The Documentary: Part 4

David Burt:

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 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 the contribution that the startup sector is going to make to the economy.

Wyatt Roy:

I think in some ways, we’re probably a victim of our own success, which is a good thing and it’s also a curse as well.

Adam Spencer:

Wyatt Roy is the executive director of the Tech Council of Australia.

Wyatt Roy:

The fact that the country has had more than a quarter of a century of uninterrupted economic growth is completely remarkable. Whenever you travel around the world, that is the story that people know about Australia, is this amazing period of sustained growth, rising living standards, high GDP per capita, open economy. It really is a success story and there is this notion that Australia is the lucky country and in many ways, I think that is true. We are lucky in the sense that we have had these resources and we do live close to people who want them, but I do hope and I do think at some level, there is a bit of a recognization that as a country, particularly in a changing world, if we’re going to keep those living standards rising, if we’re going to keep creating job opportunities for Australians, then hey, we do need to do things differently.

Malcolm Turnbull:

I struggle to see any downside in supporting and encouraging a startup sector. It’s just such a massive multiplier.

Adam Spencer:

That is, of course, Malcolm Turnbull.

Malcolm Turnbull:

The world is changing faster than it has ever changed, and it is changing at a much greater scale than it ever has. So all of that means that if you want to win, whether you are an individual, a company, or a country, you have got to be able to turn that environment of rapid change to your advantage, and so you’ve got to be innovative. You can’t get out of bed every day and say, “I’m going to do today exactly what I did yesterday.” You’ve got to be somebody that is challenging the old ways of doing things.

Adam Spencer:

Hi. I’m Adam Spencer, and this is episode four of The History of the Australian Startup Ecosystem. We’ll continue our story after these messages from our sponsors. We’re picking up our story in September 2015 when Malcolm Turnbull was elected Prime Minister. Just three months later, he would unveil a key part of his vision for the future of Australia, the National Innovation and Science Agenda or the NISA.

Alex Scandurra:

When NISA was launched, it was quite an exciting time.

Adam Spencer:

Alex Scandurra is the co-founder of Spark Festival and former CEO of Stone & Chalk.

Alex Scandurra:

We were very lucky. It was launched at Stone & Chalk by the prime minister and there was a huge amount of anticipation around it. It was something that the startup community around the country had been lobbying for for quite some time in terms of really putting the potential of startups and the economic development outcomes that they could reach and produce for the country.

Dean McEvoy:

I think the promise of the National Innovation and Science Agenda was great when it first came out.

Adam Spencer:

Dean McEvoy is a co-founder of TechSydney.

Dean McEvoy:

I gave a bit of hope that the government was finally seeing the impact that this industry could potentially have on Australia as an economy and us as a global provider of technology to the world rather than just being a consumer of it.

Malcolm Turnbull:

Well, the objective of NISA was to really create the boom that could go forever, which was the ideas boom.

Adam Spencer:

Again, Malcolm Turnbull.

Malcolm Turnbull:

Mining booms, commodity booms come and go, but human ingenuity is perennial. There’ll always be someone coming up with a better way to do whatever you were doing yesterday, and so the NISA was a lot of different measures, tax, investment, research, all sorts of things, but they were all part of a package that was designed to increase the innovation ecosystem.

Wyatt Roy:

There were lots of people that were involved in the National Innovation and Science Agenda, but I don’t think anybody would give me a hard time for saying, in many ways, it really was my baby.

Adam Spencer:

Today, Wyatt Roy works in the private sector, but in a previous life, he served as a member of federal parliament. When Turnbull was elected, Wyatt was sworn in as assistant minister for innovation and he played an important role in the development of the NISA.

Wyatt Roy:

The National Innovation and Science Agenda was the big innovation push of the Turnbull government when Malcolm Turnbull came to power. It was intended to be the first large policy response from a whole of government point of view to, how do we diversify the economy? How do we drive that prosperity up? How do we ensure that the sector can grow? That focused on, I think there’s about 24 policies across nine government departments because as you can imagine, to grow a technology company in Australia or to scale it to the world, the policy challenges that you face are often ones where you need the government not necessarily to write a check or to have a silver bullet approach to fixing a challenge for a tech company. They need to create the right environment for those companies to grow.

