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MC: Good afternoon everyone, if I could ask you to please take a seat so that we can get
started. It's quite a full event that we have on today. A lot to get through and we want
to leave as much time as possible as well for your questions once the panelists have
spoken. I'd like to welcome you all to Queensland Small Business Week here at The Edge. My name
is Karina Carvalho and I'll be your emcee for today. I'm new to Queensland, so if you
don't know who I am, I'll just explain very quickly that I present the ABC News here in
Queensland. Before that, I was in Melbourne, presenting ABC News Breakfast, which was a
national program, so some of you may know me from that. Before that I was in Perth with
the ABC as the 7 p.m. news presenter there for four years. So that's a little bit about
me. But what we want to know about is Queensland Small Business Week. And today is I think
we're into the third day of the week, so it started on Wednesday. Also celebrates the
contribution that small business has made to this fantastic state.
This week is an opportunity to recognise not only the efforts of small business owners
but also the many employees who've worked to help them succeed. So thank you for joining
us here today. In particular, to learn more about the coming a high growth start-up.
Firstly I'd like to acknowledge the traditional owners of the land on which this event is
taking place and pay our respects to the elders past and present. This afternoon's event is
also available by webinar and we have more than 20 participants logging in for the webinar
throughout the state, so we welcome you. And in addition, we welcome the Mackay office
of the department, which is hosting a networking event and watching us live from the Mackay
library. A big welcome to you, it just goes to show you how far technology's come that
you can do all these regional hookups!
So building a startup with ambitions to scale means finding the right support, and today
we hope this event will provide you with the support that you need. I would now like to
call on the Minister of Tourism, Major Events, and the Commonwealth Games and of course Small
Business – the Honorable Jann Stuckey MP to the stage for the official welcome.
Hon. Jann Stuckey: Thank you so much and may I say this is an absolute joy to watch the
ABC News and see you present. So you have a fan here, and I'm sure I'm not the only
one. Look, good afternoon. It is already. Good afternoon ladies and gentleman and could
I also respectfully acknowledge the traditional owners and custodians on the land on which
we meet. The owners who are with us today and those who have passed. Could I also acknowledge
Mr. Steven Tait who's the Chief Executive Officer, Chamber of Commerce and Industry
Queensland. A very important partner with this government on a number of great initiatives
and I'd also acknowledge Leigh Angus, the Program's Director of iLab Accelerator, Rick
Chen, the co-founder of Pozible Propriety Limited, almost said puzzle there with that
z in it, Jacinta Caithness, Partner of Price Waterhouse Coopers Australia, my Director
General, Dr. Richard Eden, friends, small business owners and would-be one and all.
It is terrific to be here at the age where I'm at in a live event tied to becoming a
high-growth start-up. As part of our Queensland Small Business Week celebrations, I really
hope you'll find the webinar not only interesting but also interactive and gain some terrific
information about becoming a high growth start up. Sounds quite exotic, doesn't it?
Last financial year, my department delivered 15 interactive business-related webinars,
which attracted 1,570 participants. So I encourage everyone here to participate in future webinars.
If you'd like to find out about some of those webinars that we've already held, all of the
recordings are available via our Business and Industry Portal, or BIP as we call it,
at www.qld.gov.au/business. Before I speak a little bit about the high-growth startups,
I would like to briefly outline what initiatives that we have undertaken as your State Government
to support our goal of reducing unemployment to 4% and cutting red tape by 20% by the year
2018, which just happens to be the year the Commonwealth Games are coming as well.
Your State Government has worked very hard over the last 12 months to implement the following
promises to small business. The first one was to pay all bills from suppliers to government
up to $1 million within 30 days, to expand the payroll tax exemption threshold, to establish
the skills and training taskforce, to reform the skills and training system. To scrap those
useless declaration forms and to reinstate the principle place of residence stamped duty
concession. To also cut green tape by passing the environmental protection green tape reduction
bill. To repeal Labour's industry waste levy. To create a Department in Government with
specific responsibility for Tourism and Small Business. To reign in the government spending
and stop squandering taxpayers money. And to better consult with small business through
the Queensland Small Business Advisory Council, which I chair.
I'm really proud to be able to say that we've delivered on every single one of those commitments
without our first 12 months. And there are many, many more commitments to come. The Newman
Government, ladies and gentlemen, is unashamedly pro small business. And we are committed to
growing very strong and prosperous for Small Business sector. Like you, we understand that
small business is the backbone of our economy, and underpins along with our four pillars
of Tourism, Construction, Mining and Agriculture. The statistics, though, do speak for themselves.
There's about 412,000 small businesses here in Queensland, and they represent 96% of all
businesses and employ almost half of all private sector workers.
I come from a small business background. So did my father and his father before him. Before
entering politics, I ran my own successful communications consultancy, consulting to
businesses on the Gold Coast for more than 15 years. Mostly, I consulted to major resorts
and tourism operators. Today, I am still the director of a small medical practice in Coolangatta
with my husband. Many of my government colleagues come from small business backgrounds. I guess
you could say, we "get" small business.
We have a genuine passion for and intimate knowledge of small businesses. We understand
the challenges and the need for support, guidance and coaching at various times. We recognise
that Queensland's small businesses are the engine room for innovation, employment and
economic progress. We also recognise that high growth startup businesses play an important
part in growing our economy. Becoming a high growth startup is difficult and we want to
help yours to survive.
Around 60,000 new businesses are established in Queensland each year. However, the stark
reality is that after just three years, only about half of those will still be operating.
Sounds a bit like politicians! That's not in the script, is it? The businesses who do
survive go on to create more jobs, generate a greater economic impact and have the potential
to give back to the community. Very soon you'll be hearing from high growth startup entrepreneur
Rick Chen, but I will briefly – if I may – touch on Rick's story.
Rick co-founded Australia's first crowd-funding platform, Pozible, in 2010. A platform allowing
creative individuals, groups and organisations to raise funds online. Rick had a unique business
idea that quickly went to being an unwritten thought to one of the major crowd-funding
sites around the world, and has helped dozens of creative projects get off the ground. Rick
took the risk and put everything on the line to pursue his passion for technology and helping
others. And I would really like to extend my sincere congratulations to Rick on his
success. I'm sure you would join me in doing that.
