Andrew Nunn believes Australian states and territories should work cooperatively rather than competitively
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Andrew Nunn is the co-founder, Chairman and Executive Director of JBS&G, one of Australia’s largest privately owned environmental consulting companies. Andrew also holds the position of Chief Entrepreneur of South Australia, a role in which he is tasked with providing advice to the South Australian Cabinet and the business community to enable entrepreneurialism across the state. In his conversation with guest host Alex Carpenter, Andrew discusses how his entrepreneurial journey started at the age of thirteen washing the exterior of homes before they went up for sale with his brother, as well as his view that states and territories, including South Australia, should focus on their strengths and work cooperatively as part of “team Australia” rather than focus on interstate competition.
South Australia’s Chief Entrepreneur and Advisory Board: https://www.diis.sa.gov.au/innovation/entrepreneurship-and-future-industries/chief-entrepreneur
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 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, Alex Carpenter. On the episode today, we have-
Andrew Nunn: My name’s Andrew Nunn. I’m South Australia’s chief entrepreneur, and pretty damn excited to be part of the work that’s happening here in South Australia. I’m an engineer by training and have set up a consulting engineering company over a number of years, but my focus is now stepping out of that a bit more and getting more into the startup ecosystem and providing support and help to the government and to the companies who really want to drive it forward here in Adelaide. And how we do that best and most efficiently is where I’m at.
Alex Carpenter: When would you say you started getting involved in the startup ecosystem?
Andrew Nunn: Well, it’s interesting. I mean my first company I ever set up, although it wasn’t a registered company, I was 13. I grew up in working class suburb in Melbourne called Pascoe Vale, and myself and my brother, by chance set up a business, washing people’s homes, weatherboard homes. You have a lot in the northern suburbs of Melbourne, and prior to people selling their houses, they couldn’t afford the cost of painting the houses and painting the weatherboards. But a wash normally did a pretty good job. So we started just one or two because we were asked to do it and then worked out that pretty quickly, if I went to real estate agents, they would take me to their customers and we set up quite a good business. So it was fantastic. It ran for two, two and a half years.
Andrew Nunn: And then my brother, who was in the business with me, his grades started to drop, so Mum made sure we had to shut the business down. So that was a bit disappointing because it was a really good taste of just getting involved in something and just, not how easy it is, but bit of lateral thinking to how do I solve a problem. And all of a sudden, connect to the right people and you’re off and away. So it actually really whet my appetite.
Andrew Nunn: In 2002, I started my engineering company. I got transferred to Adelaide from Melbourne in 1999, and I set up this company called Soil and Groundwater Consulting. It took me a little while to get established in Adelaide, but once I got set up here, I realized that most companies didn’t have their best people in Adelaide. In the late nineties, if you had a gun in the consulting field, you’d normally send them to Melbourne or Sydney so they could generate more revenue. So, I just saw there was enormous opportunities with a range of really good clients here. So, I set up a business here in 2002 and it’s still running now. I merged it with a Sydney based company in about 2014, and since then we’ve got about 350 staff, 360 staff around the country in about nine offices. And yeah, so that was when I really, really felt like I built a business and bootstrapped the whole thing. So it was a really good experience.
Alex Carpenter: Absolutely brilliant. I mean, from those little seedlings of running around and cleaning houses to much bigger things. Back in the early two thousands, what was the ecosystem like there? Was there any ecosystem or is it just like you set it up and that was pretty much it? Not many people were doing what you were doing.
Andrew Nunn: Yeah. I think that’s a really good point. There wasn’t too many people starting their own business, certainly in my field. I mean, I had quite a narrow focus at that point in time. I was relatively new to Adelaide. I didn’t know a lot what was going on in terms of outside the consulting engineering field. But what I did know is there wasn’t a lot of people doing what I did. In fact, I had a lot of resistance to people saying, “Well, why would you do that? You’re in a safe job here. Adelaide, it’s a growing city. Do a good job here, and then you can go back to Melbourne with a promotion.” And that was the original plan. But you’ve got to be adaptable to these things, and when you just see an opportunity, I just had to go for it. It was just one of those things that was just so obvious that it just had to be done.
