Trevor Folsom discusses the challenge of securing talent for Australian startups
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Trevor Folsom is Co-Founder and Chairman at Investible, an early-stage investment group that aims to connect ground-breaking companies with the capital, expertise and networks they need to realise their potential on a global scale. Trevor is also Entrepreneur In Residence at UNSW, and formerly was Chairman of Car Next Door, an Australian peer-to-peer vehicle rental platform, which was sold to Uber in 2022. In his conversation with guest host Will Tjo, Trevor discusses the challenge Australian startups face in securing talented employees, as well as his perspective on how the Australian startup ecosystem has evolved over the last few decades.
Car Next Door: https://www.carnextdoor.com.au/
Trevor on LinkedIn: https://www.linkedin.com/in/trevorfolsom/
Adam Spencer: Hi, I’m Adam Spencer, and Welcome to Day One, the podcast that spotlights Australian startups, founders, and the organisations 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: Hi everyone and welcome back to the Australian startup series interviews. Our guest today is Trevor Folsom. Trevor, it’s so good to have you on the show today. Thank you.
Trevor Folsom: Yeah, thanks, Will. Thanks for inviting me.
Will Tjo: To start us off, could you introduce yourself, and what you’re currently working on?
Trevor Folsom: Yeah, it’s Trevor Folsom. I’m a co-founder of Investible, which in essence, is the combination of an investor network, and also a series of funds in the venture capital and particularly early stage. We love to invest in seed-based technology founders that are starting their journey, and are looking for capital and support.
Will Tjo: To start us off, I’d love to take us back right to the very beginning. Trevor, would you say that you’ve always been an entrepreneur? Take us back to even university days.
Trevor Folsom: Yes, my father was an entrepreneur, and had the experience of a lifetime, both to grow and have some success, but also saw the downside of the entrepreneur journey. So I was an unlikely entrepreneur, if you ask my mother, she didn’t want me to go anywhere near that, but something inside me always wanted to run my own business. I did do the typical journey of starting lots of little things, even at university days, and had no neglect, or concern, or fear for starting things, but also obviously had to tie down a job, so I went into the financial services industry and grew from there, but there was something of a real desire to do something my own and different, but I had no idea what that was going to be.
Will Tjo: Do you know now? What was that desire that kind of pulled you in?
Trevor Folsom: It was really opportunistic, it came by learning from an American finance company who were out here in the late ’80s and early ’90s, and they really revolutionized the financial services. Unfortunately, they weren’t a big player here in the market competing with the banks. I was fortunate enough to meet my co-founder, Creel Price at that business, and we both lived that journey. As a first time corp executive I really thought that’s what all businesses were like, so I was gifted into an amazing culture, and a business that was very innovative. But it was only when they sold out, and I learned from a few other businesses that gave me that desire to do things differently, and to leverage it. And so the opportunity to meet Creel at that business was fortuitous, and we started our first business together in the late ’90s.
Will Tjo: Yeah, and I can see from your profile, you’ve been with some of the most iconic names, both in and outside of the startup industry, such as Car Next Door, and then you were chairman of The Salvation Army. What year would you say that you first launched into the ecosystem?
Trevor Folsom: Well, really, you could say it’s when Creel and I started Blueprint Management Group, which was in 1996. And if you recall, that was the period just before the dotcom, and not long after the dotcom crash, and the bubble that was formed around that. We started a software business, we weren’t particularly sexy in that time, and there was certainly nowhere near the infrastructure and support and ecosystem that there is today. But in 1996, we started our first business, we were able to certainly attract lots of really quality staff to help us on the journey, but we did it in a very different way that entrepreneurs have the luxury of doing today.
Will Tjo: Yeah. Tell me more about that, how there was, in essence, a lack of infrastructure. So who did you rely on?
Trevor Folsom: Oh, I guess it was just friends and family, as they say, and people that were mentors. I didn’t really understand that terminology back then, but looking back now, certainly I was able to leverage my experience in sport, and connections that they gave me, particularly in rugby and water polo, and a number just were available to help. It was really about reaching out, being brave enough to ask some questions, and ask for advice from people, and so it was just done in a fluid nature in that sense. Certainly, early days, we were fortunate enough to meet a few investors that are still mentors today of ours. They didn’t actually invest in our business, but really gave us good insights, and probably, in those late ’90s, there was certainly a lot of interest from investors, a lot of private equity individuals coming down and looking at the venture space, and those that got into realestate.com, and car sales and seek certainly benefited, and that sort of was the rise of what I consider the very, very early days of the ecosystem in Australia.
