Adam Spencer: Hi, I'm Adam Spencer and welcome to day one the podcast that spotlights Australian startups, founders and the organizations that empower Australian entrepreneurship.

Adam Spencer: We go back to the beginning to tell the story of Australia's most inspiring founders and how they built their companies. You're listening to a special interview series as part of a documentary W2D1. about the history of the Australian startup ecosystem. On the episode today, we have.

Cheryl Mack: So my name is Cheryl Mack and I am the CEO and founder of Aussie Angels.

Cheryl Mack: We have a platform for angel investors to co invest together without having to worry about any of the admin or a compliance or getting an AFSL that is usually required to run a syndicate. So if you're looking to invest or start a syndicate, please come talk to us. I've been in the startup world basically since I graduated university.

Cheryl Mack: Uh, my parents ran a startup before that was the term that was used. And so I was exposed to it at a very young age and I basically started working for startups when I got out of university. Uh, I moved to Australia in 2015 and I've been in the startup ecosystem here ever since. I've been angel investing for the last three years and so working

Adam Spencer: on a couple of companies as well.

Adam Spencer: I mean, apart from your family being, you know, entrepreneurs, your parents, why are you so interested in startups? What attracts you to it?

Cheryl Mack: I think it's the, the limitless of it. I, when you're working on a startup and when you're working in startup land, there's no boundaries. And I never really did well with authority or boundaries or rules.

Cheryl Mack: So being in an environment where, uh, you can work and do what you want within the realm of this is the goal we're working towards has always really appealed to me. Also the speed of it. If you've ever spent any time in corporate, you'll know that work life tends to move at a much slower pace. Again, that's something that I've never really done that well at and being in an environment where you can move fast and break things has always really appealed to me.

Cheryl Mack: And then of course you couple that, the cherry on top is the aspirational aspect of it, that you're building something bigger and more exciting and you're going to change the world. And that's something that just, that's why I get out of bed in the morning. It's not for a paycheck. Uh, it's, It's, it's to build something that will potentially make a difference in someone's life in the future.

Adam Spencer: Hmm. Yeah. I love that. So you studied a bachelor of commerce and marketing right at uni. Has that helped you at all in your, in the startup world?

Cheryl Mack: Anytime anyone asks me, Oh, like, you know, was going to university a good thing to help you in your career? My answer is always nothing that I learned in terms of theory.

Cheryl Mack: at university have I ever used? I don't think I've ever really done a proper SWOT analysis or any of the theory that I've learned at university. However, the soft skills that I learned at university, I use every single day. Things like the ability to work in a group of people who are difficult. Uh, or have differing views to you, or have differing objectives to you.

Cheryl Mack: That's something that I absolutely use every day. The ability to build up a network and build relationships with people, and build those in a genuine way, but also that can provide value for both parties. Absolutely something that I use every day. So those are the kinds of things that I absolutely learned from university, and I'm not sure if you can get that kind of experience interacting with people anywhere else.

Cheryl Mack: But did I, do I use the theory that I learned at Accounting 101? No.

Adam Spencer: Okay, so let's jump into the, the meaty part of the story we're trying to tell about the Australian Startup Ecosystem. You jumped straight into the startup plan when you graduated. What year was that? And, and also Jumping forward a bit as well, what prompted the move to Sydney, Australia?

Cheryl Mack: Yeah, so I graduated university in 2012, started working for a startup in Vancouver at the time. Again, doing marketing automation, working myself out of a job and then moving on to the next startup. And that was purely because I didn't want to get a corporate job and I wasn't sure what else I was doing.

Cheryl Mack: And it just, it was just something to do while I figured it out and then turned out that was what I wanted to do, which was pretty fun. And so then I moved to Australia in 2015 and I figured, I've worked for a number of smaller tech companies. that time and I thought maybe I'll go work for a bigger tech company now that I'm here in Australia.

Cheryl Mack: And the move really was just, it was prompted because my partner, um, my fiancé now, he worked at PWC and he said, Hey, I want to go live somewhere else in the world before we settle down. Are you, You know, you up for that? And I was like, yeah, sounds good. If we go to Australia, then I don't need a visa. I can just, I have a passport.

Cheryl Mack: I'm Australian. My parents were born there. So we could just go and then I don't need my own visa. And he was like, okay, let's do that. So it's supposed to be a two year thing. It's now been two years. Nearly seven. And we've just bought a house. So you can imagine how that two year plan went. But back to the, back to the story at hand.