Andrew Nunn: But the ecosystem itself, I dare to say it was in its infancy. I don’t think it had even really started in the early 2000s. I think Adelaide was a place just finding its feet a bit in the early 2000s. It was a smallish community. It had lost the Grand Prix and all those things that happened around that. There was a bit of a downward feel of it, particularly if you came from the eastern states back across. So yeah, just the move even to come from Melbourne across to Adelaide was seen as, particularly in Melbourne, what the hell are you doing? But that’s what opportunity looks like. When everyone says, no, that’s possibly the time to say, yes.
Alex Carpenter: A hundred percent. When everyone’s saying no, it’s probably a good time to start building something. I mean, what kind of supports did you have at that stage? Did you just start figuring it out by yourself and learning from trial and error or was there any support around you at that time?
Andrew Nunn: Not really. It was really interesting because I had to fund the whole thing. So I’d moved to Adelaide and I was renting a place in an area called Norwood and I was renting a little townhouse there. I had a house in Melbourne because I’d always planned to go back to Melbourne. And then when I decided I was going to start up here and then commit to Adelaide, I decided I’d sell that house. And I used that money to help me fund a couple of guys to come and join me for two years. And so I guaranteed them two years salary, which that and the startup cost was pretty much the cost of the house. So I was going to be a bit screwed if it all didn’t work, which is probably not a bad way to be, because it just makes you work that bit harder.
Andrew Nunn: But realistically, in my mind, I just had to bootstrap it myself. And so, as I said, I used the sale of the house and the funds from that to help bootstrap it, support it, give it its best chance for two years and really worked hard at it. But I had a very clear vision of what I thought the industry was doing badly and how we could do it better. I had really good relationships with my clients here. And I basically went out with the mantra, if you don’t support a young startup like us having a go, you’re just going to be left with the big boys. So all the things you whinge about the big boys being expensive and not listening to you and all those things, well, you perpetuate your own problem. So, we’re here with a whole different model, support us, and we’ll continue to grow and you’ll get a better outcome out of it. And that’s, to be honest, what happened.
Andrew Nunn: Often, the difficult thing of a startup is to make sure you get paid. And so we very much set up our business around going to the big people like BHP and Adelaide Airport Limited and Adelaide Brighton Cement, and a number of really big companies and said, look, we’ll do your work for you, but we need to get paid within 30 days because that’s the thing, cashflow that causes a bit of a problem for small companies. So that was the real structure that we set up. As I said, clear vision, clear sales pitch, and then work like hell to deliver on what we told people we would do.
Alex Carpenter: Fantastic. And I think it’s that grit and determination that’s hopefully one of the characteristics that Australian entrepreneurs are known for and continue to be known for. But I’m curious on, when do you feel like we turned a corner? Has the Adelaide ecosystem turned a corner in terms of promoting and supporting this kind of stuff. Is there any point where you were like, wow, there’s actually other people like me around now. This is cool.
Andrew Nunn: Yeah. It was really interesting because probably five to seven years after I started and it was clear, we were having a lot of success, I noticed a number of others in my industry do the same thing. Guys who knew what they were doing and were leaders in their sector and had enough experience, just pulled that and said, “Okay, I’m going to have a crack at this myself.” And now, in my field or in the engineering field, there’s a whole range of startup companies that have bootstrapped themselves and got themselves going. And in a consulting environment, that’s probably not too bad because your set up costs are quite low. And as long as you’re getting paid regularly through your clients, you can probably bootstrap it and drive it.
