Why Startups are easy, hard and mostly fail

The romance of cycling into a co working space, armed with a skinny latte, tight jeans and hipster looks can draw many to the promise of giving a startup a go.

It could have been precipitated by being chucked out of that corporate job you always hated. Maybe you’ve struggled with an itch you just have to scratch. It might be the allure of untold riches that some startup founders accumulate.

Be forewarned, startups (and I mean a disruptive, scaleable tech startup here, not a Mum and Pop café business or some gardening franchise) are about the riskiest business you can set up.

Setting up your startup is the easy bit.

For some, raising money can be a breeze too. You either have some savings, can go a few months without earning anything or can convince some investors to pop some money in.

Spending that money, well, that’s easy too. We made this mistake when we set up our tech business many years ago. We raised money, quite quickly, and then we spent it. We had an office, some staff, a website… Ta Daaa, we had a startup!

Except we had no business. We had no clients. Well, none that would pay us anything. For a while at least. They were on free trials. And when they did pay, it was small bikkies compared to our monthly costs. Cash crises, sleepless nights and arguments ensued. We almost went under, a few times, but ultimately were saved by our investors, who propped us up (put more money in) while we shaved costs (me and my fellow cofounder took no salary for months) and worked out how to make it work. This was when the business really began.

Disrupting an industry, and the way it has been doing things, is hard. Change happens slowly.

But one thing is central, and never goes away, even when people forget this during the hype and excitement of a new business or disrupter.

You are only going to succeed in business if you find a big problem your customers will pay you to solve.

That’s it.

I have met so many (too many) startup founders who have forgotten this central truth – as I did, when I set out.

Because unless you solve a problem for your customers, they will not pay you, and if they won’t pay you, you haven’t got a business.

Too many founders like to tell me the wonderful features of their app or website, gushing about all the things it can do for its users. Too few tell me what problem they are solving, and how customers will pay them to solve it.

CB Insights have published a report into why startups fail, based on 101 post mortems.

What’s top of the list? No market need. 42% of failures cited this as their number 1 reason for failing.

In other words, the customers were telling them they weren’t going to pay for whatever service was being provided, in sufficient numbers.

The number 2 reason? Running out of cash. Which is the same reason as #1. You need to allocate funds wisely, and be sensible, but overall if you had enough customers willing to pay you to solve their problems, you’d find a way to stay in business.

#3 is “wrong team”. Businesses are run by humans after all, and if they can’t get on, or work together, or have complementary skills, then things can get tougher than otherwise. But you should be able to get rid of the bad people, and hire better ones.

#4 is “being outcompeted”. Someone else beat you to it. Their product is better made or sold or solved the customer problem better (there’s that customer problem again).

#5 was “pricing/costing issues”. Do you offer a free trial, for how long? What packages will then be on offer? How good is your onboarding, and conversion of free to paid? It’s a dark art, and also a science.

Most of these and other reasons are all versions of the same essential issue – not understanding the customer and their problem.

Interestingly, the venture capitalist Bill Gross gave a TED talk in 2015 on this subject. His research showed that the single biggest reason startups succeeded was timing.

Too late, and you’re dead. Too early is better than too late, but it can be hard. Getting the timing right, when the customers and industry are ripe for the disruption you bring, is gold.

Timing, says Gross, is more important than getting the right team together, or the brilliance of your idea, plan or business model, the execution of the strategy or adaptability and resilience.

Rebekah Campbell, Hey You and Posse founder,  writing last week in the Fin Review argued that her startup mistake was raising money in the first place. Don’t raise money at all, she said, but get out there nice and lean, and be close to your customers.

You can argue and debate all this until the cows come home, but in the end, it’s all about the customer. Don’t even think of setting up a startup until you have cracked the big, hairy problem your customers are going to pay you to solve for them.

The rest will then follow naturally.

The full top 20 list is below


While at the buffet table

On holiday we gorge ourselves at the hotel buffet breakfast, something we do not partake of in our normal daily routine back home.

You can learn a lot about human nature, other people and perhaps yourself at the buffet table. Or rather tables, because arranged across 3 rooms are tables of food of all types and shapes and tastes. It is interesting to watch people’s behaviour when they are presented with an unlimited amount of food. More food than they can hope to consume. Food that would not other otherwise come within miles of one’s normal breakfast table. I rationalize this feast by arguing that this will last us til dinner. And often this is the case. After breakfast, we might strike out on a tour and eat nothing again til evening time. Yet, even with this defense, my 3 course breakkie is greed to the extreme. Someone cooking omelettes to my instruction? Great. Fruit juice, coffee, toast, cheese, salad, bacon, roast potatoes (for breakfast?), noodles and yoghurt. Wow, I’m stuffed.

Before all this though is the “wait to be seated” instruction. This is plainly written at the entrance, but in an otherwise open plan dining area, this is problematical as holiday weary families emerge from all parts and miss the sign. Although this morning you could not miss the meaning as there was a distinct queue, and I was in it. Despite this, a burly Russian waddled up with his family in tow and plonked his plastic credit card room “key” down in a table that just 30 seconds earlier had been allocated to another family, who were now at the juice counter. The Asian staff quietly informed him that the table was someone else’s and pointed him to our queue. He stalked off muttering something in a surly fashion. Later I saw him walking around looking for something. Rather than ask a kindly waitress, he took a marmalade pot from an empty table as his. He showed no compunction at this, it was the done thing. The same way he ignored the queue and tried to abscond a table for himself earlier. I do not blame the Russian necessarily, but one thing I have noticed on this island is the amount of Russian and Chinese tourists, something that simply had not existed last time I visited in the mid 1990s. Signs and menus in local restaurants and bars are all in English, Russian and Chinese (and nothing else – not even in Thai.) The opening of their countries and increasing wealth to a privileged emerging middle class has allowed more of them to become tourists. Every second family in our hotel is Russian it would appear. Nothing wrong with that, it’s just an observation. It might show changing times and increasing influence of these countries. I think I’ve heard but one American accent. The culture shock for them might be quite strong. The etiquette of queuing is not ingrained. Yet.

