Transcript Synced · select any line to jump ▾ 0:00 Adam Spencer: Let me tell you about our partner, Teamified. If you need to build a top-notch team quickly, Teamified is your go-to solution. They not only provide fractional CTOs, they can also do contractors and even remote team members tailored exactly to your needs. And whether you're looking for expertise in the Philippines, India, or Sri Lanka, Teamified has you covered. What's amazing is that Teamified uses a blend of AI and human expertise to cut hiring times by 50%, cent. The platform handles everything from automated onboarding to day-to-day management and even performance tracking. You can also handle rewards and recognition, buy equipment, and order training all through their platform. Simplify your hiring process and get the best talent fast with Teamified. Check them out now and transform your team. Go to dayone.fm/teamified. That's dayone.fm/teamified. T-E-A-M-I-F-I-E-D, and get started today. Hi, I'm Adam Spencer, founder of the Day One Network, which is bringing the history of the Australian startup ecosystem to you. I believe in founders. It's why I do everything I do at Day One and our media company, W2D1 Media. And that's why the Day One Network exists, to create helpful content for founders. We've got some great shows in development. But a large part of what we do couldn't be done without support from our partners and sponsors. And I couldn't be happier than to be working with NTP, who get community better than any other technology recruitment company out there. A Newcastle company like mine, NTP are invested in seeing the growth of the local tech community in Newcastle, Sydney, and more broadly Australia. So thank you NTP for helping us bring— Thank you. Helpful content to founders and the startup community in Australia. Back to the interview. Hi, I'm Adam Spencer, founder of the Day One Network, which is bringing the history of the Australian startup ecosystem to you. I believe in founders. It's why I do everything I do at Day One and our media company, W2D1 Media. And that's why the Day One Network exists, to create helpful content for founders. We've got some great shows in development. But a large part of what we do couldn't be done without support from our partners and sponsors. And I couldn't be happier than to be working with NTP, who get community better than any other technology recruitment company out there. A Newcastle company like mine, NTP are invested in seeing the growth of the local tech community in Newcastle, Sydney, and more broadly Australia. So thank you NTP for helping us bring helpful content to founders and the startup community in Australia. Back to the interview. Hi, I'm Adam Spencer and welcome to Day One, the podcast that spotlights Australian startups, founders, and the organizations that empower Australian entrepreneurship. We go back to the beginning to tell a 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 is producing about the history of the Australian startup ecosystem. This episode was conducted by guest host Will Cho. On the episode today, we have— 3:22 David Burt: Hi everyone, I'm David Burt. I am the Director of Entrepreneurship at the University of New South Wales, and there I run something called the Founders Program, and we help any UNSW student, staff member, or alumni go through the journey of exploring if a startup is for them. And if it is, we help them get started in the right way and help them get to their first few million dollars of customer revenue or capital raised so that they have the best possible start to their journey. 3:48 Speaker C: Amazing. Any favorites that you've come across so far? 3:52 David Burt: Yeah, in terms of, you know, what we do at UNSW, it's any student, staff member, or alumni. So each of those different groups of people approaches startups quite differently. So you You can have students that start next-generation technology companies. A great one is a company called Forage, which helps students have virtual internship experiences. And this was a company that was started in about 2017, '18, went through the UNSW Founders Program, and now has raised about $40 million in capital, is, you know, starting to become a really fast-growing global company. It's a really good example of a— Mm-hmm. Student startup. We have another one which is called called Bandicoot Imaging, which was started by some image scientist alumni, used to work for Canon's R&D lab in Australia. But when they closed that down, a few of the engineers got together and started a company called Bandicoot Imaging. So came back to the university and went through the Founders Program as they started their company. And then we also have a lot of really smart scientists and researchers at UNSW, and we've helped a number of them start companies, including one called Contac— Tyle, which sort of next-generation robotics company bringing that cutting-edge scientific research and technology into startups. 5:09 Speaker C: This is a very broad question, but what do you think makes up the characteristics of a successful startup? Is it just a groundbreaking idea or founders that are relentless? 