Showcasing Melbourne to Stanford’s elite


map-stanford-banner-e1490931420441.png

Revealing the best that Melbourne has to offer: from the City of Melbourne to the University of Melbourne and the Melbourne Accelerator Program.


MAP recently hosted Masters Candidates from Stanford University’s Graduate School of Business on their Australia Study Trip. MAP Director Rohan Workman and
the Konosuke Matsushita Professor of Management from Stanford, Professor George Foster, answered their burning questions about the Australian startup ecosystem.

students
Masters students from Stanford University’s Graduate School of Business visit MAP at LAB-14 in Carlton.

At Stanford it has been difficult at times to get students from different Schools (eg. Business or Engineering) to engage. How does MAP approach this issue?

RW: It can definitely be a challenge to get cross-faculty engagement. MAP’s founder open mic nights have helped encourage students and alumni to mingle more. Any time we provide a forum where people can get to know each other, whether that’s networking, drinks, talking before and after events and getting to know each other… it all helps. It’s really the activities around the content we deliver that helps the most.

 

Stanford offers coursework that gives students a chance to try building something. Is this available at Melbourne?

RW: 
Absolutely! In 2016 the University of Melbourne launched the Master of

wade-institute-students.png
Students at the University of Melbourne’s Wade Institute study entrepreneurship as a Masters program.

Entrepreneurship at the Wade Institute which is an entire one year Masters program designed to teach the fundamentals of entrepreneurship.

More broadly we’re also finding more entrepreneurially-focused classes on offer across a variety of Master programs in different faculties. This is where MAP comes in too. We’re focused on providing experiential education and giving people an opportunity to learn how to be an entrepreneur in a relatively risk free environment.

GF: What Stanford does perhaps better than anyone else in this respect is bring venture capitalists (VCs) and industry experts into the classroom. We have the cases written for students to study, but then we also bring the entrepreneur into the classroom to co-deliver the classes. This is what I see MAP building up to, and that’s what makes for a great entrepreneurial education.

Hacking4Defense-Stanford
Stanford class ‘Hacking for Defense’ are taught by Steve Blank, consulting associate professor at Stanford and author of The Startup Owner’s Manual and leader of the Lean Startup movement. Steve is joined by retired U.S. Army colonels and class co-teachers Joe Felter and Pete Newell. (Image credit: Rod Secrecy)

How do startups feel about operating in Australia, rather than going over to Silicon Valley?

RW: There are a number of reasons why Australian founders choose to stay in Australia. There are favourable R&D tax incentives for being based in Australia where you can get up to a 43.5% refundable tax offset. Visas for entrepreneurs and more entrepreneurial activities in high schools are also helping to build awareness and understanding about entrepreneurship as a career path in Australia.

Many of the difficulties Australian-based startups face are linked to geographic location and a smaller market size. Australia has a population of 24m and the US has approx. 330m, so it is a vastly different market and so people from Australia will travel there to explore it.

Because of Australia’s geographic proximity to Asia, this presents a strong opportunity for our startups. Naturally there are cultural and business lessons to be learned in this space, which is where MAP is partnering with institutions like the University of Melbourne’s AsiaLink and Asia Institute to deliver content to Australian founders.

Also, Australians are typically used to travelling. A number of the startups who have come through our program spend a lot of time in the US but they’ve maintained a base in Melbourne simply because it is cheaper to do so. Tax incentives coupled with lower labour costs for highly skilled Australian workforce (paid in Australian dollars) make it more affordable to be based here and just travel back and forth.

 GF: In my opinion there is also greater loyalty in Australia too. In Australian-based companies you would expect to see less turnover than you would in Silicon Valley, where everyone is looking for their next move. In Australia, if you make a good hire, they’re more likely to stick with you.

 

Are major investors domestic investors or do they come from the US or Asia?

RW: Recently we’ve seen a major influx of investors from China, but there’s no doubt that the best VCs in the world are in Silicon Valley. The best entrepreneurs in the world will raise funding from these top tier VCs, so a sign of success, in my opinion, is not seeing more Australian VC firms start up, but seeing top tier VC firms open offices in Australia because the there is a critical mass of quality deal-flow.

The current debate in Australia is about whether we have enough venture funding. I’m a strong believer that if you have the quality, the deal flow and funding will follow. We’re also seeing an increasing number of Asian investors demonstrate interest in Australian startups –  especially where they see opportunities to link back into china for production or scaling purposes.

 

There is a high likelihood of failure in startups. How do you normalise the idea of failure, especially in a risk averse culture?

RW: I’ll start with the silver lining here in that a greater aversion to failure does result in more tenacious entrepreneurs, who will doggedly pursue an idea.  This can be beneficial because they are just determined to make it work when others may give up earlier.

We also see more bootstrapped companies here in Australia than you typically see around the world, so you find ways to mitigate or minimise the risks.

scott-li-on-failure.jpg
Scott Li, co-founder of The Price Geek (MAP13) delivers his address at the 2016 Melbourne Entrepreneurship Gala.