Adam Spencer:

Wyatt Roy outlined what he sees as four key pillars of the NISA. Firstly, creating a more entrepreneurial culture within Australia.

Wyatt Roy:

So one is, how do we change the culture in our country to have a more aspirational and more entrepreneurial culture, and one that embraces risk? Because Australians traditionally can be quite risk-averse in some things.

Adam Spencer:

Second, attracting more capital into the startup ecosystem.

Wyatt Roy:

How do we attract more capital? Pre-NISA, there was about $200 million invested in venture capital in Australia. Today, in a quarter, there’s several billion dollars that are now invested, so that was a big change.

Adam Spencer:

Third, increasing collaboration between Australian researchers and the business community.

Wyatt Roy:

How do we drive collaboration between higher education industry on commercialization? Because we’re really great at research as a country, but we’re not very good at commercialization or haven’t been traditionally.

Adam Spencer:

And lastly, talent and skills with a focus on education and immigration.

Wyatt Roy:

And finally, how do we have the right talent and skills to drive and create those companies? So real focus on how we get people with particularly STEM skill sets into the country or Australians gaining them over time to grow the sector. So focus on those key four areas and like I said, 24 policies across nine government departments and it was the first big push in the space.

Adam Spencer:

We’re going to briefly look at some of the NISA policies in these four key areas, starting with attracting more capital.

Malcolm Turnbull:

There are some parts of the NISA that are enduring like the tax breaks, the funds, the CSIRO Main Sequence Ventures fund, of course, is one of the funds that I started. The Biomedical Translation Fund is ongoing, so I think the NISA worked very well. There was just a massive increase in the amount of money invested in since the NISA, massive increase in the amount of money invested in startups and the amount of venture capital that’s available.

Adam Spencer:

The NISA included a range of adjustments to Australia’s tax system and business laws that were designed to drive further investment into startups, including $106 million in tax incentives for angel investors providing seed funding to startups.

Wyatt Roy:

One of the things that we changed in NISA was the tax incentives around investing in this space. People were traditionally pretty conservative in Australia in what they invest in, secure things that give you a nice, but secure return over a long period, property infrastructure resources. If you created, as we did in NISA, tax incentives to basically make it more advantageous to be investing in this space, somewhere that has more risk, but with the right tax incentives, you create an environment where you can also get greater reward. What we’ve seen in the last five years is a lot of people who have made a lot of money investing in those very conservative things, infrastructure, property resources, have now become very large investors in technology and technology investments in Australia. So I would say that’s a [inaudible] outcome from a tax change.

Adam Spencer:

The NISA also made changes to bankruptcy laws, which Turnbull’s government believed put too much focus on penalizing and stigmatizing business failure.

Wyatt Roy:

We also changed the bankruptcy laws. Part of that was saying it is okay to fail and when you fail, you learn and then you’re able to rebuild and create new companies from that experience. If you go to Silicon Valley, you’re basically not taken seriously unless you failed once or twice in business. In the Australian context, that was certainly not the case. But something as meaningful, I suppose, as changing or tailoring bankruptcy laws so that you could start a company after one year instead of three, those sorts of things do impact culture over time as well.

Adam Spencer:

The second key pillar of the NISA we’ll look at is increasing collaboration between Australian researchers and the business community. Australian researchers had long been recognized as among the best in the world. However, when it came to taking a scientific discovery or new technology, developing it into a product and bringing it to market, a process known as commercialization, Australia was lagging behind. In our last episode, Peter Devine, the CEO of Uniseed, highlighted the lack of collaboration between researchers and the business community as a key issue in Australia’s startup ecosystem.

Peter Devine:

It was set up to solve a problem, which was to bridge the gap, this valley of death between an invention at a university and what we now say to a point where something’s investable.

Adam Spencer:

David Burt, who today is director of entrepreneurship at the University of New South Wales, was one of the people working to bridge this valley of death in the years before the NISA was announced.

David Burt:

Yeah. 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. Really, there was evidence coming out that the great 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 [inaudible], we designed on the back of a napkin a program to help scientists commercialize their science, give scientists much more of a leadership role in taking a technology from a scientific context into a commercial context. Fortunately, a guy called Larry Marshall came along and seed funded it. When he became the CEO of the 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 we generated, was able to position the ON program as it then became into the NISA, and then that enabled us to spend about $40 million over five years, taking about four and a half thousand 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. We created about 65 new companies through that process. 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. That initial thinking done by [inaudible] and a few others, including Bill Bartee and Phil Morle 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.

