Peter Tippett discusses the future evolution of company ownership and management
Peter Tippett is a serial entrepreneur with decades of experience working in startups both in Australia and around the world. He is currently working on three ventures, all of which he co-founded in the last few years: BodyMindLife, a platform for passionate community creators, educators, teachers and students, Vault3, which provides storage services on blockchain, and KULA, which utilises Web3 technologies to create online communities. In his conversation with host Will Tjo, Peter discusses his first-hand experience seeing the internet evolve from Web 1.0 to today, as well as how he sees company ownership and management evolving in the future.
Peter on LinkedIn: https://www.linkedin.com/in/petertippett/
Adam Spencer: Hi, I’m Adam Spencer and Welcome to Day One, the podcast that spotlight 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.
Adam Spencer: This episode was conducted by guest host Will Tjo.
Will Tjo: Hello everyone and welcome back to the Australian startup Series interview. Our guest today is Peter Tippett. Welcome to the show, Peter.
Peter Tippett: Thank you very much for asking me to join.
Will Tjo: So could you tell us a bit about yourself and what you’re currently working on?
Peter Tippett: I’ve been building startups since the… Would you believe the late seventies when I wrote my first software on a [inaudible] I moved to Australia from New Zealand in 1995 with my company then and really started getting involved in the Australian startup scene after leaving [inaudible] legal about 2008. We built our first Australian based startup, which we took global with live TV engagement, and I left that in 2014. Did another startup 2015 and then moved North to Newcastle just over three years ago. A bit of a variety of activity.
Will Tjo: You’ve been an entrepreneur, a serial entrepreneur at that, for about five decades now, and so you’ve seen the start of the whole ecosystem. What has it been like and how has it evolved?
Peter Tippett: Well, would you believe I built my first computer when I was 17? Would you believe one megahertz processor with 128 bytes of memory?
Will Tjo: Wow.
Peter Tippett: And a hexadecimal keypad. I wrote my first commercial software on the Apple II and that’s when I first learned the experience of IP Fair, where a company says they’ll sell it, and then three months later they come with, “Oh, we can’t sell it.” Then three months later they came out with their own version and about 70% was my code.
Will Tjo: Wow.
Peter Tippett: Yeah, so I’ve been through what they call the web one, web two, and I’m actually in the process, would you believe, of building a web three business right now.
Will Tjo: Wow. Every single one.
Peter Tippett: Yep.
Will Tjo: Was it difficult creating software back then, launching your own products? Because you mentioned there was a business that took your software. Was there much support structures around you?
Peter Tippett: There was nothing. I was in New Zealand. I was building software for companies, and I actually even built my own accounting software company, which I started in ’87 and that’s why I came across there in ’95 with it. That business today is still in business. I left that in 2000 due to different experiences. But back then you weren’t called a startup, you were just a business.
Will Tjo: Just a small business.
Peter Tippett: Just a small business. I wrote a web server to my accounting software in ’96, and came running up in the Channel Nine software awards, but that was all the only accolade you could get. And everything was bootstrapped.
Will Tjo: Yeah. When would you say those things started to kick off, and we had some semblance of a community start to rise?
Peter Tippett: When I left [inaudible] legal in 2008 and joined the startup, it was based around the 80-20 rule as a public, unlisted company. So they raised some money from non-sophisticated investors. And that was an experience, to see how that worked, but I wouldn’t do it again. We end up with 180 shareholders and managing shareholders as a nightmare, especially when things don’t go out well, because the GFC hit about five months after raising the money.
Peter Tippett: But out of that came our live TV engagement, which we took global. People seen it on the cricket for about six years as the Viewers Verdict, where the commentators asked TV audience what they thought. And we had clients like UFC, Disney, NBC, Red Bull, Fox Sports, using our software around the world. It was all started by us, actually, getting on a plane, 2010, in August and we flew to Boston to meet the chief marketing officer of UFC.
Peter Tippett: We pulled out the iPad and said, “Here’s your TV screen.” Gave them the phone and said, “Tell us who’s going to win the fight.” And basically did it. We switched it around, tried to sell, and that was on iPhone three. Two minutes later he says, “Can you put it on our next event in Indianapolis in four weeks time?” We went, “Yeah, no trouble.” Walked out the door and went, “Oh God.” We hadn’t even put it on a TV screen yet.
