people were brought together to talk about how to make the Australian startup ecosystem competitive and help it to grow more rapidly.

Colin Kinner: And at the time there were pockets of startup activity. Sydney probably had a reasonably vibrant community, albeit pretty small. Most other capital cities had very little. Regional startup communities were just non-existent, completely non-existent.

Colin Kinner: The venture capital space was really looking pretty sparse and I know at the time when we looked at the VC landscape, there were conclusions drawn that we really didn’t have a VC industry and venture capital in Australia, was such a small total number of investments and total cash put to work every year that it was really a blip on an international scale. 

Colin Kinner: The catalyst for that was a number of people who said, look, we really need to do a whole lot better. I, for my sins volunteered to take the lead on authoring the first Crossroads report for StartupAus. That ended up being a pretty lengthy document that looks not just at what’s happening in Australia, but internationally and said what does best practice look like?

Colin Kinner: What are the countries that are really growing their startup ecosystems very well, what are they doing? And what can we learn from that that could be replicated here? And it ended up recommending about 20 actions, some of which were pretty substantive. And I’m pleased to say that quite a lot of those have since been acted on at least to some extent by federal government, state government, the ecosystem itself. So I think for me, that was probably a pivotal point where the ecosystem leaders looked at what was going on and said, geez, we should really be doing a lot better. 

Adam Spencer: What were some of the major points that were taken out of that, that were acted on?

Colin Kinner: One of the really key ones was that we need to actually invest in startup ecosystems as a thing. And at the time, the federal government looked at startups and put them in the same basket as SMEs and said, all right, so startups, they’re just like two and three person businesses that don’t come to much.

Colin Kinner: And we said well, actually, no. They start looking like SMEs because they are by definition, small one to three person teams. But they have the potential, if they’re adequately supported to become multi-billion dollar companies and to create jobs and prosperity and all those things that we know and love. 

Colin Kinner: And it took a long time for particularly the federal government to get that. But I think one of the themes that has always been in the work of StartupAus and other ecosystem-building initiatives has been that you need to invest in capacity building around skills. So teaching entrepreneurship skills so that people actually know how to do this stuff.

Colin Kinner: Stimulating investment so that you’re actually making it easy for people to invest in startups and then supporting the soft infrastructure. So looking at things like startup co-working spaces, early stage VC funds, angel groups, and trying to make it easy for them to really grow their reach because they’re really crucial to the success of an ecosystem. 

Adam Spencer: What draws you to this space and the people in it?

Colin Kinner: I think we have to do it. As a nation it’s not optional. I’ve got a young son and I hope that by the time he enters the workforce, you know, the job prospects won’t look like, get a job at a bank, a mining company, or an insurance company. 

Colin Kinner: You know, I think we’re certainly well on the way to having a technology-driven economy, but compared to a lot of other countries that we would like to see as our peers, we’re actually a long way behind still. So to me, I think, there’s a burning platform narrative that says, as a nation, if we don’t get a whole lot better at this, we’re going to find ourselves really falling behind. 

Adam Spencer: So where were you in your career back in that 2010 to 2014 part where things were really starting to kick off?

Colin Kinner: I was running things like incubators. Remember incubators? We used to get people all sitting in a room at desks for long periods of time. And everyone thought that by co-locating a bunch of startups, good stuff would happen. So it was kind of at the time where I guess people were starting to look for other models.

Colin Kinner: It was at the point where I know a number of Australian ecosystem leaders were looking at things like Y Combinator in Silicon Valley and saying hang on, maybe this is the new incubator model, you know, they seem to have been doing okay. And I think there was a realization that having bums on seats and coworking spaces with good wifi really wasn’t enough. It had to be about access to expertise and good guidance. So I think that was really pivotal. 

Adam Spencer: I think you mentioned that you spend some time, was that in startups?

Colin Kinner: Yeah, so I was running an early stage fund that invested in deep tech startups. So generally startups that come out of the university sector based on, often years of research and trying to make that match between a piece of technology that looks like it could have commercial potential.

Colin Kinner: And probably the more difficult part of getting researchers and maybe post-docs from that research group to make the leap and say well, I’m going to take a chance and put my academic career on hold or even, end it so that I can be an entrepreneur. And it was actually really interesting that in the UK, at that time, there was a very strong cultural shift towards building companies. And there were a lot of academics that were very enthusiastic about jumping in and becoming an entrepreneur. And I’ve yet actually to see that in Australia. So that’s something that I think we have a massive opportunity to do more of.