Back at the buffet table, I notice someone recognizable next to me. He’s taller than I imagined, looks fit and ripped, but the face is a give away. It’s Mason Crane, the newly tested English leggie who delivered the worst bowling analysis of any debutant in history just last week in Sydney. Despite this, analysts think he has something. Didn’t Warnie go for 1 fer loads in his first test?

So what do you do when a world class sportsman is standing next to you? Well, if you’re English like me, you smile and say nothing. After all, he’s on holiday poor lad, he’s only 20, has his girlfriend and parents and a mate with him. So I move on down the buffet and take my seat. Proof, should you need it dear reader, is in the photo (as taken by my dear wife) …

The buffet breakfast is convenient for the weary traveller, who can stoke up before a hard day battling the crowds at local tourist spots or around the pool. It’s also economic for the hotel, who don’t need to wait on tables besides ensuring the trays of food are replenished and helping people with some replacement cutlery or marmalade pot. Or, in one case, vegemite for a middle aged Aussie.

In this way, the holiday buffet contract is complete, and we can waddle off self satisfied to whatever the day has in store for us. Perhaps a game of squash can assuage the guilt of the 3-course breakkie? Maybe, just maybe.

Make Maths and Science compulsory!

Dear reader, before we forge headlong into another new year with all its promises and possibilities, let us extend the space and perspective gifted to us this time of year to ponder an unpleasant fact.

Your typical Year 11 and 12 in WA may not take a Maths or a Science subject.

Not only that, the trend is going in the wrong direction. But before I get to this, I need to take you back in time, and give you some international perspective…

The UK, Singapore and Australia

It is well proven that economic growth derives from investments in education, science and technology.

For 13 straight years, I taught Economics, Maths and Business subjects to IGCSE and A-Level (in the UK), then the International Baccalaureate (in an international school in Singapore) and finally Economics and Management (at TEE level, the forerunner of ATAR) in an independent boys’ PSA school in Western Australia.

I am now a parent of two secondary school age children.

This perhaps affords me a unique international and personal perspective on the importance of STEM (Science, Technology, Engineering and Maths) subjects to Year 11 and 12.

As for the IB Diploma, a full ATAR course requires 6 subjects, but does not stipulate any required subjects, beyond taking English. The best 4 results are then used for uni entrance, which means you can bomb out (or even drop altogether) 1 or 2 of your 6 subjects and it does not affect your ATAR score (which is a ranking of all the Year 12 results in WA in order – the top student(s) will score 99.95. In 2017, 16 students managed this).

Under the IB Diploma though you cannot drop any subjects and still graduate with a diploma. In the UK, you can’t drop an A-Level and still expect to go to a university.

Everything matters. An important lesson one might think.

IB’s all-round strength

Comparing the three systems I have taught in, I can state categorically that the IB diploma provides a far superior all-round education (as compared to someone doing 3 A Level subjects or ATAR). I am not alone in that view.

IB students have to choose a Language & Literature subject, a Maths, a Science, a Humanity, a second language and an Art subject… choosing 3 at a Higher Level, and 3 as Subsidiary for the full diploma. You might do 5 hours of study in a Higher subject a week, and 3 in a subsidiary, plus home work of course.

IB diploma students also take ‘Theory of Knowledge’, a fantastic grounding course in culture, psychology, ethics & law… how we know things to be true, or not. Plus, students write an extended essay (a research thesis) in one of the main higher subjects, and have to do a certain amount of recorded ‘Community, Action and Service’ activities – such as sport, travel and community work.

The end product is a highly well educated, holistic graduate, ready for what the world or university has to offer.

The school I taught at in Singapore produced some of the highest IB results in the world. Half the world’s IB diploma students that graduate with a perfect score (45/45) are from Singapore. The pass rate in Singapore is 98% (globally it’s 80%).

Coming from this to teaching TEE in WA, I felt the educational standards were lower than in Singapore, even though I was teaching at one of the top boys’ private schools in Perth, 80% of whom go on to study BComm at UWA.

STEM Decline

Wind on a few years, and I was shocked to discover that recent trends show a declining number of Maths and Science being studied in WA, with a significant proportion of students studying neither subject area. This something I’ve blogged about before.

To recap: the average number of science subjects taken by Year 12 WA students declined from 1.41 to 0.66 between 1986 and 2012. (Report: Optimising STEM Education in WA Schools, TEAC/ECU, 2013). That’s halved!

The average number of maths subjects taken declined from 0.92 to 0.69 between 1992 and 2012. That’s 50% down.

The reports also note that there is also a lack of STEM qualified teachers (too often teachers are teaching out of their training area just to get someone in front of a class), and we don’t even have a database of what qualifications STEM teachers currently have. If you don’t measure the problem, you can’t manage it.

Just think about this. The average year 12 student does not even take one maths or one science subject. If you randomly chose 3 students, perhaps you’d see 2 Maths and 2 Science subjects between them.

In other countries, such as one of our closest neighbours Singapore, students record among the best results in maths and science globally. There is serious investment in education and a drive (by students and parents) to get the best results. It’s embedded in the culture, and in many ways Singapore, with few natural resources (land, minerals, food, water…) to speak of, has had to invest in its people to survive, and thrive. Despite this disadvantage, Singapore’s GDP per capita is above Australia’s. In 1980, Australia’s GDP per capita was twice that of Singapore.

It’s a global marketplace… even in Perth

Our current and future year 12 graduates are moving into a globally connected, super competitive world of work. They will not only have to compete with each other, and unseen millions in other countries, but also with technology such as AI, that may be able to do their jobs quicker, cheaper and faster.

Of course, there will be well paid jobs in the future in our State, but these will go to the most-rounded, grounded, bright young things who can show that they can work in teams, show initiative on their own, handle complexity, communicate well and design and solve problems. From wherever they come from.

To think that many WA school graduates will not have a grounding in Maths or Science is worrying. STEM pervades everything, (or STEAM or ESTEAM or whatever you want to call it). It will be the building block. It will be necessary, but not sufficient.