The breadth and depth of startups and angel investors is growing in Australia. There are
abundant opportunities to create high-growth businesses in Queensland and it's imperative
that startups find the right information and support from the beginning. This will help
them get through the post-seed stage or "valley of death," as it is popularly referred to,
to also maintain their stamina and successfully manage growth. Right here in Queensland, we
have world-class business and innovation incubators with expert advisors and mentors that are
supported by our own BIP. My department's new look BIP successfully acts as the Government's
one-stop shop for business to government services, delivering a range of tools to assist business
from inception all the way through to expansion and on to export. With more than 600 business
customer service pathways, the BIP helps high-growth startups to establish and manage their businesses,
including developing the right schools, building capacity, connecting to ideas and new technologies,
accessing new markets and promoting services. I'm very pleased to say that over the last
two years, our BIP has saved Queensland businesses over a quarter of a billion dollars in time
and money savings.
In addition to growing our online services, the Queensland Government is giving small
business a serious burst of energy in other ways. In May, I'm very proud to say we launched
the Queensland Small Business Strategy and Action Plan, from 2013-2015. It is a whole
of government framework that provides a planned and coordinated approach to address challenges
and set the economic conditions for business success. This is the very first coordinated
plan for Small Business in many, many years, and the Government is committed to working
with the business community and our industry partners to secure the future prosperity of
small business in our state. There are five priorities in our plan, and there's 32 actions
that will be delivered over the next two years. All of them focused on building profitable,
innovative and resilient small businesses.
The priorities are to lower unemployment, make it easier to do business, increase the
opportunities, build stronger business to government engagement and maximise business
potential. We're also harnessing the future, and encouraging small businesses to focus
greater attention on the digital economy and the opportunities it presents. We want our
businesses to become more efficient, innovative, productive and competitive. To be able to
access information, new ideas and new markets around Australia and the rest of the world.
Our highly successful Mentoring for Growth program is just one way that we are assisting
high growth startups. The Mentoring for Growth program is one of the 32 actions in our plan
and connects businesses with industry mentors. The program has a network of over 800 volunteer
business mentors and professionals, who assist businesses, address growth opportunities and
of course their challenges, by helping businesses take the next step to grow and expand.
The Mentoring for Recovery program evolved in from the success of these all-year round
programs, to help business recover from natural disasters. Another action in our strategy
and action plan is the inaugural Queensland Small Business Week, which we are taking part
in today. Today, as you've heard already, marks day three of our small business week,
which celebrates the contribution small business makes to the Queensland economy. And it's
devoted to helping small business have a really big future. A range of activities dedicated
to small business are on offer throughout the week and throughout the state to give
people an opportunity to learn about starting or growing a business.
It has been a very busy week so far, with COSBOA's 11th National Small Business Summit
held in Brisbane over the last two days. In fact, there's 80 events planned throughout
Queensland Small Business Week to help give our small businesses the recognition they
deserve. And as well as today's webinar, which the government has been very pleased to sponsor
and assist, we are holding Buy locally Saturday tomorrow, to encourage people to support their
local small businesses right across this great state of ours. Buy locally Saturday expands
on the successful Think Queensland, Buy locally campaign, which started in March this year
in partnership with CCIQ, to encourage consumers to choose local products and services over
others. I encourage everybody here today to spend tomorrow out, supporting your local
small businesses and buying locally. You can find more information on our BIP.
Ladies and gentlemen, thanks so much for inviting me along today. It really is a pleasure to
be your Small Business Minister and as you can see, your government is working hard to
support you and small business and deliver a very strong four pillar economy. Let's always
remember, Queensland is a great state with great opportunity and there's plenty for us
all.
MC: Thank you very much to the Minister. I think her speech now sets the tone for what
should be a very enjoyable discussion. So I'd like to welcome to the stage our panelists
– Leigh Angus, the Program Director for iLab Accelerator. Leigh has more than 15 years
experience in marketing and business development for IT companies in Argentina, Israel and
Australia. Leigh is also the cofounder of Wizzy Board, a startup developing technology
for augmenting online games and toys to touch screen devices. And last year she became the
Program Director of iLab Accelerator. Our next panelist is Steven Tait, Chief Executive
Officer of the Chamber of Commerce and Industry Queensland. He's been a very busy person this
week, much like the Minister. Steven is a commercially focused business leader with
a proven track record in developing organizations through periods of change in competitive business
environments. So please welcome Steven. Jacinta Caithness is a Senior Manager at PWC and Principal
of Indy 1 Consulting. Jacinta has more than 15 years experience of working within the
retail and consumer industry and has worked with some of Australia's leading brands including
Boost Juice and Kikki K. Jacinta's achievements include AFR Boss Young Executive of the Year
and Telstra Young Businesswoman of the year. Welcome, Jacinta. And our last panelist, who
has already been mentioned, Rick Chen is the cofounder of Pozible Proprietary Limited.
Rick co-founded Australia's first crowd-funding platform Pozible in 2010. It's gone onto become
the third largest crowd-funding platform worldwide and raised more than $11 million for the industry.
Rick this year was selected by the Australian newspaper as one of the Top 20 Australians
to watch out for in 2013. A great honor indeed. Welcome to Rick. If you'd like to just acknowledge
our panelists, please.
So the format for this afternoon is that each of the panelists will give a short presentation
on what they see as the important factors when becoming a high growth startup. So I'd
like to welcome our first panelist, Leigh Angus.
Leigh: Thank you very much. We were just talking a little bit before it's a tough gig to talk
about how you make a high growth in about five to eight minutes, so I'll try and do
my best. I wanted to talk about three things, if I may. Firstly, about access to experience
and skills and knowledge. Ideation and the validation of a market and then the third
one is obviously funding and capital. So, just to very quickly talk a little bit about
iLab, but to frame it in the context of language, there are some language used in terms of organisations
that support founders or entrepreneurs at very early stage. You may have heard of incubators,
accelerators or co-working spaces. I just wanted to quickly define those a little bit
in my view, just because sometimes they get a little bit mixed up, but it's also a good
way to understand where you can go for support services and funding.
So co-working spaces tend to be a number of entrepreneurs coming together in an environment
where they can share ideas but concentrating on their own businesses. So, the local one
here in Brisbane, River City Labs, another one down in Sydney, Fishburners, York Butter
Factory down in Melbourne, Silicon Lakes at the Gold Coast. These are lovely environments
for you to be able to kind of mix and mingle with colleagues or like-minded people. Generally
you'll pay for a desk or a couple of desks, depending on what your needs are as a business.