Adam Spencer:

As well as supporting the establishment of CSIRO’s ON program and Main Sequence Ventures, the NISA launched or supported a range of other initiatives designed to drive research and scientific innovation.

Tim Boyle:

NISA was very, very significant for those that work in the research commercialization in the higher education sector.

Adam Spencer:

Tim Boyle is director of innovation & commercialization at Australia’s Nuclear Science and Technology Organisation.

Tim Boyle:

The impact through the collaborative research space was felt. The impact on significant landmark research infrastructure such as the Australian Synchrotron and the migration to ANSTO ensured that that capability was available as the sovereign capabilities for Australians for long term. Other issues such as national collaborative research, infrastructure, strategy, national research, infrastructure roadmap, changes to research block grants, including increased incentives for industry engagement leading to sponsored research, and then the focus on collaboration and retaining the best and brightest people in Australia really did set the right tone for changing the deep tech and research-led innovation agenda in Australia.

Adam Spencer:

The third key focus of the NISA was talent and skills. Around $100 million went to initiatives designed to improve education of science, technology, engineering, and maths or STEM subjects in schools, and a further 13 million went towards expanding opportunities for women in STEM industries.

Megan Sebben:

I know there’s a lot of attention, I guess, being paid to this. There’s initiatives to try and increase the participation of women and minority groups in STEM. I think these are all really good things.

Adam Spencer:

Megan Sebben is the kickstart program manager at CSIRO. As well as these education policies, the NISA aimed to bring people with STEM skills into the country by adjusting immigration policies and creating a new entrepreneur’s visa.

Yasmin Grigaliunas:

I think in terms of talent and skills, developing and attracting world-class talent, I think that’s starting to happen.

Adam Spencer:

Again, Yasmin Grigaliunas.

Yasmin Grigaliunas:

I feel like there’s an energy now around bringing talent back and getting our Aussies back from these international high-flying companies. I feel like Australia is starting to see and be a bigger player in that attraction of talent and skills for our country.

Adam Spencer:

The final key pillar of the NISA, while more broad and intangible than the previous three could be considered the most important of the four, creating a more entrepreneurial culture.

Malcolm Turnbull:

I do feel that the most important thing I did in many ways was talking about innovation and talking it up and legitimizing it and just generally, I don’t know, making it a hot topic.

Adam Spencer:

Throughout the series, we’ve discussed the limited visibility of the Australian startup ecosystem throughout the general public. Many people we spoke to for this series believed that this visibility was increased by having our head of government put innovation at the forefront of his agenda, including Melissa Widner, CEO of Lighter Capital.

Melissa Widner:

Malcolm Turnbull probably doesn’t get enough credit for what he was really trying to do and he made innovation the forefront of his agenda. You just had it talked about much more in the mainstream.

Sarah Pearson:

From my perspective, when Malcolm Turnbull did his piece in 2015, it was almost like it put rocket fuel in us.

Adam Spencer:

Sarah Pearson is an investor, board director, and advisor.

Sarah Pearson:

Someone said to the innovation ecosystem, “Hey, okay, you are valid. Off you go. Here’s some programs to help,” but also you’re valid. This is what you want Australia to do. So I saw a massive acceleration then, which was really good. Humans that were doing it anyway, plus others that jumped in because there was money around, but it just gave a lot more momentum.

David McKenna:

The [inaudible] was great.

Adam Spencer:

David McKenna is an innovation manager at the Reserve Bank of Australia.

David McKenna:

It was a time where it meant innovation was front and center, not just in the economy, but public servants were really looking at how they can be more innovative and more exciting and more engaged in co-design and collaboration and commercializing research and all those sorts of things that you think would be normal, but they’re not in that space.

Adam Spencer:

There is no doubt that the Australian startup ecosystem saw a period of significant growth in the years following the unveiling of the NISA. But correlation is not causation, and the extent to which the NISA contributed to this growth is something we heard a variety of perspectives on. As we’ve already heard in this episode, many people see the NISA as having been a major contributing factor, including Colette Grgic head of startup ecosystems at AWS Australia, New Zealand.

