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. 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 is producing.

Adam Spencer: This episode was conducted by guest host Will Cho. Hey everyone. And welcome back to the series. Our guest

Will Tjo: today is Michael Batko. Welcome to the show, Michael. Thanks so much for having me. Could you tell us a bit about yourself and what you're currently doing?

Michael Batko: Yeah, um, so I'm the CEO of Startmate, um, Startmate.

Michael Batko: Um, we define ourselves as the epicenter of startup ambition in Australia and New Zealand. We started off as an accelerator and now we have many more programs and which we call fellowships for operators as well as investor programs.

Will Tjo: Michael, what made you get into startups? Have you always been interested in it?

Michael Batko: Um, no, not at all actually. I, um, started in finance myself, so I was actually, my first job ever was as a financial analyst in American Express and then I did a bit of consulting. Um, and um, my first startup actually was when I first moved to Australia. So you can hear from my accent that it's, um, German.

Michael Batko: So I'm from Austria, but I moved to Australia seven, eight years ago. And, um, I actually really wanted to work in a bar and be a backpacker, but turns out that my first job in Australia would be, um, as the first kind of employee at Mad Post a, um, marketplace for pets.

Will Tjo: As that's quite a big difference, you know, being a bar, working in a bar and working at a startup.

Will Tjo: Did you, did you fall into it? What drew you to Madpaws?

Michael Batko: Yeah, totally. Uh, it wasn't planned at all. Um, honestly I posted on a Facebook group and like, Hey, who's got a job for me in Australia? And a friend of a friend of a friend connected me with the founder, um, Alexis, um, who didn't even want to hire me.

Michael Batko: And I actually played a soccer game with the team. And, um, and they liked the way I played. So, um, I actually was then, um, hired as part time first and then full time later. Um, and it was complete serendipity. I didn't know anything about startups. I didn't know anything about dogs or cats or marketplaces, and it was completely random.

Will Tjo: Coming from a background, obviously not working in startups, how did you adapt then, um, working at Madpaws?

Michael Batko: Yeah, totally. Oh, so interesting. Um, I think the biggest one was the one around, um, In a corporate or in bigger companies, there's always somebody who knows the answer or somebody who you can go to, to mentor you, to tell you how it's done.

Michael Batko: And there's already somebody above you who's responsible for it. And, um, it's, uh, it's, it's, it was just such a different attitude where you actually had to have the drive and the hunger to find the answer for yourself. And I was kind of the attitude of like, well, nobody will tell you what it's, what we'll do.

Michael Batko: Or how it's done right, because often there is no right because you often are doing things which nobody has done before. And that kind of attitude was like the biggest shift for me and how did I, um, how did I change into that sphere? Um, honestly, it just took time. It was quite natural, but it took time.

Michael Batko: And I think one of those pivotal stories, um, from my early journey in Madpox actually was, which kind of illustrates the way of thinking, was that I still remember Alexis. Um, gave me an intern and himself a hundred bucks on Facebook advertising each and was just like, whoever gets the most clicks on this ad will get a case of beer.

Michael Batko: And that was kind of like the, Oh wow, this is very different to a corporate. I have no idea what Facebook advertising and now I'm just getting a hundred bucks to just play around with it. And that kind of attitude, that was kind of what shifted my mindset.

Will Tjo: Yeah, absolutely. I mean, one thing, the next to the next, and here you are as the CEO of start made, you know, one of the most prominent, um, accelerators in Australia and throughout your time working in the startup industry, how do you think our ecosystem has changed to say over those last seven or so years?

Michael Batko: Oh, so much. Um, so much. I'm just trying to think for a structure, which I can tell you a little bit to tell you about the difference. Um, there's probably two, one of them is on the operator front and the other one is on the VC front. Um, on the operator front, when I first started, um, in startups in Australia, that was seven, eight years ago.

Michael Batko: Now I worked with Matt Pauls and an expert for 60 years, essentially like an operations manager. And there was just no network to, to ask anybody questions. So like I said, like you were kind of there by yourself trying to figure things out. And there was no other way for me to talk to other operations managers or.

Michael Batko: Talk to other startups, maybe outside of the coworking space I was in. And there was just not that much communication, especially as somebody more junior in a startup itself. So the big change from back then to now, um, it's just a one of so many more support networks exist. I mean, even as part of start, maybe we've got now fellowships of hundreds of people who all live in one Slack channel who ask each other questions around marketing and operations and hiring, et cetera, and that just didn't exist seven, eight years ago.

Michael Batko: It would have been so helpful. And the other side of things is maybe the VC front, which I've already noticed, Oh, and stuff made over the last three and a half, four years where three, four years ago, getting a VC job was pretty much impossible because there was literally no VC jobs advertised. Just like the number of VCs was actually quite low.