Peter Tippett: We delivered that one month later and had it working. And that idea started back, would you believe, only in April, 2010. So 2010, April, we started it. We’re on air with UFC in September. Six months later, we were in Brazil with Miss USA doing 65,000 votes a second. Now on Amazon and hammering that away as our first real test of what we had developed. But we raised most of our money offshore after that and raised, I think, about 18 million.
Will Tjo: Why was that? Why did you go offshore? Was it just a lack of capital in Australia?
Peter Tippett: Lack of capital. The market was only just starting here and we had connections into Silicon Valley, but a lot of our money actually came out of Canada, because it was the TV executives and the TV investors that were backing us at that point, basically. And it was part of TiE as well in Australia, which is a entrepreneurial network, and we were doing mentoring and helping other startups.
Peter Tippett: In those early days, it was young, there was no structure yet, and it was the level of experience. What we see today is we based on that third cycle of experience, but back then there was no real founders. And as [Nicky Blackberg] can tell you, raising a fund at that time was… It took him a year. And basically, when we dealt with offshore… Like we did one deal, would you believe, in 15 minutes for one and a half million and it was in our bank account seven days later.
Will Tjo: Why is that the case? I mean it seems that Australia seems to lag behind the rest of the world. I’ve heard some guests say between 10 to 15 years. Would you agree with that?
Peter Tippett: Yes and no. There are some here that will take a chance and go with it, are moving quick. It’s just the difference of volume of capital. Like AirTree’s announcement yesterday for 35 million for web three. Well, in the last four weeks, 7 billion dollars US has been allocated to web three projects as funding. It’s just the scale difference. And basically we’re only on second generation founders. We haven’t even hit third generation founders, where you got to think, in the US, they’re on 10th cycle. It’s just experience, and the willingness, but also the amount of capital.
Will Tjo: Yeah. Do you think, then, it kind of roots towards a cultural problem? Australian founders and investors just don’t have the risk appetite?
Peter Tippett: Yeah. I was doing the raising for this business last year. We had a couple of people put money in, and then when we went back, it says, “Well, we done with web three with NFTs.” Basically only one of them wanted to comment. The other one’s going, “No, I don’t get it. I don’t want to play in that world yet.”
Peter Tippett: And to the point our pitch deck has actually been structured so it’s orientated just for the people who understand web three. If you’re not into web three, we won’t even talk to you now, because we spend all that time educating you. But I’ve seen this before. I saw it at the start of the cloud in 2008, with all the ups and downs, all the [inaudible] going, on and that business I pow-wowed could never have happened without the cloud. And that’s what I see right now. It’s just the web three is maybe going four times faster than the start of cloud did.
Will Tjo: Yeah. And Australian investors and founders just haven’t kept up with that speed.
Peter Tippett: Well, basically, I’ve been listening to presentations from Jason [Canalalas] who’s inside, where VCs pitching to you, and he’s done that. And the VCs in the US are actually pitching to investors now to say what they can do for them. Where Australia, number of VCs or investors are angel investors, that is to say, well, a very different attitude. And it’s very interesting to see the American model. And we’re dealing with some in Israel right now and it’s the same. Attitude is, “You’ve got a great idea, how can we help you?”
Will Tjo: Do you see that change over the next, say, five or 10 years, or do you think it’ll take longer for our ecosystem to mature?
Peter Tippett: I think it’s going to accelerate. The issue is, see, web three is very different to the old SAS model. So web three is about community, and basically, the way you raise money under web three is very different. You’ll do a pre-seed, and you’ll do a seed, but then your series A will not be from the investor network, it’ll actually be from your community, and your community will start funding you, just like you do with IPOs on the stock it’s going.
Peter Tippett: And that’s going to change a lot of habits, because suddenly, you as an investor who would rather come in a series A, series B because it’s safe, suddenly now don’t even have those on the table anymore. Now you got to realize you’re going to have to write checks sooner and you can’t own as much. And that’s like John Henderson actually wrote his blog yesterday. There’s no more of owning 20% of us, of a company, ’cause it’s going to be owned by the community.
Will Tjo: Do you think our development on the change of ownership structure, so instead of having a series A and B, it’s going to be community funded is a good or bad thing?
Peter Tippett: It’s going to be DAO driven, but it’s not going to… It’s going to be like I had with the public company, but the difference is you are doing this all remote. People have actually got to be doing things to have votes. They can’t just buy some shares. They have to be engaged in the community to get voting rights. And because they’re also using your currency or token, there’s money always going into your treasury to allow you to do things. So the bigger your community grows, the more everybody makes, ’cause the community benefits. So your community becomes your advertising channel and your go to market channel. No more giving money to Google and Facebook.