Andrew Nunn: But the ecosystem more broadly, to be honest, probably from my perspective, it’s probably been the last decade that it’s really got a kick along. I think back in… What was it? 2010, 2011, I think, BHP were looking at doing the big open pit at Olympic Dam, and there was enormously good feeling in the city. It was a real can do feeling. And I think that spurned a lot of people to go, okay, we can have a crack at this and we can have a go. There’s a real feeling. Once you get a feeling of optimism in the city, it’s amazing how infectious it is and everyone goes, “Oh, I can have a go at that. I can do that.” You have a big company like BHP is willing to commit to this place, well, so are we. And so that was great. Only problem was when they pulled out, it left everyone a little bit heartbroken for a while. So out of that was this drive probably from 2012, ’13, that really started a slow burn, but a continual burn to grow.
Andrew Nunn: And probably going back about five or six years ago, maybe more, the Tonsley Innovation Centre was set up down at Flinders Uni, down south here. And that concept of an innovation hub was really born. It took a while to get it going, but you look at it now and it’s flying. You’ve got Technology Park up in Mawson Lakes up to the north, which is fantastic. You’ve got the BioMed precinct right here in the city. And then most recently, Lot 14, again in the city. Now you’ve got a whole range of other smaller innovation areas set up, but it now is a real critical mass of innovation and startups really getting going. I mean, pretty much all of those districts are now completely full. Lot 14 is absolutely full to the gunnels and every time they look at building another building their leases are already taken up.
Andrew Nunn: So yeah, I think there’s enormous energy now and you can feel it. Back in the day where I told you about BHP going to go open pit, that same feeling is here now. This amazing feeling of optimism and we’ve backed the right horse and we’re doing really well. We’re building innovation centers and people are recognizing it. We’ve got just this week, Microsoft, their space set up called Azure is committing to Adelaide and Nokia is coming here to set up. So, there’s just a lot of activity here at the moment. It’s just a really good vibe.
Alex Carpenter: It’s fantastic to hear. It’s exciting to see how far it’s developed since the early 2000s. I’m curious on like, there’s a lot of stuff going on there that you’ve just mentioned. How on earth do you define that umbrella that captures all of that stuff, all of that energy and all those different environments and ecosystems and industries that we’re calling the startup ecosystem? How do you actually put a ring around all that?
Andrew Nunn: Well, that’s a really good question because it’s developing reasonably rapidly. And actually one of the things I’m looking at here, working with the department, is really looking at how we map this better, how we have much more ability to visualize who’s who in the ecosystem, because really big on that concept of collaborating and getting people to work together and the ability to see who’s doing what in an ecosystem, not only allows for that level of collaboration to happen across the city, but it also enables the population of Adelaide to get involved and to see what is really happening in their city. And that’s the sort of thing that continues to drive that excitement and hopefully ultimately the investment in what’s happening. I think once you grab a city in itself to be really engaged with what’s happening in the ecosystem, then it all keeps moving.
Andrew Nunn: But to answer your question, it’s really an issue of trying to keep a profile and a process of who is exactly doing what, having them come back and talk to the various startup hubs and the various innovation districts, so we can map who’s doing what. But as I said, the issue for me is how do I get the best value out of that? How do I find out what are the issues that each of these startups needs, to go to the next stage to scale up? Now, they all need customers and ultimately they’ll all need capital, but at different times they also need, as I said, this concept of collaboration. How do they make their startup better by collaborating with the guy over here, or the girl over there, who are doing something amazing, and that would really augment what they’re doing to make their startup even more robust, even more scalable?
Andrew Nunn: And so that’s the role of the chief entrepreneur in a way, is to advise government, how do we do this better? How does government set policies around how we keep an eye on who’s doing what and how they do it more efficiently, how they do it so they can scale up and scale up here in Adelaide, and how they do it so they can hire people, create jobs, create businesses and create wealth here? And so that’s the real focus of it from my perspective at the moment, what advice I need to give to government to make sure that they can have the most targeted commitment and targeted engagement with the startup community that gives the best bang for its buck.
Alex Carpenter: And that leads on to a really important point, I suppose, from the government’s perspective, and I suppose, from your perspective, what’s their role in this ecosystem? What thing do they uniquely have to do in order for this thing to really get up and fly?