Michael Batko: There were never any new roles because the VCs were like the size, even the big ones were a size of like five to 10 people. And especially over the last three and a half years, they've, they've exploded like just a number of VCs, but also the size of VCs. And there's never been more roles in venture capital than over the last two, three years.

Michael Batko: Like now they come out weekly in all different areas, not even just on the investing side.

Will Tjo: Yeah. That's very interesting. So in essence, it's almost the density of our ecosystem, the people, support structures, and just in general, they're all growing since you last worked at Madpaws. What do you think is the catalyst for this?

Will Tjo: Why is there such an explosion in interest in startups?

Michael Batko: Yeah, definitely. So it's, it's probably just a long time in the making. It's those stories which started 10, 15 years ago, which are finally Kind of coming to fruition where, um, the, the most prominent startups in Australia are now kind of laying the foundation for like the second and the third wave of startups where people from Atlassian and, um, and Canva, et cetera, leaving the organization, starting their own startups, becoming operators back into the ecosystem, and it's kind of like fueling each other, um, and it is attracting a lot more money, which therefore is also attracting a lot more talent.

Michael Batko: Which then is kind of growing the entire ecosystem to get up and the exciting thing is that the startup ecosystem has always been one of people just paying it forward and helping each other. So a couple that together with a massive growth and suddenly you've got massive network effects of people helping each other and without expecting anything back, which is just incredible.

Will Tjo: Yeah, absolutely. So I'm not sure if you've ever dabbled into startups in Austria or perhaps anywhere else in the world. Do you think that we're on a, on the right direction as an ecosystem in Australia or what else could we be doing to improve on?

Michael Batko: Yeah, no, absolutely. I mean, it's all the right building blocks in Australia.

Michael Batko: I genuinely think we, um, can be world leaders and already world leaders in, in building startups. Yeah, it is exactly the right kind of attitude and we've got all the right ingredients, um, from universities, people taking risks all the way, um, through to building companies. Um, there's definitely a couple of things which we can improve, uh, on as a country, um, such as policies and sophisticated investor kind of, um, restrictions.

Michael Batko: Um, but no, it's absolutely in the right

Will Tjo: path. So you mentioned that, uh, just then that we, we do have all the right building blocks, like people taking risks, uh, outside of university and so on. Um, I think I read somewhere that Australia in terms of startup commercialization is not really punching our weight in terms of OECD countries.

Will Tjo: Um, I think it was like rank 40 or something in the world, which is pretty low, like to be completely honest. Why, why do you think that's the case?

Michael Batko: Yeah, so, um, the, the one thing which, um, Australia still needs to change a little bit is the mindset of taking risks. Um, other countries just have to more inherently as part of their culture.

Michael Batko: Um, whereas in Australia, that's just not the norm yet. This is, for example, actually something that we're trying to address at StartMate with an initiative we call the Student Fellowship, where students in Australia, I mean, actually when I compare it back to Austria and Europe, by the time you graduate in Austria or anywhere in Europe and you study, you've probably done three different internships in three different companies and by the time you choose your career, you've already had so many different touch points.

Michael Batko: In Australia, that's actually not quite the case yet. Usually what I see people doing is, um Study law. And then the natural thing to do is do a clerkship. And then you actually end up in exactly the same law firm post studies again, which is like you haven't even tried that many things yet before deciding on your career.

Michael Batko: Um, and the kind of change in mindset of like you trying something that's not banking, consulting law, um, being a lawyer, et cetera. Um, and going up outside of it is actually something that just needs to change. So for example, what I mentioned days at South Bay, we do a student fellowship. Of now 200 students every six months in the summer and winter breaks who just get to explore startups for two weeks who get actually matched to internships and start startups and actually just building that that kind of more risk appetite in a way and showing people like this is genuinely a career path and if you can change that then it kind of elevates the entire startup ecosystem again.

Will Tjo: Yeah, what you said about seeing startups as a genuine career path kind of piques my interest because why do we not see it as something that could be a viable career?

Michael Batko: Why exactly? So that's that. That's the thing. Like people still see it as risky or they don't see themselves building one because they don't have the technology skills or I'm not the developer, et cetera, et cetera.

Michael Batko: But that perception seems to change. Like we, um, You don't actually need to be able to, uh, to coach, to be in a startup. You actually, startups have so much to give you. Like so many people see, um, see their careers kind of like a, I want to eventually be in a startup in order to get there, I need to build up my skills first, and then they go into banking, consulting, and to learn Excel and here and there and so on, and kind of thinking about like, I need to build up my skills first, but actually the, out of the flipping the thinking and being like, well, actually in the startup is when you can learn the most.

