Alex Carpenter: So to start off with when did you start getting involved in the startup scene?

Kate Cornick: I think I always had a real interest in the startup scene because I did my degree in electrical engineering at the University of Melbourne in the early two thousands. And it was around that time that the.com boom had happened. And there was also the bursting of the bubble, but it was an area that there was certainly a lot of chatter around during my degree.

Kate Cornick: And that led me to have a lot of friends that I studied with, who ended up moving to Silicon Valley and had successful startup careers. I always had a dream of running my own startup, which I did finally get to do in 2014 onwards. And yeah, so I think it was something that was always in me.

Kate Cornick: But running my own startup was when I really got involved in understanding the pain. I can’t say I’ve got that involved in the ecosystem and I wish there was a support then that I had now. You know, I was involved in as many people are, sort of thinking about how to run a startup for many years and getting ideas around, but it wasn’t until 2013, 2014, that I really took the plunge and left my day job and ran this organisation full time.

Kate Cornick: That was very early days, there wasn’t a huge amount of support. And I was so focused on growing the business. I didn’t really engage in the ecosystem. So when I really started to understand that ecosystem was when I was approached about running LaunchVic after I had an exit from the startup. And that was when I really started to deep dive and understand what the ecosystem had to offer.

Alex Carpenter: Yeah, wow okay. That’s an interesting journey. I’m curious on like how could we do better to articulate the supports that are available in the ecosystem? Cause I’m sure you’re not the only person that’s built startups without even realizing there is support out there.

Kate Cornick: Well, it was a very big part of what LaunchVic was set up to achieve is to really promote the ecosystem, put in place programs. And we’ve proudly supported over 125 programs to come into being. So there is, I think now a lot more support out there and you can Google what support is there and come up and find things.

Kate Cornick: But back in 2013, 2014 you couldn’t do so easily. And you really had to know the ecosystem to engage with it, but I do think it’s still a problem and we need to really shout from the rooftops that there is a huge amount of support out there. And if you have a great idea and you’re toying with the idea of setting up a startup, that there are places to go to really help you.

Kate Cornick: And there’s investment capital out there. And there are opportunities to grow and mentors who will support you and talent to help your company scale. And all those things that in the early days were points of stress. So I think there’s a lot more support out there, but there’s still a lot more work to do to tell people that there’s that support out there.

Alex Carpenter: Yep, fantastic. And I’m huge supporter of your work. So going back a smidge, I suppose you weren’t too engaged with the ecosystem when you were a startup founder yourself. But I’m curious on, like, when did you have any interactions with like how many other people around you were doing a startup and how big that like sub-community might be?

Kate Cornick: I think it was rather difficult to find that out. And I think that there was definitely a sub-community and when I started LaunchVic and really got engaged, I got to know that community are a fabulous group of people. But I think when you are growing a company and we had reached a size where we were scaling quite rapidly, we had international offices, we had quite a sizeable amount of seed capital under our wings.

Kate Cornick: You tend as a founder, not to engage in the community and you tend to really put your heads down and bums up and get on with scaling and just doing the work you have to do to grow your business. And I think there are now more scaling support programs out there, which is a great thing. But it can be a very lonely job being a founder because when it’s the very early days and your sort of fluffing around trying to find an idea and you’re trying to find co-founders and you might be trying to find your product market fit.

Kate Cornick: That’s a time that is really great to engage in the community and grow your network. The challenge is when you actually do start growing your company, you get into the pressures of having investors that want to see results and you’ve become so focused on the business. You forget that it is actually still really important to take time out for yourself, meet with peers.

Kate Cornick: There’s a huge amount of learning that you can get from peers. And I didn’t take advantage of that and that was a mistake. And I should have done more of that engagement, but to me, the community was much more early stage than where my company was at the time in Victoria. I don’t think that’s true, but that was my perception at that time.

Kate Cornick: And that made it very hard to find my peers, I didn’t know who they were. I knew who competitors were. But you don’t necessarily want to talk to them, but who are the people that similar stage of business to me and trying to grow? I just didn’t have the networks and I should’ve made more of an effort back at that time to reach out and find those people, hopefully with the advent of LaunchVic and the growth of the sector that is now much, much easier to do. And you don’t have to look too hard to find your peers and to get involved and get that support.