Stop the Chicken!

As I have learnt in life, you get what you reward, so be careful what you reward.

If uni entrance is determined by the best 4 of pretty much any 6 ATAR subjects you can muster together, then you can bet parents and their children will pick whatever seems easiest to game the system. And they do.

We have to stop this short term ‘chickening out’ to less academic ATAR subjects at Years 11 and 12 to merely boost the ATAR score and ‘play the uni entrance game’. Everyone who goes through the last 2 years of schooling should spend at least 1/6th of their time on Maths, and 1/6th on at least one Science subject. That’s not a lot to ask is it?

I am amazed I even need to argue this. Other countries make it so, the IB makes it so. We will be left behind in the global marketplace, and we will not be doing the right thing for our children and our state either if we look the other way on this one.

Another disturbing factor is that those in lower socio-economic areas are even less likely to follow maths or science through to school end. We are developing a divide in society where the better off students will have access to more STEM subjects, will do better at them, all because of the postcode they were born and grew up in. This has to be wrong.

ONE Recommendation

Therefore, I make one simple proposal – make Maths and Science compulsory through Year 11 and 12. Parents, I am talking to you!

This is above politics. I am not criticising or proposing changes to government policy. Yes, some people will ignore my call. People don’t like change, especially if their little cherubs are involved. But sometimes, with right on your side, you can make the argument.


Some Resources:

Answer to question posted above:

9   –   3  /   1/3  +   1

The division (BODMAS*) is done first, so 3 divided by 1/3 = 9

= 9   –  [ 3 /  1/3]   +   1

= 9 – 9 + 1

= 1

* brackets, operations, division, multiplication, addition, then finally subtraction

And the Cup? well, you got that right? I love Maths forever (as the square root of 16 is 4).

The Bursting of the Bitcoin Bubble

Chart showing the price of one bitcoin since its creation in January 2009

Nearly every topic of conversation this holiday time is veering towards bitcoin, and its amazing run up in value this year.

What is the bitcoin? How do you make money on it? Should I invest in it? Do you have some? How do you get some? It’s amazing right?

OK, hold on. We’ve seen this movie before, and it always ends in tears.

At the beginning of 2017, the price of the cryptocurreny (or digital currency) bitcoin was around US$1000. Today, it stands at 18 times that. How many things do you know rise in price by 18 times in a year and hold their value? Remember, in bitcoin’s case, there is no central bank, or government or gold providing security and ensuring there is some value there. It’s all based on trust.

Over the latter part of 2013, during a two month period, the price of bitcoin rose from about US$150 to over a US$1050. A 7-fold increase. People were calling that a speculative bubble, and they were right. From its peak, the price collapsed in a few days and stayed around $250-$500 for the next few years.

By January 2017 the price had crawled back steadily to $1000, and made its first attempted break out in April reaching $1250, only to fall back below $1000 again. All seemed reasonable. Every time it tried to jump out of its price band, it would fall back and behave like a ‘normal’ asset price should.

Then in May this year, it leapt out to a new record, $2000, and with a few self-correction (perhaps profit-taking) blips along the way a rocket fuelled run up began that took the price to $4000 in August, $6000 in October and $8000 in November. Each time it passed one of these milestones, there was an immediate drop, before taking a deep breath and climbing to new records within a few days. By mid-November it was on a geometric up slope, the kind of price increases you always see before a crash. The momentum has continued through December, starting the month just below $10,000 and now, 19 days later, almost doubling again.

No wonder it’s the topic of every barbecue, coffee catch up and dinner party.

Imagine investing $10K in it in January this year. It would be worth $180K today!

This type of steep rise only ends in a fall. And the steeper the rise, the harsher the crash landing will be. It has gone beyond rationality and flipped over into euphoria. A mate of mine’s every second post on Facebook is about bitcoin (“get in!“). When this happens, you know you are near the end.

If you look at previous speculative bubbles, which are easier to spot after they have burst, and the factors that have caused them, you can clearly see they are all present today in bitcoin:

5 signs of a bubble:

  1. Prices are sky rocketing exponentially
  2. Widespread media coverage
  3. Irrational exuberance over the asset
  4. People start to believe the hype
  5. People who don’t normally invest start to

As soon as you hear people say “we’re in a  new paradigm!” or “this time it will be different!” then you know it’s time to bail.

Not only are these 5 warning signals shouting at us loud and clear right now with bitcoin, you don’t need a long memory to think back to the pre-GFC stock markets in the run up to 2008, or the house price rises prior to 2006 in Western Australia and the ‘mining boom’. I lived and breathed a tech boom during the dotcom bubble of 1999/2000 forming my own e-business during that time. When the crash inevitably  came, we knew we would raise another bean for a while, and so it proved.

The bursting of the bubble

Once you have this irrational run up, a relatively minor event can burst the bubble and send prices crashing back down. The ‘Emperor’s New Clothes’ fallacy that had been holding it up is seen for what it is, and flight ensues.

For the dotcoms it was a famous Barrons article (‘Burning Up’) in March 2000 which explained how the land grab ‘revenue growth’ was slowing and most of the dotcoms only had a few months of cash left. As prices fell, people sold shares (if they could) precipitating yet more price falls.

Once those left holding bitcoin realise they are not worth $20,000 or more, then you watch as they try to get rid of them as fast as you can say ‘blockchain’.

When will it burst?

How much further can it rise? Markets have no upside ceiling, and people’s irrational exuberance can go on for a while. But burst it will.

Recent history may teach us a lesson…

The world wide web was created in 1989 and went live for the world in mid 1991. At the outset, it was the domain of computer geeks. It was not until a few years later most of us even heard about this new technology. (Sound familiar?) Around this time we might have set up our first email address and started visiting websites. It was a few more years on that dotcom businesses started up trying to sell us everything online. By the time we heard of a few dotcom billionaires in the late 1990s, everyone and their grandmother was investing in dotcoms. The NASDAQ index ran up from 1,100 in late 1998 to over 4,600 in early 2000…

The NASDAQ index (of mainly tech stocks) 1995-2017

From the time of the WWW being given to the world to the ultimate crash of the dotcoms was 103 months (~ 8 and a half years).