Michael Batko: That's actually the that's the kind of the interesting ones that change here.

Will Tjo: Hmm. I want to touch a bit a bit into more of the Owners side so you mentioned that at start mate For example, you have this two week program where you expose people to working in startups and so on Is that would you say that's a solution to changing this mindset or do you think it starts with I don't know Government or universities to run these programs or like, how do we start to make effect to these, um, mindset changes and who should do it?

Michael Batko: Yeah, honestly, I'm probably not the best person to, um, to kind of comment on like the, the large scale initiatives, et cetera. Like what I always like to do is kind of play my role, just doing things bottom up and affecting things that I can affect in a way. And I'm always just the one staying away from policy changes because they can take a very long time.

Michael Batko: So what I love to do is literally like affect 400 students a year, and if those 400 students build a hundred companies, that's a hundred companies per year, which are built kind of, which is a really good starting point. And that's kind of like the, it's almost like I, I really am interested in like the atomic little units of individuals changing the world rather than trying to affect entire governments to change them.

Michael Batko: And absolutely there needs to be changes as well.

Will Tjo: Yeah, I understand your point. It's when, when we start to dabble into these large scale changes, it becomes quite boggling to think about, um, how, how does in practice that actually works. Um, what you mentioned also is quite interesting because. From your sphere of influence, you just want to say help 400 people and then, um, those people create their companies to help more people.

Will Tjo: Do you think that there is a little bit of instability in relying on hope as a strategy to grow our ecosystem? So in essence, we're hoping that people will go back and give to the community, but what if they don't? Does that mean that our startup ecosystem is doomed to fail?

Michael Batko: Um, no, I almost don't see that as hope in a way.

Michael Batko: I almost see it as a given. There's almost no way of somebody not to give back. It's almost like if somebody reaches out their hand to you to help and you change your life, it's almost inevitable for you to want to give back to the community. We've seen the time out time in time out again, the staff made over 10 years now where founders go through the accelerator program, get so much help, come back as mentors, invest their personal money back into the staff.

Michael Batko: And then we see the same things in fellowships. It's almost like that, that flywheel, which just never stops, like you probably still remember that person which, um, helped you get your current job or the job just before that. And you will never forget them. And whenever I ask you for a favor, you will always pay it back.

Michael Batko: And I think it's those kinds of moments which, which change your life, which people just don't forget. And they will always want to pay it back. Maybe that's a bit of like, yeah, romanticized view of the world, but I genuinely believe in the good of people.

Will Tjo: The next question, I guess, is. If a new founder or entrepreneur came to you, given all your experiences, your mistakes, wins, what's one piece of advice you'd give them that would help them increase their chances of success?

Michael Batko: Um, I always keep coming back to the same advice here, honestly, like, and, um, it is always the one around talking to customers. It's like people always see fundraising as, as the goal, or money as the goal, or persuading people to come on the journey, or mentoring and getting advice, etc. But the only answer which is right is always the one of talk to customers and that's the best advice I have for any founder whatever stage they're in like whatever problem they have the answer always lies with the customer whether they are at the interview stage whether they already have hundreds of customers it's always the one of like coming back to that and talking through the problem and what is the actual burden challenge here and you will always find the answer.

Michael Batko: be able to distill that. Ultimately, founders have kind of two problems here. Like one is a product problem, and the other one is a distribution problem. And both those problems can be solved by customer conversations on the product side of things will be able to determine what's actually important to the customer to actually build.

Michael Batko: And on the distribution side of it, it's the same thing of like, if you talk to enough customers, you actually distribute the product, um, to the world and you essentially doing sales and marketing already inherently.

Will Tjo: Yeah, definitely. It's a kill all birds with one stone and you're constantly bringing your customer into that journey of building your product rather than building a solution to try to fit it into the problem.

Will Tjo: The last question, I guess, is not really a question, but more about a space for you to talk about anything that's on your mind regarding our community. So. Is there anything that is currently on your mind that you'd like to get the word out? Um, we're aiming for this podcast to reach policy makers, entrepreneurs, mentors, investors, and so on.

Will Tjo: What, what's, what would you like them to hear?

Michael Batko: Yeah. Um, I think what, what is on my mind is, um, is kind of the future of, um, of the, of Startmate itself is probably like the biggest one for me where, um, what we have, what we are landing on in Australia is. Lots and lots of spaces and communities and accelerators and co working spaces, et cetera.