Peter Tippett: And that’s going to change a lot of activities in this area. It’s quite interesting and quite fun for this massive change.
Will Tjo: Do you think then, with the rise of technologies like this, then I guess geographical ecosystems won’t necessarily matter as much. There’s no point having an Australian ecosystem or American ecosystem, Israeli, and so on.
Peter Tippett: Yeah, it would be a lot more connected. We’ve already got used to it with Covid. Like the business I’m building could not have existed without the effect of covid on people’s attitudes. Because, basically, pre covid, only 5% of teachers believed they could teach yoga and wellness online. Covid, now over 90% of them can do it and they believe it can be done. That’s the change. We as a people now accept online, like you and me doing an interview. Normally we would’ve been sitting in a room together, face to face, and doing this, not doing it over an internet connection, where you’re in Sydney, I’m basically Newcastle, two and a half hours distance apart.
Peter Tippett: And it’s like my team, even though they’re around Newcastle, actually the time we spend face to face maybe once every two to three weeks. And we could be spending face to face but we don’t because we find it’s more efficient working remote.
Peter Tippett: And that’s going to change. I’m talking to a company in Israel right now. After this interview, I’ve got a call with lawyers in Switzerland to set up the foundation for this project. Basically, it’s a global activity, and my shareholders, well, the DAO owners will be all over the world as well. So it’s a very different… This web three, it’s coming back to the pure idea of the internet, of being decentralized, but now an organizational activity. The infrastructure can support it. So it’s now about how we think organizationally and behaviorally, which is very different to [inaudible] about tech now.
Will Tjo: Yeah.
Peter Tippett: Tech’s the easy part.
Will Tjo: So far we’ve been talking about the support structures and infrastructure, or founders and investors. What about government? Do you see them as a key player in web three?
Peter Tippett: Yes. The issue they’ve got is the speed of web three. Who would’ve thought six months ago NFTs would’ve done what they’ve done now, where last month they did 9 billion in transaction volume just on Open Sea. But you can see India yesterday announced that they’re going to do a 30% tax on crypto, so they can start taxing you, because that’s the only way they’re going to get access to it. Which means, inherently, they’re going, “Well, it’s here, the Pandora’s box is open, we can’t put it away, we’re going to manage it.”
Peter Tippett: The problem is governments moves too slow and companies are going to work really hard to manage that. For us, like us looking at Switzerland, why? Well, Crypto Valley in Switzerland is where Ethereum and all them are. And there’s a lot of talent there, but there’s also the legal structures are there. We were considering Singapore three months ago, but Singapore has been changing the rule and that’s a big difference.
Will Tjo: It’s interesting that you mentioned this because it sounds like there will be a brain drain towards geographies that are more friendly, that have more friendly policies.
Peter Tippett: Well, we’re not moving ourselves. We’ll keep a subsidiary here, which is running the business and doing everything. Engineering will spread around the world because talent is talent, and with the whole online world, it doesn’t matter where it is anymore as the last year can tell you. So that’s a big change and all that. So yeah, it’s a real headache in that way, and basically we just got to deal with it.
Will Tjo: So Peter, what we’re doing with this podcast is to document, as accurately and truthfully as possible, the history of our ecosystem to inform where to go in the future. And we’re trying to reach all the corners of the ecosystem. Founders, investors, policy makers and students. Pick any one of those, or all of them, what’s on your mind that you feel like all of them need to hear?
Peter Tippett: Well, I say I moved out to the Sydney startup saying three and a half years ago. So I haven’t been networking, haven’t done the face to face the same. And I found, in the regional, there is a lot of talent up there, but it’s not noticed and that talent’s having to go to the city. But now, with remote, we don’t have to. And I think, basically, Covid allows, now, regional to actually be thought about properly, which has been the major issue as I see for regional.
Peter Tippett: Regional’s now valuable. The facilities we got, like the university here in Newcastle, the whole top floor of a brand new building is dedicated to co-working space with the latest technology available, and then the three floors below have got all the creative industries, so got access to green screen rooms, sound recordings, video, and the people who are doing it. The creators and that, which is what web three really supports, are going to come from those places. And that’s the thing. [Inaudible] Where we are doing, there’s a lot of heavy, deep tech going on, but I’ve noticed it’s very much from being in Sydney to being regional. Regional feels as though it’s forgotten.
