Why technology hasn’t made life more stressful; Meet the woman who wants to make the “Starbucks of nail salons”: Best of the Web1:06AM | Friday, 23 January
Among New Year’s resolutions this year unplugging digitally seemed to be almost as popular as losing weight and quitting smoking. It is all in response to the notion that digital technology — like round-the-clock email and friends’ envy-inducing Instagram photos — is stressing us out and making us unhealthy. As Claire Cain Miller argues in The New York Times, ‘Technology Has Made Life Different, but Not Necessarily More Stressful’. Miller cites research which shows frequent internet and social media users do not have higher stress levels than those who use technology less often. And for women, using certain digital tools decreases stress. Meet the woman who wants to make Miniluxe the “Starbucks of nail salons” Fragmented industry? Ripe for disruption? Tick and tick. In this FastCompany interview, Lydia Dishman speaks to Miniluxe chief executive Sue Thirwall about her plans to roll out nail salon franchises across the United States. Thirlwall aims to elevate the hasty, daub-and-dry experience found at many a corner shop. That includes new level of individual attention, even for walk-ins, and hyper-vigilant hygiene. The best digital business models put evolution before revolution Your business doesn’t need to be like Apple or Uber, according to Didier Bonnet and George Westerman in the Harvard Business Review. The pair say business model innovation is hard. But they argue managers make it harder when they think about it only as radical industry reinvention. While revolutionary business model changes can be valuable, you don’t necessarily need to transform your industry. You don’t need to destroy your current business model. There is another way to make money from business model innovation. Sometimes it’s better to think a bit smaller so you can set yourself up for big results. Image credit: Flickr/ mtaphotos Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The final communique of the 2014 G20 Leaders’ Summit called for enhanced economic growth that could be achieved by the “promotion of competition, entrepreneurship and innovation”. There was also a call for strategies to reduce unemployment, particularly amongst youth, through the “encouragement of entrepreneurship”. This desire to stimulate economic and job growth via the application of entrepreneurship and innovation has been a common theme in government policy since at least the 1970s. The origins of this interest can be traced back to the report produced by Professor David Birch of MIT “The Job Generation Process” that was published in 1979. A key finding from this work was that job creation in the United States was not coming from large companies, but small independently owned businesses. It recommended that government policy should target indirect rather than direct strategies with a greater focus on the role of small firms. Fostering the growth of entrepreneurial ecosystems Over the past 35 years the level of government interest in entrepreneurship and small business development as potential solutions to flagging economic growth and rising unemployment has increased. It helped to spawn a new field of academic study and research. This trend was boosted by the success the iconic “technopreneurs”. Technology entrepreneurs such as Steve Jobs of Apple, Bill Gates of Microsoft, Jeff Bezos of Amazon, or Larry Page and Sergey Brin of Google have become the “poster children” of the entrepreneurship movement. One of the best known centres of high-tech entrepreneurial activity has been California’s Silicon Valley. Although it is not the only place in which innovation and enterprise have flourished, it has served as a role model for many governments seeking to stimulate economic growth. Today “science” or “technology” parks can be found scattered around the world. They usually follow a similar format, with universities and R&D centres co-located with the park, and venture financiers hovering nearby looking for deals. Most have been supported by government policy. What governments want is to replicate Silicon Valley and the formation and growth of what have been described as “entrepreneurial ecosystems”. However, despite significant investments by governments into such initiatives, their overall success rate is mixed. So what are “entrepreneurial ecosystems” and what role can government policy play in their formation and growth? This was a question addressed by the first White Paper in a series produced by the Small Enterprise Association of Australia and New Zealand (SEAANZ). The purpose of these papers is to help enhance understanding of what entrepreneurial ecosystems are, and to generate a more informed debate about their role in the stimulation economic growth and job creation. What is an entrepreneurial ecosystem? The concept of the “entrepreneurial ecosystem” can be traced back to the study of industry clustering and the development of National Innovation Systems that took place in the 1990s. However, the term was being used by management writers during the mid-2000s to describe the conditions that helped to bring people together and foster economic prosperity and wealth creation. In 2010 Professor Daniel Isenberg from Babson College published an article in the Harvard Business Review that helped to boost the awareness of the concept. The diagram below shows the nine major elements that are considered important to the generation of an entrepreneurial ecosystem. The focus of this first SEAANZ White Paper is on the role of government policy. Future White Papers will deal with the other eight elements. Isenberg outlined several “prescriptions” for the creation of an entrepreneurial ecosystem. The first prescription was to stop emulating Silicon Valley. Despite its success the Valley was formed by a unique set of circumstances and any attempt to replicate it in other places were unlikely to succeed. This led to a second prescription, which was to build the ecosystem on local conditions. Grow existing industries and build on their foundations, skills and capabilities rather than attempting to launch high-tech industries from scratch. The third prescription was the importance of engaging the private sector from the start. Here the role of government is indirect and one of a facilitator not a manager. In trying to shape the growth of such ecosystems attention should be given to the support of firms with high growth potential that can help to generate a “big win” early on. This is the opportunity for local success stories to become role models for others. However, care must be taken by governments not to try to pick winners or over engineer the system. High growth firms by nature are inherently risky and highly innovative firms are typically unique. As such there is no magic formula for their success. Helping such firms to succeed is more about removing obstacles to their growth such as anti-competitive cultures, unfair taxation on small firms, unnecessary “red tape” or lack of access to markets, skilled employees or investment capital. In seeking to help stimulate entrepreneurial high growth firms it is important, according to Isenberg, to avoid flooding the system with too much “easy money”. This can take the form of government grants and venture capital funds that are too easily obtained. What is important is to grow firms with strong root systems that can sustain their own growth as much as possible before seeking additional funding. Such firms should be financially sound; profitable and well managed, or their likely success rates will be low. The focus should be on encouraging sustainable, growth oriented and innovative firms not simply fostering more start-ups. Starting a new business is the easy part, successfully growing it is the challenge. What can government do to stimulate entrepreneurial ecosystems? The challenge for government policy is to develop policies that work, but avoid the temptation to try to effect change via direct intervention. A 2014 study of entrepreneurial