Adam Spencer: I’m curious to see what your perspective is on what makes the Australian ecosystem so, I guess, maybe unique or what is an advantage that we have here and maybe what is a disadvantage we have here.

Colin Kinner: Yeah, I mean, I think we obviously have advantages of lifestyle, you know, quality of living. I’d like to say housing affordability, but I think that would be a stretch particularly in some parts of the country. We have pretty good talent. So we have universities pumping out some very capable graduates.

Colin Kinner: I think we need to not get caught up too much in the advantages because every country on the planet is competing for the same prize of economic success. And so, you know, whatever we’re doing, we got to think about it as being in the innovation Olympics in a way.

Colin Kinner: It’s not good enough to say well, we’ve got beaches and kangaroos and barbecues, we’ve really got to dig a bit deeper. Disadvantages, I think we have economic laziness. I think, you know, as a nation, we have had massive success for a very long time largely based on a resources boom. I think that has led to a pretty relaxed attitude towards building businesses and building the economy. And I think that’s been a massive disadvantage in terms of having urgency around tackling some of the things that we need to get better at. 

Adam Spencer: I’m curious to know, is there something that you hold so true and you believe to be the case, but no one else seems to be on the same page with you about in regards to the ecosystem?

Colin Kinner: For me, I think one of the fundamental truths is that to be successful as entrepreneurs, people need to know some of the nuts and bolts and have the skillsets. I find it really fascinating that people start companies with approximately zero idea of how to build a company, particularly a tech company, because we’re not engaging, we’re engaging in business model innovation.

Colin Kinner: So by definition, a lot of tech companies are competing based on business model innovation, meaning they’re doing something that no one else has done before. And so it’s not like you can set up a bricks and mortar retail store or a restaurant and say we pretty much know the business model. There’s not much thinking to be done there. We just need to turn the wheel. 

Colin Kinner: So I think given that, I still see a lot of people failing really quickly in their companies where they do things that, that had they the benefit of have access to some guidance along the way that they wouldn’t do. 

Colin Kinner: You know, I’ll often say to people, you wouldn’t start a dentistry practice if you weren’t a dentist and you didn’t know any dentists, but we still see people that, you know, say well, I’m going to start a technology company and I’ve dropped out of banking and finance or whatever it might be, but I’m a smart person. I’m just going to have a crack at it. Sometimes it works, but generally it doesn’t. So I think that’s a massive gap in the ecosystem that really needs to be plugged. 

Adam Spencer: So did you write one or two reports on the ecosystem?

Colin Kinner: So the two major reports that I’ve authored are the StartupAus Crossroads report, which I wrote the first of those and then two subsequent years 2014, 15 and 16. And then separately to that I was asked to write a report for the Commonwealth Chief Scientist, at the time, Ian Chubb looking at entrepreneurship in the university sector and making some comparisons with international best practice. 

Adam Spencer: What were some of the key findings out of that report?

Colin Kinner: At the time when we looked at how entrepreneurship is taught in universities in Australia and how students startups are supported, the conclusion was that there were a few universities doing really good stuff. But there was a very wide spectrum of capability, right down to, you know, reasonable number of universities that either had zero entrepreneurship programming or just taught it as a purely academic subject in their business school.

Colin Kinner: And so there were some recommendations that came out of that, that basically said we have to get a whole lot better at this. And again, looking at other countries, you know, we looked at Singapore for example, where the university system in Singapore is massively supported by the Singaporean government.

Colin Kinner: To the extent that they actually have a program for Silicon Valley immersion, where it’s called the National Overseas Colleges Program and they take several hundred graduates from NUS, National University of Singapore every year. And they put them on a six to 12 month internship in Silicon Valley.

Colin Kinner: And since then they’ve expanded that to other startup ecosystems like Beijing and Stockholm, London. And the whole point of it is to say, let’s give people a massive leg up in expanding their horizons, learning from world’s best practice and then bring them back. So you know, over, I think it’s now about 10 years, they’ve been running that program, over that period of time, they’ve created thousands of startups and given those founders access to really deep expertise and really deep networks around the world. 