Will Tjo: So what I’m hearing is, even though there is this greater recognition of regional ecosystems and talent due to covid, it still largely goes unnoticed compared to the metro areas.
Peter Tippett: Yeah. Well, you look at what Tech Central is doing. It’ll centralize and pull lot of people in. The brain drain’s going to come out of the regional, but a lot of people go, “Well, I don’t want to go into the city. I want to have a lifestyle and I can have a lifestyle if I work remotely.” So then the whole centralization model starts to break down.
Peter Tippett: But then the issue is, is face to face networking is the most powerful form to communicate. It’s been easier for me to talk to investors internationally than to talk locally, because internationally, they’re already used to doing Zoom calls, and I’m doing that on a regular basis. Where, down in Sydney I haven’t really tapped the investment community in Sydney at all, which is a very different thought process. I’m only two and a half hours away, but rather deal with other people around the world. It’s a very different game.
Will Tjo: What sort of form would you want the recognition to come in? Is it infrastructure development?
Peter Tippett: I think it’s more… I can see what, in Newcastle, we’ve got Diffuse, we’ve got Camplify that’s now public. A lot of the startups are starting to appear. They’re on people’s radars and getting acquired or invested in. And the money’s actually coming internationally. Some of the checks are being 20 million checks, 20 million dollars. That will start getting us recognition, but that’s a slow process.
Peter Tippett: And that’s the whole thing. It is a lot slower than being in Sydney where you’re, basically, in those hubs where you’re face to face. The speed of communication, the speed of growth is essentially faster. As I talk about when you’re doing it through this, your bandwidth is through a little pipe, but when you’re face to face, the pipe is massive and the amount of information that you can pass. And that’s why face to face networking, or going face to face events, works so well. But I got to come down to an event next month. I got to be there for three days. I got to pay for four nights accommodations. In Sydney, that’s $1,200. Thank you very much. And that’s the other thing, for regional, travel becomes annoying. My co-founder lives in Byron.
Will Tjo: It’s just allowing greater use of technology, really, to facilitate the process instead of having to physically just be there. That’s the disadvantage of regional.
Peter Tippett: Yeah. And we’re a lot more overpaid with remote. I still find the Zoom models are the best we have right now. I did research and video conferencing, would you believe, back in 2001? Wow. The team I had, we built a whole video conference system for Doctors Without Borders and I had a Sun Micro as the machine encoding everything, a Sun mini computer, which is the size of a filing cabinet. And your video size was 240 by 320. We now doing video at 720 and 15 frames per second still, which is basically why we get fatigued, because we’re only operating it 15 frames per second when we’re video conferencing and we see at 24 frames per second.
Peter Tippett: Technology’s got to go through another jump, but then Australia has an MBN that’s not that fast. I’m a Kiwi. My brother-in-law rubs it in every time I go over there. He says, “Oh, come here and have a play with my system.” He’s got a fiber to the house. One gigabit synchronous connection. To your house. My laptop died three hours before flying to NZ. My screen died. So I took my spare one, got to my parents’ place, and I plugged into the network. Four hours later I downloaded my whole old laptop via the internet where I had it backed up onto that laptop so I could work. Wouldn’t even contemplate it here on the MBN.
Will Tjo: Yeah, we’re barely pushing 50 megabytes per second.
Peter Tippett: Yeah. I’ve got about a hundred meg [inaudible] and about a 20 up. And if I go 200 meters closer to the river, I got 5G. Would you believe it’s 800 megabits down and 80 up on 5G? But there’s not many people on it so I can be at that speed. That, I think, is going to hold us back, is our speed of internet.
Will Tjo: So lastly, Peter, this is the advice question. If a brand new entrepreneur or founder came to you, given all your experience, mistakes and wins, what’s one piece of advice you’d want to give them to increase their chances of success?
Peter Tippett: Tap into the mentor network. I’m a mentor at the university and we run a program for mentor services where they allocate two or three mentors to a startup. So you don’t get one eyed view, you get a view from three different people. So you actually get a proper view of what’s happening. And that’s, to me, is talking to other people who have been there, but they’re not over far ahead of you. They may be three months, or six months, or 12 months ahead of you, so they’ve felt your pain.
Peter Tippett: Too many of the mentors are advisors, they’re accountants, or lawyers, and all that, and they’ll give you great advice, but you want founders. People who have been there, and felt the pain, and have the scar. And I’ve got a lot of them over the years. But it’s being able to get to those. But it’s so hard, because there’s so many startups being created every week, and there’s only so many founders.
