Startup Grind APAC was held in Melbourne on the 9th and 10th of December 2019. This article summarises the sessions I attended on the first day of the conference and also mentions some of the other experiences of the day.
# Registration
Registrations opened at 8:00am in preparation for a 9:00 kick-off. As I tend to do with these things I arrived early, so I had a chance to relax and enjoy a coffee before registration. During registration I received a plastic attendance card and a cool sheet of stickers from Neustar’s .CO registry.
After registration I had some time to kill, so I entered the exhibitor area and had a quick look around. While I was there, I bumped into Luke Henningsen from Ucities. I also had a chat to the team from Xplor about their childcare software and how it could potentially integrate with Ento.
# Welcome
At 9:20 is was time to kick-off, better late than never! Kyle Hubbard was our MC for the day. He introduced Chris Joannou the APAC director and general manager of Startup Grind. Chris gave us a warm welcome, reminded us that Startup Grind is all about helping others, giving first and making friends, and then shared some information about Startup Grind. I never knew that Startup Grind is active in over 120 cities, has 600 chapters and involves over 2 million entrepreneurs.
# Fireside Chat - William Bao Bean and Alan Tsen
The first presentation I attended was a fireside chat with William Bao Bean, Managing director Chinaccelerator and MOX at SOSV and Alan Tsen from Sidefund.
In this chat William shared some detail about SOSV and a lot of information about scaling into Asia and more specifically China.
SOSV is primarily a seed or angel investor. They’ve supported around 1,000 companies to date with their investment and accelerator programs and run 1 regional accelerator as well as 5 vertical accelerators. SOSV has a strong biotech and hardware focus; an area that often requires them to help PhD recipients improve their business skills.
Chinaccelerator is the region-specific accelerator and helps businesses scale into the Chinese market by providing funding, but also helping to adjust product offerings and business models to fit within the Chinese business landscape. The majority of businesses involved in Chinaccelerator have been previously funded, and almost all already have a stream of revenue.
I’ve often heard that in order to enter the Chinese market it is often necessary to partner with a local company. William suggested that this shouldn’t be done too early in the process and instead time should be taken to start establishing in China and to select a local partner when required. He suggested expanding into China could be considered as a startup within a startup.
The Chinese market has a number of differences to the western markets. One of the key differences is 11/11, a day on which many Chinese will do several months’ worth of shopping. This one day means that suppliers need to be ready and able to cope with a huge surge in demand, followed by a long lull. One of the interesting effects of this the need for financial services; customers require finance to fund the huge amount of purchases they make on this single day, and suppliers require finance to be able to prepare the stock required for the day. This model works well for companies like Alibaba who profit by providing finance to both the suppliers and the customers.
Another key difference in the Chinese market is the monetisation of social media. Western organisations, such as Facebook, discourage or disallow the direct monetisation of social media posts, yet in China this incentivisation is built into their social networks. This allows influencers to have a direct impact and also enables companies to sell directly to consumers through the social networks.
In China, privacy is a low priority, this means that AI/ML technology can be utilised to highly personalise customer communications; it’s now become so common that customers expect it, and they expect almost every mobile app to have location tracking enabled. By tracking the user’s physical movements, a profile can be built about the user and this can then be used to market specific services to them based on a location derived credit score.
At the end of the chat, William summarised the key points as:
- Drop your biases when crossing border;
- Listen to the customers;
- Be data driven.
# Fireside Chat - Warrick Cramer and Nikos Psaltopoulos
The second presentation was also a fireside chat (I’m still disappointed there wasn’t a fire, but it was a 38°C day). This time Warrick Cramer formerly of Vodafone Tomorrow Street and Nikos Psaltopoulas from MarineTraffic chatted about resilience, innovation culture, big data and “the hustle”.
Warrick started by talking about early in his career when he was running a startup with around 10 employees and was looking to partner with a corporate. In his story he imparted details about how he was rejected to the point of being escorted from the corporate’s building; but after quickly realised his staff needed him to succeed. His resilience eventually paid off, as he met another person within the corporate who listened to his pitch and accepted the proposal. As part of this section he also highlighted the importance of learning about the risk profiles used by corporates and enterprises; and making sure you can satisfy their requirements.
We also learnt about an idea being rejected in Australia as local organisations thought “no one will need it”; after pitching the idea in the US, investors were found, and a profitable exit strategy was achieved 5 or 6 years later.
It’s also important to note that when pitching ideas, make sure the same idea isn’t being implemented in another location; investors are often interested in an original idea, but if you’re the second player to the table they will tend to shy away unless you have a differentiating factor.
The topic then moved to encouraging an innovation culture. One of the first challenges Warrick faced at Tomorrow Street was discovering that staff were willing to innovate, but when an innovation failed, they were “publicly executed”. In facing this challenge, Warrick had to start with senior management and get them to accept that failure was ok and a normal part of innovation. He also had to get teams to own and talk about failure so everyone could learn from them; this was challenging as the teams and individuals had adopted a culture of hiding failure.
As part of the innovation challenge Warrick also had to determine how to involve stakeholders from a number of different silos to ensure the ideas were either stopped or progressed rapidly.
During the talk about innovation culture the impact of social media was discussed, specifically in relation to people only posting about the positives in their life. As part of this there was some discussion about learning to read though the exaggerations people display on social media.
Coupled with innovation is a willingness to recognise that it is okay to stay small, not everyone wants to be the next Google. However, for those who do want to succeed globally, it’s a necessity to set aside the “get it right locally, then go global” attitude and to think global and consider the local market as a proving ground or test market.
The discussion then turned to big data, AI/ML, ethical sue of data and empathy. There was so much in this section I wasn’t able to get notes quickly enough, but the key points were:
- If we don’t display empathy the next generation won’t have any;
- If we put money first, empathy will be lacking;
- It’s too late to “turn off” big data;
- GDPR is one way to regulate big data, but is it the right one for Australia?