Colin Kinner: So I think, you know, we look at that sort of thing and although Australian universities have got a lot better in recent years. I think there’s still a very big gap or to look at it another way, a very big opportunity to do some new things.

Adam Spencer: What year was that report was commissioned? And the other question was, what did the landscape look like at the time to have people go well, we need to understand this better. Like what was the big problem they were trying to solve? And what was the solution that they were trying to implement?

Colin Kinner: So the chief scientist was of the opinion that the university sector probably needed to do more to encourage entrepreneurship among students and staff. And that a lot of what it was trying to do to encourage, to support those companies that people were trying to create actually wasn’t that great.

Colin Kinner: So it was a hypothesis, and so what he asked me to do was to look at that and test the hypothesis and come back with some data. Chief scientists like data. So that report, which was released in late 2015 looked at the data and looked at the international benchmarks around the world and came to the conclusion that although we had some universities doing some good stuff, we were actually a very long way behind. 

Adam Spencer: I’ll ask this question now, it’s a standard question that I like to ask everyone to just, you know, compare answers. But it’s the advice question, so if a brand new entrepreneur, founder, come to you tomorrow no experience, and you could give them just one piece of advice that would slightly increase their chances of success, what would you tell them?

Colin Kinner: I would recommend to first-time startup founders, that they go and connect with at least five other founders who are a few years further ahead than they are. The tendency is for people to say, oh, I should try and get a bit of time with Mike Cannon-Brookes, co-founder of Atlassian.

Colin Kinner: That’s pretty hard to do. And at the same time, you know, Mike’s days of being a scrappy startup founder are a little bit further behind him. I think startup founders often are surrounded by cohorts of other first time, early-stage founders. So you show up in any coworking space in the country and what you’ll tend to see is startup founders sitting next to other startup founders and without being unkind about it, the risk is that you’ve got basically the blind leading the blind. 

Colin Kinner: So what I suggest to early-stage founders, particularly if they’re not engaged in a startup community, is that they come up with a list of five or so people that they think are, maybe in the industry that their startup is in that maybe might have some direct relevant experience and reach out to them because almost always the answer is yes, of course, I’m happy to spend some time talking to you and sharing some tips and tricks. 

Adam Spencer: Why is that? Why are people so, founders, I think specifically, so generous with their time?

Colin Kinner: I think it’s because basically every startup founder has only made it, has only been successful by having the benefit of other people before them sharing their time. So there is a very strong give first mentality in the startup ecosystem in Australia. And I think people have recognized that the pay it forward thing actually does work.

Colin Kinner: And I’ve yet to see really any example of a successful founder declining to give back in that way. So I think it’s an absolute given as you move up the ranks and build successful companies, that there is an expectation of giving back. 

Adam Spencer: What do you think defines a startup ecosystem and a follow-up to that is, what defines it as a particularly strong ecosystem?

Colin Kinner: That’s a pretty big question, what defines it I think, I mean, we can look at the kind of academic perspective that says, here are all the elements of a startup ecosystem. There’s founders and there’s investors, and there’s the soft infrastructure that supports them and there’s capital and all that stuff.

Colin Kinner: I think the more interesting way to look at it is to say well, you know, what are the interactions that we need to have between those various element? And I think that’s probably where a lot of the kind of a recipe for success comes in. It’s about how do you make sure that there is a frictionless connection between founders and investors? That’s a classic one. 

Colin Kinner: We have massive amounts of capital in Australia, certainly compared to 10 years ago, even five years ago. And we have a large number of founders out looking for capital, but we still see a pretty challenging situation, particularly when it comes to access to seed capital, so really early stage capital. 

Colin Kinner: And so I think, the success of an ecosystem is about saying, what are the friction points or what are the gaps in terms of marrying supply and demand. It could be expertise with founders, or it could be capital with startups that are ready to raise money.

Colin Kinner: And I wish that there was a simple solution to that, but there’s actually not, I think partly it’s just raising the level of maturity of the ecosystem. I think actually one thing that we could do more of is to look at international ecosystems that are flourishing and doing really well. 

Colin Kinner: Because I think there are, again, we looked at this with the StartupAus Crossroads report, over numerous editions of that report. We looked at international ecosystems and there’s so many smart things being done in other countries that we actually don’t need to come up with a lot of new ideas. Really all we need to do is say, what’s worked elsewhere, would it translate to the Australian context? And if so, let’s do it. 

