Adam Spencer: Can you give us a bit of an elevator pitch on Startmate? 

Lauren Capelin: Sure a Startmate is Australia’s longest running accelerator program founded back in 2011 with the principle of bringing together founders, wanting to raise up their ambition and kind of benefit from a fast track to success by exposing themselves to mentors and best practice ideas and investors, you know, across Australia and New Zealand, but also globally to achieve those aims. So we’ve invested in over 150 startups across that time. And the total value of all of the startups that we’ve invested in is you know, 1 billion at this point.

Adam Spencer: I interviewed Michael, a couple of years ago for a little piece about Startmate. I wanted to tell the story of Startmate and something that I see coming up in Michael said this as well, I think but I see this everywhere, the core kind of value of Startmate is founders helping founders. And that, that seems to just be, yeah, the core messaging. 

Lauren Capelin: I think that’s right. I think that the core of Startmate, the thing that people don’t realise they’re going to benefit from is this accountability process to each other. And that is the founders helping founders piece. But, it’s more just having people around you who care that you are hitting those goals and those objectives you’re setting for yourself and all of the external kind of support and mentorship, and even, you know, the investment to an extent certainly helps along that journey, but it’s the week to week progress that really sets apart you know, an accelerator like Startmate.

Adam Spencer: Yeah I really love that value of founders helping founders and that community element. I’m interviewing Niki Scevak later today and I listened to an interview that he did last year or the year before. And he was talking about how something that they realized, I don’t know if he was talking about Startmate or Blackbird specifically, but the community scales a lot better than a person can. 

Adam Spencer: So, focusing on that community element and bringing people together that will help each other scales a lot better. And I think that works really well at Startmate. And this is a great little segue, I guess, into your history, because I believe that community is something that you value quite highly as well. 

Lauren Capelin: It is that’s true.

Adam Spencer: Can you tell, tell us a little bit about where you came from just before you joined Startmate. 

Lauren Capelin: Yeah well, I guess I would start the story back in 2010. And you know, for the most part, that was the relative dark ages, as far as our current startup ecosystem goes. And I was on the fringes of it all back then, but I started working with an author called Rachel Botsman, who had written a book describing the socioeconomic movement that she was calling collaborative consumption that we know better today as the sharing economy. 

Lauren Capelin: It was about profiling businesses like Airbnb, TaskRabbit, you know, Uber wasn’t even sort of operating at that point. And companies like Lyft were operating on two different names like Zimride. So it was very much the early days of that trend. And in Australia it was even smaller again, obviously we were looking to the global success stories and, you know, even back then, Airbnb was only a 30 person company. So, it was definitely still early. 

Lauren Capelin: But the startup ecosystem here was emergent to say the least, I think there was groups like Silicon Valley meeting, you know, doing the tech meetups where you’d attract, you know, maybe tens of people. Maybe there was 30 to 50 people, the, the kinds of conferences and offerings for people to learn about entrepreneurship were few and far between, and even, you know, back in 2010 Startmate was probably a glimmer in Niki’s eye.

Lauren Capelin: Really, as he was trying to confront this opportunity to help Australia’s tech talent and you know, startup entrepreneurial talent to really make something of what they were working on because the constraints of our local ecosystem back then meant that people had to go overseas for that kind of support and insight.

Lauren Capelin: So, yeah, I guess I was in the ecosystem meeting entrepreneurs, particularly in the collaborative consumption side of things in Australia. So the local scene in that sense here was much smaller. And probably the standout successes at that time would be companies like Airtasker, which was founded in 2011.

Lauren Capelin: But you know, back then there was a handful of companies and the added constraint in Australia being that consumer-facing technology was always a much more challenging business model. It was really difficult to get a business like that off the ground in Australia because we didn’t have the density.

Lauren Capelin: So there was a lot more success occurring in the kind of B2B space. You know, you had businesses like Atlassian, obviously operating through that time and growing in success. But yeah, the kind of community facing technology or the startup technology for consumers was a lot more limited back then.

