Recap: AmCham NEXT engages the start-up ecosystem
The key focus of AmCham NEXT’s first event of the year was the entrepreneur and, being held in the Tesla showrooms at Martin Place, the location could not have been more apt. Alex Lynch (Google Australia), Robert Wickham (Salesforce.com) and Malcolm Thornton (Cisco Systems) talked us through the ins and outs and ups and downs of launching a start-up and being an entrepreneur in today’s start-up ecosystem.
The start-up ecosystem in Australia is always changing, rapidly growing and by all accounts flourishing. In fact, Sydney is ranked as having the 17th best start-up ecosystem in the world according to the 2017 Genome Start-up Ecosystem Ranking report. Robert likened the dynamism of the Australian ecosystem to the experience of a passenger travelling on an aeroplane. On the inside of the plane, the pace is slow and unremarkable. The air conditioning is too cold so you ask the flight attendant if you can have another blanket to keep your legs warm. Although you didn’t like the Bourne movie with Jeremy Renner, you enjoyed the original Matt Damon trilogy so you decide to watch the latest instalment on the in-flight entertainment. But on the outside of the plane surroundings are constantly changing as the aeroplane rockets through the troposphere. Cruel seas, towering mountains, howling deserts, pass by in an instant as you rue your decision not to order the vegetarian meal – it’s always served first. As is the Australian start-up ecosystem. As we sit at our desks, go to our 11am meetings and take our daily coffee with soy milk, start-ups are innovating up a storm unbeknownst to us but right under our very noses.
But how do we reconcile the two worlds? That is, how does the high-paced, high-risk start-up engage with the firmly established, somewhat risk averse big corporate? What is becoming clear for both of these players is that in order to survive the game, this is an all but necessary engagement.
In this context, the two big questions that were put to the panel were, firstly how does a start-up engage with a big corporate and secondly, how does a big corporate engage with a start-up.
In addressing the first question, emphasis was placed on connectivity. In order to really engage with a big corporate, the entrepreneur needs to make connections and with the right people. Networking evenings are a great start and a good way to meet a broad range of people. Even better are innovation hubs: the Cisco Innovation Centre Australia is just one example. These are often the most effective way of creating connections as they are purpose built for start-ups and the people involved know, or will know someone who knows, how best to take the relationship to the next level.
Another tip for a start-up wanting to engage with a big corporate is for the start-up to sell its point of differentiation – its ‘super power’ if you will. How is your start-up different? Why is your start-up better? And, most importantly, how will your start-up solve the problem / issue / challenge tasked by the big corporate? In answering these questions a start-up will require structure, clarity and a defined objective, things that often prove illusive to the uninitiated.
On the other side of the coin, the big corporates need to work just as hard to engage start-ups. Facilitation of networking events, innovation hubs are one part of the picture but more than this big corporates need to foster a firm-wide culture of acceptance and encouragement when dealing with start-ups. Malcolm noted that almost all technology companies started as a start-up, and so once they had found their way to the top, companies like Google, Salesforce.com and Cisco had a duty to send the elevator back down to help other start-ups find their way too.
A big part of this attitude change revolves around treating the relationship with the start-up as a partnership between both parties rather than that of a parent company and an acquired subsidiary. The foundation of the start-up is built upon collaboration and cooperation and to treat it any other way would surely compromise the start-up’s chances for success – to the detriment of both parties. Both parties need to be clear on common objectives, how to achieve them and in what ways the other party is willing and able to offer assistance and solutions.
Although it might suit your comfortable and risk-free constitution to be oblivious to the flurry of activity going on outside that aeroplane window, the reality is that to continue to do so will surely mark a missed opportunity. The fact of the matter is that today’s market demands that the big corporate needs the start-up just as much as the start-up needs the big corporate. And although pathways between the two are beginning to stretch toward each other, there is still a great deal of work to be done before they fully meet and both start-up and big corporate are able to interact freely with each other.
Matthew Mooney is a member of AmCham NSW’s NEXT Committee, and is an Associate from AmCham member company Baker McKenzie.
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