Bitcoin went live to the world in January 2009. Add 103 months to that and you get August 2017. So the bitcoin run up has already outlasted the creation of the world wide web and the dotcom boom.

Drilling down further, you could argue the NASDAQ bubble began in earnest in Oct 1998 and popped in March 2000, 17 months later. The bitcoin bubble started in March this year, so according to this expect a burst around August next year. Somehow, given the strength of the bitcoin bubble (18 fold rise over 11 months, as opposed to the NASDAQ’s quadrupling over 17 months) one thinks it could come much sooner than that.

Return to form, price landing

If you examine the NASDAQ chart closely, you can see that the exuberant run up during 1999 was corrected by the crash, then a slower rise through to late 2015, and then a slightly increased growth of the index throughout 2016 and 2017. The index is now even larger than at the peak of the dotcom boom. The difference this time is that it is being driven by actual results, not spin and marketing fluff. Google, Facebook, Apple, Microsoft & Amazon are now 5 of the largest companies globally, and are producing immense (and increasing) revenues and profits. They are trading at fairly sensible multiples of 18, so don’t seem over priced.

Where will Bitcoin land, post crash?

I have no idea, but you’d expect it to be in the range of its pre-bubble trend, which was around $1000-$2,500.

Although I am fascinated by the blockchain itself, I am not going anywhere near bitcoin, or any other coins (including ICOs) for that matter. Nor, you may be interested to know, is Warren Buffett. He didn’t invest in dotcoms either.

Real (estate) disruption

Last week I visited an old watering hole with a former real estate client. He’d been one of the first to give our fledgling online business a go back in our first year (1999/2000), when it was far from certain that we had a valuable service, or that we’d even survive.

[Our early clients gave us a ‘fair go ‘in that wonderful, open Aussie way. There’s something refreshing about this positive quality of Australian culture. It’s deep rooted. It explains why voters turn on governments that go early to the polls (Carpenter 2008) and why they backed the same sex marriage even though most would not get direct, personal benefit. It just seemed fair.]

Over a cool pint of Squires we reminisced over what has become of the real estate industry over the ensuing 17 years, and how it has adapted to digital disruption.

In many ways, the day to day job of the agent has not changed much. The essential ‘list and sell’ activities are much the same as they were in 1999. But a few things have changed forever.

We used to drive buyers around properties”, my agent friend recalled, “We’d have to arrange to get the keys of the various properties and then pick up the buyer and visit them all. We don’t do that anymore as these days everyone has the information to hand on their phones. Who’d have thought that back in the late 90s?

Another major change is more obvious – the shift from print advertising to online.

Back in 1999, the real estate lift out of the Saturday paper used to be 120 pages thick with row upon row of property ads. Last week’s lift out (if you call it that, as it took little effort to “lift”) was 20 pages thin, and most of this was taken up by one page display ad fillers. There were barely 4 pages of classified (lineage) ads. Back in the late 1990s, this lift out was the real estate bible. If it was not advertised in there, the listing was invisible. Agents would crawl over hot coals to get mentioned in the editorial section.

My real estate remembered a story of that time.

The newspaper salesman visited our offices every year to “negotiate” the annual price increases with us,” he told me, “One day he was acting so arrogant, it really got on my nerves. He knew he had me over a barrel. What choice did I have? I got so annoyed I almost kicked him out of my office, to which he said ‘But I can get you tickets to the footy!’

“‘I don’t want to go to the footy with you!’ was my reply.”

How the power has shifted since.

A quick back of an envelope calculation suggests that the local Saturday paper used to rake in $1million a week in classified real estate ads at the turn of the millennium. $50M a year. And they would have done similar numbers in car, boat and job ads.

Nearly all of that revenue has gone online since, lost forever. It’s a salutary lesson for anyone thinking they are impermeable to change.

If the mega-profitable price-making monopolist newspaper business sitting pretty in a secure, isolated market can be taken down like that, then who is safe?

Back in 2000, the relatively small real estate website business, realestate.com.au (now called the REA Group) was worth barely $6M, was running out of cash and close to folding. It had had 3 CEOS in 4 years. In WA, less than 30 (of the 1000 or so) real estate agency offices listed properties on its website. The business did not put sales boots on the ground until 2002. In 2000/2001, the same newspapers REA would later disrupt were publishing articles crowing over its imminent demise post dotcom crash.

Yet slowly and surely realestate.com.au took hold, and today, 17 years on, is worth $10Billion. Yes, ten billion. That means its value has risen 1,600 times over the ensuing years, and is far more valuable than the various print media empires it disrupted. Imagine betting a lazy $10K on that – it would be worth over $16M today.

REA’s growth in value was not some fast unsustainable bubble; it was a slow, inexorable growth borne from the strong underlying shift of real estate marketing dollars from print to online. It’s the kind of growth in value that sticks.

Fundamentally, online platforms offered better value than print (for advertisers and users), 24 hours a day service, and agents could update the ads themselves whenever they liked (rather than phone them in by Thursday lunchtime as they used to do). The web offered agents the ability to build their own virtual shopfront (website) and have databases emailing out new listings to potential buyers automatically (alerts). The web offered ease of comparison, mapping, calculators, access anywhere anytime, and the ink did not come off on your fingers either.

It was fairly obvious that the web would replace print over time, and the leading website would make the lion’s share of the money. Instead of dominating one local market, the #1  website would dominate an entire country, and that’s what REA Group did and why they are worth $10B.

The irony, not lost on my real estate mate, is that the internet did not save agents from paying exorbitant advertising fees, it just shifted them from print to online.

We went from the frying pan into the fire!” said my mate.

But here’s what I want to know,” asked my former agent friend, “When will we be disrupted? Will we be ultimately be replaced by AI or some new technology?