Colette Grgic:

They do think that 2016 when we saw Malcolm Turnbull take a stand nationally for innovation, that was a point when we saw a lot of infrastructure get put in place, but is really now still continuing to support the ecosystem.

Tim Boyle:

I think that in October 2015 is another landmark point in time where the dial shifted when the National Innovation and Science Agenda, NISA was announced

Adam Spencer:

Again, Tim Boyle.

Tim Boyle:

At that point, there was a massive amount of investment and spotlight put on innovation in the startup community. And from that, we’ve seen the green shoots grow into flowers.

Adam Spencer:

However, not everyone is convinced that the NISA was successful at achieving its goals.

Alex Scandurra:

Unfortunately, I think NISA felt very short of its intended objectives.

Adam Spencer:

Again, Alex Scandurra.

Alex Scandurra:

I think that’s in part due to the fact that it had four ministers of industry and innovation in very short spaces of time that started to gain some traction and very quickly just lost wind. And also, with a change of Prime Minister, that made it quite challenging as well. Across the board when it comes to culture and capital and collaboration, we just didn’t see how that really started to drive as a result of NISA, but rather, what we started to see is despite the failings of NISA, the culture and collaboration across the ecosystems was really just growing organically and in smaller pockets.

Adam Spencer:

One criticism is that the NISA failed to sell the importance of innovation in the startup sector to the general public.

Annie Parker:

Well, arguably, NISA, whilst to the tech community was very well received and applauded, the rest of Australia didn’t, and therein lies the problem.

Adam Spencer:

Annie Parker is the executive director of Tech Central at the Greater Cities Commission.

Annie Parker:

We collectively as a tech community then clearly need to have done a better job on the storytelling. Why is it important? What will it bring us if we were to have invested better and more consistently? I think we all need to own our own part of that. If we haven’t got the narrative right, then we as the experts in our field should take the leadership on that piece to try and fill the gap. We shouldn’t expect politicians to be able to answer everything. If they’re not from the tech industry or if they’re not from the commercial side of private sector, why should they know how to sell that story?

Aaron Birkby:

So no, I don’t think NISA’s successfully achieved its four key pillars.

Adam Spencer:

Aaron Birkby is the co-founder of Tribe Global Ventures.

Aaron Birkby:

I actually don’t think the Commonwealth programs have actually achieved much at all. I think the states have done a much better job. The Commonwealth have some of the greatest leaders, but they just haven’t been utilized. I think back to the Malcolm Turnbull era and what it suffered was a really poorly executed marketing campaign. We didn’t sell it to the mums and dads. We didn’t sell it to the punters. We didn’t sell it to the voters.

Adam Spencer:

Others we spoke to felt that a government-led push to grow Australia’s startup ecosystem was always going to have limited success.

Samantha Wong:

I don’t think that ecosystems grow top down.

Adam Spencer:

Samantha Wong is general partner at Blackbird Ventures.

Samantha Wong:

I think they grow bottom up, as in they start with maybe one, two, three people having an idea and starting to work on it. I don’t think founders wake up in the morning and go, “Oh, I think I’ll start a company today because Turnbull or anyone else…” I really admire what Turnbull tried to achieve with that policy. I should emphasize that as well. I just don’t think that that’s how founders work. They don’t wake up one day in response to a statement from the government and decide to start a company.

Blake Wilson:

If government or people who have influence are thinking about the ecosystem and how they can, I guess, move the needle, first, we’ve got to realize that this isn’t something that happens overnight.

Adam Spencer:

Blake Wilson is the founder of The Management Practice.

Blake Wilson:

That doesn’t happen with a single policy like the ideas boom that former Prime Minister Turnbull came out with. That stuff doesn’t work. What works is allowing people to have the skills to think on first principles basis, really unpick complicated problems down to their elements, and then come up with innovative solutions that will allow society to address those issues and do something different about it in a different way.

Adam Spencer:

Many guests we spoke to for this series acknowledge the challenges that come from changes in government and creating sustainable and long-term policies.

Malcolm Turnbull:

I think a lot of people feel it hasn’t fulfilled its full promise. That may be true. One of the problems with not being prime minister for a bit longer than I was was that the commitment and the passion that I had for innovation simply didn’t continue.

Wyatt Roy:

Well, it’s a natural challenge of dealing with government no matter what industry you’re in.