ecosystems undertaken by Colin Mason from the University of Glasgow and Ross Brown from the University of St Andrews for the OECD, developed a set of general principles for government policy in the relation to these ecosystems. They contrast “traditional” versus “growth-oriented” policy approaches to enterprise development. The first of these approaches tends to focus on trying to grow the total number of firms via business start-up programs, venture capital financing and investment in R&D or technology transfer. This is a “pick the winner model” and can also include business or technology incubators, grants, tax incentives and support programs. Such programs are essentially transactional in nature. It is not that they are of no value, but they cannot guarantee success via such direct intervention. A “growth oriented” approach is more relational in nature. This focuses on the entrepreneurial leadership of these growth firms. It seeks to understand their networks and how to foster the expansion of such networks at the local, national and international level. The most important thing is the strategic intent of the team running the business. Firms seeking to grow need to be given help in linking up with customers, suppliers and other “actors” within the ecosystem who can provide resources. Government ministers can play a critical role in fostering enterprise and innovation. Their role is to direct the government departments and agencies to focus on the problem and develop effective policies. A minister who has a good understanding of what entrepreneurial ecosystems are, how they form and the role and limitations of government policy is well-placed to generate more effective outcomes. Key recommendations for government policy In summary, key recommendations for government policy in the fostering of entrepreneurial ecosystems are: Make the formation of entrepreneurial activity a government priority - The formulation of effective policy for entrepreneurial ecosystems requires the active involvement of Government Ministers working with senior public servants who act as ‘institutional entrepreneurs’ to shape and empower policies and programs. Ensure that government policy is broadly focused - Policy should be developed that is holistic and encompasses all components of the ecosystem rather than seeking to ‘cherry pick’ areas of special interest. Allow for natural growth not top-down solutions - Build from existing industries that have formed naturally within the region or country rather than seeking to generate new industries from green field sites. Ensure all industry sectors are considered not just high-tech - Encourage growth across all industry sectors including low, mid and high-tech firms. Provide leadership but delegate responsibility and ownership - Adopt a ‘top-down’ and ‘bottom-up’ approach devolving responsibility to local and regional authorities. Develop policy that addresses the needs of both the business and its management team - Recognise that small business policy is ‘transactional’ while entrepreneurship policy is ‘relational’ in nature. For more reading see: Mazzarol, T. (2014) Growing and sustaining entrepreneurial ecosystems: What they are and the role of government policy, White Paper WP01-2014, Small Enterprise Association of Australia and New Zealand (SEAANZ). Note: Tim Mazzarol is President of the Small Enterprise Association of Australia and New Zealand Ltd (SEAANZ). SEAANZ Ltd. is a not-for-profit organisation founded in 1987. It is dedicated to the advancement of research, education, policy and practice in small to medium enterprises. This article was originally published on The Conversation. Read the original article.
Don’t be mesmerised by cool apps and flashy new gizmos – the top technology inventions of the year are ones that will have a lasting effect. Most are advances in fields that are already changing us. Some will have immediate impact; others are portents of transformations that may take decades to complete. In this vein, and in no particular order, here are what I consider to be ten of the best technological innovations from 2014. 1. DNA nanobots injected into cockroaches Nanotechnology is a growing research field that manipulates materials on a molecular scale. One prospect is to transform medicine by injecting nanobots into the body where they perform functions such as treating disease. In February, an Israeli team described devices they made from DNA and injected into cockroaches. By performing a kind of origami, the DNA nanobots assembled themselves and were able to control a molecule that targeted specific cells, so demonstrating their potential to carry out medical functions such as attacking cancers. 2. Nanotubes in chloroplasts created super plants Nanotubes are large carbon molecules that form tubes with unusual thermal and electrical properties. In March, a team from MIT and CalTech published a method for inserting nanotubes into plant chloroplasts. The novel combination boosted photosynthesis and plant growth by several hundred percent. Applications are still years away, but besides increasing plant growth and production, there are extraordinary possibilities: tapping plants for electrical power, building self-repairing materials and erecting buildings from materials that generate their own power. 3. Scallop-shaped robots swam through blood Researchers at Germany’s Max Planck Institute developed tiny robots that could swim through the bloodstream, repairing tissue damage or transporting medicine. The challenge they faced was blood’s viscosity: it not only impeded movement but also varied according to speed. They solved the problem by designing robots in the shape of scallops powered by an external magnetic field. These robots provide a starting point for many kinds of medical devices of the future. 4. A microchip helped a paralysed man regain the use of his arm Implants are revolutionising the treatment of many medical conditions. In April, researchers at Ohio State University reported success in using a microchip implant to help a paralysed man regain use of his arm. Ten years in development, the device, known as Neurobridge, stimulates muscles according to brain patterns. The innovation raises hopes for many disabled people. It showed that by plugging into our brainwaves we may one day control all manner of devices by thought alone. 5. Nose cells helped repair a severed spinal cord Biotechnology is producing new cures for medical conditions long thought to be permanent. A medical team at Wroclaw Medical University cultured nerve cells taken from a patient’s nose and surgically inserted them into his spinal cord. The transplanted cells stimulated severed nerve fibres to grow and rejoin, thus bridging a damaged section of the spinal column and allowing the patient to walk again. This innovation showed that damage to the nervous system can be reversed. 6. Unmanned drones: the future of delivery services Unmanned flying drones are taking on a rapidly growing number of roles, especially in surveillance and monitoring. Following Chinese experiments last year to test drones as a delivery system for parcels, 2014 saw rapid expansion of serious business interest. In August, Google used a drone to deliver chocolates to a farm in Outback Queensland. By year’s end, Amazon, DHL and many others were scrambling to establish unmanned delivery services in several countries. 7. A swarm of self-assembling mini-robots Robots are already important tools in many industries, but put them into swarms and they can do so much more. In August the journal Science reported work at Harvard in which 1,000 mini-robots, the largest swarm so far, was able to assemble itself into programmed shapes. There is still a long way to go, but it raised the potential for structures that self-assemble, which would revolutionise construction. 8. 