My introduction to the startup ecosystem came in 2015. I was working at the University of Melbourne and tagged along to a Melbourne Accelerator Program (MAP) pitch session. The room full of start-up founders showed unwavering regard for MAP Manager, Rohan and he had an undeniable ability to respectfully and critically challenge the brilliant minds in front of him. It was clear that Rohan was an entrepreneur at heart and immensely passionate about supporting others through the startup journey he had already navigated. Sitting down with Rohan over coffee recently, I had the pleasure of learning about his own entrepreneurial journey, including his new venture and the inspiration he takes from Harry Potter! I’m super excited to see what comes next for the Australian entrepreneurial ecosystem, particularly with the launch of Rohan’s new program.
“I got my first job out of university during the Global Financial Crisis. The job was in corporate advisory and recovery and I worked on some of the biggest corporate collapses in Australian history.
I learnt a lot, but it was the wrong end of the business life cycle for me. I didn’t want to be in the graveyard, picking up the pieces.
I had some savings behind me and was faced with a decision – buy a house or start my own company. I opted for the latter and in 2008, I founded RosterCloud, a HR management software system that helped events businesses manage large numbers of casual employees across multiple events and locations.
Investing in myself rather than property was the best decision I’ve ever made. To this day, the proudest moment of my career is sending an invoice to our first customer.
When my co-founders and I started RosterCloud, we had three or four false starts with technology development. We also underestimated how long it would take to get customers and how hard it would be to get funding – we made all the mistakes you could possibly make. But, in time, we landed some big clients across Australia and the software was even used for a royal wedding in Dubai. Then, three years ago, we ended up selling RosterCloud to a listed company.
A year into my work with RosterCloud, I started working with the Melbourne Accelerator Program (MAP). When we asked people to apply for the program, they would question what a start-up accelerator was.
Every university has a start-up accelerator now, but MAP was the first in Australia. These accelerators offer start-ups mentorship, advice, and the resources needed to succeed with their business ideas.
At MAP, we helped companies understand the process they needed to go through to test their idea and move it forward. Rather than finding the answer for them, we would ask the right questions
Each year, we received over 150 applications for ten positions but we never told people their ideas were bad. Studies show that the business ideas that tend to succeed are those that are divisive – some investors will think they are good, others won’t.
Companies that didn’t get into the program were given mentoring and access to our networks. Some companies applied for three years running before finally getting into the program. I think they were encouraged by the courtesy and transparency of our program.
Companies that stand out have some sort of unique insight into the market they are trying to develop. But more importantly, they have a spark.
At MAP, I distinctly remember Kyle Slater pitching Nura – headphones with personalised sound technology. The concept itself was amazing and the founders had PhDs, but it was their spark that led to their selection. And it’s that spark that’s now led them to raise over $20 million in venture capital, employ 40 staff across Melbourne and secure investments from some of the biggest names in Hollywood.
While start-ups like Nura are flourishing (according to a 2015 report from the Office of the Chief Economist, 40% of net new jobs are being created by small-medium enterprises less than five years old), there’s probably not a week that goes by without a massive corporation announcing they are slashing jobs.
In Australia, we have a strong education system, a strong healthcare system and a strong welfare system. Our biggest asset is our people and we need to invest in the knowledge economy to build new businesses that will create jobs and opportunities into the future.
Five years ago, it was very difficult to find the resources to start a company. Now there are lots of resources out there to help you in the early stages but once you get some momentum, and need more money and advice than your immediate network can provide, it’s hard to find. Getting through this phase is critical to raising venture capital.
According to LaunchVic, 75% of companies that try to raise angel investment fail to raise enough or raise at all. It takes an average of six months to close a funding round, by which point most of these companies are out of business and can’t grow into contributing members of the economy. In 2017, I turned my attention to trying to solve this problem.
The result was Skalata Ventures, a not for profit seed investment program designed to help companies become significant and sustainable.
Skalata Ventures has got funding from the government, university, philanthropic and corporate partners that will support us for the next few years and we have started a seed fund to invest in businesses that come through the program. We’ve also established five university partnerships, which will generate a pipeline of early stage companies, create employment pathways for students and help connect alumni networks.
This year, we will invest in 10 companies. In 2020, we hope that grows to 20 and then continues expanding after that. Companies accepted into the program will get $100,000 and access to a six-month bespoke program run by our team. With support from these entrepreneurial experts, we will help them develop product market fit, create a sustainable business model and build the business infrastructure required to scale. Further funding of $150,000 will be available for companies that have met key milestones at the end of six months.
I recently finished reading the final Harry Potter book and what struck me as amazing was the way that JK Rowling planned the entire story well in advance.
Her approach to writing is one of an architect setting everything up before building it . In a funny way, I think it is similar to what a founder needs to do — they need to have a vision for the future and then go out and create that. At one point, every massive company we all know, was just a figment of somebody’s imagination.
We need to make decisions today that will set us up for the future.
In the next ten years, I hope that Skalata Ventures has a sustainable business model – one where our investments and successes will cover the cost of operations, so we no longer require government or philanthropic funding. I hope we have a nationwide footprint with a long list of really interesting and rapidly growing companies that are creating jobs and providing opportunities across Australia.
There’s been a massive shift in the start-up community in the time I’ve been involved – with more government support and media than ever before. Alongside this, there’s more maturity in products and programs, more investors and more expertise in general. I think the next five years will be more exciting than the past five and I can’t wait to be part of it!”