Adam Spencer:

Again, Wyatt Roy.

Wyatt Roy:

Unless we want to replace democracy with some sort of benevolent dictatorship, that somebody who’s lost an election… There are certainly days when I think, oh, a benevolent dictatorship sounds pretty nice, but of course, that’s not going to change in our country.

Malcolm Turnbull:

We definitely would’ve done a NISA stage two. It isn’t a set and forget. What my intention was, and I think it was quite stated explicitly at the time, was that you do the NISA, you review it in a few years, see what worked well, what didn’t, and then you do the next stage. You just have to keep at it. I remember when I launched the NISA, someone said to me, “Do you guarantee this will work?” and I said, “No. I can assure you that some of it will not work. Whatever doesn’t work, we’ll dump and whatever does work, we’ll do more of. If we find someone who’s achieving the same objective more efficiently, we will shamelessly plagiarize them.”

Adam Spencer:

I spoke to Malcolm Turnbull in 2022 while Scott Morrison who became Prime Minister in a leadership spill in 2018 was still in office.

Malcolm Turnbull:

I’m not saying that Morrison and co are against innovation, but they certainly don’t like talking about it. Everything I hear from Canberra is that innovation is a no-no word because some pollster has told, “Well, someone has said that when people say innovation, voters think that means some kid with a laptop’s going to steal my job.” So all the focus, all the government rhetoric, instead of being on innovation and science and technology, is on tradies and utes. Now there’s nothing wrong with tradies and utes, [inaudible], but we’ve got to be realistic. Many of the jobs of the future do not exist today and we’ve got to make sure that as many of those new jobs are developed by and occupied by Australians here.

Sarah Pearson:

It was a shame that it all fell apart somewhat when Malcolm finished his time.

Adam Spencer:

Again, Sarah Pearson.

Sarah Pearson:

It’s certainly, from my perspective, slowed down politically since then.

Craig Swann:

And it certainly doesn’t help if you have a change in government.

Adam Spencer:

Craig Swann is the event director at SouthStart.

Craig Swann:

The next government just acts as everything that was done and then rebuilds it with a new set of acronyms and they do it again. When you’re tied to election cycles for some of this innovation growth, you just don’t have that bipartisan big picture like goalpost that you’re all moving towards. That’s the problem when you rely on government.

James Alexander:

Especially in a country like Australia where government policy and technology innovation has been a constant flip-flop.

Adam Spencer:

James Alexander is the co-founder of Galileo Ventures.

James Alexander:

You don’t have the same agencies you might want to see in Australia, which can keep a consistent investment of dollars into consistent industry verticals. That’s a big problem in Australia because every government that comes in every year flip-flops and changes. So where I think it could do a much better job is supporting a consistent agenda over multiple different governments, and that’s really difficult because it needs to have an agency and that’s what we lack in Australia.

Adam Spencer:

To what degree the NISA was successful at achieving its goals is clearly a matter of some debate, but it is undeniable that the Australian startup ecosystem continued to enjoy significant growth in the second half of the 2010s.

Hamish Hawthorn:

It was a sense that we were on a cusp of real prominence in Australia for the startup ecosystem.

Adam Spencer:

Hamish Hawthorn is VP of corporate development at Propeller Aero.

Hamish Hawthorn:

This was early 2016. We’ve seen the benefits of Atlassian’s success. We’re just starting to see the next wave of successful companies coming through. There was an expectation, I felt at the time, that these success stories would start to become the lightning rods for a whole new wave of entrepreneurship. I could see that at the beginning of 2016, this was just about to explode.

Danielle Owen Whitford:

I think the measures of success over the last five years have started to shift.

Adam Spencer:

Danielle Owen Whitford is the CEO and founder of Pioneera.

Danielle Owen Whitford:

I think there’s a lot more money flowing into this space, so that always makes something more legitimate because you can earn a living, you can support your family, you can create a legitimate career path. I think also, we are seeing a lot of local success, so we’re seeing people be celebrated. If you look at the Financial Review, [inaudible] list of wealthy, young Australians, successful companies, companies that are growing, you’re seeing a lot more entrepreneurs and a lot more technology startups on those. You’re seeing all of the very big, well-respected companies like the management consultants and the like. They’re constantly publishing fast-growing companies and often entrepreneurs and technology startups are in that group.