3D printers pushed the boundaries 3D printing is now an established technology, but developments this year expanded its capabilities and applications. At the one extreme a team in Amsterdam began a project to build an entire house using 3D printing. Meanwhile researchers at Princeton developed a 3D printer that could print with five different materials, incorporating dot-emitting diodes, and demonstrated it by making contact lenses. This raises many possibilities, from wearable video to monitoring the health of pilots. 9. The next frontier in space exploration Events this year highlighted the international character of solar system exploration in coming decades. Following a ten-year flight, European Space Agency’s probe Rosetta went into orbit around the comet 67P/Churyumov-Gerasimenko. On November 12, it released the probe Philae which became the first spacecraft to land on a comet. Meanwhile, Mars exploration moved forward. India’s Mangalyaan spacecraft went into orbit around Mars in September and in December, NASA successfully launched the new Orion spacecraft, a first step in preparing for manned exploration of Mars. 10. Green power and clean water Necessity is the mother of invention, so the greater the need, the more important the invention. A worldwide need is the 780 million people around the world who lack access to clean water supplies. The challenge for inventors is to meet the World Health Organisation criteria for practical systems: accessible, simple and cheap. One notable innovation this year was a portable new system called Sunflower developed in Switzerland. Easily transportable, it used sunlight to generate electricity, and at the same time provided heating, refrigeration for food and purified water. What of next year? We can be sure that growing fields such as automation and nanotechnology will continue to surprise us. The US Patents Office granted more than 300,000 patents during 2013, nearly 30,000 more than 2012. If patents provide a reliable indicator, then new inventions are appearing faster than ever. This article originally appeared at The Conversation. Image credit: Ohio State University Wexner Medical Center
The startup scene continues to flourish in Australia, with hundreds of new startups launching this year and many scaling nationally and overseas. Here is StartupSmart’s pick of some of the startups to keep an eye on in the new year. 1. Bitcoin Group Melbourne-based Bitcoin Group, the entity behind bitcoin arbitrage fund Bitcoins Reserve, has big plans for 2015. The company plans to raise $20 million at 20 cents a share by listing on the ASX. On top of that, the startup is a big supporter of the local bitcoin community. Chief financial officer Allan Guo previously told StartupSmart Bitcoin Group hopes to raise the profile of bitcoin in Australia and make sure more people understand digital currencies. “There are people building exchange platforms, as well as payment systems, wallets, all the technology, but for us we see the biggest problem with bitcoin is the lack of understanding, the lack of trust,” he says. “The transparency, the legitimacy, that’s what we want to bring.” 2. Swift Swift is a Melbourne startup that grew out of after-hours alcohol delivery service Liquorun, and allows retailers and other businesses to deliver their products to consumers within one hour. Swift is a classic example of an Aussie startup taking a niche concept and applying it to the broader market. “Shopping online is very convenient until it comes down to accepting delivery of the item,” founder Joel Macdonald previously told StartupSmart. “You know where you’re going to be in the next 60 minutes but you don’t necessarily know where you’re going to be the next day. Everyone’s time poor.” Swift was one of five companies to recently secure funding from BlueChilli’s $10 million venture capital fund and is in talks with a number of US retailers. 3. Stashd Fashion-discovery startup Stashd launched earlier this year and allows users to swipe left or right on an item depending depending on whether they would like to ‘stash’ or ‘trash’ it. The app features more than 100,000 items and users in more than 80 countries. Co-founder Jessica Wilson says 30% of the apps users are “power users” and have engaged with the app more than 100 times since downloading it. “I think a lot of it is you become super addicted to it,” she says. “Internationally we’ve grown well because it is different, and we’re one of the first people in the fashion app space.” Stashd has plans to grow the product range to include items from the likes of Zara, The Iconic and Asos.com. The startup will likely announce a seed investment round in the next few months. 4. Wattcost Aussie startup WattCost has developed a device that can be attached to a household’s power meter to provide home owners with real-time data on power usage. Former Microsoft evangelist Robert Scoble says WattCost was the most interesting startup he has seen all year and Google could very well buy the company in the race to become the dominant Internet of Things platform. “We don’t know who’s going to win, but Google’s in the early lead because they bought Revolv, they bought Dropcam and they bought Nest,” he says. “And I think this is going to be another one that they’re going to buy, because knowing how much electricity is going through the house, knowing when the rates are changing, that’s really important.” 5. TalkLife Global social network TalkLife was founded in Adelaide and this year announced a collaboration with a London-based business accelerator. The startup allows young people to discuss issues such as depression and suicide and support one another online. It has grown rapidly since its launch in 2012, with currently more than 100,000 users worldwide. Founder Jamie Druitt previously told StartupSmart the startup is working with Harvard and MIT research teams to investigate how data can be used to predict high-risk mental health episodes in young people. “I think it is fantastic that TalkLife can give them the opportunity to see data on mental health in real time,” he says. “I think we need to look at how we can grow TalkLife now – it has only ever grown organically but we’re not even scratching the surface of mental health. We’ve got a long, steep road ahead.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Research released this week by the Diversity Council of Australia has found the stigma surrounding mental health is still prevalent in the workplace, despite many employers taking steps to tackle the issue head-on. The survey found while 86% of businesses have carried out initiatives to address mental health in the workplace, the same amount of organisations report that mental health issues at work were common or very common. Australian tech startups are not exempt, with entrepreneurs describing mental health as the “black dog in the room” for the startup community. Long hours, financial pressure, isolation and fear of failure can be the unfortunate downsides to working on a startup – all of which have the potential to exacerbate mental health issues. Athula Bogoda, organiser of Melbourne Silicon Beach Drinks, told StartupSmart mental health is not given enough attention in the startup sphere. “It’s something we need to discuss,” he says. “The subject is something that has not been spoken about and in the US there has been about three or four known instances of founders committing suicide so it’s something we should talk about here.” Bogoda says meetups like Silicon Beach Drinks are important because they provide entrepreneurs the opportunity to get away from the computer and meet people are going through similar things. “Meet-ups like ours are in a position to bring up the subject [of mental health] and implement appropriate measures,” he says. “The culture of hackathons can be mentally and physically draining – you come in on a Friday evening and hardly get any sleep by Monday. It’s in the culture of startups, but I don’t know how effective the message is that you should work like that.” However, there is good news. Bogoda is quick to acknowledge that people are beginning to have conversations about startups and mental health and questioning whether practices that have been in place for a long time are ultimately good for people’s wellbeing. “People