Andrew Nunn: It’s a really good question. I think government needs to support with infrastructure. I think that’s fundamental. I think building the innovation districts and building the communication networks between the districts and setting up a framework for how people can engage with each other, is certainly the government’s role. Enticing and encouraging other companies to come to engage with various sections of the startup community is also government’s role. I think though, we’ve got to be careful to make everything government’s role. I think there’s a whole issue there, as I said before, about engaging the broader community in this innovation and entrepreneurship journey, because it is a statewide citywide thing. We need everybody to feel part of this, so that their kids and their grandkids think, yeah, we’ll set up our business here in Adelaide, because it’s got the level of connectedness between the various innovation districts is great.
Andrew Nunn: A city of 1.2, 1.3 million people, it’s perfect size to do pretty much anything we want to do. You’re 15, 20 minute train trip to each of the innovation districts. So the degree of connectedness around this is what the government can help coordinate. And then it’s really up for the community and the innovators themselves and all the startup companies to really build on that, I guess, infrastructure’s network and really start to fill it out. And universities play a key role there too, right? So a lot of the work coming out of the research and startups out of the universities really needs to be targeted in such a way that the groups coming out have got the best chance of commercialization, the best chance of success and that they understand how to run a business, so when they do get some capital, they know how to deal with it, how to deploy it, how to manage it.
Andrew Nunn: So government has key infrastructure roles and key connection roles for national and global connection for companies. But realistically, I don’t want to obfuscate the need for individuals to really step up and really work hard, because the reality is, setting up a startup is hard work. It requires an enormous amount of dogged determination and just keep pushing through all the barriers and a lot of shoe leather to find capital if you need it, to find customers where you need them. So it all takes time, but the government needs to do some of the role, but not all of the role. And we’ve just got to move away from that feeling that the government needs to do everything because not only is it not sustainable, but it doesn’t build a strong, robust ecosystem of people who are having a go. So yeah, my view very much is the government builds some infrastructure and then lets the ecosystem drive itself.
Alex Carpenter: Yeah, totally, I love that. And if we conceive of the whole ecosystem as a team, and then we think that we’re only as strong as the weakest player on our team, I’ll give you the hard question. Who’s the weakest player in Adelaide?
Andrew Nunn: Hmm. Well, I think our biggest issue in Adelaide at this point from my perspective is probably how we get the collaboration happening together, how we continue to drive that interconnectedness of people. I mean, it’s an ecosystem that’s growing and growing really rapidly. It’s how you keep the community engagement, how you keep the engagement between the various players. But fundamentally, my view for Adelaide is we need to really not try and be all things to all people. I have very much a national view of what we should be doing. We should play to our strengths, whether that be geographical, geological or a political advantage that we have over everyone else. Well, they’re the things that we should be pushing for, and they’re the things that we should be driving for us. We shouldn’t be trying to do everything that every other state is doing.
Andrew Nunn: And so that takes a bit of discipline too, is really going, okay, look, our key focus area is going to be defense and cyber security and space, where we have natural advantages. We have natural advantages in mining and renewable energy and a whole range of these things. So let’s focus on that and let’s do that better than anyone else. So if anyone, for instance, has got a space startup, they say, I’m going to Adelaide, because that is where the national center of the space agency is. That’s where all these startup companies are happening, building their satellites and micro satellites. This is where Microsoft is, and this is where a lot of the driving’s happening in that space industry. And so that all takes time and we’re moving forward with that really well.
Andrew Nunn: We don’t have a weakest link per se. We just have a system that’s growing. Look, the government’s committed an enormous amount of money to both infrastructure and funding to set up grant programs for startups, grant programs for scale ups and commercialization. So I think the framework’s all there. And I think because we’ve done that so well, I think you’re seeing the global recognition of what’s happening here and I think you’ll see a lot more startups getting in here. So the next big issue, and it’s probably a big issue for everyone, probably even Sydney, but outside Sydney, more so, is getting access to capital and getting enough VC interest in what’s happening in other states. So that’s a real driver for us at the moment, and that’s a real focus of where we go next.