Tim Boyle:

From there, we start to see corporate space start to come in.

Adam Spencer:

Again, Tim Boyle.

Tim Boyle:

So we started to see [inaudible], the IAG corporate accelerator program, and then suddenly, everyone had a corporate accelerator program at some point, most of the big corporates in Sydney. The ecosystem was exploding.

Paul Bassat:

And so the last 10 years have been certainly really exciting to see businesses like Canva and Airwallex and [inaudible] and Linktree. Some amazing Aussie companies emerge in the last decade.

Adam Spencer:

Paul Bassat is a co-founder of Square Peg and Seek.

Paul Bassat:

Airwallex is a great example. It’s six years into its journey. It launched its product in 2017, 4 years ago. These are remarkable businesses and more and more of the best and brightest kids are saying, “I want to work in startups” or “I want to start my own company.”

Adam Spencer:

We’ll continue our story after these messages from our sponsors. Last episode, we highlighted the issue of limited diversity throughout Australia’s startup ecosystem. While this issue remains to this day, during the second half of the 2010s, a number of organizations were established with a goal of bringing people from diverse backgrounds into the space. We’re going to take some time to highlight some of those organizations starting with the SheStarts accelerator.

Lucinda Hartley:

I became involved in the startup ecosystem completely by accident sometime in 2017.

Adam Spencer:

Lucinda Hartley is a founding director of Neighbourlytics.

Lucinda Hartley:

I’m not new to business. I’ve run a bunch of companies before, but I never really saw myself as a tech founder. In fact, I wasn’t really even interested in that because my brother’s a software engineer and it just looked really boring from the outside. Apologies to all the devs out there. I, I guess, became more and more curious about this problem of how do we create more data or insights to create better cities. I put in an application to join the SheStarts accelerator with not more than a back of an envelope of idea of like, “I reckon we could use social media and digital data to solve this problem. What do you think?” Then to our enormous surprise from 800 applications, we were accepted to join this accelerator and it was this jumpstart and we were suddenly propelled into this startup ecosystem, which I’d really given very little thought to before. I’d given a huge amount of thought to how we solve the problem, but I hadn’t given much thought to what the startup ecosystem actually was.

Probably the biggest thing that we got out of SheStarts was having access to a very wide network into the startup ecosystem, so other founders, mentors. We were introduced to a lot of investors. That program got a lot of PR, so we got a lot of visibility, perhaps more than we might in our first fledging year of a startup. I felt that that gave us inroads to the ecosystem, which gave us a lot of network and platform to grow through. Many of the founders from that program, we’re still in touch with regularly. They’ve become a real network for us.

Danielle Owen Whitford:

I started out in 2018 doing SheStarts, which was BlueChilli’s accelerator program, which was brilliant.

Adam Spencer:

Danielle Owen Whitford, who we heard from earlier in the episode, also credits SheStarts as having been very important to her startup journey.

Danielle Owen Whitford:

Nicola Hazell, who ran that, really brought us in as a group of women starting businesses and we were all at the same starting point. None of us had even started our companies and some of us didn’t even know much about startups. So that was great because we all grew at the same time. The support and how you build a startup, how you find customers, how you look to investors, was really, really valuable. The mentors in that sort of community were very, very valuable.

Adam Spencer:

Another organization that was launched during this time is SheEO Australia, which has since become Coralus. Julie Trell, the founder of Playful Purpose, told us about SheEO.

Julie Trell:

SheEO is really changing the way capital flows and giving women and non-binary entrepreneurs and non-entrepreneurs a chance to change the world and how business is done who should be funded. SheEO ventures are all somehow self-defined, focused on the sustainable development goals. We say they’re working on the world’s to-do list. We need to have more diverse people that are making the investments, that are making the decisions. The systems that have been set up are set up by the people who set up those systems, and so we need to take a step back. It’s not a zero-sum game. Organizations like SheEO are helping to move the capital in different ways, in new ways where it’s inclusive, where everyone can make decisions.

Pete Horsley:

My name’s Pete Horsley. I’m the founder of Remarkable. We’re a tech accelerator for early stage startups in the disability tech space. We got actually contacted by our major Australian telco. They said that they liked the work that we’re doing and Telstra said that through their foundation, there might be an opportunity that we could get some funding. We went back to them and said, we want to create an accelerator and try and support early stage ideas, help them commercialize and get them into market so that we can get that technology into the hands of people with disability. So 2016, we set about launching that and Remarkable has been going ever since.