5:21 David Burt: Yeah, so most of the A lot of the startups that I've worked with and, and continue to work with are started by scientists and people that fundamentally want to change the way something is done in the world. A really great example of that is a company called RapidAIM, which was started by a couple of founders, Nancy Schoellhorn, along with her co-founders Darren and Laura. And they wanted to change the way that pesticide was used in agriculture. And they had a new technology, which is a sensor device which can detect the presence presence of pest insects. And they started a company to essentially accelerate the process of technology adoption so that people eventually will use less chemical pesticide because they've got more confidence that their pest management strategies are working. And this is sort of the reason I'm bringing up RapidAIM is the example of what does it take to be a successful startup is you have this group of very smart, very motivated, very hardworking founders that want to change the world. And so I think if you get a confluence of the right team, an interesting technology or integration of existing technologies, a valuable market, then you've started well. 6:33 Speaker C: Yeah, what you said before in regards to being a scientist, that, that sort of piques my interest. Is it always a prerequisite to have that deep expertise into your startup in order for it to be successful? Is it possible for, say, a young passionate founder with not a lot of experience or expertise or knowledge in, in that particular industry to still be successful. 6:56 David Burt: Yes, that, that's definitely true. And I think Y Combinator has proven that this many times over. And I think what a lot of people forget is when Y Combinator was first getting started, I can't remember what year it was, but you know, a lot of people didn't take that hypothesis seriously that you could have a young startup CEO that could build quite a valuable company. But I think it's very accepted fact now that really with the right team and the right network of support around them, first-time young, relatively inexperienced founders can build huge global companies. So it's possible. It doesn't mean that it's likely. It's still hard. But I think for Australia's, you know, economic future, the more young people that we have starting well in their, you know, new companies with the right support means that it's going to be a better economic outcome for for everyone. So yes, first-time young founders can build massive, globally successful companies. The company Forage I talked about earlier, uh, a few minutes ago, is a great example of that. 8:00 Speaker C: I see. David, you've got almost a decade of experience working in entrepreneurship and the startup ecosystem. What drew you to this space? 8:10 David Burt: Yeah, so in late 2014, I was working at the CSIRO, which is Australia's national science agency, and was quite interested in the process of research commercialization. And as part of that, saw some really interesting things happening in the US with a program called the Innovation Corps Program or I-Corps Program that was funded by the US National Science Foundation. And really there was evidence coming out that the great sort of research commercialization outcomes were happening. There was a guy called Steve Blank who was writing quite prolifically about this method and the success. And so I was looking at that and reading that. And along with a guy called Beau Leis, we designed on the back of a napkin a program to help scientists commercialize their science, sort of give scientists much more of a leadership role in taking a technology from a scientific context into a commercial context. And so that was when I really got quite interested in this process of what role do startups play in science commercialization. And, you know, fortunately, a guy called Larry Marshall came along and seed-funded it, and when he became the CEO of the CSIRO— CSIRO. And then we were able to demonstrate some really good evidence that you can help scientists start companies, and it's a really valuable thing to do. Then, long story short, Larry, using our evidence that, that we generated, was able to position the ON program, as it then became, into the NISA, the National Innovation and Science Agenda, that came out in 2016. And then that enabled us to spend about $40 million over 5 years, taking about 4,500 scientists through the ON program, which was this process of helping all of these scientists figure out the pathway to impact for the technology, and if a startup company was the right way forward for them and their technology. And, you know, we created about 65 new companies through that process. And I think it's important to note that there was a lot of other things happening at the same time in the ecosystem, especially driven by the CSIRO. Yeah. That initial thinking done by Beau Lees and a few others, including Bill Bartee and Phil Maul and Larry Marshall, resulted in the creation of Main Sequence Ventures, which has had a massive impact on that science commercialization, research commercialization space. So there are a lot of things happening inside of the CSIRO. Small team of people were really thinking about how can we increase the mixing rate between entrepreneurs, and scientists to try and get more deep tech companies started. 10:45 Speaker C: Hmm, interesting. When you say that the ON program began in 2014, it seems that a lot of the support structures for startup founders began within the last probably decade or so. When you look at other geographies like in the United States, it happened a lot longer before that. Why do you think we're sort of late to the party here? 11:11 David Burt: Yeah, better late than never. Party is definitely in full swing. So, you know, it's, yeah, we took a little while to get there. And listen, I don't have the comprehensive history of startups globally, but I think it's important to put a flag in the ground and understand that there is a path dependency to a startup ecosystem maturity. And It's the wrong question to be like, hey, how can we be more like Silicon Valley? Because we're never going to be like Silicon Valley because Silicon Valley is the dividend of $1 trillion of US Department of Defense spending. So the fact that the US pursued the strategy for the Cold War