Alex Carpenter: I’m curious, if you have any opinion on the startup ecosystem that you’ve shared with a couple of people and you find that’s a bit on the nose, like it’s a bit unpopular at the moment to have that opinion. Is there something there that you see that others don’t?
Andrew Nunn: Well, as I said, a lot of people don’t necessarily believe we should be doing just the things that we’re good at. We should be trying to do everything. I mean, my view is if you’ve got enormous, endless amounts of capital and endless amounts of startups and an enormous amount of engagement capacity, great, let’s do everything. But we are a state of 1.3 million people, and so playing to our strengths at this point in time, and at this stage of our journey, in the development of ecosystem, I just think it’s a much safer road for us. And just picking out the things that we do better than anyone else. If we had endless resources, great, let’s do everything. But we don’t, and so let’s just play our role in the national innovation, the Team Australia type approach to the startup ecosystem. And let’s do our bit better than anyone else.
Andrew Nunn: And that’s not necessarily a consistent view all across. The other one is how we engage VCs and how we generate more capital. The view I have is that we need a fair bit of patient risk capital coming out of private industry and private people, high net worths here in Adelaide, that the money’s there, that people need to understand in my mind, that the investing in startups is a legitimate part of any portfolio, and that a small amount of money invested in early stage, higher risk startups, but high return startups, is a really legitimate investment proposition. So I just think it’s fundamental that we bring the community along with the development of this ecosystem and that they all feel part of it. This concept that there’s not enough jobs here for my kids and grandkids, well, maybe let’s not sit on our capital and let’s invest it in startups, so that we can build all these jobs for our kids and grandkids.
Andrew Nunn: So I just think there’s a responsibility to high net worths and people who have done well, to reinvest back into the startup community and drive it. Look, probably up till the start of this year when I took over the role, I had virtually no investment in startups, and now I’ve deployed probably three to $4 million into startups over the last six months, including the purchase of Australian Fashion Labels that was in receivership here because myself and a number of like- minded individuals thought, look, we just can’t afford to lose things like fashion industries and creative industries that have taken years and years and years to build, and that we need to step up and get involved and support them. So I’m putting my money where my mouth is and getting involved in the system. And not only is it an enormous amount of fun in understanding startups and talking to the guys, kicking these businesses off and looking at the world in a completely different way, solving problems that a lot of us haven’t even thought of yet. It’s legitimately good financial investment that every decent portfolio should have some of that in it.
Alex Carpenter: Couldn’t agree more. I’m fascinated though. You said that prior to starting in the role that you’re in, you hadn’t deployed capital into the investment scene and you might be falling into that category that I do of, we’re not sophisticated enough. But I’m curious, from your discussions and your experience now, what are the barriers? Why aren’t people in this space more and what should we be doing to attract them into it?
Andrew Nunn: Hmm. It’s a really interesting point, because I think through my role of chief entrepreneur, I get to talk to a whole lot of people. I get to see what people are doing and the way they’re thinking and a number of them, particularly young people see the world. But they’re not only young people. You’ve got a lot of guys here, who’ve had a career doing something else, have identified a problem going, “I’m going to go and fix that. And I’m going to get some money through a series of mates and we’re going to go and solve that problem.” And so, there’s quite a lot of that. I think you need to bring the community along. Funds that spread the risk over startups, and so I can invest in a fund that’s spread over a number of startups, because not every startup’s going to scale and be a unicorn obviously. And so the ability to spread over a range I think is really important.
Andrew Nunn: And so, we’re having discussions here about startup funds and how do we make funding available or funds available, investible funds available for mum and dad investors to get involved and be part of the ecosystem. But it goes back to a bit of what I said before. You can’t be what you can’t see. It’s really important that we have some map of who’s doing what, and if I wanted to invest in the space sector, what are the five or six companies, or maybe there’s 20 companies, that I should be looking at to invest in, at this stage, to be part of that journey. And I just think that ability to see that and to work out how to be part of that, is really important.
