Dr. Jana Matthews, one of the world’s leading experts on entrepreneurship and growth, is the program director for ANZ Innovyz START, an accelerator program that is part of the Global Accelerator Network led by the United States’ TechStars.
Matthews is a global thought leader and was a member of the original team at the Kauffman Center for Entrepreneurial Leadership. She also is the founder of four entrepreneurial companies, including The Jana Matthews Group, a global consulting group specialising in entrepreneurial leadership and business growth.
The ANZ Innovyz START program is modeled on the successful format developed by TechStars, which originally started in Boulder, Colorado, and since has galvanized the startup space across the U.S. It boasts a 92% success rate, unprecedented for high-risk technology ventures, and has so far pumped in $126 million into 104 startups.
The TechStars program is simple: Pick the most exciting startups, pack the founders into a room for three months and have a team of top-flight mentors provide sage advice. The accelerator program also brings in opportunities for entrepreneurs to pitch at venture capital firms and angel investors, and throws in several other perks. In return, startups part with equity stake.
In an interview with Anthill, Matthews discusses the entrepreneurial environment in Australia and New Zealand, its unique challenges and much more. Excerpts:
Q: First of all, how does the Australian entrepreneurial landscape appear to you?
Jana Matthews: From my perspective, Australia, particularly Adelaide, is on “the cusp.” There’s more emphasis and support for start-up and growth companies and the commercialisation of innovation. Australia has ANZ, a bank that’s actually making loans to small and growing companies and a listing platform like ASSOB where small companies with innovative concepts, a team in place, and a decent business plan can get funding. There’s interest in all parts of the country in building an entrepreneurial ecosystem, and successful entrepreneurs are willing to be identified as such, and are beginning to mentor other companies. The landscape looks very fertile to me.
Q: What are the challenges Australian entrepreneurs face? Are they any different from that faced by their counterparts elsewhere in the world?
Jana Matthews: Yes, AU (and NZ) entrepreneurs face several challenges: (1) Size of the population is too small to sustain growth companies. U.S.A. companies have a market of 312 million people to sell to. AU has 22 million, and NZ only 4.4 million, so companies need to go global more quickly in order to grow.
(2) Geographic distance from markets is a factor. Internet, teleconferencing and air travel help, but it takes more time for AU companies to get to major markets. I live in Boulder/Denver and it’s an hour flight to (Washington) D.C. or N.Y.C. — 1 ½ hours to San Francisco/Silicon Valley. From Sydney to Singapore is at least 7 hours, and it’s 12 hours to San Francisco.
(3) And given that distance, it’s more difficult for AU companies to have the relationships and knowledge of key vendors, suppliers, sales reps, appropriate channels, venture capitalists, etc. in their particular industry in the countries they are trying to penetrate.
(4) I’ve also been told about the “tall poppy” syndrome where people try to cut down those who are successful. My response is, “Get over it!” Learn to celebrate those who are successful, and provide support so that many more entrepreneurs become successful!
(5) We need more successful entrepreneurs to “give back” and share their time, knowledge and money through mentoring and investing in the next generation of entrepreneurs.
Q: What are the odds Australia will come up with the new Microsoft, Google or Facebook?
Jana Matthews: I think the odds are very good that an Australian would come up with a equally innovative concept, but several things could inhibit their rapid growth:
(1) Access to financial capital (not enough AU angels willing to do high risk/high return deals, and not enough venture capital in Australia);
(2) Access to potential employees. For example, a lot of software and web 2.0 companies are moving to Boulder to be closer to the software and CIS engineers (current and former graduates of the university who want to stay in the area). AU needs to have these pools of talent;
(3) There are very few role models, CEOs and management teams who have experience with rapid growth, from the ground up. There’s a reason why VC often require that an experienced management team be brought into the company as a condition of investing. Most entrepreneurs don’t know what they don’t know about growth, and that’s a huge risk to the company. We need a larger cadre of leaders and managers who’ve been through the growth process and can lead or mentor others through it.
And, finally, proximity and travel time to markets noted above. All these will be inhibitors to growing a company such as Google, Facebook or Microsoft — but all are problems that can be solved if we focus on them. The good news is that the world is getting smaller all the time, and it’s much easier to build a global company from a country such as Australia or New Zealand.