Now that’s a good question,” I replied, “You have to think it will happen in the next 5, 10 or 20 years. My guess is it will happen slowly, over time. While it’s happening, it will be easy to ignore. Many will scoff at the suggestion that real estate agents will be replaced by new technology like AI or an app. There  will be disbelief, laughter and scorn, just as the rug is being pulled out from under them. It’s exactly how print behaved just as they were losing the battle unknowingly.

“But what happened to print media, Blockbuster, Kodak, Nokia and the postal service… will happen to you someday. It might arrive with little fanfare. It might take years to take hold. But you can bet some well backed tech business will reinvent how property is bought, sold and rented. If they make the experience far better than an agent, and their system becomes trusted and feels secure while saving loads of money, you can be sure people will give it a go.”

That’s digital disruption, in a nutshell.

Jobs jobs jobs?

Panelists discussing the future of the job (left to right): myself as moderator, Colleen Yates, Nate Sturcke, Colin Barnett, Phebe Cho, Julian Coyne, Pia Turcinov.

Australia has notched up a world record – 26 years without a recession. That’s the longest time between recessions for any developed country, since records began.

During  that time Australia has withstood the Asian economic crisis of 1997, the tech crash of 2000, 9/11, the global financial crisis of 2008 and a mining construction slowdown post 2012.

The last time Australia had a recession, in mid 1991, Bill Hayden was Governor General, Bob Hawke was Prime Minister, Carmen Lawrence was Premier of WA, and we had the first Gulf War. Bryan Adams’ Everything I do, I do for you was number 1 forever, other hits of the year were I’m too Sexy, Things that make you go Hmmmm and Ice Ice Baby…. agh they don’t make ‘em like that these days do they?

Back in ‘the recession we had to have‘ (as then Federal Treasurer, soon to be PM, Paul Keating termed it) Federal opposition leader John Hewson affirmed the GST as a major policy platform (which later became electoral suicide). The Simpsons debuted on Network Ten, Hawthorn beat the Eagles in the grand final and Mitchell Marsh was born. The population of WA was 1.6m, 1 million less than today.

There’s no doubt the Australian economy has been resilient, and been fairly fortunate. A whole generation has grown up with almost full employment, low interest rates, more and more jobs, rising standards of living and lots of opportunity.

The current Aussie economy is dynamic, with over a million Aussies changing jobs annually, with businesses constantly entering and exiting various marketplaces.
While agricultural and manufacturing jobs have declined in total numbers, the expanding service sector has taken on more.

12 million people have jobs in Australia – 6.5M men and 5.6M women. Healthcare and social assistance is now the single largest industry, accounting for over 12% of the workforce. Unemployment has held steady around 5.5%.

And yet… there is an impending sense of unease out there.

When some people hear politicians and even a Prime Minister spruik ‘Innovation’ all they hear ‘redundancy’ and ‘unemployment’.

Change, although the only constant, is threatening and scary. It makes people look for the easy scape goat solution, be it Brexit or Trumpism.

The answers are not so straightforward.

A few months ago my teenage daughter bemoaned to me that she does not know what she wants to do when she is older. I told her not to worry.

“The jobs of 5 and 10 years’ time have not been invented yet, isn’t that amazing?!” I say.
“Well, that doesn’t help!” comes the reply. “Take it from a former CEO like me,” say I, “the employers of tomorrow will want your creativity, your leadership skills, that you can work in a team, or independently with initiative on your own, your problem solving, your empathy with customers… THAT’s what they’ll hire. Learn & demonstrate those skills and you’ll be fine.”

But what kind of jobs will be there for our kids and grandkids in the near future? What industries will fall, and what new ones will rise? Will we even have a thing call a “job” or a “career”? Does it even matter? Will more of us have more free time? Will robots be waiting on us hand and foot, or by robotic arm and robotic wheel?

This was the topic of an Innovation Summit I moderated recently, a 4-minute chat with the panellists from West TV can be viewed here.

Some of the discussion:

  • while a robot might replace 5 manual workers, every new tech job creates 5 more.
  • some jobs will disappear, others will be required.
  • many of us may will enjoy a ‘portfolio career’, where we take on several titles – we’ll be part social media consultant, part MC, part web developer, part teacher.
  • A (Cognizant) report declared recently that the following jobs will be created within the next five years: data detective; bring your own IT facilitator; ethical sourcing manager; AI business development manager; master of Edge Computing; walker/talker; fitness commitment counsellor; AI-assisted healthcare technician; cyber city analyst; genomic portfolio director; man-machine teaming manager; financial wellness coach; digital tailor; chief trust officer; and quantum machine learning analyst.
  • Within the next 10 years we’ll have: virtual store Sherpa; personal data broker; personal memory curator; augmented reality journey builder; highway controller; and genetic diversity officer.
  • It will be important to spread our risks as an economy – the mining industry is super wonderful when booming, and awful at other times (which is the majority)

The “death of the job” has been predicted before. Although the disruptive changes we are seeing seem to be changing more things more rapidly, there is time to adjust, and new opportunities will always be thrown up. The winners will probably be those (countries, states, organisations and people) that can adapt, and the losers will be those that are stuck in their ways.

Left to their own devices

I could leave you, say good-bye. I could love you if I try, and I could, and left to my own devices I probably would,” sang The Pet Shop Boys in 1988.

It’s not one of the best songs ever written, but the ‘left to my own devices’ stuck in my mind, and, these days we are often left to our devices, of a different kind. We all have various (mobile) devices, and we reach for them with increasing alacrity these days. That’s fine, I assume, as long as we are performing our main functions, such as conversing with our fellow human beings, giving attention to our friends and family, doing some meaningful work and getting out and about in the sunshine every now and again.

The question is, how much is the next generation on their devices, and is that good, or bad? As parents, it can be easy to plonk the iPad in front of the children to entertain them at the restaurant, or when we want some peace. But what message does this send? That, when eating out, we don’t want them to converse across the table? That their needs and questions are of no import? What kind of parenting is that?