that it did, it turned to a lot of the universities and industry around that Silicon Valley area that was really sort of Simple way of saying it is intercontinental ballistic missiles need computer chips. And so the people that they tapped to do the deep technology cycles on how do we design these things, how do we produce these things, really kickstarted the genesis of what Silicon Valley is. So Silicon Valley is a dividend of essentially national security policy in the US. And you can look at some of the other really interesting, vibrant startup economies like Israel or China, And you can see similar links between different elements of national security or national economic policy and really vibrant startup sectors. So in terms of why is Australia a little late to the party? Well, you know, we come from a different context. We've been an incredibly lucky country. We've largely been able to become a first world, high standard of living economy by digging things out of the ground. So what's gotten us here has been great and fantastic, but that's not what's going to help us be prosperous in the future. So yeah, Australia's a little late. To the startup party. But we're here now and it's growing well, and it's believable that if we're able to keep the momentum going and keep growing, we'll be able to, you know, really ensure that at the end of the day, Australia's living standards are maintained at that high level. That's going to come from, you know, the contribution that the startup sector is going to make to the economy. 13:18 Speaker C: Yeah, I get your point. It's, it's not something that you can easily just copy-paste. Every single geography and their startup ecosystem had a completely different history and why they came about, and Australia was just different. You mentioned that if we continue on this current tangent, perhaps we'll have a better standard of living and so on. What excites you about the next 5 to 10 years for our startup ecosystem? 13:41 David Burt: Yeah, I don't know about better, but maintenance would be great. I think Australia already enjoys one of the best standards of living in the world, and I think what has underwritten that has been generations of resource extraction from the Australian economy, like from kind of the Australian geography. And so that, for a number of different reasons, there are a number of trends that are working against that sort of geographic dividend underwriting high, relatively high standards of living. And so for me, a key question is how do we maintain high standards of living for all Australians? And sort of startup sector is a really believable contributor to that. And so in terms of what's exciting, I think we have a world-class research sector, we have a world-class education sector, we have a relatively free of corruption commercial environment. We have a democracy, so we actually have all the fundamental elements that make for an economy and a society that's really supportive of and conducive to startup formation. 14:43 Speaker C: I want to change gears a little bit in terms of who bears the onus of supporting this ecosystem. You briefly mentioned in Silicon Valley it was a trillion dollars being poured into universities, those sort of research areas, then is it the government that bears the onus of creating this system or an ecosystem? 15:03 David Burt: Yeah, and this is where it's important to recognize that having a vibrant startup ecosystem requires a lot of different things. One of the most important is people that step up to be founders, people that step up and say, I am going to take the risk to quit my job, to mortgage my house to start a company that has a relatively high chance of failure. And so on an individual level, becoming a startup founder is economically just sort of the expected value of that decision is lower than going and getting a job, frankly. And so at an individual level, starting a company is a deeply irrational thing to do. Now, from a whole of economy level, you actually want as many people starting companies as possible within reason because that's how you get economic development. And there's really good research that shows the vast majority, if not all, of net new jobs in an economy are created by firms less than 10 years old. That includes more traditional SMEs as well as startups. But the sort of takeaway from that is there's a lot of evidence that suggests you need people stepping up to start companies. That could be a cafe, that could be be the next Atlassian. That's where job growth comes from. That's where skill retraining and refreshing comes from. And so here's where we get this tension between, at an individual level, starting a company is frankly an irrational thing to do, but at an economy level, we actually want to see many people stepping up to start new companies. So how do you reconcile that? It's essentially a bit of a tragedy of the commons that creates the bubble of permission for the role of government. We're looking at that and we can go, Mm-hmm. We can describe this as a market failure. And so there is a role for government to step in and deliver some degree of support, economic support for those people that are stepping up to start the next generation of companies. And we see that. We already have some good settings around that in Australia. You can see that in terms of the tax incentives, some of the discounts on fees. You don't have to pay payroll tax until you breach a certain threshold of headcount or salary paid in your company. 17:18 Speaker C: Mm-hmm. 17:19 David Burt: And then we also have the role of the universities. Universities are an extension of government. They're government-owned organizations. And so I would suggest that the government sector has a powerful and needed role in supporting and nurturing the people that are stepping up to start the next generation of companies. 