Adam Spencer: Yeah, can I just ask from your point of view, around 2010, 2011 could you see any support infrastructure at that time or any government support? What was there then? 

Lauren Capelin: Yeah, that’s a great question. I think there was always an awareness from state governments at the importance of you know, the development of these industries. But I would say that their practical support came a little bit later with you know, things like supporting Stone and Chalk as one of the larger co-working spaces in Australia now there’s like a network of them, but in Sydney to support the FinTech ecosystem. 

Lauren Capelin: But that didn’t happen until 2015. I would say that it was a lot more of the private individuals and then maybe some corporates who got particularly involved. So the launch of Fishburners and that may have had state government support actually you know, things like that, the creation of those coworking spaces, I would say were the very first real efforts to support this growing ecosystem.

Lauren Capelin: Obviously Optus, I believe pretty big role in supporting Fishburners financially back then as well. And without those kinds of destinations for startup founders to congregate and find a community. I think we would have you know, been a lot further behind than we are now.

Adam Spencer: So your role, when you were working alongside Rachel Botsman, would you say you were operating in the startup ecosystem ecosystem at that point?

Lauren Capelin: Well, I think my answer to that is that essentially what we ended up doing was operating in the startup ecosystem more at a global level. I was spending a lot more time in, you know, the San Francisco and New York and London ecosystems, as well as, you know, second tier ecosystems like Paris and, you know, other European cities and even south America there was a lot more momentum, particularly in the collaborative consumption side of things globally. 

Lauren Capelin: And I would say it was dwarfed in Australia by other kinds of technology businesses that were emerging. And again, back to my point around consumer technology, not really having had a moment back then. So there was definitely sharing economy type and I think sustainability focused technology.

Lauren Capelin: So companies like Sendle which was originally to share a lot of the sustainability focused, consumption reduction, those kinds of businesses that were really building a subset of the larger tech ecosystem. But I would say that it wasn’t getting the main stage attention until you know, later on 2015 and 2016, when businesses like Airtasker really show that they weren’t going anywhere. And that consumer technology in Australia actually did have a chance of getting a foothold and building a critical mass of users. 

Adam Spencer: I do want to talk about all those other ecosystems that you have experienced and relate them back to the Australian ecosystem. But just first out of curiosity what was the catalyst to switch or transition from, you know, the sharing economy or collaborative consumption kind of space to the FinTech space where you worked at Reinventure. 

Lauren Capelin: Great question. So I worked with Rachel for five years from 2010 to 2015, and it was this recognition from my side that at least in Australia, the collaborative consumption or sharing economy ecosystem, wouldn’t be a large enough or significant enough pillar of the broader tech ecosystem here and was seeing the success that, you know, I guess, splitting out from the sharing economy. FinTech as a trend or as a thing which had a lot to do with decentralising finance or distributing power in some of these previously strongly held institutions and industries, that was definitely a thematic that came out of the collaborative economy.

Lauren Capelin: And we saw, you know, peer to peer lending being one of those key business models that emerged really strong through that. So when I was looking at you know, a shift away from the collaborative economy and the reason for that being that I think the direction of the collaborative economy, more broadly was definitely getting into highly you know, venture scale, focused businesses that were going global as opposed to what some of the initial opportunities were for it to be much more hyper-local in those opportunities and to achieve a relative scale, but perhaps not the venture backable scale that, you know, other companies might be able to achieve.

Lauren Capelin: I really just wanted to explore a vertical that had more of that scale opportunity but that had I guess that retained a level of integrity in doing that, because I think there was some of that lost along the way in the collaborative economy. 

Lauren Capelin: So I looked to what was being more successful in Australia and the FinTech ecosystem was starting to form and it was as nascent, I would say, as the startup ecosystem was back in 2010, there was 20 to 30 companies of significance across the country back then. But the bridge for me was the peer to peer lender Society One, which we had seen as part of the collaborative economy to-date being one of the more prominent and successful FinTech startups in Australia by that point.