Will Tjo: Yeah, and as you say, you started just right where when the dotcom boom happened, and kind of rode that wave, what was it like right after the bust here in Australia?
Trevor Folsom: Yeah, it was really crazy times. I saw some of my friends, and peers, and others that were jumping out of their jobs and just investing all over the world in that space, and it was really crazy. And we’d get approached a lot, we’d pitch our business, but it wasn’t have a dotcom on the other end of the name, and it wasn’t a global consumer business or brand, so it just didn’t get the attention. But I saw lots of people [inaudible] , it was there a crazy time, and we can look back at it now and learn from it. But it was an amazing time for those individuals that were able to ride through that and navigate, and a lot of them are now great investors, and supporting the ecosystem in other ways.
Will Tjo: Yeah. What you said before about how back then, wasn’t the infrastructure that we see today. Can you tell me more about what sort of support structures are available that you use today, as well as when did it start to kick off?
Trevor Folsom: Yeah, when I think about the evolution in the Australian ecosystem, as we know, we followed what we could learn in The U.S., and particularly in Silicon Valley, and programs, and which later became labeled accelerators, and incubators were certainly the early makings in those sort of early 2000s. It’s really evolved now, and so there’s support at every level, there’s support for early first-time investors, which are really powerful and a great way to help educate first-time investors and angels.
Trevor Folsom: Everybody’s looking to get involved in a startup in some form, whether it’s mentoring or consulting. We are now seeing universities really lean in, and governments as well, to recognize the need of support, and to help the ecosystem grow. So areas all over, I mean the investor side was always sort of there in the early days, but now it’s much more coordinated and considered, and there’s a real open opportunity for that advice, and whether it’s to raise capital, or just to help prepare you to grow your business, but it is not too hard to find an event, or a collaboration opportunity, and there are programs of all levels for both first-time entrepreneurs, and entrepreneurs that want to look for a co-founder, or just to support others.
Will Tjo: Yeah, a lot of guests point towards that 2012 era, is when it started to really kick off, that hockey stick growth from the founding of Startmate and so on. Would you agree with that time period?
Trevor Folsom: Yeah, that’s probably when it started to really… Thinking out a bit and mature, and I think we’ve got a lot to thank for those guys, Innovation Bay, [inaudible] , who set the charge, and recognized the opportunity to bring people together, and then certainly Phil and Nick from Pollenizer, whom they sort of, 2008 to nine, they did a lot of lifting, certainly in Sydney, and then Melbourne not long after started to follow that trend. So by about 2012, there was established programs, ecosystem, and much more awareness, and then since then, it’s really evolved. And like I said, to a lot of founders, and there’s a really great opportunity out there for them to seek information. And we do see that on the investment side, where founders are really coming a lot more prepared, and certainly knowledgeable about what it is they need to do with their business to attract funding.
Will Tjo: Yeah. I’d love to turn towards improvement opportunities now, and I’d love to get your perspective. Do you think we’re on the right track as an ecosystem, or is there some things that we could still be doing better?
Trevor Folsom: Yeah, we’re certainly on the right track. There’s great evidence now of changes in the way that investors are setting up, and we’ve got a lot of good funds now that are specialized in their areas, like Tenacious Ventures in the ag tech area, and the Giant Leap in ESG, and even Investible, we’ve now got a climate tech fund. So that’s a good example of funds, not just being so broad, and really looking to invest in sectors. We’ve got some great secondary market funds now evolving, and Ian Beatty from SecondQuarter is a great example of that.
Trevor Folsom: We’ve got some now new development of adventure deck products with the Marshall family office, and what Melissa [inaudible] ‘s doing, and also sounds like there’s going to be others that are coming in, which is a great recognition, and probably a good desire. In terms of the program side, I’m hearing some really fantastic things going on around the universities in particular, I’m involved in New South Wales university, and they’ve been fantastic in attracting some good people, back to add value, but also people outside of the university, and the programs like that at UTS and ANU and Canberra, there’s just some amazing examples that we are evolving and creating opportunities for both founders and investors.