A few years ago, Taiwan introduced a law restricting the amount of time children should have on screens and devices. Apart from the obvious issue of how on earth do you police such a thing, was Taiwan correct in doing so, and if so, why? Juveniles, so said the new law, “may not constantly use electronic products for a period of time that is not reasonable,”  which begs the question, how much time is “not reasonable“? Parents and guardians could be fined up to A$2,000 or so if found in breach of the law.

I expect the answer is somehow in a happy medium. 6 to 9 hours a day glued to a screen, I think we all can agree, is not healthy. Kids need to get out and run about, climb trees, play sport, ride bikes, interact, and get up to all kinds of nuisance. Is it that we (helicopter) parents are buzzing around too much these days, not allowing kids to be kids? Local comedian Griff Longley certainly thinks so, and he has set up a not for profit organisation Nature Play that encourages parents and their kids to get out doors and do stuff. Like make cubbies. Whatever, just get out there and do things. Together. Unstructured. Like we used to. “It’s OK to stuff up and have stuffups”, says Longley. Dang right. It builds resilience, it’s how we learn.

I wonder if the screens are just an easy babysitter option, or actually serve some positive purpose for the children? Simply taking them away is not the answer. The devices are out there, everyone has them, and to deprive children of them is to hold them back compared to their peers. Certainly, there needs to be some happy balance between active play and iPad consumption. Certain hours of ‘screen time’ can be negotiated, depending if it’s a school night, weekend or holiday. Screen time can include all screens, TV, play stations, Wii and mobile devices.

For younger kids, I’m a fan of the Family Zone service, which can be set up on every device, and provides screening of everything the child does online, limiting access to questionable sites, and allowing the parent to set times when devices can be used, and when they can’t, anywhere. I’ve found children are fine with rules, as long as they are clearly explained, and consistently enforced.

In this digital age, we shouldn’t ban our kids from being online, or becoming confident with technology. It is going to be a huge part of their living and working lives. They should certainly understand there is a place for devices, and certain times when they are put away. The precise rules, I reckon, like everything, are up to the parent and child themselves to negotiate and enact.

Leaving them to their own devices, I certainly would not.

7 Perth podcasts worth listening to …


In an era of self-publishing, you might expect to find some local West Australians broadcasting their views via the channel of podcasting.

I’ve been listening to, and in some cases have been a guest on, some of these pods. Some of the magnificent 7 highlighted here have been podcasting for years, some are relatively new to the game, but all are professionally put together and are (in the main) a joy to listen to. In each case, I can tell you that I have met and know the people involved. They are all producing them (for free) for the right reasons – to educate, interest and in some cases probe the listener.

No doubt there are many more people podcasting away in WA. In a search for others, I found a plethora of church podcasts (over a dozen) and quite a few that had been seemingly abandoned. The ones I highlight are all podcasting away frequently, once a week in most cases.

Before I get to them, here’s a brief history of podcasting…

The term was first coined by a British journalist back in 2004, a year after the iPod came out – so it’s a blend of ‘iPod’ and ‘broadcasting’. In fact, ‘audioblogging’ as it was known before, started 15 or more years earlier in the mid 1980s, with the humble beginnings of the world wide web. It was a quiet, slow burn for the most devoted during the 1990s, until the new millennium dawned and the advent of easy to use audio web players.

As an activity, podcasting took off in the mid 2000s with the iPod revolution (‘1000 tunes in your pocket‘), but then fell away as we all jumped onto video sharing (with the rise of Youtube) and the distractions of social media. The fact that pods were only audio saw them lose out in the popularity stakes to the wilder, visual treats of Facebook, Twitter, LinkedIn and the rest.

Ten years on, and podcasting is now making a come back. Between 2013 and 2015, the amount of podcasts on iTunes doubled. By 2015, there were a billion podcasts subscriptions – the average person subscribes to 6. One in three US citizens listen to podcasts, 67 million of them monthly. 52% of podcasts are listened to at home, 18% in the car. 85% of all podcasts are listened to through to the end, or mostly the end.

I find podcasts fill that otherwise dead time commuting to work, driving in the car or doing the gardening. Yes, as I’ve written about before, it’s good to let the brain declutter, but listening to a podcast is also a great way to learn and engage the brain. I subscribe to a whole host of different pods from around the world, on such varied subjects as philosophy, biographies, sport, satire, business, design, technology, history and politics. It’s radio on demand, and you can consume a tremendous amount of free and interesting content on almost any subject under the sun. Perhaps, I will share some my world wide favourites in another post. For now, let me describe, and humbly invite you to subscribe, to these 7 local podcasts, which I think you will find are well made, and great to listen to…


‘The Road to CEO’, and ‘The Key to Authority‘ from Jenish Pandya

If there is someone in Perth who has most inspired me to become interested in podcasting, it is Jenish Pandya. One of the nicest guys you’re ever going to meet, Jenish has already concluded his fantastic ‘Key to Authority‘ podcast series (57 episodes over 2015 and 2016) interviewing thought leaders on various topics, and now has started a new series, ‘The Road to CEO‘, where he interviews CEOs all about the job of becoming a CEO and what it’s like ‘in the hot seat’ so to speak.

I was interviewed on both, and was impressed with Jenish’s passion and energy for the podcasting format. He’s become a bit of  a local expert, and can often be seen speaking on the topic of podcasting. Not bad for a Water Corp engineer, who does all this in his spare time.


‘Mark my words’ from Business News.

Mark Pownall and Mark Beyer, are CEO and Editor respectively of WA’s only dedicated business media organisation. The 2 Marks are the most respected business journalists in Perth, and their 18 minute weekly show is a must listen to those who want to keep abreast of what is happening in the world of business in WA.

They’ve been podcasting now for more than three years and have a nice, natural style together. They obviously respect each other greatly and are firm friends and colleagues. Mark P asks most of the questions while Mr B provides most of the detailed analysis, although Mr P also chips in with his perspectives as well. It makes for a really interesting combination, and for those of you who may have missed what’s happened in WA during the past week, it’s a great catch up. I like hearing each other’s perspectives plus a welcome sprinkling of humour. More than you might get in the paper or online, you get to hear why these major stories are the main stories of the week.