Cheryl Mack: When I landed here in Australia in 2015, I thought, well, I've worked for a bunch of smaller tech companies. I, who, maybe I should go work for a big tech company. And so I thought, who's the biggest, baddest cat in town I could go work for? And I kind of looked around and at the time, like, Canva wasn't really a thing, Airtasker hadn't gotten big yet.

Cheryl Mack: There was really a handful of them, and the two that kind of caught my eye was really Atlassian and Freelancer. com. And so I thought, okay, well, you know, I kind of looked into the values of each one, and I thought, Aw, you know, Freelancer seems to resonate with me, you know, I think I like the idea of democratizing the workforce, and removing the physical boundaries of borders, and it just, it appealed to me.

Cheryl Mack: So I basically showed up on their doorstep, and I said, Hey, You're gonna hire me and took about a week, but they eventually did and I can't even remember what the role was. I I just I kind of jumped in and I yeah, I can't honest. I don't even remember I think I just asked a bunch of people to recommend me and and I actually showed up on their doorstep like That was back in the day when you could just get in the elevator.

Cheryl Mack: And I think I asked to see somebody who was there and was like, Hey, like, I love what you're doing. I'd love to come work for you. What do you got for me? And like I said, it took about a week, but they eventually gave me a role. And I can't remember what it was because it really only lasted like a couple of months.

Cheryl Mack: Because what happened was when I was in Vancouver, I started the Vancouver chapter of startup grinds, which at the time they only had about 20 chapters around the world. And so I started the Vancouver one. By the time I moved to Australia, I was like, Oh, I'll run the Sydney chapter. So I started running the Sydney chapter.

Cheryl Mack: And because I was doing that, I was invited to this like tech fancy dinner thing. This was like three or four weeks in to moving to Australia, maybe three or four weeks in. it freelancer. And so I sit down at this table and like I look across and it's filled from one end to the other end, all males, all big tech, uh, company CEOs.

Cheryl Mack: And, uh, and who sits next to me like across from me is Matt Berry. And he's sitting there and he, he looks at me and he's got this confused look on his face. He looks to one side and he confirms like, yeah, there's, you know, people who are at my level here. And he looks at the other side and he confirms, yep, there's people.

Cheryl Mack: He's like, the heck is this? We just hired this girl as stuff like lowly account manager. Like what is happening here? And so throughout the night, he got to understand that I was much more involved in the startup space than you know, what, what he might've thought originally based on, you know, what they'd hired me for, but I'd picked the company based on the company, not the role.

Cheryl Mack: And I've always been. Um, and life doing that, and this was no exception. So a couple of days later he pulls me into a room and he goes, Hey, you've got some like startup event marketing experience. And I'm like, yeah, and he's like, okay, great. We just acquired this company. It's called Sidstart. Um, it's It's unprofitable and it runs for a full day and I don't know, it's, it's not that great.

Cheryl Mack: Do you want to work on it? I was like, sure, okay. And that was the birth of Starkon. I kind of ran with that. I built the company from there and within a year we had 2000 people coming to the events. I turned it around, made it profitable and I, yeah, and then I, I rebranded it to Starkon and built that as a subsidiary company under the freelancer.

Cheryl Mack: com group.

Adam Spencer: What was some of the biggest challenges in turning that festival around?

Cheryl Mack: In fairness, so the person who had run it before, Pete Cooper, he had run it as more of a like side project, philanthropy on his side. It wasn't his full time thing. So he purposely did that. It's not that he wasn't able to make it profitable.

Cheryl Mack: I'm sure if he wanted to do so, he could have. He was running it more as a side project rather than being able to give it its full attention. So I. was able to give it my full attention. You know, I just changed pricing structures and, uh, did a bit of marketing. The funny thing is that people think, you know, people come to me and they say, Oh, Cheryl, like, you're so amazing at events and you, you know, Starcom was such a success.

Cheryl Mack: It's recognized all across APAC now. You must be really good at events and conferences. And I'm like, No, actually. The first hire I made was an events logistics person. The reason Starkon was so successful is because I'm good at branding and content and storytelling and marketing. Not because I'm good at events.

Cheryl Mack: You give me a run sheet and I'm like, eh, what's happening here? Like, I can do it, but it's not my strong suit. So I think there's a bit of a misconception there about my background as to why Starkon was so successful. But we had such a good time. We helped so many startups get on stage. We had about 600 startups that went through the pitch competition in the last couple of years, I think a little bit less than the first first couple of years, but to be able to support that many startups to get a voice in an ecosystem that felt very exclusive at the time.