Lauren Capelin: And Reinventure, one of the companies that initially invested in Society One as a FinTech specific venture capital fund caught my eye because they were really driving the growth of that subset of the startup ecosystem and really building out the FinTech community to be the significant thing that it is today, I would say.

Lauren Capelin: So yeah, I approached them with the idea of building a portfolio community for their investments thinking that, you know, FinTech as a common thread and the fact that they actually had investment from Westpac Bank meant that there was a link between all the startups that might not necessarily be the way other venture funds were we’re investing, there was a lot more connection and commonality in this space. So that was the choice to jump into the FinTech ecosystem in 2015.

Adam Spencer: Right. Awesome. Going back to yeah, you mentioned, you know, London, Silicon Valley, the other ecosystems that you were involved in what are some of the, looking at those again, systems compared to the Australian ecosystem today, what are some of the biggest differences that you’ve seen? And also, what do you think makes the Australian startup ecosystem or innovation ecosystem unique in comparison to those others? 

Lauren Capelin: Yeah. I think at the time it really was the density of those environments from a, I guess, entrepreneurial activity perspective, like there was so many more people working in in that space, proximity to capital to grow these businesses a lot higher risk appetite for that early stage investing.

Lauren Capelin: I think back in 2010, 2011, there was really nothing to speak of in the Australian ecosystem of that kind. We’d been so burned by the, you know, dot com boom and bust that there was little appetite to take these kinds of internet businesses or technology businesses seriously. 

Lauren Capelin: So yeah, the proximity of innovation and the kind of communities forming around these new ideas. There was lots more coworking spaces, I think even the role of accelerator programs was pretty important in different places. That may not have always looked like a kind of three-month course, maybe more, just like a co-located work environment and access to mentors and things like that.

Lauren Capelin: Certainly, you know, globally, obviously, Y Combinator has had an impact across the board, but I think there were local ecosystems replicating that same kind of function. And yeah, I think that that density also contributed to a more willing population who were ready to test these kinds of startups and that might’ve been consumer facing you know, more willing to download the new app and give it a try and provide feedback, not just write it off. 

Lauren Capelin: But even the business community I think that’s where the lag has been for Australia, because we have had a strength in the kind of B2B or enterprise technology layer. The willingness of our business community to be innovative and to adopt new technologies and to take those kinds of risks has certainly grown over the last five or so years, but took a long time to really help the businesses get off the ground.

Adam Spencer: Yeah, do you see any unique competitive advantages that our ecosystem has that we should be leaning on harder?

Lauren Capelin: That’s a really good question. I think there are some challenges that we have you know, there was a level of complacency I would say in our economy for the longest time, you know, even with the collaborative economy, kind of coming off the back of the global financial crisis and the challenges that created for people looking to supplement their income and, you know, maybe, you know, make money off of assets that they had all that sort of stuff.

Lauren Capelin: Those were the drivers of the collaborative economy globally. And in Australia, we really didn’t even feel the impacts to the same level. So I think that has been a disadvantage for our ecosystem. I think the advantages today are really related to our relative way of life. And you know, the kind of economic environment people live in here. I guess it’s being shaped a little bit by COVID right now in the sense that it may not be the best place to live because people are generally in all kinds of lockdown up and down the east coast. 

Lauren Capelin: But that has become a really attractive thing for lots of tech companies to stay based here as opposed to you know, trying to compete for talent and space and you know, paying huge amounts of rent, both home and office space rent globally. But again, in a COVID era, a lot of this you know, a lot of these advantages aren’t necessarily relevant anymore. 

Lauren Capelin: I think we have you know, excellent education. And that is leading to some really promising new startups emerging you know, we have great science and research and development capability here. It’s just that we have left the support financially and otherwise for a lot of those things to get to scale. But I think that’s changing quite quickly as well.