17:40 Speaker C: How about in terms of successful founders coming back to develop the ecosystem? And tied to that question is, do you think that government support into our ecosystem is inefficient? I come from the perspective of the government just tries to solve this problem by throwing money at it, developing this accelerator and this incubator, and just funding when it doesn't really create successful startups. 18:08 David Burt: Yeah, so two very separate questions there. Um, the easy one to answer is successful founders coming back and being involved in helping the next generation, and that is absolutely necessary for the ecosystem, startup ecosystem in Australia, to be successful. So regardless of what you're doing as a practice, if you view being a great startup founder the same as being a great doctor or being a great engineer, having mentorship and guidance from those people that have done it before and sort of, you know, gone through that hardship and that struggle and have lessons to pass down and have networks to open up and plug people into, that's absolutely required. And so I think there has been an element of certain successful business people in Australia have a great economic career from starting a company and then kind of go dark and go live on an island or a yacht somewhere. That's definitely bad. For the startup ecosystem. But I think you sort of look at the current generation of startup founders that have had a degree of success over the past 10 years, and most of them are showing up and giving back, which is fantastic. And that's where you— again, universities can play a powerful role there. We see a lot of alumni wanting to give back. So the Founders Program at UNSW really only exists because of philanthropic donations of people from the UNSW community, some of them alumni of the university, others actually aren't alumni of the university, but just love what what we're doing. Michael Crouch, Dr. F.F. Wong, Maha Sinetanby, Chris Baxter, all of these people have donated to UNSW like millions of dollars, like over the past, you know, 10 years, about $20 million of donations to support the next generation. It's not just their money, it's their time and their networks as well. So successful founders giving back with their expertise, their mentorship, their money is absolutely necessary and needed. In terms of government support for the startup sector, it's a much more nuanced and difficult topic. But by way of analogy, government spending is always going to be inefficient. It's just a matter of making it more efficient over time. And, and probably the best analogy to draw is something like the Pharmaceutical Benefits Scheme. So the government will subsidize medicines that have a really broad-based powerful impact on the community. So if you're a diabetic, don't quote me on this, but I'm pretty sure there's some element of government subsidy for those people that need insulin. 20:48 Speaker C: Hmm. 20:49 David Burt: And if there's not, there should be. Because a lot of people need that medical treatment. I'm not a medical health expert. Whenever I talk about this, it's dangerous. But the principle is there. The government, now in the way that the government operates that scheme, I'm sure there's some inefficiencies, but the PBS has been running for decades as far as I'm aware. And I think that's a pretty good government intervention. And so yes, you can always find inefficiencies, but the key thing to measure is what is the impact of that spend? And is that spend getting more efficient over time? And that's the important principle to measure government by. 21:26 Speaker C: So in essence, Government spending will always have a degree of inefficiency, but it's just if they're continually improving over time, it'll just get better and better. 21:34 David Burt: Yeah, and that's where data is really helpful. And probably one of the things that is weakest at the moment in, in the Australian startup ecosystem is a lack of data. So we had a really great mechanism for collecting data called Startup Muster, but the last time that organization was funded to do its, its data gathering and analysis, I think was 2017. 2017, '18. So we are struggling from a lack of data. And frankly, I'm not able to have an informed opinion about whether government support for startups is efficient or not at the moment, like whether it's getting more efficient or not, because we don't have good data on what's actually happening in the ecosystem at a granular enough level to be able to sort of pass judgment on government policy. 22:24 Speaker C: What would you say, as a community and an ecosystem, we could still be doing better today? 22:34 David Burt: Yeah, it kind of depends on, on what position you hold in the ecosystem. So if you're a startup founder, build a great company. If you're a successful startup founder, show up and mentor and invest back in the next generation. If you're a stakeholder, then design or implement a policy that's going to support the sector. So it really depends on what seat you occupy on the bus. From my perspective, I'm super fortunate to to be sort of running this startup support engine for the University of New South Wales. And we show up and we try and gather a community together and help the next generation start a company. And that looks like everything from running very early stage curiosity events that help people sort of ask themselves the question of, what is a startup? Why should I care? Is it for me? Like, we need every single 18-year-old in the country to ask themselves that question. Is a startup for me? Is this something I should be interested in? Should I care about? Is this a career? And then for the small percentage of people that answer that question in a positive way and go, yes, I'm interested in a startup, they need education, they need events and experiences, and to be supported. So in terms of what we can be doing better, like everything, but that's too big of a conversation. I think people need to consider what resources do they control or influence, what incentives are there, and then find ways to increase the impact, the positive impact that they're having on supporting that next generation of startup founders to start and grow great companies. 