However, there is no doubt that failure is a bigger fear here than in the US.  MAP is playing a role in encouraging the conversation around failure, for example, MAP alumni founder Scott Li honestly broached the topic at our Melbourne Entrepreneurship Gala last year, and MAP Deputy Director, Dr Clare Harding, stood up alongside fellow panellists at Melbourne Knowledge Week 2016 to talk about ‘That good ‘F’ word; the beauty and necessity of failure’.

For MAP, the focus is always about the individual’s development as well. While we support and encourage them to take risks during the program, we’re equally preparing them with an entrepreneurial skill set that is equally useful and increasingly valued in other areas (be that joining a different startup, founding a new company or joining a larger company).


Is there much interest in the double or triple bottom line in Australia?

RW: There is a growing impact investing scene in Melbourne. This is attributed to both a long history and legacy in philanthropy and the growth in startups that impact driven and mission focused. Work needs to be done around translating what impact investors are looking for so that startups can better understand and showcase their value in order to access the available funds that exist and are growing.

GF: The Australian ecosystem has also adapted. Smaller pools of VC funding have been offset by startups appealing to or approaching private families. There are a large number of families that immigrated to Australia in the early 20th century and made their fortune in more traditional businesses. These families now have private offices to manage their wealth and have made investments in startups.


Tell us about Australia as a destination for startups from overseas.

RW: There are a few factors that help Australia attract entrepreneurs. Firstly, people tend to like Australians – not sure why but we’ll take it.

Australia is also a great place to live. Melbourne has been named the world’s most liveable city for 6 years in a row now, with a number of other Australian cities also listed in the top 10. This ranking is turning into an economic advantage in that several international companies are now using the Australian lifestyle as a reason to set up their offices here. Go Pro, Slack, Square and Stripe are all companies that have set up their regional HQ in Melbourne in the last couple of years.

Slack HQ Melbourne
Communications company Slack bolsters Melbourne’s startup ecosystem with their offices on Swanston Street in Melbourne’s CBD.

People tend to underestimate and therefore underplay the cultural differences between Australia and the US – there are actually a lot of differences but they tend to be nuanced. With our neighbours in the Asia-Pacific region the cultural differences are more obvious and as such we tend to spend more time trying to understand and navigate them.  The Australian Government has been proactive in encourage primary and secondary schools to include Chinese as a language and there are many soft diplomacy initiatives between specific markets.

GF: I would also add that in the last 20 – 30 years, Australian Universities have been a favourable destination for Asian students for their tertiary educations. This means that we now have a heritage of Asian students and alumni who are open to Australia and who view Australia favourably, so are keen to pursue business opportunities and connections with Asia and Australia. As Universities across Asia get better, the concern and challenge for Australian Universities will be to continue to attract the best students from the region, to ensure these relationships continue to be built from an early age.


What is appealing about the Australian lifestyle?

manchester-press.jpg
A thriving cultural, food and coffee scene contribute to Melbourne’s title as the world’s most liveable city.

RW: The beer is cold, the food is amazing and Melbourne is the cultural capital of Australia with events on every week in a range of areas. It’s just a great place to live. Although the cost of living is slightly higher than other cities the average wage is too so it evens out in the end.

GF: Australian startup culture is much the same as in New Zealand. Entrepreneurs work to achieve the three Bs: beach house, BMW, boat. Once entrepreneurs get to this stage, they tend to sell up and live happily ever after. There is less serial entrepreneurialism than in the US. Aussies and Kiwis really respect the weekend, and the focus is on lifestyle, so it takes a very strong person (entrepreneur) to break away from that culture and push on.

 

P1020292
Mr Rohan Workman welcomes Stanford’s Prof George Foster to MAP’s headquarters in LAB-14.

 

 

 

 

The art of asking for an introduction

MAP’s Director Rohan Workman has given (and asked for) his fair share of introductions. Happy to oblige and connect, he shares his advice below on the art of the warm introduction, or as he calls it…

NEVER ASK FOR AN INTRODUCTION WITHOUT READING THIS.

One of the reasons why I love the startup ecosystem is because it is one of the most proactive industries in terms of people willing to help each other out. The reason is pretty simple:  no entrepreneur has ever succeeded without the help of many others. As a founder, it is impossible to know everything you’ll need to know about how to make your business successful. Every entrepreneur who has succeeded over the years will have received help from others without the expectation of anything being provided in return. It’s a simple pay it forward philosophy. It’s awesome.

One of the key components of this philosophy is that of the introduction. If you need help you may need an introduction to the person who can help you. Yet, for the most part, I’m left underwhelmed about how people (especially those entering the ecosystem and who have very little to offer but their manners) go about doing this.

Due to the sheer volume of poor introduction requests I receive I’ve decided to write this blog post to help explain how to put a good introduction request together.

Here are the key things that you need to consider regarding introductions.