Cheryl Mack: I think we, we really did a lot of good for a lot of companies in their early days and I monitored a lot of the companies that were coming through Startup Alley and our pitch competition and you know, I always said if we need to create a fund so that we can invest just if we put 10k in the top companies that went through Startup Alley and the pitch competition, we'd be rich right now.

Cheryl Mack: Canva was in our startup alley in the very first year, which is so freaking cool. Like ShipIt won the pitch competition in the first year. Checkbox. ai won it in the next year. So we've really, like, we had a lot of the early days of those startups coming through and we, you know, we played a part, at least I like to think that we did.

Adam Spencer: So 2015, when you, I think you mentioned when you moved to Sydney, what did the ecosystem look like? What did it look like in 2015 and maybe compared to now? What has been some of the biggest changes?

Cheryl Mack: I think in 2015, startups weren't mainstream, like convincing the likes of Microsoft and Salesforce. And all of those big companies to give us the time of day here in Australia was really difficult.

Cheryl Mack: AWS was one of our first believers and I think they were one of our first sponsors to come on board. But it really took a couple of years for people to take notice that this whole like startup thing was actually interesting. And for the bigger companies, it meant a new stream of customers. For the average person, There was no vocabulary around it.

Cheryl Mack: Nobody was thinking, Oh, I'm going to graduate university and join a startup. There just wasn't, it wasn't like they even said, I'm not going to join a startup. It just wasn't. A thing that anybody talked about. So back in 2015, there really weren't that many startup events. There are very few that have been longing or have been running as long as start con did.

Cheryl Mack: And now that we know what happened, you know, start con not running anymore. So a few of them have actually outlasted us. I think, uh, West tech fest, um, has, which is fantastic. Uh, but at the time really, there wasn't that many startup events. There was like a couple of meetups that were running. And I think we really played a big part in.

Cheryl Mack: Making it exciting and fun and building up that space where there was really nothing. It was Sid Start and that was it. And we took it from a place of, yeah, there's one startup events in Sydney to there was like four or five or six conferences in 2019 just in Sydney alone focused on startups. And then of course you've got everything in Melbourne and in Adelaide, Brisbane and Perth.

Cheryl Mack: So it really built up over the years. And I think that It showed the sheer number of people that were excited about coming and getting involved in this space that was producing some really cool companies that were coming out of the woodworks. And I think somewhere, uh, maybe like 2018, we started to get big corporates who would say, we'll buy 20 tickets, uh, in bulk for our staff because one, it's cheaper than your average 2, 000 corporate personal professional development conference that we could send them to.

Cheryl Mack: And two. They have so much more fun when we send them to you and they learn about the same and they, you know, they, they're exposed to this crazy innovation. But that never would have happened in 2015. Like, I was calling up founders when I ever, when we first launched the ticketing platform in 2015, every single person that bought a ticket, I put in a personal like the first probably couple hundred until I realized that 1500 people wanted to come to this thing.

Cheryl Mack: But the first couple hundred I called every single person, the ticket would get bought and of course their phone number would come through. And so I'd pick up the phone, I'd call them and I'd be like, Hey, who are you? Like, what are you doing? Do you know any other founders that might want to come? Can I get their phone numbers?

Adam Spencer: I love that.

Cheryl Mack: And one of the other things that we did was we looked at, um, bringing in international speakers, and that was just something that was not done in 2015. Like, like I said, Pete Cooper had done a fantastic job at, um, building up the event and, you know, he had the big players, Mike and Scott spoke, they continue to speak every year, by the way, fantastic, very supportive, but it was only Australian speakers.

Cheryl Mack: And so we thought one of the things that. Can be really helpful in terms of expanding your worldview and building globally scalable companies is being exposed to Global ideas and global insights. So I immediately called up some of my friends in North America and Vancouver and Silicon Valley and said, Hey, I'm running this conference in Australia.

Cheryl Mack: Do you want to come? And a lot of them said, okay. Turns out coming to Australia in summertime is actually on a lot of people's bucket lists. So I convinced, um, yeah, I convinced some of the CEOs and founders and, um, And heads of growth from some of the biggest companies like Pinterest and SurveyMonkey to come to Australia and speak to our founders.

Cheryl Mack: And a lot of them did it simply because I said, we need to build our ecosystem here. And these people need to learn from people like you, please come and share and. They did, and I always made sure to give them a really, a really great experience from the moment they landed in that airport to when they took off again.