24:04 Speaker C: Hmm. Before, you mentioned helping 18-year-olds discover whether entrepreneurship was the right path for them, and then you said that out of that small percentage— why did you mention small? Do you think that there's not enough 18-year-olds seeing entrepreneurship as a viable pathway as a career? 24:23 David Burt: Oh, I think I can, I can probably prove that enough, not enough 18-year-olds are asking themselves, is a startup for me? But I think the same is true for 19-year-olds and 20-year-olds and 40-year-olds and 50-year-olds. There's not enough of a support there for people to consider the question. And that's because there is no business model that's successful around that. You know, I get I'm a little upset at the sort of number of people that sort of are selling education around entrepreneurship and telling everyone that you can be a founder. And so I think the more nuanced way to look at the equation is great startup founders can come from anywhere, not that everyone can be a great startup founder. And, and that's both a skills and personality piece. It's also a stage of life and there's a lot of moons that have to align for things to go well. And so I think I'm a big fan of entrepreneurship and startups, but I meet a lot of people who really want to be a startup founder for identity reasons. You know, they're like, oh, this seems like a cool thing to do. And that's not enough. That's not a good enough reason to go start a company. Like, I've seen people lose their houses because their company hasn't worked. Like, so you don't want to jump off that cliff inappropriately. Mm-hmm. But I think in general, there's not enough of a narrative and not enough support to help anyone, regardless of age or background, consider, is this startup thing for me? And again, that's why government has a role. That's why the University of New South Wales has a powerful and effective role working at the earliest stages of people's journey. Like, if you choose a great venture capital firm like Main Sequence Ventures, they don't have the business model to go into a high school and talk to every student about entrepreneurship. Now, they might drop in now and then. They might find a way to, to communicate with that audience at scale using the newsletter or video technology, something like that. But they're not going to be able to give those students one-to-one attention. But for any student that decides to study at UNSW, we've got the resourcing, we've got the model that we can interact with all of them on a one-to-one basis. So the Founders Program at UNSW helps about 5,000 people a year, and we can do more, 'cause a lot of what we do is connect the next generation of founders to the people a couple years ahead of them, or to a great mentor who's part of our alumni network. It's, it's really comes down to this question of who can interact with the next generation? That's the lens that I look at it through, because I'm at the University of New South Wales. So just depending on your position in the ecosystem, It's a different way to answer that question. 27:05 Speaker C: Lastly, David, if a new entrepreneur or founder came to you and given all your experiences, mistakes, and so on, what's the one piece of advice that you would give to make sure and help their startup succeed? 27:19 David Burt: Yeah, it's tough to come up with one piece of advice, but, you know, I think instead of a piece of advice I'd give them, the conversation I'd look to have with them is to really ask them and be curious about why they want to start a particular company. What is it about going on that journey that is motivating for them? Because I think the— I've worked with hundreds of founders over the past decade, and the thing that all the successful ones have in common is they have a powerful intrinsic motivator for why they are building a company. and that looks different, and there is a financial element to that as well. But the dominant element of that intrinsic motivator, the things that gets them out of bed every day, even when it's, it's consistently hard, is because there's something quite motivating and authentic and valuable about that company, usually changing something about the world. Like, come back to the example of, you know, Nancy and Darren and with, with RapidAIM, they want the way that pests are managed in agriculture to be different. They want much less chemical pesticides used in agriculture, and the way to do that is to start a billion-dollar company that helps farmers change their land practices. So the less about a piece of advice and more about a conversation around why do you want to go on this journey, What does success look like? Why is that worth struggling for? And if they have a great set of answers to those questions, then I think that's a really good signal that they should keep pursuing this path of a startup and entrepreneurship as a way forward. If they don't have compelling answers to those questions, then it's a bit of a signal to go back to the drawing board a little bit before you jump off the cliff. 29:15 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.