are now talking about doing exercise, meditation and mindfulness exercises to boost productivity,” he says. One Australian tech startup that is tackling the issue of mental health head-on is TalkLife, a global social network that allows young people to discuss issues such as depression and receive support from their peers. The startup has grown rapidly since launching in 2012, with around 105,000 users worldwide. Founder Jamie Druitt told StartupSmart startups can be hotbeds for mental health issues; however, it doesn’t need to be this way. “I think clear communication is critical and understanding the expectations in other co-founders,” he says. “If you are on your own, that’s where accelerators are beautiful because you can come in and you do have the support of other founders around you.” Druitt says people’s attitudes to mental health can slowly change by entrepreneurs recognising they may fail and for the media to give ample air-time to stories of failure. “A lot of people talk about the success stories but not a lot of people are talking about the failure stories. It gives you a much clearer understanding that you may fail or you may come out the other side. We do make it out that we are invincible.” Druitt says around 9000 people log on to TalkLife each day and the startup is working with a Harvard and MIT research teams to investigate how data can be used to predict high-risk mental health episodes in young people. “I think it is fantastic that TalkLife can give them the opportunity to see data on mental health in real time,” he says. “I think we need to look at how we can grow TalkLife now – it has only ever grown organically but we’re not even scratching the surface of mental health. We’ve got a long, steep road ahead.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
It’s a list that includes an Australian author, a former United States federal prisoner, a CEO of a multinational consumer goods company, a Harvard business school professor, a millionaire entrepreneur and more. These nine TED talks are sure to inspire, stimulate and generate thought about how to successfully run a business. They’re a must watch for SMEs and entrepreneurs. 1. The failurist: Markus Zusak This one’s a little bit different. Markus Zusak isn’t a businessman – he’s an author, but he details an important subject many in the business world have to confront: failure. The Australian writer is best known for his novels The Book Thief and The Messenger, but in this TED talk he explains how his personal failures cultivated motivation, and how his failures and humiliations made success feel so much better. Zusak discusses his original failures, first as a child, then as an adult, which helped propel him to success. It was his original failures that gave him the motivation to do so much better; this is perhaps someone everyone in the business world can learn from. Story continues on page 2. Please click below. 2. Profit not always the point Harish Manwani, the chief operating officer of Unilever, calls for a redefining of business models in society, and asks for businesses – if they want to remain relevant in the 21st century – to define themselves beyond what they sell and produce. Manwani asserts that in the 21st century for business, it shouldn’t be about generating revenue or turnover; it should be about creating a better culture – changing lives – in the process of doing business. Story continues on page 3. Please click below. 3. How data will transform business Philip Evans provides a fact-driven, theory-based look into the future of the business landscape. In this video, Evans, a senior partner at the Boston Consulting Group, looks at how the power of technology is driving the boundaries of how we think about business strategies, and how it will change in the future. Evans explains why he thinks two longstanding theories in business strategy are invalid in today’s market and what he thinks the future of business holds. Story continues on page 4. Please click below. 4. Success is a continuous journey Richard St John, entrepreneur and founder of marketing company the St John Group, poses the question of why so many people reach success and then fail. St John reminds us that success isn’t a one-way street, rather, it’s a consistent journey. He uses his own personal experience of going from being a successful businessman to a failing and depressed shell of his former self. His search for true passion coupled with the use of eight key principles, “passion, work, focus, push, ideas, improving, serving, persisting” helped him to climb the ladder of success once again after his early failures. Story continues on page 5. Please click below. 5. Dan Pink: The puzzle of motivation Business author Dan Pink explores the mismatch between what science knows and what business does, and in doing so, opens up an entirely new operating system for business models. Pink examines the rules underlying current workplace structures and unveils that, in fact, the rules are ill-defined. “The rules – if they exist at all – should be surprising and non-obvious,” he says. During his presentation, Pink looks at Australian success story Atlassian, which grants employees 20% of their work time to autonomously work on ‘whatever they want’ to promote creativity, free thinking and a healthy working environment. An interesting talk if you want to tackle the topic of motivation and rewards in business. Story continues on page 6. Please click below. 6. Work-life balance is an ongoing battle The most poignant of all the TED talks on this list, Nigel Marsh talks about finding the balance between work and life, and how the ongoing battle can either destroy or build an individual and their business. Marsh is the author of three books, Fat Forty and Fired, Overworked and Underlaid and Fit, Fifty and Fired Up, he is also the co-founder of Earth Hour. Marsh says an individual needs to be responsible for setting and enforcing the boundaries that they want in their life. He shows that the “small things” matter and that being more balanced doesn’t mean dramatic upheaval. With the smallest investment in the right places, Marsh believes you can radically transform the quality of your relationships, the quality of your life, and society. Story continues on page 7. Please click below. 7. Lessons in business … from prison Jeff Smith, a former US senator and prisoner, discusses the ways in which he saw a reflection between the top CEOs in the United States and the prisoners he spent time with in federal prison. Smith talks of the ways in which the ingenuity of the prisoners behind the walls, their ambition, drive and can-do attitude, is something that those in the business landscape can definitely learn from and recreate to ensure greater success in the business realm. Story continues on page 8. Please click below. 8. Your body language shapes who you are Harvard Business School associate professor in social psychology Amy Cuddy talks about what nonverbal communication does in terms of judgements from those we associate with. Cuddy says our body language not only affects how other people see us, but also how we see ourselves. What results is an interesting take on how to be more confident in your work, your life, interviews or general interactions, a key skill which will certainly help you become more successful in your business. Story continues on page 9. Please click below. 9. How to get your ideas to spread It’s not important how good your idea is, marketing guru Seth Godin says, it’s about how good your method of spreading the idea is – the idea he promotes is that “Ideas that spread, win”. Godin says consumers don’t care about ‘you’ at all – they have more choices and less time – and in a world where everybody has more choices and less time, the obvious thing to do is just ignore things. The challenge is to spread an idea worthy of the attention of other people. Godin says the most important question to ask when marketing an idea is: “Is it remarkable; is it worth making a remark about?” This story originally appeared on SmartCompany.