Incubators tend to be a little bit more associated to universities, so the support and services,
coaching, mentors, entrepreneurs in residence, that are there for sometimes businesses that
are being spun out of universities, might have a deeper technology, or may have a team
of employees or a founding team that's maybe one or two people.
The third one is accelerators, and some of you might be familiar with those. The most
popular being perhaps Y Combinator in the States. These are very intensive programs
to be able to take new ideas or high performing teams through a very accelerated product build
in short amounts of time. Most tend to be around three months. Some will do four or
five months. Now, just in context, iLab is an incubator and accelerator, so we run a
program where we will seed fund up to $20,000 for founders or entrepreneurs who have a concept
or an idea that they would like to put out to the market. And then also have follow on
funding to which we're just about to raise or finish raising $1.5 million for some of
those ideas that are being tested in the market, to see that they have the opportunity to grow
and then have some capital waiting for them to be injected into those ideas.
iLab is predominately tech-enabled. So that means we'll work with a lot of tech people
who like to build stuff. What we do is we then try to encourage them to build stuff
that matters, in terms of the market. Sometimes we'll work with non-tech people who have a
very good scientific background or have worked in industry and would like to productise their
ideas or their knowledge into web-based or technology-based platforms and content. So,
again, a little bit about iLab, we're owned by the University of Queensland and solely
funded by Queensland Government, there to support early-stage tech-based ideas.
So part of being involved with iLab or River City Labs or Silicon Lakes, these environments
really is to access coaches, mentors, experienced people, which I believe is crucial for early-stage
entrepreneurs to be able to mold their businesses into what looks like a high-performing business.
Often, we will see people who have kind of worked in a bubble for a little while, in
their own home or perhaps in a university, and have not really gone out to market to
ask the questions, "What am I building, is it desirable? Is it priced right? Is this
something that's going to appeal to a market?" So being in an ecosystem or environment where
you have a good source of coaches, business coaches, mentors, readily available is a lovely
way in the early stages to be able to pull yourself out of that bubble at the ideation
stage and really test what you're building has the potential to take in market. First
in a safe environment with coaches, but then secondly as I mentioned we've, really, it's
important to put them out into market and start to test those ideas out to market. And
coaches, business founders, or successful business founders in the past are a really
good source of knowledge on how to do that in an appropriate way that supports what you're
trying to do, that builds into your product and produces you an outcome that is closer
to what is likely to fly in the market, not what you believe is going to fly in market.
I guess this takes me to the ideation stage and I wanted to perhaps put it out there that
there is a great opportunity now for individuals to create products and services and test those
products and services at very low cost. Local platforms, such as the crowd-funding and crowd-sourcing,
which Rick will go into details, there is also means or platforms for outsourcing work
to local organisations to overseas organisations to be able to build up what is commonly known
as minimum viable product, or a prototype or early-stage concept that you want to put
to market. With software as it is today, it's very easy to build in a light agile way, which
means you can tweak and tune that product or prototype as you develop, based on the
feedback, based on the input that you're receiving from potential live customers, from the community
around you and from potential market.
So things like Elance and Freelancer, oDesk, software packages or also services like Launch
Rock enables you a very quick, easy web presence. Google Ads pointing customers onto buzzwords
that might attract and audience that you can then start to work with. Survey Monkey, these
are all very cheap, free tools out there that you can use for surveying, asking questions
of your market before you've even built something.
I guess one of the sad things we find is that often people will come into iLab and have
spent significant amount of dollars in building out a prototype, of which they haven't even
actually put out to market in any way in terms of testing or validating with the likely customers,
and only to find it is not desirable that they've missed the mark all together. So what
we try to do is encourage testing right from the beginning, with little or no cost to you.
So I guess the other thing I wanted to point out which we've noticed as well, which would
be interesting, there are a lot of people who will come in and who have worked in industry
and see an opportunity, which is great. They know the industry well, They've got a gut
feel about it. What we try to then encourage is to test that hypothesis or that gut feeling
that they're right. But they're entering into the world of software, and this is quite interesting.
A number of people who don't have skills in software misunderstand that software is like
an animal. It needs to be fed. So the concept of kind of building it and putting it out
there – for example like an app on iTunes – doesn't stop there. It actually becomes
a real suck in terms of time and money, in terms of keeping it up to date. So we will
often work with founders to understand what the whole cycle looks like with software,
and not just the initial creation, so that over time they're building a business that
they can actually feed the animal and not the animal start to destroy them.
Also, I guess another thing I perhaps wanted to put out there as well is often we will
see people who come in and say, "I've got a great idea for an app." Now, that's a pretty
busy world out there in terms of apps, so I guess one of the things is that apps are
not really a sustainable business. Monetising apps is in many cases very difficult to do.
The bulk of them are often free. There's a very small percentage that takes off and does
well. Apps as part of more of a comprehensive platform of services and products is a beautiful
and sustainable business model. So what we do in iLab is encourage people to think beyond
just the app, to think about multiple products, multiple revenue models, that they can make
out of their idea and that will grow over time. They'll introduce new ideas, but not
to limit themselves or think they will be able to survive off say an app going up onto
iTunes. iTunes is a platform – an app is just one product of that. So we're really
asking them to think more broadly and deeper about their ideas.
Finally, just in terms of funding, there are some great opportunities now in terms of accessing
funding from multiple sources. I just wanted to mention a couple of them, particularly
as I mentioned in iLab, we have funding up to $20,000 for new ideas, and there are other
accelerators across the East Coast that will do that as well. Taking into account, though,
it's highly competitive. But one of the things that we do – I just want to raise – is
that we often see people asking for funding just based on the idea. What I would suggest
is really have a clear understanding beyond just what is the idea, really knowing sort
of the market and the application. The idea is the 1%. Those that we get involved with
really have a clear idea of what the execution will look like over time. How they're going
to implement it. How they're going to distribute it out to the market. But there is some great
funding available in terms of grants, friends, family, angel investors, I guess all of them,
even from Commonwealth grants and local grants, will expect you to clearly understand what
the business opportunity is rather than, say, just the initial idea. It's how that idea
will be deployed over time.
Thank you very much.