Alex Carpenter: That’s fantastic. And so building on that as that was a gap back then of being able to identify who your peers were, what do you think are the biggest gaps at the moment? 

Kate Cornick: I think there are two gaps that we see at LaunchVic. The first is the number of entrepreneurs per capita. So the number of people that are actually trying to start their own startup and it’s much lower in Australia than it is in the rest of the world. And we really need to change that because I don’t think Australians are any less entrepreneurial.

Kate Cornick: I think they’ve probably had a few less leavers to force an entrepreneur outcome. So by that, if I look to the UK where I’m from, you’ve got friends over there, I followed the UK tech scene very closely. The GFC in 2007 to 2009, had a really big impetus on driving the tech sector because so many people who were university qualified had got good corporate careers, lost their jobs and had to find their own employment. It was entrepreneurship by necessity and that spurred a huge growth in the ecosystem over there. And London’s now gone on to be one of the greatest ecosystems in the world.

Kate Cornick: I don’t think we’ve had that impetus until very recently with COVID. We’ve had a very safe environment for employment, we’ve got good corporates. The corporate life is much safer than the startup life and therefore people haven’t had to necessarily take the plunge into entrepreneurship.

Kate Cornick: So it’s really been very much a choice of a very small subset of people. And I think we need to encourage more risk taking because through that risk taking, we will see more companies like the Atlassians, the Canvas, the Airwallexs, the Afterpays, the Aconexs, et cetera, that go on to become the next generation of corporate enterprise that create jobs for our economy, future proof, Australia, and that’s really important.

Kate Cornick: So I think that startup creation and encouraging more people to actually take the plunge is really important. And we are starting to see drivers. We’ve seen that through COVID. This has been an incredibly tough time for a lot of people, but we also recognize that more people are stepping up and saying I don’t want this job that I’ve had, or I don’t have that job anymore.

Kate Cornick: And therefore I’m going to be an entrepreneur. And also we’ve seen a number of startups do exceptionally well. And in Victoria, we’ve got a 10.75% growth rate in jobs from the startup community, which is way higher than the broader economy. So, you know, the sector is doing well. 

Kate Cornick: So, increasing startups is one. The second one is increasing access to particularly that first money in the seed series A capital early stage funding is a real problem. And it’s again, across Australia, we see venture capital grow year on year, but what we’re seeing is that it’s actually growing late stage capital, not early stage capital, and certainly in Victoria, which we follow very closely, but I suspect more broadly in Australia, we’ve actually seen a stagnation of early stage capital for many years. 

Kate Cornick: Certainly since we’ve been tracking it at LaunchVic, it’s never peaked above 100 million early stage capital in Victoria. Despite the fact that late stage capital’s on an exponential growth. And so if we’ve not got enough early stage capital in market, it means we can do everything we can to encourage startups to create.

Kate Cornick: But if there’s no capital to pick them up and help them grow, we’re actually doing a disservice to the community. So we’ve got to increase startup capital, commensurate with increasing startup creation. And they are two things that LaunchVic’s very focused on.

Alex Carpenter: It is fantastic to hear you say that, I could not agree with those, both of those points more. I’m curious on what are we doing well though? 

Kate Cornick: Well, I think Australia is doing well at producing great companies and I listed a few before. We are a tiny nation, a long way from the rest of the world. And yet we are producing some really great companies. Would we like to see them be produced at greater scale and faster? Absolutely. 

Kate Cornick: But the reality is we are being noticed and we have got great founders. The Atlassians, the Canvas, the Aconexs, the Airwallexs, the Afterpays, et cetera, that are proving that you don’t have to jump ship, move to Silicon Valley and go and grow your business overseas. Absolutely, we’re talking startups, we’re talking businesses with global potential. They have to necessarily have global offices. 

Kate Cornick: At LaunchVic, we’re not particularly interested in startups that don’t have that international trajectory. We recognize that there’ll be strong presence internationally for these companies, but the fact that headquarters aren’t jumping ship and moving to the US or the UK is really fantastic. 

Kate Cornick: It’s fantastic for the startup sector, it’s fantastic for the founders, it’s fantastic for the people that do well, whether it’s a founder exiting or an employee with a piece of equity who then exit, who then come back as often very experienced staff into new startups or invest into the ecosystem. So I think we’re starting to see that flywheel kick off and that’s really a great thing for the community.