AVCAL has long advocated for a stronger nexus between publicly funded research and real economic outcomes. The roadmap towards achieving this, however, has been a matter of much public debate. It was therefore a welcome move for to see the federal government recently release a policy discussion paper called Boosting the Commercial Returns from Research. The discussion paper speaks about the key gaps in Australia’s innovation system such as the lack of research-industry collaboration, and the need for more targeted research incentives to drive commercialisation activity. These issues are all well-known and are largely beyond contention. The discussion paper also reviewed the policies introduced by other jurisdictions to strengthen the translation of research into commercial outcomes: the US, UK, Germany, New Zealand, Netherlands, Sweden, Canada and Denmark. Despite our relatively high levels of research funding by international standards, Australia ranks behind most of these jurisdictions on commercialisation measures. The paper explained how these countries have introduced a range of measures, including targeted research/industry collaboration programs, to foster commercialisation. What the paper doesn’t mention, however, is the fact that all of these countries have, as an integral part of their commercialisation policies, something that is currently largely absent in Australia: a publicly funded venture co-investment program. Around the world, traditional institutional investors have been gradually but inexorably pulling back from supplying the high-risk capital needed to back new ventures. Although corporate venture funds, high net worth individuals and successful entrepreneurs have stepped in to take their place to some extent, this has largely not been sufficient to address the overall funding gap. Of the fact that few Australian startups have made the transition to medium or large companies domestically, Sam Chandler of Nitro PDF has said that Australia is a good place for startups, but not so much for growth. For every success story that is reported in the media, there are many, many more promising companies that are not achieving their full potential due to lack of access to risk capital. Such risk capital is the lifeblood of a successful commercialisation pipeline. And the gold standard so far in addressing this issue -- with the wider benefits seen to be greatly outweighing their shortcomings -- has been the formation of government co-investment programs to back local new ventures. These programs have been invaluable (including in Australia) in providing the funding catalyst so crucial to bringing research from the lab to the marketplace. In fact, in the US, President Obama’s Startup America initiative identified “unlocking access to capital” as their first priority, including the need for government co-investment in risky ventures in partnership with the private sector. Both New Zealand and the UK have identified the lack of capital going into VC funds as a “market failure”, and 2002 and 2009 respectively introduced the New Zealand Venture Investment Fund and UK Innovation Investment Fund as part of their respective national solutions to address this. It has been proven that this model works not just internationally but also in Australia. The now-ceased Innovation Investment Fund program was instrumental in seeding Aussie success stories such as SEEK in their early stages. The South Australian BioSA model has shown that for every $1 of public funds BioSA has invested in early stage technology companies, these companies on average have achieved $10 in further investment or revenue from sales. Indeed, Harvard professor Josh Lerner said in his recent visit to Australia that matching investments schemes were one of the most effective tools for governments to foster venture capital. Country Public venture investment programme Country Public venture investment programme US Startup America $1b Early Stage Innovation Fund(2011) Netherlands Dutch Venture Initiative(2012) UK UK Innovation Investment Fund(2009) Sweden Various state-owned VC funds such asInlandsinnovation AB,Industrifonden and Sjatte AP-fonden New Zealand NZ Venture Investment Fund(2002) Canada Venture Capital Action Plan(2013), Northleaf Venture Catalyst Fund (2014) Germany ERP EUR 1bn Fund(2004), INVEST-Subsidy for VC (2014) Denmark Dansk Vækstkapital,Vækstfonden The government has recently made positive strides in setting the stage for a more vibrant startup environment. The recent announcement of the rollback of the 2009 Employee Share Schemes changes and additional measures to encourage take-up in startups, and the proposed expansion of the Significant Investor Visa requirements to encourage investment in venture capital, are positive first steps. The Victorian government’s recent contribution of $5.6m over seven years to secure Brandon Capital Partners’ Biotechnology Translation Fund’s headquarters in Melbourne is another positive step. But there is of course, more to be done. The commercialisation discussion paper’s proposals, which focus largely on the need for aligning research incentives with commercialisation objectives and greater industry-business collaboration, are further steps in the right direction. However, the issue of how commercialisation is to be effectively financed, and how innovative, high-growth ventures can get adequate access to capital, cannot be ignored. Given the wealth of evidence on this matter, the extraordinary consistency of international policy responses to this challenge, and independent expert views on the matter, it seems almost incontrovertible that we need to address the funding blockage for venture capital through a new government co-investment program to replace the Innovation Investment Fund, which was abolished in the 2014-15 federal budget. It would be a shame, after all the positive effort undertaken to remove roadblocks to the venture industry, to falter at the final hurdle. Dr Kar Mei Tan is head of policy and research at the Australian Private Equity and Venture Capital Association. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Melbourne-based startup lawyers General Standards is opening New York and London offices to support its Australian startup clients’ international expansions. Since launching in 2013, the company has advised over 200 startups and is helping launch more than 30 new companies every month in Australia. Founded by Australian startup lawyer Kurt Falkenstein, General Standards has built its Australian practice focused exclusively on advising startups, entrepreneurs, angel investors and venture capital funds. In anticipation of the firm’s growth, James McQueen, a former senior associate with Corrs Chambers Westgarth, has joined the company as global CEO. Former Minter Ellison London senior associate Campbell Unsworth has been appointed as global director and UK partner and will launch the UK office later this month. Spencer Wolf, a graduate of Harvard, Columbia and Yale universities commenced as the New York partner in July. “As a startup with a healthy mix of global ambitions and local talents, we recognise that some of the most innovative ideas for our business and clients will come from a more global perspective,” McQueen says. “Leveraging expertise and market experience across Melbourne, New York and London for the benefit of our Australian clients, and vice-versa, is a great way for us to deliver on this. “What we’re doing is certainly disruptive in terms of the legal industry, and at its heart is supporting the growth of startups in Australia.” Falkenstein says in the past it’s been difficult for startups to access legal advice simply because it’s too expensive and law firms find it difficult to justify offering startups discounted advice without doing the same for larger, established companies, loyal to their firms. Because General Standards focuses exclusively on startups and doesn’t have those “legacy clients”, it says it’s able to offer a more transparent service. It uses a technology-driven model which enables it to provide low cost, fixed-fees and allows its lawyers to spend more time helping entrepreneurs. “We want all entrepreneurs to be able to afford top quality advice when it comes to starting a new business,” Falkenstein says. “We wanted to give startups the legal support and structuring advice they needed, at a fixed-price and in a transparent way that makes sense for them.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The business world is abuzz this morning with news that China’s biggest e-commerce business Alibaba has filed its initial public offering, which could become the largest IPO in history. Alibaba Group was established by billionaire Jack Ma in 1999. The business has two main shopping websites, Taobao and Taobao Mall (or Tmall), which serve an estimated 79 million customers in more than 240 countries and territories. The group also has investments in a Chinese department store operator, mobile messaging apps maker Tango, and China’s version of Twitter, Weibo. Described as “eccentric”, Ma is known for both his unconventional career trajectory and idiosyncratic business style. Here’s five things you didn’t know about the man nicknamed “Crazy Jack”. 1. Ma started out at as a teacher Alibaba’s chairman studied to become a teacher after twice failing university entrance exams. Ma’s struggle with formal education and finding employment, including being knocked back from Harvard 10 times, is well-documented. He says he was even tuned down from a job as a secretary to a general manager at KFC. 2. He founded China’s first internet company Ma’s first foray into the digital world was with China Yellowpages, believed to be the country’s first internet-based company. According to the Wall Street Journal, it was a trip to Seattle in 1995 that sparked Ma’s interest in the internet, after he discovered during the trip how little information about Chinese companies existed on the web. 3. He enjoys singing pop songs and hit musical tracks Ma also apparently has a soft spot for performing Chinese pop songs and his favourite songs from the Lion King in front of crowds of thousands at his annual company conferences, called “Alifest”. In the past he shared a stage with former US President Bill Clinton, Los Angeles Lakers basketballer Kobe Bryant and Arnold Schwarzenegger. 4. Ma is huge fan of kung fu Ma is such a fan of kung fu novels that Alibaba employees are all required to take nicknames from kung fu novels. According to the Financial Times, which named Ma its Person of the Year in 2013, Ma’s nickname is “Feng Qingyang”, which refers to an “unpredictable and aggressive” swordsman. 5. He admits to knowing very little about technology Despite being the founder of one of the globe’s largest online businesses, Ma admits that he is not an expert when it comes to technology. According to TechCrunch, the entrepreneur says he cannot write code and knows little more than how to send an email.
A eulogy for Twitter. Adrienne LaFrance and Robinson Meyer argue in The Atlantic that the social media platform is dying. Although Twitter added 14 million new users for a total of 255 million, the pair say Twitter’s users are less active than they once were. “Twitter says these changes reflect a more streamlined experience, but we have a different theory: Twitter is entering its twilight.” According to France and Meyer, the question is – did Twitter change or did we? “Twitter used to be a sort of surrogate newsroom/barroom where you could organise around ideas with people whose opinions you wanted to assess. Maybe you wouldn't agree with everybody, but that was part of the fun. But at some point Twitter narratives started to look the same. The crowd became predictable, and not in a good way.” Uber cab confessions. As Uber attempts to upend the Australian taxi market it’s worthwhile taking a look at Mickey Rapkin of GQ’s take on spending a week as an Uber driver. Uber is pricier than your standard taxi. So what's the hook? Instant gratification, a hint of glamour, even some sex appeal. “Uber capitalizes on what economists refer to as ‘slack resources’ or ‘underutilized capacity’,” Rapkin says. “Translation: Why let your car sit idle in the driveway when you can turn it into a cash machine? The future is all about monetising downtime.” Gap alums rule the fashion world. In SFGate, Maghan McDowell writes about the Gap retail program which is known as the Harvard of retailers. "If you're trying to develop a career in retail, you have to do this program," says Stanford graduate Jessica Lee, who chose Gap over Google's Associate Product Manager Program, then under Marissa Mayer, in 2008. "You're not just applying to a job. You're being fostered, and they're basically paying you to learn." But as McDowell discovers, while Gap seems to have no problem attracting and training top talent, holding onto them after they reach middle management seems a more elusive endeavour. “The program remains renowned among retailers, but former Gap trainees have moved on from Gap to lead other companies – or to start their own. Call them the Gap Mafia. They're steadily influencing retail at boundary-pushing brands gaining recognition all over the world.”