Will Tjo: Yeah. I mean, reflecting over the last two decades back when you first started that Blueprint Management, how has the ecosystem grown? Has it been what you expected it to be?
Trevor Folsom: It’s hard to say, I mean, really, if I look, it’s only 10, 12 years, I’d probably give it a level of achievement. There’s certainly more to do, and we are challenged by distance and some other areas, but I certainly think… The best example is reflected in the founders, the way that they think about their businesses now. It was pretty common in 2000 and 2005 to hear an investor, or even a successful entrepreneur highlight that Australian founders need to really think more global, and be broader, and more ambitious. We definitely see that now, founders are recognizing that the success that they can really achieve is unlimited, the technology that’s available to get your first customer doesn’t have to be any longer in Sydney, or in Australia for that matter, you can be on the world stage straight away. So we’ve adopted that, and I’d say we’re definitely on the right track.
Will Tjo: Yeah. You mentioned there’s still more to do though, tell me more about that, what are some of those things?
Trevor Folsom: Look, I think we’re all challenged by the talent war at the moment, and it’s not unique to us as early stage venture businesses, but it is particularly challenging when a lot of the activities in capital cities, like Sydney and Melbourne, they’re expensive cities to live, and so when you’ve got a talent war going on, and a lot of employees need a cost of living, and so starting the ecosystem, or having a focus around the capital cities is really challenging. Startups, they need to be careful of their spend, and their burn rates early, so they just naturally can’t compete on salaries. So there’s a challenge that we all face across, and there’s not an industry that doesn’t, but particularly relevant to us here in the startup world. And whether it’s the case of looking to cheaper locations to start these businesses, moving hubs around the country, certainly governments all around have recognized the opportunity to create a pathway, and to build a micro ecosystem in their own areas, and I think that’s a really positive thing.
Trevor Folsom: I’m quite surprised that the big recruiters, and, or other innovators haven’t really caught onto the opportunity that there is to recruit, or create a new model of engagement for finding talent, and bring them into early stage startups. There are some great examples of people that have spent their time, and effort, and energy, and they may not invest with capital, but they invest in resource or a service offering, in the hope that when that business does mature, and grow, and can afford to pay fees that are equivalent to what the market demands, things like that are a real opportunity. So I’m expecting our innovators around the country to come up with ways to try and help, and particularly help this sector, because if you do get it right, these businesses are going to grow fast, and if you are the recruiter or talent champion of choice, then you’ve got a great business idea, or certainly as an individual, you’re going to have a great career.
Will Tjo: Trevor, do you have any unpopular opinions about our ecosystem, something that you believe is true, others don’t seem to be on the same page as you?
Trevor Folsom: Yeah, look, it could be unpopular in the negative or positive way, it’s probably an opportunity more so, and I predict that it will be. Corporates in Australia haven’t really cracked the model, mass generalization here, and not everybody’s in this bucket, but compared to The U.S., where probably 12 years ago, when I spent a lot of time there, you could see some of my peers in The U.S., fund managers are backed by 70% of their LPs are corporates. We’ve got institutional money coming into our funds, but it’s prominently, super funds, corporates really haven’t leaned, and those that have, I mean they’ve done some good R&D, and some work to learn about the innovation space, or to tick the box. Others have supported and sponsored programs for the same means. Some have tried to build venture funds, and consider themselves as having the ability to that be quite complex, and not a lot of great examples there.
Trevor Folsom: And so really, I think the next phase, and the opportunity we’re going to see is that corporates will start to find out, and partner with fund managers, and recognize that there are opportunities for them to invest behind a manager and alongside, and to support in other ways, whether it is a learning exercise or not. But in The U.S., it certainly has proven that the corporates over there, 15, 20 years ago learned pretty quickly that they bear off backing the fund managers, and I think that’s going to be the next evolution in Australian venture capital particularly.
Will Tjo: Yeah. Why is that? How come corporates haven’t leaned in?
Trevor Folsom: The biggest competitors in a corporate is inside, and the one’s own ability or desire to continually create a service offering themselves, so that’s one of the elements that’s probably held back a little bit. And the others is, I guess, the real big focus, in relative terms, investing 10 or 20 million into this sector, it’s not going to change the bottom line, and the short-term focus of share price is probably one of those elements. So we need innovative CEOs and boards to look beyond that, and to see that there’s… Especially if their own business is under attack, they need to be really more aware, and invest in other models, and other companies. It’s really been probably a short-term focus on shareholder value, and also, those that have ventured a little bit maybe didn’t get the success that they probably thought and hoped, so they retreated, but I think that backing fund managers now, there’s a lot of experienced managers in this market, I think is really a great opportunity for them.