1. BEFORE THE INTRODUCTION REQUEST

Introductions are personal validation.

If somebody is going to introduce you to somebody else they are staking their reputation that you will not jeopardize their existing relationship. It is important to keep this in mind when framing an introduction request.

How do you keep this in mind?

  • If you hardly know the person that you’re asking for an introduction you need to determine if that person is best placed to intro you. If they are the right person you need to be very careful with how you frame the intro.
  • Have you thought about whether it is appropriate for the introduction to be made?

Always be courteous of the existing relationship.

p1000387


Just because somebody knows somebody / is connected to them, it doesn’t mean they can make the introduction.

There are two issues here:

  1. Social media is misleading in regards to quality of relationships. How many people are you connected with on LinkedIn or Facebook that you hardly know?  Instead of asking somebody for an introduction to somebody else that you can see they’re connected with, ask them if it would be appropriate for them to make an intro.
  2. A person may know somebody but is unable to provide an introduction without an appropriate reason (this relates to more senior stakeholders). It is difficult to make introductions to some people (more likely to be senior people) unless it is worth their while. Have you thought about why they would want to meet with you? The more senior the stakeholder the better reason you need (above and beyond them providing you with charity / pity) as to why is in their interests to meet you.


When asking for an introduction, you must do the groundwork.

Do you know the person you’d like to speak with? I.e. Do you need an introduction to somebody at a specific company but you’re not exactly sure who it is? If so, do some googling to find out who at that company you’d like to speak with, or at the very least what department they are in. Don’t just say “I need to speak with somebody at Australia Post, can you introduce me?” LinkedIn can be very helpful here.

2. REQUESTING THE INTRODUCTION

A simple two step process.

  1. If you don’t know the introducer that well / know if the introducer is able to make the intro, then email something like this:

=====

“Hi Rohan,

I noticed that you’re connected with ABC at XYZ company.  I’m hoping to speak with them and was wondering if you could intro me?  The reason for the intro is [insert a well thought out reason].

If able, let me know and I’ll send through an email which you can forward on to them with bio, dates, details, etc.”

=====

That email is lovely – I wished I received more of them.

2. If you know the introducer relatively well / believe the intro shouldn’t be an issue / the person has already offered the intro, then you can jump straight to the second step:

=====

“Hi Rohan,

I’m traveling to the Bay Area in the week beginning Monday 23 January and would welcome the opportunity to connect with ABC.

By way of background, I’m [insert who you / company background are in one or two sentences].  The reason why I’m keen to connect is [insert why you want to meet them and if possible why it is in their interests to meet you].

I noticed that they are located in San Francisco and I’ll be there the week beginning Monday 23 January.  At this stage either of the below options would work well but I should have some further flexibility if neither suit:
– 2pm on Tuesday 24 January
– 10am Thursday 26 January

I can meet at a location convenient to them and please let me know if you’d like any further information.”

=====

The key thing about this email is that it allows the introducer to forward it straight on.  They don’t need to describe who you are and why you want to meet somebody they know.

YOU HAVE MADE IT EASY FOR THEM TO INTRODUCE YOU.  THAT IS GOLD.

Some additional tips.

  • Be specific with dates and times. Sometimes people early on in their entrepreneurial careers don’t want to impose and are therefore more vague under the false pretense that it is more courteous.  This is not true.

Don’t say “If you have time for a coffee in the next few weeks that would be fantastic”.  Say, “How are you placed for a chat at either 2pm on Thursday 26 January, or 10am on Friday 26 January?”

This makes it very easy for people who have busy schedules to see if they have a gap.  If they can’t make those times work but are happy to meet with you they will offer an alternative.

  • Keep meetings short. 20 minutes is ideal for busy people and forces you to get straight into the specifics. It takes a lot more preparation to be concise, so do your homework first (see above).
  • Be flexible. Giving someone the option of a phone call rather than a face-to-face meeting might be the difference between making a connection and not… and if you impress on the phone, there’s always the chance of a follow up meeting.
  • Prepare in advance. If you’re traveling make sure you provide the dates and send the intro request email well in advance. Prepare your pitch, refine your questions and do your homework. Meetings should not be about information that’s already readily available on the company website.
  • NEVER be late for the meeting. This is so important, it needs repeating. Never be late for the meeting! Being late for a meeting shows that you are:
    1. Disorganised
    2. Don’t value their time

Neither of the above are desirable for a first impression.

alejandro-escamilla-2

3. AFTER THE INTRODUCTION REQUEST / MEETING

Follow up.

  • Follow up with the person you met with to provide any information you agreed to provide. A lot, dare I say, most people don’t do this.
  • Follow up with the person that made the introduction thanking them again and letting them know how it went. Very few people do this and if you do it will buy you serious brownie points and help establish greater trust with the person who introduced you that you are worthy of their introductions.

That’s probably enough for now.

Happy hunting.

Rohan Workman
Director, MAP.