Simon Thomsen:

Well, you’ve got Usman and Catalysr.

Adam Spencer:

Simon Thomsen is the editor of Startup Daily.

Simon Thomsen:

Usman Iftikhar with some Sydney guy, he runs a program. So very simple backstory for him. You really should have him in there because part of Australia’s entrepreneurialism, and let’s take it broader than the idea of technology has been founded on immigrants coming out here. There have been these extraordinary migrants who’ve come out to this country and built things from scratch and that’s an entrepreneurialism, which I think is such an important part of our story. Usman’s backstory is quite simply that he got out here. He struggled, couldn’t get a job despite being highly qualified and that is part of what does happen around here. We’ve got this debate around skills at the moment, skilled migration. But Usman came out. He set up Catalysr as a way for migrant entrepreneurs to start their own businesses. He does his own program and he’s branched from Sydney to Melbourne now and he’s giving new Australians this opportunity to build a business for the first time in a new country, which I just think is something extraordinary. He brings an incredibly different perspective to the middle-aged, white guy one that I have, but it’s a great one.

Adam Spencer:

While we won’t be able to credit all of them, we’ll be finishing off this episode by touching on a range of other organizations that were founded between 2016 and the end of 2019, all of which have contributed to Australia’s startup ecosystem in important ways.

Rachel Yang:

Hi. I’m Rachel Yang. I’m a partner at Giant Leap. Giant Leap is an impact-focused VC fund. We target the same returns as traditional VCs, but we use an impact lens to review our investment opportunities. We invest across three themes, health and well-being, sustainable living, and empowering people. The ecosystem more broadly has grown, but impact investment was still very nascent and particularly impact VC with us as Giant Leap being the first 100% impact-focused VC. There were others in the US but in Australia, there was still a belief that you had to trade off impact for commercial returns, but now, the narrative has really changed. People are realizing that in fact, if you don’t focus on impact and don’t think about the social environmental problems that a company is solving, then you’re potentially leaving value on the table.

Talent wants to work at places where there is a strong mission and purpose and then also consumers want to buy sustainably and ethically, so there’s a real opportunity now that people are starting to see, but back then, it really wasn’t talked about in that way. It was seen as you’re either working on a not-for-profit or social enterprise or you are working on a commercial business.

Maxine Sherrin:

I’m Maxine Sherrin and I’m program director of Spark Festival. Spark Festival is Australia’s largest event for startups, innovators, and entrepreneurs. It’s an opportunity for people to share knowledge in that way that is different. You can watch a million YouTube videos. You can read a million articles on Y Combinator, but there’s something very valuable about hearing the story of someone who you can really relate to, who you can go up and ask a few questions of afterwards. Then secondly, and it ties to that, it’s just that networking thing, the connections that get made. It’s quite incredible the number of people who’ve met through Spark Festival and then I find out about it years afterwards that they’ve gone on and so and so. She’s my mentor that I met through your programming meetups or they met co-founders or investors and all sorts of stuff.

Adam Spencer:

Cheryl Mack, CEO of Aussie Angelstold us about her experience taking over management at SydStart, which she rebranded and launched as StartCon in 2016.

Cheryl Mack:

Back in 2015, there really weren’t that many startup events. There was a couple of meetups that were running and I think we really played a big part in making it exciting and fun and building up that space where there was really nothing. It was SydStart and that was it. We took it from a place of yeah, there’s one startup event in Sydney to there was like four or five or six conferences in 2019 just in Sydney alone focused on startups. Then of course, you’ve got everything in Melbourne and Adelaide, Brisbane, and Perth. 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. We helped so many startups get on stage.

We had about 600 startups that went through the pitch competition. To be able to support that many startups, to get a voice in an ecosystem that felt very exclusive at the time, I think we really did a lot of good for a lot of companies in their early days. I monitored a lot of the companies that were coming through Startup Alley and our pitch competition. I always said we need to create a fund so that we can invest. Just if we put 10 K in the top companies that went through Startup Alley and the pitch competition, we’d be rich right now. Canva was in our Startup Alley in the very first year, which is so freaking cool. Shippit won the pitch competition in the first year. Checkbox.ai won it in the next year. We had a lot of the early days of those startups coming through and we played a part, at least I like to think that we did.

