Earlier this month I was in San Francisco and New York. This was my first trip to the US as an angel investor and in spite of hearing all about how different and dynamic the market is compared to Australia I was still amazed.
I travelled to attend Springboard Enterprises’ A Week with Springboard event, including their annual Winners Circle Awards Dinner. I accompanied Lauren Hall, CEO of iVvy (of which I’m an investor and board member), one of the eight alumni from the 2014 Springboard Enterprises Accelerator program connecting women entrepreneurs to growth experts and venture capital networks. While in the US, I also had the chance to meet other potential business and partnership opportunities in San Francisco and New York.
Australian start-ups inevitably get compared to our US counterparts on many levels. More so in the tech space where, budding entrepreneurs have tried to emulate the successes of those in the Silicon Valley. Having met with many other start-ups, investors and media while in the US, I know we have a long way to go to achieve the entrepreneurial maturity of the US. While our innovation and spirit of adventure is applauded on a global scale, there are fundamental challenges that we need to overcome – beyond the very obvious issue of limited funding.
Here’s a quick checklist of tips for entrepreneurs that I jotted down on the flight back:
1. Know whether you investor wants to bet on your idea or your business: For a country that bet over $166 million in the 2014 Melbourne Cup (main race alone), we are very risk averse when it comes to start-ups. Many traditional investors bet on businesses more and ideas less. The US has more investors willing to take a gamble on an idea. They are comfortable with the knowledge that not all might work out.
With more new seed / early stage investors entering the market in Australia, try and find the right fit for your business. While the investment is always welcome, it doesn’t help if your investor wants to see immediate returns and you are a big picture ideas person. In the US, the culture of Silicon Valley has resulted in a relatively clearer distinction between the two kinds of investors (amongst many others). If you are an ideas person, find someone who dreams and thinks big and understands long-term vision.
2. Be more agile – ready to change and adapt: Start-ups, especially tech start-ups in the US, are more agile and responsive to market demand and needs. Product developments and customer centric solutions are turned around at a far quicker pace than in Australia.
It could be because people work longer hours than here. I’m not saying we should all compromise on our work life balance that makes this country amazing to live in; but, if you are selling to the US or other global markets, be prepared to compete with their levels of agility.
3. Network, network and network: Silicon Valley entrepreneurs are masters of networking. For most of them, it is a daily occurrence and something they get used to quickly to build the business. As entrepreneurs, we all get caught up in the busy-ness of work. We need to set time aside to focus on networking – remembering that it’s not just drinks and dinner.
Entrepreneurs in the US are also more forthright about what they want. Here in Australia, we hold back and believe in building relationships before asking for money. This could, and should, change as entrepreneurship grows and people get increasingly time poor.
4. Accept failure: Australian psyche is not hard wired to accept failure as easily (especially where bigger investments are concerned). During my trip, I met a fair few people who spoke about ventures that did not succeed openly and honestly, without any shame – almost wearing them as badges of honour. Most US entrepreneurs consider it a learning curve that helped them fine-tune their next idea.
As a sporting nation that prides itself on our successes, we need to become more accepting of failure in general, not just in business. Take a note out of 99dresses founder Nikki Durkin who talked openly about the how’s and why’s of her venture’s failure.
Given the size of our population, we will never be as big as the Silicon Valley – and we need not too. But by combining our ingenuity, spirit of innovation and adventure with learnings from the US, we can create more global success stories and drive entrepreneurship in Australia.