Andrew Nunn: I think there’s a leadership point here, though, for look, I’d like to say for super funds and again, other really successful high net worth people to say, I’m going to put some money into startups because I think it’s fundamentally important. One, for the community, two, for the state and the city, and three, for me as an investor to have a broader spread across a whole range of investment opportunities. And startups and scale ups are a really significant part of that in terms of significant in the sense that they have potential to have 10, 20, 100 times return on capital. But they also have a chance of failure. So you don’t want your entire investment portfolio to be in it, but it’s certainly appropriate to have some of it in there. And I think if we could get that through the community, both here in Adelaide and more broadly across Australia, I think you’ll find the whole ecosystem nationally will just go from strength to strength. It’s that concept of just greater access to patient risk capital is just really important.
Alex Carpenter: Totally agree. I think we are starting to see that move a little bit, but there’s so much more work to be done in that space, for sure. I mean, I imagine you get this all the time, as with that title of chief entrepreneur, like when the first budding of an entrepreneur comes to you and asks you what’s the one thing, what’s the elevator, 30 seconds of this is the wisdom that I can give you that will budge you into the right direction. What do you say?
Andrew Nunn: Well, for a lot of people, I always say, trust your gut, because there’s a reason you’re doing what you’re doing. The easiest path is probably not to do it, to go and work for somebody else. But it’s like telling a painter not to paint. They just have to. Or a musician not to make music. They just have to. And people who are entrepreneurial have to do the same thing. They see a problem and they need to fix it. So I say to the people, trust your gut and really be clear on why you’re doing it and what your purpose is, because that vision will be challenged at times. You will wonder whether you’re on the right path. You need to be true to what you were doing and why you were doing it. Be agile. Yes. Be able to adjust your thinking, but don’t lose the vision that you had and the reason you did it, because it’s easy to do when you’re in the mire of it all. It’s easy to not know which way’s up. So, have a really clear compass on why you did it.
Andrew Nunn: The other thing, and I didn’t do this as much in my first startup, but I do it now in almost every way I invest now, is I invest alongside people. Doing it yourself is exhausting and hard work. They say it’s lonely at the top and it genuinely is. But I think the journey is a lot more enjoyable when you’ve got people to share it with, you’ve got people to get their thoughts. You get a range of different views of people who are as committed to you as to the outcome, but have a different way of looking at it. And I just think it’s really important to collaborate with people, to have partners along the way, and to make sure you’re all taking the opportunity as it’s presented, being agile enough to think about, are we exactly on the right path, but not losing the vision as you’re going through it.
Alex Carpenter: Fantastic, absolutely love that. Thank you so much for all your time. The last question is the coverall of, if there’s anything else you want to put on the record, to speak to the nation and to encapsulate the startup ecosystem, to help us to go towards the right path, is there anything else you want to add into this narrative?
Andrew Nunn: Well, I’d love to have South Australia play its role in a broader Team Australia process. I’d love to see Australia not consumed by competition internally and to really focus on the main game, which is external to our shores. I mean, taking on global companies, doing things together as a nation is where we’ve always done better. Look, as I said to you, my view very much is South Australia needs to play to its strengths as does each other state. And if we do that well, I’m not saying don’t compete at all, but I’m just saying, pick the things that we can do, and let’s not cannibalize ourselves. Let’s support what we’re doing in each of the states to really drive ourselves into the global market. And let’s really take our position there amongst the absolute leaders. Because I think it’s only then will Australia really be the startup nation that it deserves to be.
Andrew Nunn: As a young developing country, I really think if we can actually get over ourselves enough to work together and stop our petty interstate rivalries, and COVID certainly hasn’t helped with that, I just think we are so much better and so much stronger as the united nation really having a crack at what’s happened globally. And Adelaide has an enormous role to play in that. The ecosystem that is being built here through Lot 14 and Tonsley and the other innovation districts, are literally world class and are part of what I hope to be a national world class innovation country.
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.