Pollenizer is a cornerstone of the Australian start-up ecosystem and like any start-up they’ve been evolving constantly. In the month of their sixth birthday, co-founder Phil Morle spoke to StartupSmart about how they’ve grown, what they’ve learned and what’s next. “We think our purpose is to build a guild of entrepreneurs across borders. We use the word guild because we’re excited about the idea of people who are united by a common practice, a skill or trade and that’s entrepreneurship and the carving out new of economies,” he says. Pollenizer began as a venture technology company in 2007. Employing a team of developers and product managers, Morle says they aimed to be the technical co-founder for smart people with good ideas who didn’t know where to go. The model may sound familiar. It’s similar to the core of what the Blue Chilli accelerator does today. “Blue Chilli’s model is similar to our old one. It’s a model that is still needed but we needed to evolve to survive and thrive,” Morle says. This model saw the group cultivate four to six start-ups a year, including break-out success Spreets which sold for $50 million in 2009. But their early approach was to develop ideas and bring in entrepreneurs almost as employees to run the business. “We realised that every company goes through moments when it should die. And it’s the founding team’s passion that lets them make it through. So we re-configured Pollenizer so everyone was passionate and aligned because that’s what helps you punch through,” Morle says. Today, Pollenizer is partly an incubator but much of their revenue and passion is wrapped up in consulting and working with large companies to work with entrepreneurs and implement start-up approaches such as lean and agile. It was their ongoing work with Telstra that alerted them to the fact the telecommunications giant intended to launch an accelerator program, which co-founder Mick Liubinskas now works. “We’re stable now but a lot of people think we’re an accelerator or investor, which we’re not,” Morle says. Pollenizer develops business ideas and then coordinates teams from within their own network. They invest $100,000 in each idea, and bring on board another $100,000 from an external investor. They only launch one or two new companies a year. Their most recent is True Property, a company seeking to establish a realestate.com.au or domain.com.au-style offering in the Philippines. “Working with so few companies is definitely a changed position for us. Two years ago I would have talked about starting lots of companies but now we only want to launch companies we can back to the bitter end because it’s hard work and needs all of you,” he says. Having worked with so many start-ups in their most precarious days, not everything you may hear about Pollenizer will be positive. Morle says he and Liubinskas still support every decision they’ve made so far. “I honestly believe that every decision we make as a company has to be rich with integrity and we always imagine ourselves on the other side,” he says. He adds for the companies they decided to pull out of or had disagreements with, they’ve been quick to find solutions such as selling the founder who wants to continue their equity so they can continue on. “We’ve had all kinds of experiences without entrepreneurs. We’ve had the deepest love and strongest anger from both sides. What we’re doing here is very, very difficult, and emotionally driven in both sides,” Morle says, although he’s quick to level the idea they take an exploitative amount of equity. “People can only say this if they think we’re an accelerator. But we come up with the ideas, we’re there every step of the way. We don’t take equity, we give it to incentivise the right people and let them know they’re in control.” Six years of start-up incubating and a couple of years of corporate facilitating means the Pollenizer team has honed their start-up to a smoothly deployed system that enables significant expansion. In the coming year, Pollenizer will be setting up in Myanmar. Funded by global telco Ooredoo, their job is to help grow a start-up ecosystem as internet penetration goes from 1% of the population to an estimated 70% in three years. “Asia is exciting to us because it’s an exploding market with so much opportunity. We intend to focus a lot of our resources and efforts there,” Morle says. Ultimately, Pollenizer hopes to become a network of entrepreneurs and start-ups spanning the Asia-Pacific and facilitating cross-border partnerships. While the plan is always to create profitable and rapidly growing companies, Morle says even the little moments make the hard slog worth it. “When we see traction it’s the most wonderful thing. Selling Spreets is the extreme end, but a company today just got their first customer and that was just such a rush, even if it’s just a $50 sale.” He adds perhaps it’s because the moments are harder to achieve that makes it all the richer.