Adam Spencer: Jump jumping back a little bit in time, just 2015 up until today at Startmate, where you are now, what are some of the big movements you observed in those last five or six years in the ecosystem? 

Lauren Capelin: Yeah I mean the FinTech ecosystem growth is really quite phenomenal. As I mentioned, when I joined Reinventure they were the only primarily FinTech focused venture fund. And in fact, they cropped up in the absence of an appetite for investing in FinTech across the venture capital ecosystem.

Lauren Capelin: There was a willingness to take on the challenges that come with investing in FinTech. And in fact, this structure of many of our venture funds the regulatory framework they exist under the ESVCLP framework, the early stage venture capital limited partnership framework has a whole bunch of carve-outs that make it difficult to invest in FinTech.

Lauren Capelin: So there was a lot about the environment back in 2015, that made it hard for FinTech to thrive. And the other aspect of that being that most FinTech initially was a domestic opportunity as opposed to a global opportunity. Whereas most of our venture funds were focused on the global opportunity knowing that to succeed from Australia, you would need to see the whole world as a potential market. 

Lauren Capelin: But as I said, there was about 30 companies involved and the regulatory environment was still very challenging and it was through the formation of things like FinTech Australia, which I was involved with as Simon Cant from Reinventure was the founding chair. And I later sat on the board myself a couple of years really focusing on building up 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.

Lauren Capelin: And 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 where there was so much reluctance from incumbent businesses to actually partner and leverage technology.

Lauren Capelin: I think FinTech is one of those industry verticals where there has been a lot of success. In that sense and I think has been yeah, a huge contributed to its success over the last five years or so as well.

Adam Spencer: I can feel you know, your excitement and passion this space. And I’m just curious, like what draws you to this, you know, helping startups, talking to founders, investing, what gets you out of bed? Why do you do it? 

Lauren Capelin: That’s a great question. I have always been motivated by the idea that things can be different to the way they are now. And, you know, not just different for different sake, but improvement. And I think the startup ecosystem globally, but then in Australia has created so much net positive benefit and there is still so much to do.

Lauren Capelin: I’m just so in awe of individuals who have an insight that can lead to the creation of a billion dollar company or the creation of a huge opportunity for an underserved population of people the way that they can change our way of life, you know, generally for the better, of course, there’s, there’s a flip side to all these arguments, but you know, the reason I made the jump from FinTech and from Reinventure to Startmate, was to be back at the real coalface of all of that.

Lauren Capelin: I think back in 2010, there was a sense that that was quite an exhausting place to be because we had to sift through a whole lot of very vanilla ideas and very, you know, not hugely impactful, but copycat type businesses. Oh, this is happening in the US I’m going to do one of those here.

Lauren Capelin: And it’s taken us a few cycles to get to, a few cycles and a few incredible success stories to spawn that next generation of founders who have a little bit of experience behind them, or more unique insights that come from, you know, exposure and an involvement in a particular space. And we are doing things that are more interesting all the time.

Lauren Capelin: We’re innovating in areas that have previously been off limits for various reasons and actually, you know, creating real value and making real change in those places. And I just love to be there to see these people unhatch and to support them, how ever, I can. 

Lauren Capelin: Even if it’s just through, you know, through Startmate, I see my role as being to believe in them and what they’re trying to do and try to put them in the line of the right kind of support to help them get to that next level. That’s a really lonely place to be at that early stage. And you need as many believers around you as possible. And yeah, that’s the place that I think I can add the most value all things considered. So that’s what gets me out of bed.

Adam Spencer: Follow it following on from that, what do you think we’re doing really well today? 

Lauren Capelin: What I’m most excited about right now and the kind of next layer of what gets me out of bed is the sheer volume of people involved in this space right now, the mission driven way that founders come back in and support the next generation. I mean, that’s the principle that Startmate’s built on and what Niki referred to as the, you know, the way that the community can scale so much faster than anything else.