As a nice extra, Mark Pownall also records his regular ‘CEO Lunches’ with WA business leaders and puts these out on the same podcast channel. Subscribe to Mark my words on iTunes or Soundcloud or listen to past episodes through the BN website.


‘Ask Alyka’, from Alyka

The Subi-based digital marketing agency has recently begun its own podcast, with Alyka cofounder Zion Ong and digital strategist Beth Caniglia talking about a different digital topic, often with a guest in the studio.

These guys go to town, as you might expect, with 3 microphones and 3 cameras recording the action, turning the podcast into a fast-paced lively show available through all the normal podcasting and video channels. Topics mainly centre on digital marketing, naturally, as that is their area of expertise. I was interviewed in a recent one, on the topic of digital disruption, and I was impressed by the laid back style of the pod, and the professional production standards.

If you want to know what’s going on in the digital marketing space, then Ask Alyka is the pod for you. Subscribe on iTunes.


‘WA Real’, by Bryn Edwards

Based on the London version (London Real), WA Real looks to interview real people and get into the real stories behind their life.

A fairly recent podcast, having started last month, UK immigrant Bryn has already posted 7 interviews of between 30 minutes and more than an hour duration, so this one really gets under the skin of the guests, and a deeply personal discussion usually ensues. I particularly enjoyed listening to local comedian Griff Longley, who is the founder of Nature Play, a local not for profit which aims to get kids outdoors with their families. “Kids have to learn how to stuff up! It’s OK to fail and have a go.” As a parent of two, I loved this discussion and found myself saying ‘Yes!’ – which greatly amused my fellow commuters that morning.

Subscribe on iTunes.


‘Music on the Move’, from the PSO

OK, a disclaimer upfront here – I am a huge fan of PSO founder Bourby Webster, having known her since uni days, and I’m chair of a PSO technology advisory board.

I also encouraged her to start a blog, and bless her, she did, and it’s great listening. She interviews local or visiting musicians who might be performing in an upcoming PSO concert, and we get to hear what happens behind the scenes, and the motivations and passions of the people who put such a complex live performance together. Listening to Bourby chat with Matt Allen (WAAPA Gospel Choir) 5 days prior to the world premier of ‘George Michael: Faith and Freedom concert’ brought the whole experience back to me, one, I am not ashamed to say, brought me to tears.

Subscribe on iTunes for some classical music food for your brain. Go on, it’s good for you.


‘Brand Newsroom’, from Lush Digital Media

When you have a former BBC and ABC radio host James Lush managing proceedings, you know you’re going to get something polished and professional. That’s not to decry co hosts Nic Hayes (Media Stable) and Sarah Mitchell (Director, Lush Digital Media) who make the perfect team to discuss the main content marketing themes of the day. Their collective experience and wisdom absolutely nail every topic, and they usually have a guest in their studio or online, including one I absolutely loved with Nenad Senic arguing that print was not dead, and could do way more things than digital can, in some cases. 160+ episodes in, there is a tremendous amount of great content in their back catalogue to listen to.

Subscribe on iTunes.


‘Business Marketing Show’, from Ed Keay-Smith & Brendan Tully

I’ve got to know Ed over the past years as we are both eGroup members, an association of internet entrepreneurs and managers which meet first Tuesday of every month to discuss all things digital. He interviewed me on this podcast back in March 2017, when I was CEO of Business News, and he has a lovely way with his guests, laid back and chatty. Ed keeps the whole thing real, without worrying too much about fancy production tricks. It’s a raw interview, plain and simple, and some great content. He has built up quite an impressive audience with around 5,000 listeners per show, with more than 70 podcasts over the past 3 years.

If you want to know more about SEO, SEM, remarketing, online video, … for small and medium sized businesses, this is the one to subscribe to.


So, I hope that inspires you to subscribe to these local WA podcasters, and give them a bit of love and support. More importantly, listen and learn. And if you like a particular podcast, don’t forget to go in and give them a positive review. It really makes a difference in their pods being discovered by others.

UPDATED – the original post neglected to list Jenish Pandya – a terrible omission, now corrected!

The Rise of the Bots

Everywhere you turn these days there seems to be another potential tech disruptor raising its head above the parapet. The topic for today is the bot.

The rather cutesy name – bot – conjures up a sci-fi future of robotic machines doing everything for us lazy humans, who might be otherwise left to sojourn on our flying chairs a la the folks in Wall-E. Set a few hundred years from now, having abandoned a wrecked Earth, people are overweight, can barely walk on their short stubbly evolved legs and bark orders for everything they want. Robots zip around everywhere doing all the work.

I wonder if we’re really a hundred or so years away from this now. I reckon it’s almost upon us. And, as for obesity, well that is certainly among us – just look at the evidence.

But let’s get back to modern day bots. A bot, or ‘internet bot’, is simply “a piece of software that runs automated scripts over the internet” (Wikipedia).

Some are malicious (such as spambots roaming the internet for email addresses they can pester or mailboxes they can take over), and some are there to do good (answering your questions or suggesting a great blouse to go with that new dress).

Whatever they are up to, they account for almost half of all internet traffic. On smaller websites, it could be 80% or more. We know that Google sends robots to check websites out, index their content, and help rank them in their search engine. This cannot be done by humans, there is just too much stuff to read.

If, like me, you have an iPhone, then you may already be used to conversing with Siri, who is (of course) a bot. Have no hands free to tap an SMS, look up a contact’s phone number or check your appointments for tomorrow? Simply hold down the screen button and Siri is there to help.

With the release of Google Home, you can now have a Siri-like service sitting on your side table to answer your beck and call – what time is it in India? what’s the traffic like on the commute today? and what are the answers to your kid’s tricky homework questions?

A short journey from here are the bots already installed on Facebook, who can answer your typed questions. It’s like talking to a real, live person, except there’s no one there. It’s a bot. Also, have you noticed how Uber has quietly slipped inside Google Maps and Facebook Messenger to be able to offer you a ride without leaving their service?

That pop up window offering you answers to your questions on that website you’re on? Increasingly likely, there’s no one there. It’s a chatbot.