The National Commission of Audit report’s contention that government support of startups provides no real benefit to the community is flat-out wrong, according to a number of startup industry figures and two major reports into the industry. Rui Rodrigues, investment manager of Tank Stream Ventures, says the commission’s suggestion is ridiculous. “It’s a very short-sighted view and there isn’t any logic behind it,’’ he says. “They’re essentially saying that the thousands of jobs created through startups and technology have had no impact on the economy.” It’s an opinion echoed by Sydney Angels management committee member Richard Dale. “The verdict’s been in for quite a long time, a startup, as long as it’s a high growth potential venture and not a lifestyle business, is a net creator of jobs,’’ he says. Last month peak not-for-profit StartupAUS released its report Crossroads: An action plan to develop a vibrant tech startup ecosystem in Australia which highlighted that startups play a big role in job creation – three million new jobs are added to the US economy each year by new firms, while existing firms lose a total of a million jobs per year. The Crossroads report noted Harvard professor of economics Ricardo Hausmann’s observation that Australia has “an amazingly primitive export basket”, which he says will lead to Australia becoming one of the worst performers in the region in terms of GDP growth. StartupAUS board member Bill Bartee, who is also a co-founder and managing director of Blackbird Ventures and Southern Cross Venture Partners, believes the commission is taking the wrong position. “Well I don’t know where they’ve been or where they’re getting their data,’’ he says. “It’s pretty clear when you look across the OECD and the US that there’s been lots and lots of job growth from startup and tech companies that build real businesses. “The eBays of the world, all of these very, very large tech companies that drive the US economy in a lot of ways were once very small companies. “It’s not as if the government is assisting a dying industry.” artee says he’s a firm believer in the need to support tech startups by providing capital, both human and financial. Last year, The Startup Economy, a report commissioned by Google and carried out by PricewaterhouseCoopers, found high-growth tech companies have the potential to contribute 4% of the Australia’s GDP by 2033 while adding 540,000 new jobs. Currently, startups contribute just 0.2% to the nation’s GDP. The commission’s recommendation that the government abolish Commercialisation Australia and the Innovation Investment Fund would leave Australian startups in a weaker position, says Dale. “Do they benefit? The answer is yes, these programs are putting experience, talent and money into the startup ecosystem,’’ he says. “Are they perfect? No. Do they help? Yes. Does taking them away have an impact? Yes, absolutely. Are they the best way of reducing barriers startups and early stage ventures face? Probably not. “All programs, all solutions can be improved, but we have programs at the moment that are functioning, providing benefit – so don’t turn off the tap. “The two years it will take to design, approve and implement a new program, that’s two years of lost opportunity.’’ Startup Victoria CEO Lars Lindstrom added to the chorus of startup community voices speaking out against the Commission of Audit’s recommendation. “In our view CA (Commercialisation Australia) has been doing a good job and the IIF(Innovation Investment Fund) structure of government matching investment 1:1 mirrors successful initiatives elsewhere such as in Singapore,’’ he says. “I don’t agree that it’s as simple as saying ‘finance can be acquired from the private sector’, VCs have had poor returns and therefore funding is in short supply.” “It may be short-term cost-saving but in the long run it would be highly damaging to the Australian economy.’’
So many people think that money is what motivates people. Surprisingly, it’s far from the truth. The old thought system to motivation is reward and punish. The stick and the carrot. Alfie Kohn writing in the Harvard Business Review points out that offering rewards to change set behaviours like eating less or quitting smoking does not work. Numerous psychological studies back up his thesis. Dan Pink in his outstanding book Drive showed that the carrot and stick works for short-term motivation but not for long-term engagement or long-term results. “Incentives ... do not alter the attitudes that underlie our behaviours,” Kohn says. “They do not create an enduring commitment to any value or action. Rather, incentives merely – and temporarily – change what we do.” “It is plausible to assume that if someone’s take-home pay was cut in half, his or her morale would suffer enough to undermine performance … but it doesn’t necessarily follow that doubling that person’s pay would result in better work,” Kohn postulates. Simon Sinek in his book Start with Why shows that the reason behind what we do really motivates us to put in more effort long term. If someone identifies with the company value of what you are doing and the why behind it, they are more likely to adhere long term to fulfilling the role with passion and enthusiasm. As Harvard Business School professor Teresa Amabile has found, a sense of progress is crucial to actually staying engaged. In an experiment detailed in her book The Progress Principle she asked 238 employees across seven companies to keep daily diaries of their workdays. She found a pattern. A close analysis of nearly 12,000 diary entries, together with the writers’ daily ratings of their motivation and emotions, shows that making progress in one’s work – even incremental progress – is more frequently associated with positive emotions and high motivation than any other workday event. During Pink’s TED talk in 2009, he says there is a mismatch between what science knows and what business does. Rewards, he says, make us single-focused, which leads to incorrect solutions. The solution is autonomy rather than top down, which he says is great for automated mechanical processes but not for the more creative processes required in this century. Tony Hsieh, the chief executive Zappos, in his seminal book Delivering Happiness is clear that creating the why and a culture that backs it up, is the only way to get long-term motivation. Given he built the company from a revenue of $1.8m in 2001 to $1 billion in 2009, maybe we should be heeding the message. Brett Jones is CEO of The Entrepreneur Tribe by Cre8 and frequent author on entrepreneurial matters. @cre8australia
The 11 rules of highly profitable companies From the man who brought us the four-hour work week, self-described human guinea pig Tim Ferriss, is this pretty insightful list on what drives profitability. “How do you generate the most profit with the least effort? How do you maximise margins without sacrificing quality?” Ferris asks. There’s some strong advice here, that’s probably worth listening to: “Many companies will sell direct-to-consumer by necessity in early stages, often through a simple website. Only later do they realise that their margins can’t accommodate resellers and distributors when they come knocking. This is true whether your ‘distributor’ is iTunes, a worldwide widget distributor, or Orbitz.” The five competitive forces that shape strategy In a follow up to his 1979 essay How Competitive Forces Shape Strategy, economist and associate professor, Michael E. Porter discusses the forces that shape strategy in a video interview for the Harvard Business Review. He addresses common misunderstandings, provides practical guidance for users of the framework, and offers a deeper view of its implications for strategy today. “The strongest competitive force or forces determine the profitability of an industry and become the most important to strategy formulation. The most salient force, however, is not always obvious.” Why the Trix rabbit looks down on you: FiveThirtyEight, the new data blog by Nate Silver, looks at how marketing works. “…[you] might not have thought much about the eye contact of cereal-box cartoon characters. Don’t fret: a new study investigated precisely that.” Indeed, the study found comic characters depicted on the boxes of children’s breakfast cereals are almost always looking downwards. That’s because in supermarkets the boxes are typically displayed on shelves above a child’s eye-level; the characters, by looking downwards, appear to be looking at the children – in effect, making eye-contact, as a device for gaining attention and increasing trust. How Gmail happened: The inside story of its launch 10 years ago Gmail is 10 years old, and Time takes a look back at how it all happened. When Google launched Gmail on April 1, 2004, the offer of 1GB free storage per user – 500 times what Microsoft’s Hotmail offered – seemed so implausible that some mistook it for a prank. And so begun a revolution of sorts. “If you wanted to pick a single date to mark the beginning of the modern era of the web, you could do a lot worse than choosing Thursday, April 1, 2004, the day Gmail launched.”