Alex Carpenter: A hundred percent agree and I think as those exits happen, that’s potentially gonna be a great impact on the early stage angel investor stage. Do you have, an unpopular opinion about the Australian startup ecosystem? 

Kate Cornick: It’s changed over time. I think when I first started at LaunchVic, you know, I went to a lot of the community events. They were very beer and pizza, they were very predominantly white men. And we’ve worked really hard to build diversity and inclusion into our journey. So I think very early on there was this propensity to be a bit of the bro culture that you’ve seen in Silicon Valley and other places. Sort of, it was almost like we were replicating that. 

Kate Cornick: I think that’s changed over time. And I think on the country, now you go to events and there, certainly everyone we work with in Victoria is so mindful of multiculturalism. When we could go to events before COVID, rarely would it be beer and pizza, it was often cheese and wine and beautiful nibbles from all over the world.

Kate Cornick: And, people really thought hard around all aspects of their program in the context of diversity and inclusion and making sure that the doors swung wide open and no one felt uncomfortable, whether it was attending event or program or whatever it might be. So I think that unpopular opinion that we were moving down a bit of a bro culture has definitely changed which is a really good thing.

Kate Cornick: I think now, I think there’s things I wouldn’t necessarily say are unpopular. I think there are definitely things that I think the community could improve on. I think we’re actually quite a conservative nation. And particularly in corporate and as a result, I think a lot of our founders are very humble people that don’t speak up. And as a result, you can’t be who you can’t see. So it’s that classic analogy with sports people, where we put them on pedestals, we really know who our sporting heroes are. 

Kate Cornick: As a community, I don’t think we do that enough with our startup heroes. And these are people who have done exceptionally well from a business perspective. But we forget that they’re also the people that are building the economy of the future. They’re the people that are supporting disruption, but it’s disruption so that Australia’s economy remains advanced.

Kate Cornick: If we don’t disrupt, we will get mowed over by other economies who are innovating and we will simply become purchasers of other technology. So I do think there’s a real thing about the tall poppy syndrome. And we don’t profile people strongly enough in the ecosystem. And I think that is a sad thing. I think there’s also a view that the ecosystem is quite male-orientated and the reality is, it is. 

Kate Cornick: In Victoria, only one in five founders are female, but we also have to accept that it’s going to take time for that to change. Many of the successful founders that are having exits today are people that started their companies 10, 20 years ago. And back then there was even fewer representation of women.

Kate Cornick: So I think the idea that the sector is very male-orientated is a challenge for the sector. And there’s certainly, you know, we know unconscious bias exists in many forms, not just about women, but people from backgrounds, et cetera. And that is a real challenge for the sector to overcome. 

Kate Cornick: But I’m also certainly don’t want to see any sexism or racism in the sector, but I also think the sector has stepped up to that challenge and is really trying to grapple with it. And we’ve seen VCs really pay a huge amount of attention, for example, on their application processes and making sure that they are conscious of unconscious bias.

Kate Cornick: And in fact, even in some instances, let’s call it out, there’s conscious bias. But we are seeing people move. So I think that’s something that can be seen as being negative, but it’s also gonna take a long time to fix it. You know, startups don’t grow overnight and I think that’s the challenge. 

Kate Cornick: Final thing I’ll touch on is I think the way the startup community is viewed by the broader community is really interesting. And, five years ago when I started this role, eight years ago, when I founded my startup, startups were really niche, kind of nice to have, a bit of innovation theater. Yep, we’ve got one of them. Yep, I know a startup kind of attitude and it was a very nice to have. But it wasn’t taken seriously as a sector.

Kate Cornick: And I think we’re seeing that change now. And government, not just the Victorian government, but other governments are really recognizing that the startup sector is a really important part of the economy, that there’s still more work to do there. And I think that across the entire community in terms of encouraging startup creation as I spoke to before, but also making sure that corporates are prepared to buy from startups.

Kate Cornick: If you’re beginning a startup here, you want to have your first customers here. And if our large corporates aren’t prepared to buy from startups, it makes it very hard for people to grow those businesses. And it’s all well and good to say I know a startup and I’m working with a startup, but the rubber hits the road when people are talking about startups and procuring from startups and actually recognizing that the startup sector, which is underpinned by technology and these young technology companies are incredibly important to our future. 