Will Tjo: Yeah, that makes a lot of sense. So Trevor, as you know, what we’re trying to do on this series is to document as historically and accurately as possible, the history of our ecosystem, just so that we can look to the future, and we’re aiming to reach all corners from founders, investors, academics, and entrepreneurs themselves. Is there anything that we haven’t talked about today that is always top of mind for you?
Trevor Folsom: Yeah, look, it’s probably through my own experience, and those founders that have… Or the first-time founders that are really driven by wanting to test their business model and so forth. I think there’s been a lot of emphasis on the importance of raising money first as the pathway, whereas through my own experience of not being successful in raising capital, or choosing not to, I think they’re still very relevant. And so those founders that get busy, build their team, build their product out there, and can validate that, the capital will come, but trying to change that mindset of, “I need to raise the money before I can make this business work.” Is a real challenge for them. And I think we are seeing a lot more support of those founders to get them ready, but that’s really a big desire. And don’t think that until you raise capital you can make a business, in actual fact, turn it inside out, and try where you can, and hold back from necessarily raising too early, or diluting your own equity so quickly. If you can prove it out and get it right, then the capital will flow in.
Will Tjo: Yeah. I think that is a good segue into our next question, because I was just about to ask you, reflecting on your wins, your experience, and your mistakes, what’s your advice to future entrepreneurs? Is it that not being in a rush to raise capital?
Trevor Folsom: Yeah, that’s one of the ones. Yeah, definitely. It’s where we mention this talent war, it’s really, think creatively about your next hire, where are they going to come from? Can you even bring them in, and maybe engage with them in a different way early on, before they’re ready to take the big leap of faith and leave. So there are different ways to get that talent engaged, and we are in a global market now, and so they don’t have to be in your city any longer, you can certainly prove that you can build a team virtually and globally.
Trevor Folsom: And then the other standard one, and we still suffer this at Investible, is being careful of taking on too much too quickly, and try not to necessarily think you have to be the best at all the parts, certainly set a vision for such, but get really good at what you are best at, and if you can be the best in the world of that component, or that part of the industry and own that, then the rest will flow, and really good supportive investors will see that. And so don’t think that you’ll have to present the end game from the start, it’s really finding that unique space that you can differentiate, even if it’s very narrow early, get that right, and the rest will flow.
Will Tjo: I love that. And lastly, Trevor, are there any heroes in the startup ecosystem, or an individual story that you would like to shout out? I know we’ve mentioned quite a few in the episode so far.
Trevor Folsom: Yeah, yeah, those ones that I’ve mentioned are heroes and good friends of mine, and I think we owe them a lot. And there are others, somebody that’s been a mentor from the day one, when I sold my business, the best bit of advice I got that still holds today is, just because your success as an entrepreneur is current, it doesn’t mean that you’re going to convert yourself into an investor overnight. And so that was Tony [inaudible] who was on our board when we sold, and it was great advice. So I challenged him to say, “Okay, who do I go and see?” And so he opened up his network in The U.S., he was one of the first employees in Yahoo, and so that gave me great access there.
Trevor Folsom: But I also got to meet Roger Allen, who I think we owe a lot to. He was in the dotcom, he was investing then as Allen & Buckeridge, he was obviously a very successful investor and entrepreneur himself, and he’s still investing today, and he’s still a close mentor and friend of mine. And the fact that he’s gone through major changes and challenges in the industry, he’s been incredible.
Trevor Folsom: And then there’s, I guess, the founders, everybody that we invested in, and no doubt other venture funds invested in before COVID. We really expected a whole lot more carnage and crashes, and we invested in companies that are in sport tech, and travel tech, they really relied on events and venues being open, and to see them being closed for so long, it’s amazing that they all still survived through that, and so credit to them. All those founders that, again, showed that resilience, and desire, and reinvented themselves, and some, I think they’re a great hero of mine, and we can’t name them all, but certainly we’ve got a number in our portfolio that prove that we back the right people, and the fact that they could get through that phase, and even improve their businesses if they’re ready for growth that we’re about to see.
Adam Spencer: 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.