Peter Tippett: I’m part of a thing called Lunch Club, and every Thursday at 12 o’clock, I’m connected with somebody randomly and we have a half hour talk, or an hour’s talk about things. It’s just teaching new founders. Just connect with people. And it’s not about going to networking events, ’cause you only get to talk to them for five minutes and you’re going to move on to next one. Somewhere where you can actually talk to a founder for an hour.
Will Tjo: How would you suggest that the startups differentiate themselves?
Peter Tippett: Most startups don’t know what they’re building in reality until they’ve built it, and then they realize, then they find the piece, the little gem, the diamond in the rough. But most, you’ve all got to go through the pain. We all tell us, we’ve got to go through MVP, we’ve got to go through the [inaudible] , we’ve got to go through all those processes. And we do this all online and all that, but you got to do. You just got to start. And if you don’t start, well, you are not going to get anywhere. Just the act of starting is the most powerful thing, and being serious about it. So many [inaudible] , “I’ve got this thing.” I says, “Okay, and what you doing?” “Oh, I’ve got my full time job.” And I says, “Well, then you’re not passionate about what you’re about to build, are you?” “Yes I am.” “Well, why you still got your full-time job?”
Peter Tippett: “Got to pay the bills.” “Well, then work out how you to get the point where you don’t have to worry about the bills. Either raise some money, or get a co-founder, or work out away, move back home if you’re young.” I’m in my early sixties. I’m starting again. I’ve building another startup from scratch. I’m lucky. I can look at my father. He was wiped out at 55 in his business, with the engineering business. Restarted at 60. When he passed away last year he was in his early eighties. My mum’s got a couple of million dollars to live off for the rest of her life. And I’ve traveled the world and built some great products. So age is not the barrier. The barrier is people’s attitude.
Will Tjo: It’s like the old adage, if you really want it, you’ll find a way to make it happen.
Peter Tippett: Yeah. And if you can talk to people who have actually gone through it, then you can feel confident. The hardest thing is actually feeling as though you’re not an imposter. And that’s what a lot of I’ve seen. I did the females founders mentoring, just getting to think beyond the box for what… She had a normal job, at and what she ended up was way beyond what she thought, and then bringing her back to reality. But allowed her to go through that experience of expanding way beyond what she could ever think of doing, then coming back, and says, “Well, how can we test it, and make it work, and understand, and get feedback?”
Peter Tippett: And she says, “I’m thinking of building a website.” And I says, “Well, why not just… You’ve got an Instagram. You’re already using Instagram. Why not just use that as your little test site?” And away she went. ‘Cause it’s not engineering, it’s actually understanding your users. And that’s the hardest thing to get people to understand. Go and talk to people.
Will Tjo: Yeah.
Peter Tippett: I used to get sick of when startups come and says, “I can’t talk to you about my idea, but I’ve got a really great idea.” Like, “Oh, you got to sign an NDA.” Well, that’s not going to happen. So many things like that happen and still happen.
Will Tjo: It’s been a pleasure having you on the show, Peter.
Peter Tippett: Thank you very much.
Will Tjo: What’s next for you?
Peter Tippett: Well, I’ve got a call with Zurich shortly, talk about foundation structure, but we’re raising money at the moment before we do our IDO or IEO, depending on if we can be can be accepted on to exchange, which is joint interest. Because at the end of the day, we intend to support the other features there to get real income. Because, now, their online classes are now an asset. And as soon as you turn something to an asset, there’s amazing stuff you can do with it. And we’ve already proved that with the last six months, the data we’ve got. A yoga studio teacher, a teacher with one class, their class has an asset value of $18,000.
Will Tjo: Wow.
Peter Tippett: So the thing, for the first time, those teachers who are teaching are now building an asset, which in theory, they could actually borrow against to buy a house. Who would’ve thought that? That’s how big a game changer I’m seeing in this whole world right now, is IP is now able to be put in the hands of regular people to convert into asset instead of the top musicians that have been doing it for the last 20 years. Or TV shows. Regular people can access the same type of capability now. And it’s not hard to create content now. Just look at us doing this podcast.
Will Tjo: Yeah. Where could the audience go if they wanted to learn more and connect with you?
Peter Tippett: Easiest way is my LinkedIn profile. It’s Peter Tippett. Easy to find. Or my Twitter handle is Peter_Tippett.
Will Tjo: To our audience, I hope that you found it incredibly valuable. Until next time.
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.