Kate Cornick: And we’ve seen that dialogue change, but I think it’s still got a way to go in some parts of the broader dialogue around the startup sector, how much support it gets at the state level, how much support it gets to the federal level.

Kate Cornick: Having said that, I have to give a big shout out to the Victorian government. Yes, they fund LaunchVic, but you know, we got $110 million in the state budget last year, phenomenal outcome. We also in Victoria have announced a $2 billion innovation fund. So, you know, the Victorian government do recognize this and are placing importance on this sector, but there’s still a way to go before it gets up there with other parts of the economy that do get viewed and talked about very favorably as key economic contributors.

Alex Carpenter: A hundred percent, I mean I was thrilled when I heard that announcement. Cause especially during a time of economic uncertainty to fund it by that amount, it was a huge win for the whole ecosystem. I am curious though, how you been competing with the travel lobbies and the mining lobbies and the retail lobbies and all of these players who are much larger proportions of our economy and seem to have so much more government support and government ear time. How have you been trying to get your toe in the door and pull that door open a little bit more? 

Kate Cornick: Well to be honest with you, I mean, for us, it’s the great relationship we have with the Victorian government both at the departmental level and a ministerial level and LaunchVic, we’ve had multiple different ministers, all of whom have been very supportive of the work that we do. It’s very much about that sort of closed doors, daily grind of doing the right thing by the people that feed you and, you know, the government funds LaunchVic.

Kate Cornick: Hopefully pretty good job of keeping government informed of what they should be doing in Victoria. And, continually working with the government to make sure we’re putting in place really good responses to challenges the sector faces. But I think it touches on a point at a federal level and we’ve seen StartupAus morph into the Tech Council, which is very exciting and fantastic news for StartupAus. 

Kate Cornick: But I do think that leaves a gap in the sector and an area that LaunchVic can play more of a role in terms of the federal government. And there are some key challenges that the federal government, you know, as with every government need to address in the context of startups and without a doubt, the retail lobby, the mining lobby, et cetera, are getting far more air time than the startup lobby is.

Kate Cornick: And I think that’s something that we at LaunchVic started to turn our attention to, we haven’t done a particularly good job of that if any job of that in a sizable way. But I think that is changing. And I think, it’s now the right time for us. A few years ago, we were just too small. We needed to just buckle down, grow the ecosystem, prove LaunchVic is doing a good job to our stakeholders, which I think on the whole, the stakeholders in Victoria do see LaunchVic as being a key part of the sector and that’s great.

Kate Cornick: I think, as we move forward, we need to think a little bit more strongly about how we’re promoting our ecosystem, how we’re advocating for our ecosystem and how we’re connecting our ecosystem. You certainly see that come through in our new strategy, which we announced a month ago. It’s one of our key pillars and an area that we’re definitely going to be putting more attention in the coming months and years to come.

Alex Carpenter: And that’s fantastic to hear. I’m curious, going back a smidge, the importance of profiling these diverse and positive role models is so important. I’m curious on, if you could, put a couple of organisations or groups that you think do a really good job of that. Who are doing their best and profiling entrepreneurs to the wider community of Australia. Who’s doing that well? 

Kate Cornick: I actually think it’s our media friends. I think it’s Yolanda at the AFR, it’s David Swan at The Australian, Cara Waters at The Age in Victoria and Sydney Morning Herald. And of course the team at Startup Daily. They’re the people that are actually putting these people up in lights and advocating for them.

Kate Cornick: And so I think they’re the people that have done the best job of profiling our top founders. I think the community is quite good at talking amongst itself and we all know who our wonderful founders are. We all know who our wonderful community builders are, but we’re not necessarily getting that into the mainstream. But I do think our journalists are doing a great job and have a real interest in understanding and the stories and the people behind the stories, which is great. But there’s definitely more to do there.

Alex Carpenter: Hmm. Yep, I fully agree. So turning to that really early stage, possibly uni student or possibly high school student, you know, they bump into you in an elevator and they’ve got your for 30 seconds. What piece of advice would you give them? 

Kate Cornick: So I would say to them do it. It’s a great journey and you will get so much experience. Out of all the jobs I’ve had and I’ve had a few in my life, the job I learned the most from was running my own business and running my startup. It’s set me up in a career that, thought I would be running a government agency, but here I am and loving it. But a lot of what I do was learnt at the wheels of leading a startup. So I think it’s a great experience. 