Lessons from the catwalk: Models in skyscraper heels on New York Fashion Week runways may seem a far cry from running a boots-on-the-ground business in Australia, but there is a big lesson to learn from how the world’s best style-setters use social media. Writing for inc.com, Stephanie Meyers unearths six of the best tricks they use to keep their fans, far and wide, captivated on their every move. Embrace rejection and five other business lessons: Columnist and New York Times bestselling author A.J. Jacobs writes on LinkedIn that some of the best things we can learn and do for our businesses can be inspired from the most unlikely places and figures from history. Soap in a pump, who thought of that? The man’s name was Robert R. Taylor, and his simple idea revolutionised people’s behaviour across the world. He was also behind Calvin Klein’s famous fragrance, Obsession, and the ground-breaking advertising style that promoted it. The New York Times reports that he died this week aged 77, but his entrepreneurial spirit has certainly left a mark. Forget the four-hour work week, 72 is the new norm: Most people respect and admire Tim Ferriss, author of The 4-hour work week for encouraging businesspeople to work smarter, not harder. But Jennifer J. Deal writes for Harvard Business Review Blog Network that, in the US, some professionals are connected to work 72 hours a week. Demands by the boss to have meetings at 9pm on Friday night or be responsive to communication on weekends are key to this. As a business owner, where do you draw the line?
Family lives of entrepreneurs: In her last column for the print version of Inc., Meg Cadoux Hirshberg reflects on her time charting the ways entrepreneurship impacts upon families. She writes that because entrepreneurs owe the best of themselves to their businesses and families, work-life balance is impossible – but that doesn’t mean they shouldn’t try. How snacking became respectable: It may be hard to believe, given the much publicised problem with obesity in the US, but snack foods were once looked upon with suspicion and even scorn. But this essay in The Wall Street Journal describes how commercialisation altered the image of snack foods to become respectable. Richard Branson on taking an inspiration vacation: How does one of the world’s most recognised entrepreneurs nurture inspiration? He makes sure he disconnects from the office and carries a notepad and pen for whenever an inspiring thought comes to him. In this article for Entrepreneur, Richard Branson also suggests asking whether staff return from their own holidays inspired and recommends group holidays. Six skills for triple-strength leadership: The Harvard Business Review has identified an emerging, but rare, brand of leader – one with three distinct sets of strengths. This leader is seen as someone who can engage across the private, public and social sectors. The magazine sets out the six skills that set these leaders apart, including balancing competing motives, acquiring transferable skills, and building networks.
With the constant demands business owners face each day, it’s hard to harness new opportunities in the market, and find the best way to put innovations in place. Are tight deadlines, big teams and micro-management the key to launching new ideas and measuring results quickly? Apparently not, according to writer Scott Antony. For the Harvard Business Review Blog Network, he explores five ways to do things better, and they may not be quite what you expect. Most people spend a lot of time weighing up options, but in business, deliberation is impractical. For the Farnamstreet blog, writer Shane Parrish draws on the world of elite baseball to consider how we can use our “strikezone” to make the best choices. He also tells us how to know when we’re not fit to call shots. The world of high finance, computers and crime always allures, particularly the case of the Goldman Sachs programmer accused by the company of lifting proprietary computer code. The case, which saw the man jailed for eight years, has raised questions over exactly what he did wrong. Michael Lewis delves into it for Vanity Fair. With their red-striped poles and no frills interiors, barber shops verge on ‘historical relic’ when it comes to the hairdressing industry. But a mysterious attraction keeps them alive. To a female, they feel like a no-go-zone – a secret place for men to groom and chat with the barber they become friends with over the years. For The Spectator, Henry Jeffreys gives his view on why barber shops are booming, and why he keeps going back. This story first appeared on SmartCompany.
The US-founded Startup Grind event series continues to grow in Australia, with the Sydney and Melbourne chapters set to host the founders of Atlassian and Zendesk respectively.
Once the brainchild of Harvard classmates, Facebook is now a multi-billion dollar company connecting everyone and everything.
A number of new start-ups have likened themselves to US-based company Airbnb, the leader in travel rentals, which has booked more than 10 million nights of accommodation worldwide.
Yes, I promised that this week, I'd share tips on raising capital in Silicon Valley. But I've postponed that post.