MC: Thank you very much Leigh. Now, I just wanted to remind you that at the end of the
presentations from the panelists, we're going to open it up for a Q&A session, so there
will be microphones that will go around the room. So if you want to start thinking about
any questions you might have now in preparation for that, that would be great. As well, we're
inviting questions from our participants with us via webinar, and as well you can ask questions
via Twitter, in case you want to do it completely anonymously. Well, not completely anonymously.
But next is Steven Tait, so I'll hand you over to Steven.
Steven Tait: Good afternoon everybody. I'd like to thank you very much for inviting me
along to speak today. An honor, first and foremost, I want to acknowledge the Minister
for what is a fantastic initiative and something that the Chamber of Commerce is delighted
to be a part of. I think working with a department that's so focused on improving the economy
through small business is an absolute pleasure to do so. So thank you very much for inviting
us along, and also for the event.
I have to admit, that with today it was a fair degree of trepidation that I was asked
to present today. I don't think – if we were to be honest – you would use the word
startup dynamic, passionate, Chamber of Commerce are two adjectives that you probably use.
When you actually look at our organidation, and perhaps the perception of it, it's actually
quite an interesting topic for us to do, especially when I'm surrounded by people who've got far
more experience that actually runs on the board than I have. But actually what I did
think was, perhaps I could actually talk about some of the experiences that our members have.
Some of the challenges they've faced. I could put up some interesting statistics. I could
talk about some graphs and challenges. The simple fact is – the most important fact
– is that small business is absolutely critical for the future economy of Queensland. And
as an organisation, the Chamber of Commerce, we have to make sure we're absolutely relevant
to help and support that economy and these people. There's a very fine line between business
and community. The Chamber of Commerce is mandated and is there to support them. And
in today's economy, we actually have to make sure we address everybody's concerns. Startups,
innovators, high growth, we've got to play in that space, and therefore, as a Chamber
of Commerce, we actually have to change as well.
You've probably heard of the Chamber of Commerce on a number of fronts. We're absolutely renowned
for being in the media. We're there lobbying on behalf of business. We're there talking
about what business needs. We're there actually telling people what's wrong with their economy.
Actually, the Chamber of Commerce is a phenomenal voice for business because it talks to business.
What we wanted to do is we wanted to see ourselves as being a proactive organisation that not
just supports business but actually works with government in a proactive manner. To
work with them to develop the best possible business environment for the economy. Therefore,
we had to go through a significant change. When you actually look at our value proposition,
though, if you're seen as somebody as just a voice, it's kind of hard to be a compelling
value proposition for a small business. When times are tough, they're working hard. We
need to be seen to be supporting them. And what's the value proposition?
So with that in mind, we went through a whole heap of resources and organisations and about
12 months ago, we took the decision that we were actually going to reinvent ourselves
and become almost like a high performance startup. The problem was our startup was 146
years old. And when you actually look at our value proposition – and we went through
it – we actually said, "What do we actually provide our members? What sort of support
can we give a business?" And when we ask people, we didn't really get past the networking part.
Which is a challenge for us, because actually in today's economy, that part's being provided
by the digital space. Different platforms, different ways of engaging. Different ways
of having communication. And actually as an organisation, we needed to get into that space.
We needed to create an absolutely new value proposition. And the one thing we actually
asked ourselves was, how do we become absolutely essential? Because if you're not essential
to a small business, then you're nice to have. And when we went through all the challenges
that every small business faced, we thought, "What is our portfolio going to look like?
What do we actually have to create in order to make us that compelling and easy to do
business with?" So we took away all the stuff and we actually focused on what our core proposition
should be. We wanted to provide advice. We wanted to provide the most comprehensive advice
for a business at any stage of its lifecycle. We wanted to curate the best possible information.
We wanted to provide tools and service that businesses could come to us with.
They trusted us. We're 150 years old and we had a huge amount of brand trust. And yes,
there's an awful lot of information out there, but what we do is we actually point people
to the right information, like BIP. Like our trusted partners. We actually want people
to make it easy for them to do business. So we saw ourselves as a trusted advisor and
curator. We wanted to be seen that when you're facing challenges through that gross cycle,
that actually you could phone us. Whether it's employing staff, whether you want to
know what the new peer rates are, if you had issues with IR, we just wanted you to be able
to phone us. We actually wanted to create and connect you with people who are like-minded,
to share experience, to focus on ways that actually you can get best practice. So we
had to move our value proposition into the fact that you're time poor, you've got work
environments and pressures that you can't take time out to go somewhere. So like the
government, we focus much more on technology delivery now, with webinars and webcasts and
workshops are held online. And best practice and best advice. So we've now moved much more
to being a supporter. So our role today and my position today is we are part of the ecosystem
that we need to move our business to be supporting you. So whilst we probably can't give you
the best advice because that's something you guys are fantastic on your products and services,
what we can do is give you the best advice on all the other elements of running a business
that perhaps you would struggle with as you go through business.
It clearly doesn't matter if I've got the best product and the best service and the
best advice. If actually you're going through a startup and you have to change the way you
do things. As an organisation, we've had to take on board the same dynamics, the same
personality, the same drivers that you have. And the fact of the matter is, the one thing
that went through our business in the very core is that we're passionate. As an organisation,
we're extremely passionate about SMEs. We're extremely passionate about helping them be
successful, and so we created a series of values that we built our business around and
we built our staff around. It's a difficult job, taking our business from there to there,
if there's no real alignment and it has to reflect who your customers are. And the key
ones of influence and passion and trust are inherently now built into our business. Therefore,
if we can help in any other part of your business that we are not experts in, it will be around
workplace, business planning, IR. We'll point you in the right direction.
And the third part is, we've got to make it at a price that's actually compelling. So
we've had to review all of our pricing, all of our products and all of our services. So
over the last 12 months, it's been a phenomenal change, but if I would say to any organization,
culture is going to help you do that. Surround yourself with people who are far better than
you are. Keep your eye on the prize. Make sure that you put yourself in your customer's
shoes, and at the end of the day, just remember – it's a long journey and it's hard and
the Chamber of Commerce want to be there to support you. If there's anything we can do
to help you, then you let us know and we'll alter our product and service accordingly.
At the end of the day, that's got to be fun! So, thanks very much.
MC: Thank you very much, Steven. I'd now like to call to the microphone Jacinta Caithness.
Jacinta: Hello. So hello, my name is Jacinta. I'm a senior manager at PWC in Melbourne.