Lauren Capelin: It’s not about creating something getting rich and retiring or, you know, living on your yacht any more. It’s like I created real value and I learned so much through the process. And wow there’s people coming up behind me who are going to create even more value and how can I be a stepping stone for them or put them in the path of success?

Lauren Capelin: I think we are doing that so well and the tidal wave of people lining up to be part of that is immense. You know, Startmate’s trying to catch a lot of those things in different ways, whether that be through our fellowship program and having, you know, coach operators, you know, people with operating experience supporting the next generation of operators or, you know, our first believers learning how to make early stage investments in those next founders. 

Lauren Capelin: So we can push that belief out a layer further, or, you know, in our, in our accelerator, obviously to supporting these founders through our experience and networks and access to investment. So I think we are doing that incredibly well. 

Lauren Capelin: I think there is a high degree of motivation across the ecosystem for that concept of a rising tide floats all boats. We do have the tall poppy syndrome as a cultural phenomenon in Australia, but I think the startup industry is one of those places where it’s the least visible because we know how somebody else’s success has this knock on effect for the rest of us.

Adam Spencer: You know, you are involved with, in touch with a lot of founders, I’m assuming on a daily basis or even on a weekly basis. You know, if a brand new founder came to you tomorrow, what one single piece of advice would you give them that would slightly increase their chances of success in this very daunting world? 

Lauren Capelin: It’s a great question and I think I would answer with you know, what I think sits at the heart of the Startmate accelerator a methodology. It’s like, what’s the thing you can test today that gives you a little bit more clarity or a little bit more confidence or a little bit more support.

Lauren Capelin: It’s like, how do you not sit on this thing in your mind for the next six months waiting for that opportune moment to strike it’s how do you make some part of it real tomorrow and galvanize yourself and, you know, get that support around you to take the next step and the next step. These successful businesses are a compilation of tiny little steps and that’s where momentum comes from. You know, the more of them we can make in quick succession, the easier they become over time as well.

Adam Spencer: Yeah, that’s great. See I ask everyone this same advice question, and I feel like I need to implement every single one of those answers. 

Lauren Capelin: Don’t I feel like I need to implement it as well. It’s very good advice to but you know, it takes a lot of practice. It’s not as easy as it sounds to put yourself out there and make mistakes. But you know, that’s where the supportive community comes in.

Adam Spencer: And the last question I have, isn’t really a question, I just want to give the last couple of minutes here last few minutes to speak about whatever is top of mind for you. Like, what are you thinking about constantly and also keeping in mind that, you know, we want founders, we want policymakers, we want investors, we want everyone from all corners of the ecosystem to hear this story. What do you think that they need to hear? 

Lauren Capelin: Yeah I love that question and the thing that I think could set Australia’s ecosystem apart, if we do this right, is that a real acknowledgement that the startup ecosystem is for everyone. There is, you know, in Silicon Valley still very much a kind of person you probably see attached to or associated with the ecosystem. 

Lauren Capelin: And I think maybe that’s changing in pockets, but by and large, there’s a type and I think what we’re really trying to do in Australia is make everyone feel like they have a role to play. We actively want different viewpoints, different backgrounds and experiences like I always liked to talk about the fact that I’m a creative writing and theater studies major who has found a place in this ecosystem.

Lauren Capelin: And I take it very seriously that people with those kinds of creative backgrounds have an important role to play, but it also extends to how we think about who’s investing and how we think about who’s hiring and building and all of those sorts of things. We need to make sure that it is a representative ecosystem.Lauren Capelin: So how ever we can disseminate that message and you know, keep the barriers low to participation in whatever form. Even if you’re just an evangelist and a fan. That’s okay. Even if you’re not a builder or a you know, an investor. There’s so much that can be done. And I think the worst thing we could do is keep building up walls and you know, increasing the participation barrier and making people feel excluded, or outsider. So I think, yeah, everyone from policy to entrepreneur to investor has a role to play in keeping that clear.

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