Happy Startup Spring Festival! What we’re celebrating and what’s next for the Australian start-up community9:22PM | Thursday, 19 September
The Australian start-up community is one week into a three-week celebration and outreach festival, Startup Spring, with over 100 events taking place across the country. The communities in Sydney and Melbourne continue to thrive, with younger ecosystems in Brisbane, Perth, Adelaide, Canberra and Tasmania taking off. StartupSmart spoke to a range of community leaders to find out what they were celebrating, and how the national start-up ecosystem could keep moving forwards. Kim Heras, investor and founder of start-up community PushStart told StartupSmart the ecosystem had seen a lot of positive change in the last few years. “Everything from education, to the number of people starting up, to the amount of investment available and successful businesses built has increased in scale. Dramatically,” Heras says. “I've often said that the strength of a start-up ecosystem is the number of people who can make a living off it and we're seeing more and more people fit into that category.” Heras says the start-up community needs to focus on transforming its rapid growth into a sustainable ecosystem. “That involves short-term things like keeping the number of start-ups growing, getting more investment dollars into start-ups and getting more people making a living in the tech start-up industry,” Heras says, adding this will include education reform and policy changes, especially to make innovation and the tech start-up industry a priority. “We're competing with a flood of nations who are all positioning themselves to be global innovation hubs, but I honestly think we have a shot of making it happen,” Heras says. Laura McKenzie, co-founder of angel investor network Scale, told StartupSmart the increasingly close collaboration between different parts of the ecosystem was worth celebrating. "It's exciting to see an increasing amount of visible collaborations within the Australian investor and incubator/accelerator community - whether it be co-hosting events, co-investing in deals or convening to understand how we can best grow the ecosystem together," McKenzie says. She adds the team at Scale has been thrilled by the range of excellent female entrepreneurs in Australia, and says the ecosystem can and will do more to support women entrepreneurs. Orsi Parkanyi, founder and coordinator of national Women as Entrepreneurs network told StartupSmart the community needed to focus on raising awareness in the wider community both during the festival and in the coming years. “We need to make the words "start-up" and "entrepreneurship” household words. I wish to hear more and be able to use these words in mainstream media and wish that everyone in Australia knows what these words mean. We are yet to achieve this,” Parkanyi says. Parkanyi adds political pressure is still needed for the community to get the results they need. “Although recently there have been many heated discussions on the importance of small business in our economy, unfortunately there has been very little attention paid to the importance of entrepreneurship and start-ups in our future economy. I wish to see more discussions and more support from political parties in the space,” Parkanyi says. Phil Morle, founder and chief executive at Sydney incubator Pollenizer, told StartupSmart the Startup Spring Festival was a sign the ecosystem was maturing. “It has become quite large and is starting to demonstrate wins but it is still fragmented and invisible in places. Now is the time for the community to work together for deeper impact,” Morle says. He adds that the start-up community is getting stronger, and increasingly adept at self-organising. “People are working together to look at the fabric of the ecosystem to see where we are strong and where we are weak. This is happening in each city. While Melbourne and Sydney have a bit of a head start, communities in Brisbane and Perth are surging.” Claire Robertson, co-coordinator of the Perth chapter of the Founder Institute accelerator program says Sydney and Melbourne’s increasing international recognition was stimulating a healthy competitive desire for the rapidly growing Perth community to be counted. “The number of people interested in and participating in tech start-ups has seen a sharp increase in Perth,” Robertson says. “This change was initially catalysed by the opening of SpaceCubed and a rise in the number of events in the city such as Startup Weekends and meet-ups.” She adds that Perth, and Australia more broadly, still needs to address some of the funding gaps holding start-ups back.
Pollenizer, an incubator program based in Sydney, has long loved and taught the lean start-up method to founders. But as the approach continues to flourish in the start-up sector, entrepreneurs need to recognise fact from fiction when it comes to how the process works. Lean start-up methodology focuses iteration in order to discover what customers genuinely want so start-ups can be sure they’re solving a real problem, in order to get maximum traction. The team are coming to Melbourne for a two-day lean start-up workshop in the coming weeks. Co-founder and chief executive Phil Morle told StartupSmart lean has been key to Pollenizer’s success. “It de-risks the process, and I find that really powerful. It means we can spend our capital wisely. Lean spirals the whole way through, it’s about learning, holding yourself accountable and really testing what you believe, and having a shared language as a team,” Morle says. Pollenizer invests $100,000 in each new company in the program. “We found organically over the last five years, that the lean methodology helps us be in control of the discovery process as a start-up emerges. It means we can measure as we go along, and know where we are in comparison to where we should be,”Morle says. Myth one: Lean equals cheap or bootstrapping Morle says many people mistake the iterative, experimental process of lean for a cheap way to create companies. “Lean is a management discipline for maximising resources to discover and build value quickly and efficiently. Start-ups have limited resources and we have to do everything we can to get there fast,” Morle says. Lean involves launching early versions of the product to test hypotheses and ensure it’s developing in line with customer needs. “Using lean methodology means we can make sure the product we’re making is reflecting what customers actually want, and make it stronger and more profitable.” Myth two: Lean is only applicable to small ideas Morle says many people can mistake the process as being focused on small ideas, but lean works in organisations of all sizes. “It’s an iterative sequence to release something soon so you can start learning from your customers. It can start small if you need to, but over time, it can become enormous. Facebook is one of the best known lean start-up major companies, who still release early and release often,” Morle says. Myth three: Lean is inherently risky Because of the requirement to launch early versions of the product quickly, some entrepreneurs may be scared off lean because it feels riskier to launch less-honed products. “There is the fear that this will turn off your customers, never to be seen again. But the point of lean is to release early to make sure you have a series of tiny manageable failures that you can learn from,” Morle says, adding this myth is the opposite of the heart of lean methodology: experimentation and de-risking. “The most risky thing you can do as a start-up is to not try and get the customer to do something. The longer you go without seeing people use the product, the more risk we create as company.” Myth four: It’s only for technology start-ups While lean methodology was first created by Toyota after the Second World War to make the most of their limited resources and still compete with major American car companies, the lean methodology has expanded to the tech start-up ecosystem. Morle says many people mistakenly think it only works for software or tech development, but the core of the process works for any company. “Lean is about collecting data to make your offering more valuable,” Morle says. “It can be used in advertising, in medicine and in all manner of different industries when you realise it’s about doing something with a real customer as soon as possible.” Myth five: Lean is too scientific and prioritises analytics over intuition According to Morle, because lean is focused on experimenting and gathering data, people can assume the method is too scientific and leaves no place for intuition. Morle says lean is a good way to make sure you don’t believe your own hype. “What lean introduces is the yin to intuition’s yang because the two things work together. Overlaying lean and metrics with what people actually do, and then learning from that and comparing it to our intuition is the perfect combination for a successful start-up,” he says.