I work in a division called private clients, and our team is better known as the advisory
team. Predominately we're assisting entrepreneurs achieve their growth objectives. As we range,
anyone who has an idea from concept stage to someone who may have already experienced
a degree of success and wanting to expand, broadening their horizons. So, very, very
diverse range of industries. My background prior to joining PWC was in industry and predominately
retail, so Boost Juice was where I kind of began my career. I joined there in 2002 and
at the time there were only three stores and eight years later I left and there were 233
stores. So, very much an example of having seen an idea at the concept stage and being
part of the roller coaster which is a startup, growing into a very successful, now very large
business.
Now, I've been asked to speak to you today about startup economy, which was a report
that PWC were commissioned. We were commissioned by Google, to conduct an assessment, affectively,
on the state of the Australian startup system, and the ecosystem that supports it. The focus
on the report was on tech startups. However, our opinion, a lot of the findings were relevant
to small businesses in general. You can see the three points there – the key findings
were that the growth, obviously, of startups and tech startups, particularly, is very important
to the Australian economy, with the focus being on … oh, sorry. I apologise. Go back.
I may need some assistance … I think I'm good. Here we are. So, the growth being very
important to the Australian economy, with Australia needs to accelerate the use of tech
in industry.
You can see there's some stats that came from our report in that we believe that the tech
startup sector will contribute 4% of GDP and over 500,000 jobs for 2033. Very clearly you
can see there's significant potential for the Australia tech startup and the startup
sector in general to be able to underpin and the strength of our economy going forward.
Now the tech sector very much focused in our results show that the IT – or information,
media and tech communications sector – were the focus of many tech startups. However,
you can see there that in our opinion, the results of the finding were that there are
many other categories into which tech startups can have influence. Finance, insurance, manufacturing,
health care are some of them, and perhaps with my background predominately we can see
that retail is certainly an area where tech startups can focus. Huge, huge opportunity
for tech startups in that potentially is limitless for in this environment, retails are having
to constantly innovate and are competing from all elements of the matrix, from price, customer
service, distribution, stock availability and so on.
For us, the real beauty of startups is they can often define themselves according to the
needs of the client. And that is key in that the opportunity there is really limitless,
to some degree. The needs obviously from the clients are increasingly diverse.
Now, the findings, The Startup Economy Report – which I should say is available on the
internet – but some key findings here, the call to action. Our key take outs were these
five points. In order to accelerate the growth of the Australian startup economy, or the
ecosystem, we believe that with the high fear of failure rate, encouraging the culture and
the community to really proactively support and encourage ideas from startup stage, and
obviously from the incubation stage is absolutely critical. And sharing knowledge from people
who have experienced success prior, having support from venture capitalists and so on
is obviously the most important part from our findings. Also, to have more entrepreneurs
with the right skills. So, having a proactive an encouraging culture, identifying entrepreneurs
and then supporting them with the right education is obviously important too.
Australian Governments have become a significant market for startups and it has been difficult
in the past for startups to achieve or to reach this audience and Australia really needing
to open up these markets to become more open and accessible by startup companies is very
important. Venture capitalists, I mentioned, so obviously many great ideas obviously come
to real fruition with the backing of financial bodies. And the final point there is improving
the regulatory environment. So we believe in our findings that we have obviously become
some way, however, there's potential for the government to do more, in removing barriers
which may exist, preventing some startup companies from realising their objectives.
Outside of the startup economy, PwC run annual publications on a variety of areas and one
is the Private Business Barometer Pulse. What is important is that the startup economy is
obviously very much focused purely on startups and again, geared toward the tech startups.
The Private Business Barometer Pulse, effectively, says what kind of environment those startups
may be operating in today. So 2013, 300 private businesses were surveyed. And the major findings
were as follows. One, there exists a degree of cautious optimism. So businesses are obviously
experiencing growth and profit growth and sales growth to some degree, but by and large,
the sentiment is that to proceed safely, knowing there is obviously some concern how sustainable
those profit increases might be. 64% of those businesses, however, did meet or exceed revenue
targets. There remains a degree of we-can-achieve confidence, and we're seeing this particularly
in the retail sector with the growth of online and disposable income. Innovation, nothing
too surprising there in that the companies that are meeting or exceeding their targets
are not focused so much on price, but certainly on product and the innovation of that product
and how innovatively you can get to market. And a new normal. Change is something that
many people don't enjoy; however, the most successful businesses by and far, from the
sample survey we looked at, are certainly innovating increasingly within their business,
and identifying the new normal. New ways of doing things everyday.
And just finally, seven habits of overachieving businesses – so if you're look at that 64%
that were meeting or exceeding their revenue targets, only one in three says price is driving
competition. Innovation, as I've mentioned. Consumer confidence – half see that as a
barrier, and the other half see it as an opportunity. How they can diversify and produce products
more innovatively to their consumers. Not focusing so much on the dollar which they
can't control, but effectively looking at how they can make their product more attractive
to more people. Four, is investment, so 45% of those who exceed their targets plan to
invest in the next year, compared to just 17% that undershot their targets. Asia – expansion
is continuing. They're relatively less likely to trade with China or Singapore and three
times more likely than previous years to expand into India. People, over half expect to employ
more people in the next 2 months, and they expect salaries to increase by approximately
5%. That compares to an increase of 10% by underperforming companies. And training, in
terms of training, they're more likely to up-skill employees by having them work in
different parts of the business than those companies that have undershot or not exceeded
their revenue targets and that is all, sorry for my bad clicking skill!
MC: Excellent perseverance there, Jacinta and now I'd like to call Rick Chen, who is
our final panelist for today.
Rick: To start with, I'd like to thank the Minister and the whole team behind Small Business
Week for putting on the event and bringing me all the way up from Melbourne. And the
weather's great here, in Melbourne it's raining and miserable so this is great to get away
for a bit!