Adam Spencer:

FinTech Australia was founded in 2016 to support the growing financial technology industry, which has become a real strength of Australia’s startup ecosystem with companies like Afterpay, Airwallex, and SocietyOne.

Lauren Capelin:

The FinTech ecosystem growth is really quite phenomenal.

Adam Spencer:

Lauren Kaplan is startup ecosystem manager at AWS Startups.

Lauren Capelin:

There was a lot about the environment back in 2015 that made it hard for FinTech to thrive. There was about 30 companies involved and the regulatory environment was still very challenging. It was through the formation of things like FinTech Australia really focusing on building out the enabling environment from a policy perspective, but also just generally gaining the well-deserved awareness of what FinTech founders and FinTech businesses across the ecosystem were achieving. That included everything from building significant competitive companies to our incumbent financial services businesses like Afterpay, but also significant partnerships and integrations with the incumbents, which also was a testament to the success.

Adam Spencer:

Sydney Startup Hub, a startup community home to a variety of offices and co-working spaces in Sydney CBD was founded in 2018.

Joshua Flannery:

My really oversimplified version of how it came to be was-

Adam Spencer:

Joshua Flannery is the founder and CEO of Innovation Dojo.

Joshua Flannery:

… number one, Sydney rent space for co-working spaces and anywhere that a startup would have to pay for anywhere close to the CBD was just ridiculously expensive and getting worse and worse. So representatives from some of the key players like your Stone & Chalk and your Fishburners, they basically got together and lobbied the government basically articulating that look, if the government’s serious about growing the economy and really believes what they’re printing about tech and high tech companies being the future of the economy, then you’ve got to help us out here. It’s just not a feasible model for a startup to pay this kind of rent if we really want to have that densities that’s required for an ecosystem to work properly. So I think that was the seed.

Bruce Tulloch:

What I would say, and this is very much to the state government’s credit,-

Adam Spencer:

Bruce Tulloch is co-founder of BitScope Designs.

Bruce Tulloch:

… the experiment that is and remains the Sydney Startup Hub is an excellent one because effectively, what they’re doing is saying, what would it take to get critical mass in a physical location with enough businesses together to actually produce a net positive of significant outcomes for new business and startups? The money they put in the vision around the project has been a very good one.

Tim Boyle:

The establishment of the Sydney Startup Hub, along with other things such as StartCon reinvestment back into the ecosystem by some of the more seasoned and successful founders like Matt Barrie into StartCon as well, as well as the establishment of the Spark Festival and having some real leaders in the ecosystem start to stand up. I think Josh Flannery, I count him as one of those people and he became the founding director of the Sydney Startup Hub, that that’s what cemented the ecosystem in my mind. I think there was lots of activities happening and there was an ecosystem, but having that big anchor at 11 York Street changed the game in my mind.

Phil Ireland:

In Australia, what I think we do well here is that it’s well networked and there are lots of opportunities to meet other people and connect.

Adam Spencer:

Phil Ireland is the co-founder and CEO of Hone Carbon.

Phil Ireland:

I think the Sydney Startup Hub and similar in Melbourne are really good examples of state government backing spaces for entrepreneurs. There’s no lack of desks to work from or free Zoom subscriptions or whatever else it is.

Adam Spencer:

This episode has primarily focused on the organizations that support startups, but as we’ve highlighted in previous episodes, at the end of the day, it is the startups themselves that are the heart of the ecosystem. To name just a few of the startups that were founded during this time, there was Linktree, Forage, Checkbox.ai in 2016, BitScope, BindiMaps, and Athena in 2017, RapidAIM, Bandicoot Imaging, and Curious Thing in 2018, and Loam Bio, EQL, and Bare in 2019. The growth that had really kicked off in the first half of the 2010s only accelerated during the second half of the decade. Australian startups were bringing new innovative services to market and creating many thousands of jobs. The World Health Organization declared the COVID-19 outbreak a pandemic on the 11th of March. All around the world, life as we knew it was about to change rapidly and profoundly. In the next episode, we trace the history of the Australian startup ecosystem through the chaos of a global pandemic and bring our story to the present day before setting our sights on the future.

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