Kate Cornick: I’d also say, make sure you get as much help as you can early on to set your business up as well as you can. And that means having the right team around you. It means having the right investors around you, having the right mentors around you and making sure that you really are getting top quality advice.

Kate Cornick: I certainly wish I had better advice in the very early days, because in my startup, I made decisions that in hindsight, put some writing on the wall that would have meant we could have had a very different future had we played our cards differently and they were simple mistakes. Getting the wrong investors very early in the business and structuring the business from an investment perspective in not the soundest way was a key mistake I made.

Kate Cornick: I’ve certainly seen founders have challenges with co-founders and not having agreements in place on how they manage those challenges. Making sure that you are getting great advice from people that really understand how to grow a business, not great advice from business leaders who often don’t have any experience at working at a tiny company.

Kate Cornick: They’ve got fantastic business experience with huge amounts of HR support and finance support and team and all the rest of it behind very large corporate structures. So, you know, get the right advice at the right time from the right people is really critical.

Alex Carpenter: Love that couldn’t agree more again. What do you think defines a startup? I know LaunchVic has thought a lot about this and it comes through in how you’re conceptualizing your support structures. And I think that deserves a bit of acknowledgement, that it’s a really difficult subject.

Alex Carpenter: People gloss over like the definition of a startup. And they just think that there is a definition and there really isn’t and every organisation needs to think about this a bit more and it’d be good to get some clarity and uniformity on this. And I would like to hear how LaunchVic has come to that conclusion. And what benefits do they see coming after now you’ve defined it? 

Kate Cornick: Yeah, it’s a really big problem. And it’s a problem for Australia. We don’t have a consistent definition between the states. Our definition at LaunchVic is we ultimately we’ll use a qualitative definition, which is that startups are technology-based companies that are using innovation typically to disrupt markets, to grow globally.

Kate Cornick: And so when you break that down we say technology-driven and we mean technology in the broadest sense, agtech, fintech, medtech, biotech, SAS, et cetera. But this is not about muesli bar companies because, you know, and I always pick on the poor muesli bar companies, great businesses, love them, eat a lot of muesli bars.

Kate Cornick: Your average muesli bar is not a global brand, your the average muesli bar is going to be something that’s domestic market and often much smaller markets than that. And so that’s a great, smaller medium enterprise, but it will have a different growth trajectory from a business that is innovating through a Deliveroo or a Menulog that has got a global opportunity and has got global markets to chase after. 

Kate Cornick: We say that they’re innovative because they are disrupting typically. And so they’re the next generation of company. They’re not your high street accountant. They’re a firm that’s trying to make accountancy available at a cheaper cost to a global audience. And so, that disruption is a key part of it.

Kate Cornick: And global is really important for us. We don’t believe there are very many startups at all that can function purely on a domestic basis. That doesn’t mean to say that they don’t have a solely domestic focus for a period of time. But we are such a small market in Australia. They necessarily have to be thinking global.

Kate Cornick: And so when you add all of that up together, what are we trying to say? We’re really trying to get behind companies that have a very rapid growth trajectory, can reach a billion valuation and can hire many hundreds of staff. And that is very different from a smaller, medium business trajectory. For us at LaunchVic, it’s really important that we do differentiate from small businesses.

Kate Cornick: If we blur the boundary between smaller, medium enterprises that have very different funding needs, very different growth needs, very different talent needs. You end up blurring the boundary about what a startup is and you don’t get to the Puritan part of it. And you know, focusing on the Puritan part of it for us is really important because we don’t want to be helping a company that’s got an ambition to grow from one to 20 people, to target an Australian domestic market. 

Kate Cornick: We want to target entrepreneurs who are visionary, who have a dream of reaching a billion dollar company, have a dream of hiring 500 people, have a vision about changing the world and having real impact. And that means their products and services reach many millions of people.

Kate Cornick: And that is a very different trajectory and you have different supports. So our concern is when you muddy the water between the two, you don’t get the right supports in place. And if you don’t have the right supports in place, the people who do have those really big visions are the people who miss out as a result of that.