Cheryl Mack: And so they told their friends about how much fun it was to come to Australia and speak at this crazy conference called Starkon, run by Cheryl. And so we ended up getting some of the coolest names that were able to come out. And we've still paired that with, uh, a number of, like, local speakers. We, we had the CEO of Campaign Monitor, and the founder of Tyro, and Nitro, and I think Paul from Seek spoke at one point.

Cheryl Mack: So.

Adam Spencer: I want to draw on some of your, like, huge well of wisdom and experience for these couple of questions. Looking at the kind of ecosystem today, what do you think are some of the biggest gaps that we need to fill?

Cheryl Mack: Yeah, the two main ones that I think are probably the most important is the funding gap, which is that we've got a lot, a decent amount of later stage funding.

Cheryl Mack: And when you've got the right amount of traction, getting your seed series, a fund is not that difficult. It's that early stage funding where most founders can get their kind of family and friends angel round, but it's that middle stage between, I've gotten maybe a hundred K from family and friends, and now I need to raise a 500 K, maybe 500 to a million seed pre seed round from angels.

Cheryl Mack: or early pre seed VCs, and before they go on to raise their next seed or series A round. And that's the stage where I think we're lagging behind and there's a gap there. We have very few true pre seed funds, and I know the VC funds, um, all might disagree with me on that one, but we have very few true pre seed VC funds.

Cheryl Mack: And, I, I think the angel investment space hasn't matured enough yet to provide enough funding to the ecosystem for what it needs. And so we're seeing a lot of companies that are struggling to build that momentum in order to reach the point where they are justifiably, um, investable from a VC point of view.

Cheryl Mack: And I think that's hurting us. The other gap that I see and where we're similar to other countries, Western countries all over the world is the gender gap. We simply do not have enough female founders. And the reason, uh, one of the reasons, a number of reasons, but I think a large reason is because we don't have enough female funders.

Cheryl Mack: So women who are writing the checks, women who are sitting around the IC table, that's changing a bit. And, and some players, uh, like Airtree and Blackbird, uh, have absolutely taken steps towards doing that, which is great, but it's just simply not enough. We're kind of in this cycle where most of the, Founders tend to be skewed towards male.

Cheryl Mack: And you know, when you go to raise, who do you go to? You go to your friends, right? So naturally you can't blame them. Of course, they're going to go ask their friends who tend to be male. And then of course, when they go to raise that next round, those male early investors tend to also have male friends who then tend to get introduced to the founder, and then you are pushing them along to the next stage where there tends to be more men around the IC table.

Cheryl Mack: And then they're more likely to get funded because. They've already got good backers, and then, of course, the company exits, ideally, and everyone gets rich, and the whole process starts all over again, because then you've got, um, the next generation of founders who, uh, were able to make money on the deal that they invested in earlier, and that's a very, very, I've generalized, there's a, that's a huge generalization there, but there is a cycle, and we do need to break it, and there's a couple of things I think we need to do there, but in general, like, we're just simply not doing enough with the gender gap.

Adam Spencer: What do you think, as a community, or as an ecosystem here in Australia, that we are doing really well?

Cheryl Mack: Look, I think we do R& D really well. We're really good at finding new innovations. On the flip side, we're comparatively poor at commercialization. So that's a detriment, and I think we're working on it, but not quickly enough.

Cheryl Mack: We do FinTech really well. And that's really good for us, uh, because we do have a lot of banks and banking and finance tends to be an area that is more widely accepted by the mainstream, which is a good thing. We also have this unique environment where we're, we're kind of a bubble enough into ourselves that Australia is a fantastic place as a sandbox to test things and to drive new innovations before they can be impacted by other factors that would make it really difficult to establish as to whether this is, um, viable or not.

Cheryl Mack: So Australia is a really unique environment. And we've seen a lot of technologies and companies use Australia as a sandbox. And I think that's something that is, um, unique about where we are.

Adam Spencer: Do you have any unpopular opinions about the startup ecosystem that you just hold the, you know, I write, but no one seems to be on the same page with you about,

Cheryl Mack: I mean, it's not like I'm out there voicing unpopular opinions to test how many people are on the same page with me about, but just, Based on conversations that I have with other, primarily investors in Australia, I personally feel that the funding environment in Australia is entirely too slow.

Cheryl Mack: You look at what's happening in, uh, Silicon Valley and the UK and the, just the speed of deals. That get done. You simply don't have time to ponder the what could go wrong. All you could think about is what can go right and the speed of money that gets deployed allows a lot of really, really interesting things to get funded and to build up an ecosystem where people are thinking about what can go right.