So, I'm going to briefly talk about what crowd funding is and how small business can use
crowd funding as a tool for raising funds and at the same time, building an audience
base for whatever you do. To start with, hands up if you have never heard the idea of crowd
funding and you're not confident with it at all. So, crowd funding by the definition on
Wikipedia says, a bunch of people put their money together to support one initiative and
by an individual person or an organisation. And this whole process, it's completely done
online. That's the definition of crowd funding for today, I'll give a live example, a project
on Pozible. So this one morning we were sitting in the office, drinking our coffee, and these
three guys come in the office in Melbourne. So they come with iPads and big backpacks,
very nerdy looking guys. They come and say, "Hey, we wanted to use your platform to raise
funds for business idea we have and we wanted to put on a real live zombie shooting game
in Melbourne." We're like, "Okay." and they say, "We're going to go on rent an abandoned
hospital or warehouse and we're going to put real people in it in makeup as zombies, walking
around dripping blood from their face, and now we're going to build a laser-tech gun
for players to take and they're going to go into the space and they're going to shoot
them." Not really shoot them, but they're going to play the game, so they have to follow
some sorts of hints and go through the whole space to survive, apparently. So they say,
"We need $10,000 to get the gun prototype so we can register, we have a headshot, black
shot," very nerdy stuff. We're all like, "Whoa. Okay." Instantly we feel very awkward for
a second, because I think it's awkward for me. They ask me, am I going to play a game
with shooting real people in it. I'm not quite sure, but the idea sounds kind of strange,
I say, "Would you play?" It costs $750 for a team of six people to play a round of one
hour. Are you going to play? See, that's what I thought, great, we have one audience that
was going to play, it's great.
Well, I instantly think, "That's kind of awkward, I don't know, this is okay, if the zombie
gets to close to me, am I allowed to sort of punch them?" See, I don't know, it's awkward
and then these guys go online with Pozible and within one day the $10,000 was raised
and at the end of the 40 or 50 days, they raised the $250,000 out of the whole $10,000
target. They managed to put on the whole event in Melbourne, purely from the money they raised
on Pozible, and they got people in groups, booking tickets from the U.S. come down for
that particular event.
That is stunning for me, and get me thinking about, "Wow." To start with, the zombie community
is really big, we shouldn't, you know, underestimate that, even if I'm not a big fan myself. But,
it's also about the power of when you get a bunch of people, with the help of internet.
The things to scale and the achievement could potentially get is very fascinating, that's
what we do at Pozible.
So Pozible is a crowd-funding platform where we allow any sort of idea to get on the platform
to present to a world audience base. Anyone like your idea, they can pledge cash toward
the project. So the way it works is if you look at, this is a local Brisbane project,
very successful actually. Bringing the street food cart to Australia, they're raising $20,000,
actually I think it's a duppling kind of thing. It's a better version of kind of the Thailand
style, and so they have a target of $20,000 and they end up raising $21,410. The way it
works is, they come to Pozible with an idea and they will do their research, say, "This
is how much money we need to be able to do this." and they come to Pozible and they pick
a date. We allow maximum of 60 days to run your campaign, so within your 60 days it's
game-on. You have to reach your minimum target that you set for yourself. If you don't, you're
not going to get any single dollar out of this whole thing at all, this is what we call
all-or-nothing funding model. The reason we use all-or-nothing funding model is simply
because it creates an urgency around the thing to happen. We have all been to university.
assignment does not get done a day before the deadline. The same way raising funds online,
it gives them a good reason about this is what we need to do but you're going to have
to have a deadline attached to that, so people will react toward the deadline. That's also
the reason that traditional sector of charity fundraising isn't very effective these days.
So they come to Pozible, that page is up online and the time start ticking. So at that time
there'll be able to reach to their potential audiences. For example, the zombie boys I
think, well they did is they reached to all the zombie community online, offline, those
people, and then sort of go and talk to them. Potential partner organisations behind it.
Say, "Hey, if you're interested in this, have a look if you support and we'll give you discount
ticket you get early bird release." And then in return, you offer what we call rewards
back to people. Rewards are tiered products and services you offer back for people's support.
For example, you could say, if I'm a musician, we have a lot of musicians raising funds on
Pozible, if I'm a musician, if you support me for $5, I might decide to credit your name
on my album. So you can write your name on the cart and then maybe for $25 I can sign
my CD and post to you and maybe for $250 I could invite you to come to my Saturday night
dinner cooked by my dad and mum with the whole team and we can talk about music. Which is
actually a real reward of a musician very successful.
So rewards, things you can't offer in rewards is financial return. You're not allowed to
offer any sort of debt cash, and money return is not allowed. You can do experience, which
work really well for example, a special event that host we got Eskimo Joe ran a campaign
and they're a fairly established band. They offered a $4,000 for a barbeque. The boy's
going to rock up in your backyard. You organise the barbeque for 20 of your mates, and the
band is going to bring sausages and they're going to cook for you and your mate and they're
going to play in your backyard. So things like this works really well. This is what
we call rewards back. And by the time you run out on your campaign, you're going to
have to hit the minimum of 100 % funding target. You can go over that, that's not a problem,
as much as you can, but you have to hit the minimum target to be able to receive the funds.
So Pozible's been around for about three years, and we started in 2010 and then the headquarters
at the moment are based in Melbourne. We also have another team in Sydney and we have very
regular events run in Brisbane, actually just right at the H, we're going to have another
two in the next two months. We are the third largest crowd-funding platform in the whole
world and it started and operated and owned 100% by Australians, and we're very proud
of that. And the reason to use Pozible for any sort of crowd funding activity is simply
because we're very focused on the Australian market. We deal with Australian dollars, we
talk to Australian media. If you have project, the chance for you to get onto Sydney Morning
Herald, Brisbane Times, The Age, it's much higher competitive to get onto New York Times.
So, that's a lot to talk about. Fitting into this kind of short timeframe we have. I'll
be around so if you have any questions or you want to talk about my personal experience
running a startup business, I'm more than happy to chat after this. Thank you very much.
MC: Okay. I think that's all from our panelists for the moment. Now we want to open it up
to questions. So is there anyone in the room that would like to ask a question? Maybe as
you're thinking about and we'll get you a microphone in just a moment. Our questions
via webinar are not working, so if people are listening to us and they would like to
ask a question, they can do it by Twitter and the handle that they need to use is @BusinessQLDgov,
or they can use the #SmallBizWeek. Do you want to go ahead and ask a question?
Participant: Yes, Colin Kennery from Smoke Innovation, a question for Rick about crowd
funding, so this is a workshop about high growth startups, you gave a number of examples
but if I understood them correctly they weren't high growth startups. Are you able to talk
about any examples of high growth startups that have raised money on Pozible?