Kate Cornick: So for us a startup, as I say is a technology-based, innovation-led company that is disrupting markets and growing globally. And we want many more of them. We want more Atlassians, more Canvas, more Aconexs, more Afterpays, more Airwallexs, more Culture Amps, et cetera. These are the companies that are going to recreate Australia’s future.

Kate Cornick: They’re creating industries of the future. They’re going to secure employment for our children, our grandchildren for years to come. And what’s more, they’re making a massive difference. They’re creating products and services that make people’s lives better in many different ways.

Alex Carpenter: Love that and I can tell you’ve spent so much time thinking about this and working through it over the five years, because it is very difficult because I talk to many SME entrepreneurs and they get frustrated at, they want the support that they get and it’s very difficult to, especially when the likelihood of success is so low. It’s they’re trying to build something enormous and they’re unlikely to succeed. 

Alex Carpenter: So we need to support them in order to increase those chances. Whereas you’re following a well-trodden path and your chances of success launching another accounting firm, it’s pretty good because we know how to do that and you need different supports and those supports are sometimes there, but it is difficult to differentiate and it’s often a very difficult political conversation.

Kate Cornick: It is difficult and there’s always cases on the fringe. And also, I should say we love our SME entrepreneurs. They are a very important part of the Australian economy, small businesses are a huge driver of our economy. And we do need to make sure that supports are available for those entrepreneurs too. In Victoria, we have Small Business Victoria to help those entrepreneurs, and we have LaunchVic to help our startup entrepreneurs. So it is really important to have pathways and it’s not one at the expense of the other. It’s just at LaunchVic, our focuses are rather Puritan definition of startups.

Alex Carpenter: I love that. So what about the uniqueness of the ecosystem and how does the Australian culture play into that? To give us our unique benefits or unique difficulties.

Kate Cornick: I think uniqueness is around Australia as a place. And that’s both a positive and a negative. The negative is that we are a long way from anywhere. And that’s a challenge and we’re tiny population. The positive is, you know, we’re now changed the way we work and you know, we’re much more online. The world is much more accessible. 

Kate Cornick: You know, you don’t have to fly to the US to have a meeting. You can just set up a Zoom call and that will change the way we work forever. I think place is also a real positive for Australia. And we’ve seen a lot of ecosystems like Silicon Valley that have been very ruthless in terms of driving entrepreneurs. And you’ve seen entrepreneur burnout and, you know, some real challenges around how you get that work-life balance. 

Kate Cornick: I think in Australia we do operate at a different pace. It’s not a slower pace, but it’s a different pace. And I think a lot of people that I speak to that have returned from Silicon Valley or moved here from the US or the UK or Israel or other great ecosystems, often comment to me about how lovely the ecosystem is.

Kate Cornick: The fact that it’s not a 24/7, always on mentality. There’s a work bloody hard mentality, but there’s also, you’ve got to take your time and relax and recuperate, and you’ve got, in Melbourne, beautiful vineyards and beaches and mountains, all within an easy drive from the city, if you want to escape when we can, not in a lockdown. But you know, the reality is that place does make a really big difference. And I think that’s both our positive and negative.

Alex Carpenter: Fantastic. That’s all the scheduled questions, but I’m curious if there’s anything else that you wanted to put on the record that helps fill out this picture of the history of the ecosystem, as well as you know, where you see it heading. And is there anything else that you’d like to put into that dialogue? 

Kate Cornick: Only I that I think this is an incredibly important sector for Australia. It is, you know, changing our economy fundamentally. And you know, the reality is our economy is changing fundamentally and it is partly driven by startups, but it’s more majority driven by what’s happening in the innovation that’s happening overseas.

Kate Cornick: And we’re seeing that with the automotive sector and the rise, and then subsequent decline of that, we need to protect our economy against that. And it’s the entrepreneurs that are disrupting traditional ways of doing things that are doing that. So we don’t need to think about disruption and innovation as dirty words.

Kate Cornick: These are actually words that are going to create a better future for Australia in the very long term. And yes, we recognize that industries will be disrupted along the way, but it’s far better that we’re disrupting them internally than that we’re just waiting for the international decisions to be made to come and disrupt them.

Kate Cornick: And that’s exactly what happened with the automotive industry. And there’s been decisions made overseas by large corporates that have affected many thousands of Australians. How about we generate the industries here? We create the industries here, we back our entrepreneurs and create a brighter future for ourselves. So I think that’s really important.

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