Australian real estate investor and entrepreneur Will Pattison is off to the Philippines next week in a bid to revolutionise online real estate transactions. His start-up idea in the Philippines is backed by start-up incubator Pollenizer and Philippines-based start-up accelerator Kickstart. He told StartupSmart they were aware of a gap in the market, but he was looking forward to touching down in the Philippines, getting in front of people and finding out exactly what the challenges are. “We need to get down on the ground and check the assertions about the problem and understand what the opportunities are,” Pattison says. “From a consumer point of view, I’ve been looking at rental properties in the Philippines and it’s been a pain. There is a lot of information and it’s very crowded and there is just too much going on.” Pattison is working with two tech co-founders and hopes to launch the platform within a few months. He says there are a range of effective and profitable models for online real estate platforms they’ll be reviewing and incorporating into their design. Pattison adds there is limited competition in this space in the Philippines, and most properties are sold or rented via a platform similar to Australian crowdsourced classifieds website Gumtree. “It’s just an online poster-board where you put a property up and you have to pay to highlight it. But it’s too crowded; you search for a property for sale and find ones for rent instead, or in entirely the wrong city,” Pattison says. He says the platform will be designed for both local renters and buyers, but they’re also planning to develop content to showcase the neighbourhoods and nation to international investors. While the start-up is still in the earliest stages, Pattison says they plan to develop it quickly and are confident in its potential. “This plan has all the ingredients of a successful start-up. It has strong ideas, a good team and I’m being mentored by Phil Morle from Pollenizer, from one of the best start-ups in Australia,” he says.
The government has today announced a review of the regulations around employee share schemes and crowd-sourced equity funding regulations. According to the National Digital Economy Strategy (NDES) update announced in Brisbane today, this decision was made in order to “boost support for Australian tech start-ups” and would be focused on helping address the barriers faced by start-up companies in attracting and retaining staff. In a release, Senator Stephen Conroy, the Minister for Broadband, Communications and the Digital Economy, said: “As the rollout of the NBN continues, the capacity for start-up companies, particularly in the tech and digital sectors, to create game-changing businesses and applications is unprecedented.” The decision to review and simplify the employee share scheme options will be welcomed by the start-up and venture capital industries, who have been calling for such an update. Phil Morle, founder and CEO of leading start-up incubator Pollenizer, told StartupSmart the announcement was good news for Australian start-ups. “We welcome the review of share option regulations and look forward to new recommendations playing a major role in stimulating the start-up economy,” says Morle. “To foster its swelling community of start-ups, Australia needs simple, fair and cost-effective ways for entrepreneurs to compensate each other with equity over cash. This recognises the risk taken when building new ventures which are strapped for cash and statistically likely to fail.” The move has also been welcomed by the Australian Industry Group. In a release, Innes Willox, the chief executive of the Australian Industry Group said: "We also welcome the Government’s commitment to review the tax treatment of employee share schemes and to develop a best practice framework for Crowd Sourced Equity Funding, which Ai Group advocated in our recent report Ready or Not? Technology Investment and Productivity in Australian Businesses. We need to improve the conditions for innovation and commercialisation in Australia as a priority, including better access to financing." Assistant Treasurer David Bradbury said in a release the feedback from the 2012 Digital Economy Forum pointed out the government could better support the development of start-ups, and it was therefore timely to re-examine the framework around the employee share schemes. “The government can’t create the next Twitter, Instagram or 99 Designs, but we can provide the infrastructure and regulatory environment to help Australians who will,” said Conroy. A consultation paper to guide the discussions will be released shortly. The employee share schemes review will be due by December 2013 and the crowd-sourced equity funding by April 2014. The NDES update also announced an expansion of the Digital Enterprise and Local Government programs to support small businesses to better engage with the digital economy and make use of emerging online opportunities.