- How can we ensure the ethical use of AI and ML?
The final part of the discussion was around “The Hustle” and finding a happy place. As a founder the business is you, but only at the start. Once the business has employees then it is no longer about the founders but is about others. Founders need to trust the employees to do their job, they need to permit themselves to switch off and take a break as well as try to achieve a work/life balance. And importantly, founders need to be willing to recognise that at some time the business will need to be set free, left to the control of others, either to grow the business or just to maintain it; if a founder still considers the business as a part of their individual identity then this can’t happen and the employees, customers, investors and others may suffer.
To wrap it up a perfect little summary was given:
- Be resilient;
- Surround yourself with people that pick you up, and with people that will challenge you;
- Get external advice and expertise as and when you need it;
- Take a break!
# 90 Second Pitches
Prior to the first break time was given for a number of startup and scaleup organisations to pitch to the crowd. Without going into too much detail, here’s a quick summary:
- Birchel - Crowd-sourced equity funding
- Law on Earth - Public, self-service legal
- Snatchi.Shop - Sales embedded in content to improve influencer engagement
- Pocket Vision - Sync physical and digital Agile boards
- UCities - Recruiting for startups
- ProvenDB - Blockchain for database integrity
- Pelagic Dive Travel - SCUBA holiday destinations by marine animal and dates
- Meet your Maven - Mentoring for female entrepreneurs
- Feral.AI - Meat supply and sale data analytics
- Hike - Onmi-channel retail POS
- Getaboutable - Holiday destinations with mobility and special needs filtering
- Future Golf - Golf club membership for the nomad
- AutoEnhance - AI photo enhancement for real estate
- Kinkon - Digital business cards
- Qonfer - Mental health connections
# Panel Discussion – Sam Wood, Matthew Morgan and Melissa Spiers
I missed a good portion of the panel discussion by Sam Wood from 28 by Sam Wood, Matthew Morgan from Australian Life Tech and Melissa Spiers from MYOB. The bits I did hear were about the biggest learnings from the last 4 years and marketing challenges in a startup/scaleup compared to a larger corporate.
The biggest learnings were all around data and how important it is. With the benefit of hindsight, Sam and Matthew would have been more data driven, using tools like Microsoft Excel until the more expensive tools they use today were affordable. They would have used this data to better understand who their customer is, what they want and to learn that their customer isn’t like them.
Matthew then compared the differences between enterprise marketing and startup marketing. Although the budget and screen size are smaller, the need for a compelling story or narrative is still the same. The advantages of social media marketing over TV and radio advertising is that it’s possible to use the instantaneous feedback loops to A/B test ads and remove the ones that don’t perform as well (run 20 ads and then keep the best 5). It’s also important to maintain strong PR channels; feed the media, showcase opinions and educate people, it isn’t all about advertising.
# Fireside Chat - Tobi Skovron and Niki Scevak
The final presentation I attended was another fireside chat, this time with Tobi Skovron from Creative Cubes and Niki Scevak from Blackbird Ventures.
Niki was passionate about doing your life’s work so there is no need for an exit strategy from your venture. In his case, his life’s work is to help technical people gain business skills and create something that is great in the long term.
As the discussion progressed Niki and Tobi discussed the topic of Australian versus US talent pools. They both agreed that it’s always been hard to find great talent, and this is not just a modern phenomenon; also, it is generally cheaper to hire a product development team in Australia as the cost of living is lower, there’s less competition and greater loyalty. The offset to this is that the very highly skilled individuals have relocated to the US where companies can afford the extreme wages that cannot be justified in Australia.
The one point of disagreement was that Tobi suggested Australia has the talent (excluding the top few percent), but not the hustle; where Niki thought the hustle was often misdirected and Australian’s don’t waste effort on hustling for little benefit.
The conversation was then directed to how does a venture capital fund determine how much to invest. Niki said this depends on the phase the business is in.
For a business in the discovery phase, they tend to keep investment low as this keeps the business lean and encourages creativity. As the business moves to a proving or scaling stage then significant investments can increase the speed of growth and be more helpful.
As a general formula, a VC fund will expect a $1million investment to last a 5- or 6-person company for 12 to 18 months.
The topic of embracing failure was then raised. Niki said, “we only fail if we stop”, a sentiment I fully agree with. It’s also okay to fail if we learn from it and iterate to improve; this implies that we should fail fast and fail small. To help justify this the example of Michael Jordan was mentioned, and that example is that he missed more shots than he made.
Niki highlighted that an investor should not get upset when a failure happens. It is part of the investors remit to help remove stress. If the business fails completely then the investor should help those in the business to help get back on their feet. Tobi also highlighted that it’s important to recognise when a business is not making a positive difference and be willing to stop funding it, to learn from it and to move on.
Niki finished up talking about the seed round of investment. The key items he assesses when deciding on an investment is the category the company fits in; if it fits in an existing category then it is less likely to get seed funding; if it is creating a new category (e.g. Uber creating the gig economy) then it is more likely to get funding. The fund will also assess the idea of originality; and will then look at the life’s work of the founder to see how they got to their current point.
# The rest of the day
For the remainder of the day I spent some time networking with a variety of people, some of whom I’ve met before and others who I met at the event. I also had a break for a bit and wrote some of this blog article.
I finished the day off by talking to Kateryna Tsysarenko who was on the winning team at the AI Hackathon I’ve written about previously (AI Engineers of Melbourne: AI Hackathon). Her venture, AIonSpectrum (the result of the AI Hackathon) is currently involved in the RMIT Activator and is starting to seek some seed funding.
Bring on tomorrow…