Q: In the recent Fortune rankings of the world’s most admired companies, the only Australian firm was a miner — BHP Billiton. Is there something Australian companies need to learn?
Jana Matthews: Before I answer the question, it’s useful to describe how the list was constructed. There were 1,400 “potential companies” on a list that was given to executives, board members and analysts to rank on nine criteria ranging from investment value to social responsibility: 1,000 were U.S. companies, the other 400 were (a) non-U.S. companies with revenues of $10B, or (b) foreign companies operating in the U.S.A. So the list – and the ranking were heavily weighted to U.S. companies.
If we want to get more AU companies on that list, we need to grow more companies to the size of $10 billion, they need to have operations in the U.S.A., and they need to do a lot of branding and PR to enhance their name recognition among the U.S. analysts, executives and board members!
Q: How have accelerators and mentor-driven programs changed entrepreneurship?
Jana Matthews: Incubators have been around since the 80s and were designed to recruit a variety of local companies, convince them to co-locate in one facility for several years, and provide shared services. The director and local service providers do most of the mentoring. The companies pay for the space and are charged a reduced rate for the services.
Accelerators, at least those in the Global Accelerator Network (GAN) formed by TechStars, focus on a particular slice of technology. There’s a competitive application process and companies from around the world apply for admission. Those selected are paid to spend three months to focus on growing their company ($6,000 per founder – max of $18,000 for three founders). They need to live in the city where the accelerator is located and co-locate in one space with the other ten companies…Doing more faster has become the “watchword” at GAN accelerators. Graduates say their companies had a year’s worth of growth in three months. The combination of focus, mentors who have experience growing companies, introductions to partners and customers, and the chance to pitch to a room full of investors at the end is very enticing. In short, accelerators dramatically increase the speed of growth for the companies in them.
Q: As the program director of InnovyzSTART, what are your goals and priorities? Do you customise the program for Australia?
Jana Matthews: I have 10 goals:
(1) Market the program as widely as possible to gain visibility for ANZ Innovyz START
(2) Encourage mobile, web 2.0 and software companies to apply for admission
(3) Screen and select 10 companies that will get the most benefit from this program, i.e., set them up for future growth
(4) Identify and recruit an awesome set of 50+ mentors and engage them to work with the companies, open doors for them, and help the founders learn what they don’t know — but need to know to grow their companies.
(5) Rapidly accelerate the growth of all 10 companies
(6) Attract investors to Investor Day who are able and willing to invest in promising companies with great innovations
(7) Get the founders ready to present their companies and innovations to investors.
(8) Get financing for at least 50% of our companies.
(9) Bring visibility to our partners and sponsors who are actively supporting the start-up and growth sector of our economy.
(10) Help build an entrepreneurial ecosystem in South Australia and support its development throughout Australia and the Asia Pacific region.
The growth and expansion of ANZ Innovyz START can significantly impact the whole region. I’ve done this before; if you have the elements in place, it is not as difficult as you might think.
Q: Finally, why do we still have so few women entrepreneurs in technology?
Jana Matthews: I’m not sure how this plays out in Australia, but it’s alarming to hear that only 18% of the computer science degrees in the U.S. are going to women (vs. 37% in 1985). This means that most of the technology products, software, games and companies are being designed, managed and led by men, with very little input from women. What a waste! And given that women are roughly half the population, you have to ask “Why?”
The reasons are pretty well researched and documented in the U.S.A.: too few role models; assuming girls will not be as good at science and math as boys; parents who encourage sons to take risks and think “outside the box” but advise daughters to “be careful” and “color within the lines”; people who don’t value women’s perspectives on technology as much as men’s; managers/investors/board members questioning a woman’s commitment to a company if/when she gets pregnant; women not being groomed or offered fast-track positions in tech companies; women not being confident in what they know and can do. There’s more, but that’s a pretty good starter list!
In a small way I’ve been trying to enable more women to be successful, but we need to address the whole system of issues if we want to fix this problem. On a personal note I hope we attract some fantastic women tech entrepreneurs through the ANZ Innovyz START accelerator. But women entrepreneurs – and men entrepreneurs need to apply by April 20 to be considered for the program, which runs from May 28 to August 17.