Pollenizer is looking for co-founders for four of its start-ups, one of which would involve a partnership with a Skype co-founder while another would involve working with the former chief executive of CareerOne. According to Pollenizer co-founder Phil Morle, all four businesses need “gutsy entrepreneurs with the audacity to believe that they can pull off a global business with limited resources”. The businesses are as follows: Fitbit for your house – collaborating with your social network to use energy more effectively. This is a partnership with one of the Skype co-founders. “This is a brand new idea so they’re looking for co-founders from scratch,” Pollenizer co-founder Mick Liubinskas told StartupSmart. Social Powered Retail – using social networks to increase sales. This would involve working across south-east Asia as well as Australia. “Social Powered Retail is Gyft… The co-founders took it as far as they could and we’re now looking for a new set of co-founders to go where the business needs to go,” Liubinskas says. 99designs for recruitment – crowdsourcing new hires. This would involve working with the former chief executive of CareerOne. “The recruitment business is looking for more co-founders; more engineering talent,” Liubinskas says. SasS for coaches – customer relationship management, session management and other tools for business coaches, consultants and mentors. “SaaS for coaches is Coachy, which has a lot of great potential customers… We need an entrepreneurial engineer who is longing for some B2B experience,” Liubinskas says. At this stage, Pollenizer has declined to reveal the names of the Skype co-founder and former CareerOne chief executive. But according to Morle, co-founders are paid a “modest salary with great equity”. “We will train you in lean start-up skills – if you don’t already have them – and mainline you into an amazing network of entrepreneurs and investors,” he says. Liubinskas, however, is quick to point out the Pollenizer environment is not for everyone. “A lot of people who come from the corporate world, where they ran a really large company, will say that it’s the same as running a small company, which it definitely isn’t,” he says. “Some people can make that transition but a lot of people can’t. The other thing is completely green people. “[You must also have] a willingness to share… Really the key to that for me is people in the same location. “I vowed I would never, ever do another start-up where the whole team is not in the same room. Some people can do it but it makes life harder.” Liubinskas says anyone who joins the Pollenizer family must be open to change. “Start-ups change every day. Even the businesses we’ve learned a lot about, they’ll continue to change. Not a single successful Pollenizer start-up is the same idea it started with,” he says. “You also need to not be precious. You need to be thick-skinned to deal with a whole bunch of failure along the way.”
Pollenizer co-founder Phil Morle has revealed the reasons why iConnect Catering was named the winner of the latest Startup Weekend Perth, highlighting the growth of the Perth start-up scene.
Mick Liubinskas has highlighted the trials and tribulations of Pollenizer, including how it turned Spreets into a $40 million company, as the online venture builder celebrates its fifth birthday.
Online venture builder Pollenizer plans to create eight start-ups in Australia and south-east Asia this year, after raising $1.1 million from investors including Pandora founder Brook Adcock.
It’s fair to say 2012 was a mammoth year, not only for the various incubators and co-working spaces, but for the Australian start-up scene in general.
Despite being just five months old, FlikGift has already secured a strategic partnership with Australian digital media company Mi9, and enjoys the backing of start-up incubator Pollenizer.
Sydney tech start-up incubator Pollenizer has branched out to Singapore, launching a new hub in the city state and launching its first start-up there.
Tech start-up incubator Pollenizer has established an educational program designed to help entrepreneurs build and operate lean start-ups, highlighting the growth of start-up master classes.
Sydney-based start-up incubator Pollenizer has forecast an improved success rate with the ventures it partners with after striking a new partnership with digital media company backed by Microsoft and Nine Entertainment.
Team members at Sydney-based tech incubator Pollenizer have outlined lessons learnt from start-up guru Eric Ries, who visited Pollenizer earlier this month as part of a trip to Australia.
Sydney-based tech incubator Pollenizer is looking for a US start-up expert to move to Australia for six months to co-found a new web business, before returning to the US to oversee its expansion.
Pollenizer-backed start-up Pygg has raised $600,000 in six months from a host of investors, including Yahoo!7 chief Rohan Lund and Tim Howard of Seven Network’s Vividwireless.
Australian start-up 99dresses has temporarily closed its doors after 20-year-old founder Nikki Durkin ran into financial troubles, although the business’ former incubator is confident that Durkin will bounce back.
Australian tech incubator Pollenizer has partnered with APN News & Media to fund a vehicle for testing digital business models, after APN invested in Pollenizer-backed start-up Friendorse.
US hosting firm Rackspace has partnered with Sydney-based incubator Pollenizer to offer free cloud hosting and support to the start-ups it partners with.