Rick: Crowd funding, in general, it's very hard to have a formula for any sort of things
in one go. It's more around how you structure the thing to work for your own. And all successful
campaigns on Pozible will be listed there. You can go on and check them and you can filter
through. We have apps and sort of tech startup with us, and it's all about how to structure
the campaign to view your audience and how to engage with the audience. When you do crowd
funding, it's actually a very long and tiring process, honestly, because you're doing the
funding bit as well as building audience together in one goal. So it's kind of a hard work,
but it's very rewarding. It's hard to kind of generalise a rule or a formula work for
everyone, but in general engaging with people can make it work really well.
Participant: That didn't answer my question, but maybe if I can rephrase it? I guess I
just wanted to understand whether Pozible is a sensible place for high growth startups
to raise capital? In Australia, there's an increasing trend towards using Kickstarter,
which you're obviously going to be familiar with, but in order to do that the companies
need to incorporate a U.S. entity, typically a delaware seacorp, and we're starting to
see particularly in Sydney and Melbourne a lot of the incubators and accelerators are,
by default, encouraging their companies they work with to set up a delaware seacorp immediately
rather than an Australian business. So I guess I'm interested in whether there's scope for
some of those businesses to use Pozible because obviously avoiding having to set up a U.S.
company in order to raise money on a crowd-funding platform is quite appealing. Could you talk
to that?
Rick: Yeah, definitely. Well, like using Pozible compared to Kickstarter and all is way more
Australian focused. So it's more dependent on your audience. If your audience is more
Australian folks, you should definitely consider Pozible. But if your audience is more U.S.
focused, it might be good to use a U.S. platform. It really depends on how you kind of see the
whole thing. But in general, platforms are just a tool. The impact for you to get onto
front page of Pozible and Kickstarter is absolutely zero. There's no impact on our own audience,
so it's more about a tool, how you use it, in the way that you frame it.
Participant: Hi, mine's also for Rick, if you listed different benefit amounts at certain
amounts of money, can you actually cap it at a limit? So say, for example, someone was
to pledge $25 for a ticket to an exclusive launch to your event, but obviously you don't
want to have hundreds and thousands of people there, because that would be unmanageable.
Can you do that, like limit the capacity for each different benefit, and then add more
if you needed to, to open up different windows of opportunity?
Rick: Yeah, you definitely can. So when you set rewards, you can set the rewards to be
unlimited or limited. So if it's limited to people, one chosen is one less available,
so when it's gone you can add more as you go, that's all doable, yes.
MC: Are there any questions maybe for some of the other panelists?
Participant: I'll open this up to the whole panel, if I could. Can the whole panel give
us a definition of what an accelerated startup actually is in terms of their industry and
what tools an accelerated startup needs as opposed to a normal startup, where they may
not need some of the common business tools available?
MC: So can we just start with Leigh?
Leigh: Yeah, sure. I guess we'd define startups as early stage businesses that are seeking
capital for a quick injection, quick entry into market. Quick is a very loose term, some
of those companies will work 12, 14, 15 months to get their quick entry. So I guess that's
sort of how we define them.
Steven: I don't know if we can define actually the tools and specifics on an accelerator.
What we've defined ourselves as being the business critical partner in terms of giving
advice during their lifecycle. So whether it's employing, whether it's actually creating
business plans or putting the definition around how you grow a business, but giving actual
tools or funding really isn't our element. But what we do, do is we create an environment
where people can share that experience. We recently formed a strand of CCIQs called CCIQ
Technology. Not because we wanted to be the technology experts but what we actually found
was that most of our technology members actually were struggling with some of the key fundamentals
of all business, which we could help them with. So we see ourselves as being that part
of the value proposition.
MC: Any other questions? I also just wanted to make mention that the webinar, the stream
is actually working, so if any questions do come via there, we'll try and get to them.
Participant: Hello, it's Jacqueline Hodges, Moore Advisors I just wanted to ask Jacinta,
what is PWC going to do for small entrepreneurial startups? Given that often they're cash poor.
Jacinta: Yeah, that's a good question and one that we do face sometimes and the division
where I am, in advisory, because the nature of the clients we come into contact with,
we're very cognisant that there's not necessarily the deep pockets that the more established
companies do have. Many of the clients that we're working with have potentially turnover
that's less than $5 million, so it's very much focused on appreciating that without
the access to capital and cash, there still is a lot of need that they have to be able
to expand. So they're often quite clear on their vision and their strategy, but in the
event that they're not, that's where our work and our role stands with that particular group.
Then discussing, based on what the end game might be, what they want to achieve, it may
be a short-term project that obviously isn't very intensive from a fee base, it might be
a business plan structure, similar to what Steven would provide. Identifying access to
capital? Do they have the right team in place? So it could be actually quite a small project,
but in our relationship with a partner, we want to be like a trusted business advisor,
working with them, alongside them, as they continue to grow. Because as they do grow,
they'll face more challenges that we will obviously be either to, if not our division,
there'll be divisions within PWC that might be able to assist.
MC: Next question?
Participant: Hi, I'm Phil Green from Small Business, this is actually for you, Jacinta.
In your research you've found a couple of areas that were impediments. One was the regulatory
environment, and I was wondering, I know you're not a Queensland based person, but is there
anything particularly that you see as an impediment? Because this government is particularly keen
on getting out of the way. So if there's any advice you can give us there, we'd love to
hear it! The other is, the procurement area. Now, this is a vexed question and another
one we're doing work on in Queensland, but is there anything you've seen that governments
are doing that actually is good in the procurement space that we could perhaps adopt in Queensland?
Jacinta: I think the results of our economy report was very much Australia wide, so certainly
what was interesting for us is that every state government, we have a different divisions
obviously within the small business areas and the support they do provide to different
businesses. The point there on that, what called out from there, was the regulatory
environment that there are some varies in terms of grants or fundings, and really, the
opportunity for us as we saw it is to be able to assist more and more small business operators
with either access to funding or even mentor support. So it wouldn't necessarily have to
be funding from the government or in the form of rebates or grants. It's people within the
businesses, within the units of the governments, that want to be able to obviously assist the
people with the small business opportunities.
MC: Are there any more? Just at the front there.
Participant: Hi, this is a question for everyone, I guess I very much learned from seeing others
succeed, and I'd like to know if there's any case studies available of high growth start-ups
that have done it well and what tools they've used, who they've contacted? Maybe this is
a suggestion for our Minister, to have something on the business website as well. Does anyone
know of?