Based on what you say or type, the bot can quickly provide you with answers or suggestions to your queries, and can do this 24/7. They don’t get tired, have coffee breaks or moods. They can understand context, nuance and even sarcasm. Try fooling Siri, and she’ll quickly catch on you’re playing silly buggers.

Some people feel more comfortable talking with a chatbot than a real person, especially if it concerns personal issues such as health or emotional problems.

Over on Slack, the explodingly successful messaging app used by many organisations to better coordinate internal communications, chatbots are inbuilt. They’re called Slackbots (of course), and you can program them to message someone when, say, a certain task is complete, or when some other condition was met, as well as answer questions about a project.

Slack has expanded rapidly from its 2014 start. With a mission to replace internal email, Slack rose to a million users within 18 months with 300,000 of them are paying. Its valuation hit US$ 9 billion in June.

11 million Aussies are already using messaging apps, and 4.5 million use it as their primary communication tool. There is a whole generation of youngsters and others growing up who rarely, if ever, send emails. Perhaps they never will.

It’s not just the young though – the peak age for messenging apps is the 25-34 age group and more than half the 35-54 age group do likewise.

In Australia, Facebook messenger dominates, then it’s Whatsapp and Snapchat.

As a general rule, chatbots work well inside messaging, and more ‘menu driven’ info (such as ordering a meal, with bots suggesting what goes well and selling upgrades), anywhere where there is a fairly simple user experience, such as a check list. Decision tree formats work best. If this, then this, if that, then the other. So, tailored gift recommendations work well.

Bots don’t go all that well (yet) on free flow chat, but tomorrow we could see general chat, voice, avatars or some other abstract versions offering a more conversational approach. Where we end up will probably depend on what customers want and are comfortable with.

The bot battleground will probably be fought between Apple, Google and Facebook, who each want to own that bot search and interaction experience.

Fancy designing your own bot?  Well, you can with Chatfuel, which does bots for Facebook or Motion.ai.

It might be an idea to think how bots could impact your market – how you might use them (start with Slack), or incorporate them into customer service, lead generation and the like? As artificial intelligence (AI) will only get sharper from here, you can bet the bots will be a big part of our future…

Pitching advice for startups

Last weekend was the 10th Startup Weekend event. A sell out, with 118 people attending. From their 1-minute pitches, 15 or so teams were formed Friday night, who dutifully worked their way through their idea(s) before presenting in front of judges Sunday night. Most of them had a working product and some even had revenues by that time.

Earlier on Sunday afternoon I presented to the attendees on what the judges love and hate in pitches. Here are my slides, and also if you want to watch my talk, it was also recorded (20 minutes).

Here’s my basic advice:

  1. Know the criteria your judges (VCs or whatever) are judging you on. For Startup weekends it’s 3-fold: the business model, customer validation and execution & design.
  2. Start with the problem – preferably a huge, global problem. A problem that you just have to scratch, the itch is that strong. Define, describe and explain it, clearly. For if you are not solving a problem, you are not creating any value, and if you don’t create value for a customer, they are not going to pay, and if they are not going to pay, you ain’t got a business. So, on your first slide – explain what the big hairy problem is. And how you’re going to solve it.
  3. Explain how you have validated your solution – what evidence do you have that customers have this problem, like your solution, and will use and pay you for it? Surveys are nice, but usage of your piece of tech is better. And actual dollars from paying customers (not your Mum!) is best. Only when people are parting with their cold, hard cash do you know if there may be a business in it.
  4. Explain why you and your team are going to be the ones to solve this problem. Investors mainly invest in people (not an idea), because they understand that ideas can change but you remain. Above all the other opportunities they pass on, they have to believe that you have the determination and grit to keep going, when the going is really, really tough. Which it will be, often. So provide evidence of your toughness under pressure, and how the super blend of your amazing team is perfect for the challenges ahead. This should come across in your voice, your manner and your tone. You sound confident, but not overconfident. Strong.
  5. Don’t do crazy valuations or overly confident projections. Banish all ‘hockey stick‘ cash flow and revenue charts, showing slow, low revenues then some astounding take off to amazing heights after only 18 months. Rarely, if ever, (never?) do startups actually take off like this. It can take years of trial and error, pivots and tantrums, to get to a position where you are even paying your way, let alone making super normal profits. It did for AirBnB (who launched 3 times), Google (who had no business model for years) and many other very successful unicorns.
  6. Beware the ‘China number’ syndrome. ‘Oh, the market we are entering is a $20 billion market… if we’d only grab 0.05% of it, we’ll all be multi millionaires!’ This is lazy. Tell me how you are going to get your FIRST paying client, and why they will pay, and then tell me how you are going to get your 10th, 100th and 1000th… Explain, in detail, your customer acquisition strategy, and how you will scale.
  7. Do a great demo of the tech you have built, but better to do this through screen shots, not through live demo, which is fraught with problems in a live environment in front of 100+ people and judges looking on. Make it swish, have a great UX and show off the elegance of your solution. Mention what you would next do, and like to do next, given more time.
  8. In your slides, don’t inflict death by powerpoint. Use images rather than words. Use as few bullet points as possible, with a large easy font. Not too fussy, the slides are supposed to be a visual aid, not a crutch for you to lean on. In a 4 or 5 minute pitch, you may have 6 to 8 slides.
  9. Enjoy it. Smile! Engage your audience and the judges. Allow your passion to shine through.
  10. Practice, practice, practice. You should be able to nail your presentation after a few run throughs (at least half a dozen), and your timing should be bang on. There is no excuse to be rushed towards the end. Take things out if they are peripheral. You can always refer to other points during Q&A time. Aim to be word perfect, no ums and errs, no awkward moments, just one strong, believable logical argument with evidence.

Hackathons, like Startup Weekends, are a great way to condense months of learning into a 54 hour period. All the trials, tribulations & tantrums are smashed into 2 days… little sleep, anxiety, things breaking, things not working, arguments, chaos, and even triumphs… I highly recommend them.