Michael Batko: And maybe the message itself would just be what a one off this is what we're trying to build at Startmade or what we are building at Startmade essentially is kind of the epicenter of startup ambition. We actually want to marry essentially the freaky personas of startups in one place, which is founders, operators, and investors.

Michael Batko: And we actually build in this kind of place of them all to come together. So, um, maybe another way to phrase it is kind of the one of, um, what we're trying to do at Southnet is reduce the distance between people and actually just getting them to help each other and bring them closer to each other. And rather than just doing this with founders and mentors, we actually do that now between founders and their investors and once they have money with people they can hire as well with the operators.

Michael Batko: And if you've got those three people in one kind of place, that's when you have a truly thriving

Will Tjo: ecosystem. Yeah, absolutely. Something that just popped to my mind when you mentioned this is the prevalence of accelerators and co working spaces that has really grown in Australia over the recent 10 years.

Will Tjo: Do you think it can ever be a bad thing to have too many? Because you're, you're in essence competing with one another.

Michael Batko: Yeah. Um, I actually don't see necessarily as a bad thing on the competition side of things. I, I probably see it all bad thing for, um, for founders themselves. Sometimes having too much support can also be damaging.

Michael Batko: It's almost like a, just because you can walk on the power line doesn't mean you should be walking on the power line and with accelerators and too much support and too many accelerators can do is almost like help people be on those power lines for too long. What I mean by that is almost like trying to keep startups alive, which could have realized much sooner and earlier that it actually isn't, and it doesn't have a place to be.

Michael Batko: Um, so it's almost just a one off, um, letting startups die and, um, and rise again from whatever, um, next thing is that they're coming up with. So too many accelerators in themselves can actually proliferate, um, just too many companies which probably, um, just could have gone on to the next journey already.

Will Tjo: Yeah, I understand your point. It's I guess throwing money at the problem money and time at the problem when when you're not actually looking at How to solve so you're just hoping that the company will succeed when in reality It really shouldn't because it's just being sustained by you know, say VC money or accelerator money and so on

Michael Batko: Yeah, the real challenge kind of with too many accelerators is just with I always find it an interesting one of what is the actual incentive for the accelerator program itself.

Michael Batko: And the incentives are usually come from where does the money come from in terms of revenue and for founders. And that's kind of the start made attitude, the mentoring and the advice which founders get should always be from other founders and people who have been there and done that and have the empathy to help you along the journey.

Michael Batko: And if that advice doesn't come from founders, but like let's call it corporate executives or. Government officials and stuff. Well, they've actually never been in the shoes of founders and done the real kind of journey, which a founder has done. So I always find the ill place. Um, so actually just keeping that really true to, to giving founders the right ingredients, um, is super important.

Will Tjo: Absolutely. Do you think that Australia has, um, a lot of founder led accelerators and mentors, because. As we were talking about before, um, we're only really like the third generation of, um, third wave where alumni from Atlassian or, or Canva are just starting out their own companies and giving back.

Michael Batko: Yeah.

Michael Batko: I mean, um, I always see, um, Accelerators is essentially for, um, Prevalent kind of business models. And the first one is kind of the university backed accelerator where usually it's alumni of the university coming through and they're great on their limited grant funding usually. And I'm very focused on on their own alumni.

Michael Batko: There's a second one, which is kind of corporate backed accelerators, which. Again, when you think about where the money comes from, it is focused on the corporate themselves and creating good outcomes for the corporates rather than the founders. So again, like incentive alignment is very important. The third part is actually probably a dangerous one, which is government funded accelerators where, um, it is a good gig for like two or three years.

Michael Batko: Well, so you have the government funding, but it is a Accelerators are just incredibly difficult cashflow businesses because you don't see the cash coming back until 10, the line. And there's actually not much money there operationally. So once you are off the kind of government grant funding, well, then those accelerators just die and again, left with nothing.

Michael Batko: Um, and the third model, so back to your question as well, is kind of the, um, is exactly the start mid model, which is actually a mental driven seed fund in a way. So for us, actually. Every single mentor is a founder or an ex founder and they invest 10, 000 all the way up to half a million dollars personally into every single fund they will raise every six months for the cohort and they're literally personally invested in that fund and in the accelerator and in the success of that cohort themselves.

Michael Batko: So the beauty of that is that they have real skin in the game. They actually care about those startups. They've been in the shoes of those founders before and they really have the empathy to give that kind of advice. So yeah, so i'm kind of drumming the start mate, um from here And but it is a very unique business model even in the entire world.

Michael Batko: I don't know any other accelerator Which is actually even structured that

Will Tjo: way That's amazing. Well, thank you so much for your time today. Michael

Adam Spencer: Thanks so much for having me. 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.

Adam Spencer: Thanks for listening and see you next time.