Cheryl Mack: Rather than what can go wrong and focusing on the founders and how to pick and find the right founders rather than all of the potential issues in their business model. So I would say that's probably my like unpopular opinion. Not that I voice it too often because it turns out when you tell, uh, older, typically Caucasian, males that you disagree with their approach to due diligence, they don't tend to take it well.

Cheryl Mack: And I find that it's not really worth the fight when you're at a pub with a, you know, at an angel drinks and you're just trying to have a good time. So that's, yeah.

Adam Spencer: My last question is the question that I like to ask everybody, which is the advice question. If a brand new founder came to you tomorrow, what, what one single piece of advice would you share with them that would hopefully increase their chances of success?

Cheryl Mack: Hmm, yeah. Look, there's a number of things, and I know you only asked for one, but I'm going to give you three, because they're all kind of tied together. The first is, talk to your customers. Talk to your customers, talk to your customers, and don't stop talking to your customers, ever. The way that you talk to your customers may change as your business grows, but it's imperative that you continue to talk to your customers.

Cheryl Mack: The next is focus, and it ties in with talking to your customers, because, uh, when you talk to your customers, you should be able to establish the core problem that you want to focus on. And focus in the early days is really important. I think founders and people naturally tend to have this inclination around, oh, and this could feed into this, and we could also do this, and this would be naturally, like, fit with this, and like, let's build everything.

Cheryl Mack: And they think that they have to explain How the future could look where they're a company that does everything to people that they're pitching to when the reality is actually the opposite. It's much, much better to focus in on something that you can do really well and let people's natural inclination to think about the future and the possibilities on their own.

Cheryl Mack: So if you're talking to investors, focus is much better than we can do everything. And the last one is fall in love with your problem. So when you talk to customers, you'll discover a problem that hopefully you become very passionate about. And then you focus on that problem. And then you fall in love with that problem rather than your solution.

Cheryl Mack: So, uh, rather than thinking of an idea and thinking, Oh, I love this idea. This, this product would be amazing if I could just build this product. You know, I think that it will function like this and the features will be this, and this is how it's, how it will work. And I go, what's the core problem that you're solving.

Cheryl Mack: And they're like, the fact that there isn't a platform that has these features and they start to list their features and I go, no, what's the core problem that you are solving? What is the pain point that you're addressing and why is it such a huge pain point? And founders, some of them, tend to struggle with that question because they might have already fallen in love with the solution that they've devised.

Cheryl Mack: So I would encourage you to think about what the core problem is and focus on that. Because the way that you solve it might be different now than it will be in the future. If you look at what Airbnb was in the early days, you know, it was air mattresses in people's living rooms. But the problem that they were focused on is how do we help create an environment where everybody feels at home in a different country.

Cheryl Mack: Don't quote me on that, but that's the problem that they were solving and they were laser focused on that. You know, now of course they've diversed into different areas, but that's the kind of thing where you can build something around a problem space and continue to build out from that problem space and you're going to be really successful.

Cheryl Mack: Um, hopefully, I guess. Don't quote me on that one either.

Adam Spencer: Just to wrap up, remembering that what we're trying to do here with this series is tell the most comprehensive, um, version or story of the Australian startup ecosystem and we want academics, we want founders, we want investors, we want policymakers to listen to this series.

Adam Spencer: What would you tell them? What do you think they need to hear?

Cheryl Mack: I think that our policy currently is limiting. to the ecosystem and its possibility and its potential in a lot of ways. And we need to look at what other countries are doing to unlock that potential to remove barriers that are currently limiting things.

Cheryl Mack: Although we think that there might be risks in people, you know, grandma getting swindled or people doing the wrong thing, I think the risk of allowing that to happen is so much less than the risk of not opening up and allowing some of those things to happen at, at the right times with the right people and letting the market essentially regulate itself a little bit more than it currently is.

Cheryl Mack: Because we have examples from overseas that show that these models work. And that no one is going to get screwed over, and, well, the vast majority of people are not going to get screwed over if they're allowed to act in particular ways without the sheer amount of regulation that is currently holding

Adam Spencer: back innovation in Australia.

Adam Spencer: I hope you enjoyed that interview. More interviews are on the way. Follow the podcast wherever you're listening right now. Stay tuned for more interviews with many, many more amazing people from the Australian startup ecosystem. Thanks for listening and see you next time.