Adam Spencer: Is there anything that I haven’t asked you that you think is really important to cover in future interviews with other people, but also something that’s maybe really important that you think should go into the series? This timeline of the startup ecosystem?

Colin Kinner: I think one thing that’s often overlooked is regional startup ecosystems. We obviously have in Sydney a pretty vibrant startup community. Brisbane, Melbourne, maybe a few other capital cities are well on their way. But I think, you know, a lot of the work that I do through Startup Onramp is with regional startup communities where really they’re either just starting to build a community for the first time, or they have a bit of a start, but they’re really looking at kind of adding some kind of programming that will take it from a, you know, a handful of wannabe entrepreneurs to actually building some meaningful companies.

Colin Kinner: And I think that’s often overlooked. There’s not a lot of capital has been deployed in doing that. And I see a lot of startup communities that are basically surviving on volunteer time and effort. So I think, at a government level, there’s a massive market failure there. And I think at a community level there is a need for those ecosystem leaders to get together and make a case for massively increasing the investment in supporting those ecosystems. 

Colin Kinner: Because, you know, population base is there. We’re seeing, particularly with COVID, we’re seeing a lot of people say well, I don’t need to, and don’t want to be in the city any longer. So I think we’re going to see that continued trend of really smart people deciding to be based in regional rather than capital cities. 

Adam Spencer: What are you really passionate about that people need to hear more about?

Colin Kinner: The thing I’m passionate about is helping people to think a whole lot bigger. I work with a lot of early-stage founders. They are often super smart people who have domain expertise relevant to their company. And you’d look at them and say, this person could be a really good founder, but then you look at the thing that they’re working on. And I see way too many people that are working on really small ideas. 

Colin Kinner: And that’s okay, building a massive company isn’t for everyone. But I think there are a lot of people who haven’t really been exposed to the what if. What if this was 10 times bigger? What if it was a hundred times bigger? If they’re trying to raise some money, what if you had access to 20 times as much capital, what would you do with it? 

Colin Kinner: And I think that attitude is pervasive in places like Silicon Valley and London, Beijing, Stockholm. We’re not yet seeing it much in Australia. So I think, for me, a really crucial concept for entrepreneurs to get their heads around is that you can actually build really big companies really quickly, but you have to set out to build something really big. 

Adam Spencer: Queensland is, as other people have told me, the split between regional ecosystems and Brisbane is 80-20 or something like that, like 80 is out in the regions? Why is it such a great regional startup ecosystem in Queensland far better than the other states, like what made that happen?

Colin Kinner: I would argue that the regional startup ecosystems in Queensland are no better or worse than the regional ecosystems in other states, I think perhaps there’s been more focus on it, certainly from a state government level. And I think the government’s probably done a pretty good job of promoting regions as a place to support startups.

Colin Kinner: They’ve certainly funded a number of startups through grant programs, like the Ignite Ideas grant. That’s been a positive, but I look at, so Startup Onramp works with the Queensland government in rolling out our programs across regional Queensland and also with the New South Wales government making our founders course available to regional founders in New South Wales.

Colin Kinner: We’re seeing the same thing everywhere that there are pockets of startup activity in even really small kind of remote and rural areas. I’ve met people that are working on actually really serious tech startup opportunities who are in rural places where you wouldn’t imagine you’d find anyone doing anything remotely related to startups.

Colin Kinner: So I think we actually have an amazing opportunity to not be geographically constrained in programming and in the way we think of ecosystems, obviously bringing people together in person is always going to be valuable. But I think over the last 18 months, people have really worked out how to be quite effective completely online.

Colin Kinner: And so, you know, I’ve run virtual programs, virtual mentoring, and it’s actually really straightforward to build and deploy programs where you’re engaging people from lots of regional areas at once. So I actually don’t think that we need to focus too much on the geographic stuff. We just need to say, how do we get people wherever they are to be able to engage in startup activities and get the right sort of support.

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Credits

Production Credits

  • Andy Jones
  • Will Tjo
  • Alex Carpenter
  • Alan Jones
  • Oliver Gaywood
  • Aleshia Spencer

Special Thanks

  • Sorrel Osborne
  • Alan Jones
  • Murray Hurps
  • Maria MacNamara
  • Peter Davison
  • Pete Cooper

Music Credits

Music by Lee Rosevere

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