MC: Maybe we'll start with Rick on that one and you can tell us how Pozible came about
and the crowd-funding that was involved in getting that started up.
Rick: Yeah. So you're particularly after tools?
Participant: No, just some case studies, something I could read. Or anyone, pretty much we could
download online. I'm thinking just of a PDF document that we could read?
Rick: I don't know any one page sort of PDF, but my own personal experience I think running
a start-up is that to get plugged into the industry to start with. The environment these
days is much better than when we started three years ago. Although just three years, there's
a change that's huge. We have a lot of co-working space and incubators. They have events all
the time, normally it takes us a couple of months to figure out one thing and then you
go to an event that was done. So I guess plug into the whole thing and learn from others
the experience that kind of work.
MC: I think the Minister's team was writing that down, so you might get an answer to that
online at some stage. Probably only got time for maybe one more question.
Participant: Sorry for jumping the gun on all the other people, my name is Paul. I'm
from a small startup called Fusion, we're on an accelerator down in New Castle called
Slingshot, which is a lot of fun. Something I've experienced over the years is imagine,
I'll use a bit of a metaphor to describe this, so if we've just discovered a beautiful piece
of land and we're going to build a house on it, right? We wouldn't go straight to a builder
or electrician to build that house, right? We'd go to an architect, to try to help us
design the best and most beautiful place for that, to take advantage of that land. I think
small businesses are like that, but my experience is that there are plenty of people that will
give you marketing assistance or accounting assistance or potentially some IT help. But
there's very few people in the market that will help you architect the startup. Do you
understand what I'm saying? So what do you guys suggest as a platform or a tool kit for
helping to architect, to set the business up as a whole, as opposed to just being the
expert in a specific spot?
MC: Maybe Steven or Leigh might be able to answer that?
Steven: I think that's a very good question. It's one that's come up over the last 12 months
as an organisation and the subject matter of creation of content and actually advice
of being able to share that and bring it into one space is something that we're very keen
to work on as part of our value proposition, is that we are now trying to build that whole
architecture around pooling advice together. Whether it's about planning or executing or
individual disciplines. So we've actually started to put together a series of educational
programs that we deliver over technology to actually come to that space or supply that
information. But it is available, Pozible and we all have an opportunity to bring that
all together. But when it comes to just one point, if you look at a starting spot, apart
from ours and your own, if you went to the government's website that generates over a
million people a year going to that one site, just to actually have that initial direction,
is something that's a good start and is something that we're trying to work with to actually
add value and populating content into one space and creating a dialogue is something
that's high up on our agenda. So, it's a good question that comes up a lot.
Leigh: You're part of Slingshot, so you know the experience of that having structured programs
and we're seeing accelerators increasing in Australia, because they do exactly that. They
put in intensive focus and time to setting up a business right, getting things started,
correctly right from the beginning, including the intellectual property. Including the finance,
including the structure of the business and then the actual product builds themselves.
So I think over time we'll see more accelerators coming into the community. I think that's
a good thing. It's a lovely way of bringing people together in a like-minded space, putting
them to task intensively with a discipline over a period of time to produce something.
As I mentioned, produce stuff that matters for people. And to be able to affectively
monetise that stuff.
Participant: Yeah, maybe just to fill that back in, the sort of thread that's been running
through, I think this is happening in a lot of accelerators, is the lean canvas and the
lean startup. That seems to be growing in enthusiasm, I don't know if iLab are in to
that.
Leigh: We adopt the principles of lean. For those who may not be aware of it, it's a theory
that's been well adopted in the Silicon Valley by Eric Ries who actually helped mentor a
couple of local teams here. It's really kind of building quick, building agiley, building
at low cost and testing out your theories very early into market, quickly, before going
into complex builds. So, most accelerators adopt those principles, but those, I think
those are principles that have been around for a long time anyway. Think carefully about
what your market wants. Go out and respond to that market and produce something that
matters for them.
MC: Okay, we'll probably have to leave the questions there. You will have an opportunity
to speak to the panelists at the end of this, but we need to take a break now for afternoon
tea. If we can just give a big round of applause to our panelists, please Leigh, Steven, Jacinta
and Rick.
We also have a little gift for each of them to say thank you. There are just some housekeeping
matters that we need to go through. First of all, we got some feedback from the live
chat, in particular, Rick, they loved your session and what you had to say. So that was
some feedback there. As well, @fabwintal on Twitter was also interested in case studies
and examples of successful and unsuccessful startups, so that might be something that
can be looked at as well.
So we're going to break for afternoon tea now, and for those who have nominated to stay
or if you would like to hang around, there is an opportunity for an hour to sit with
an expert or topic host to gain more insights into growing your business. Now, this time
is invaluable, so please make the most of this opportunity. There will be four tables
for you to sit at and discuss a topic with a host. It commences at half past two, which
is why I'm trying to rush this so you all get a chance to have a bit of afternoon tea.
The topics are: developing your business plan with Mark Pattenberg, CEO at the Innovations
Center at Sunshine Coast; capital raising essentials with Anna Rouck, the CEO of QUT
Creative Enterprises; building your management and non-executive team, Clive Kay UQ Business
Schools, Executive Education; and Grants with John Monico, Project Officer at the Department
of Tourism Major Events, Small Business and the Commonwealth Games.
In addition to this there'll also be an ‘ask an expert' and those experts will be located
in the window bays just outside the auditorium. So the experts this afternoon are Leigh Angus,
who you heard from from iLab; David Harrison, who's the founder and director at Mammoth
Media; Brian Ruddle, who's the Managing Director at Impact Innovation Group. Now, these expert
sessions will be more personalised, more like one-on-one sessions, so feel free to ask them
anything from marketing to future planning so that might be an opportunity if you still
have questions to get those answered.
Now, very importantly, there is a feedback form in your folder. It's really important
if you can fill that out, and there's a box in the foyer for you to put it into, so please
do that. We'd also like to remind you that tomorrow, as the Minister mentioned, is Buy
locally Saturday, so in your folders there's more information about that initiative as
well.
Before we go, a very big thank you to the Minister for her time today. We know your
time is precious, so thank you for staying with us for the entire afternoon. And all
the best to all of you here, all the participants and don't forget to stay around for afternoon
tea and thanks for joining us at Queensland Small Business Week. Thank you!