Joshua Flannery discusses the key differences between Australia and Japan’s startup ecosystems

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0:59 Joshua Flannery: Thank you.

1:01 Adam Spencer: Hi, I'm Adam Spencer, founder of the Day One Network, which is bringing the history of the Australian startup ecosystem to you. I believe in founders. It's why I do everything I do at Day One and our media company, W2D1 Media. And that's why the Day One Network exists, to create helpful content for founders. We've got some great shows in development, but a large part of what we do couldn't be done without support from our partners and sponsors. And I couldn't be happier than to be working with NTP, who get community better than any other technology recruitment company out there. A Newcastle company like mine, NTP are invested in seeing the growth of the local tech community in Newcastle, Sydney, and more broadly Australia. So thank you NTP for helping us bring helpful content to founders and the startup community in Australia. Back to the interview. Hi, I'm Adam Spencer, founder of the Day One Network, which is bringing the history of the Australian startup ecosystem to you. I believe in founders. It's why I do everything I do at Day One and our media company, W2D1 Media. And that's why the Day One Network exists, to create helpful content for founders. We've got some great shows in development, but a large part of what we do couldn't be done without support from our partners and sponsors. And I couldn't be happier than to be working with NTP, who get community better than any other technology recruitment company out there. A Newcastle company like mine, NTP are invested in seeing the growth of the local tech community in Newcastle, Sydney, and more broadly Australia. So thank you NTP for helping us bring helpful content to founders and the startup community in Australia. Back to the interview. Hi, I'm Adam Spencer and welcome to Day One, the podcast that spotlights Australian startups, founders, and the organizations that empower Australian entrepreneurship. We go back to the beginning to tell the story of Australia's most inspiring founders and how they built their companies. You're listening to a special interview series as part of a documentary W2D1 is producing about the history of the Australian startup ecosystem. On the episode today, we have—

3:18 Joshua Flannery: Hi, I'm Joshua Flannery. Call me Josh. I'm the founder of a company called Innovation Dojo, and I focus on all things innovation going across borders.

3:34 Adam Spencer: So when did you first get involved in, you know, inverted commas, the startup ecosystem?

3:42 Joshua Flannery: Right. So, I guess unofficially, I was first involved in a startup in Australia back in 2004. And so, I was working as a sales or biz dev rep for an edtech company called Learning Information Systems, better known as StudyLink. So, They're basically a SaaS company for universities to manage their international student applications. So I was working for them down in St. Leonards on the north side of Sydney. But I don't, I wouldn't really call that being part of an ecosystem. We were sort of isolated down there. And it probably wasn't until Fast forward to 2012 when I scored the gig as the first official startup support guy at the University of New South Wales that I feel like I was properly in the ecosystem or part of it.

4:50 Adam Spencer: So, 2012.

4:52 Joshua Flannery: Yeah.

4:53 Adam Spencer: That seems to be around the time people that I've been speaking to say that things really kicked off. You know, Fishburners started that year, a whole lot of other things. All coincided. From your perspective though, what did the ecosystem look like at that time? Like, what was visible to you? Who were visible? What organizations were kind of grabbing your attention?

5:16 Joshua Flannery: I guess it was a pretty skewed view from my side because I was working, A, for a university who, I guess, among a lot of universities were trying to find their place in the ecosystem. The other kind of thing that skewed my view was I was not in the central business district, which is where a lot of the, I guess, corporate-backed and sponsored initiatives like your Fishburners and then some of the early accelerators that started coming out, a lot of the higher-profile coworking spaces, they're all in and around the CBD. Mm-hmm. And we were sort of close enough for people to know who we were, but far enough away to be sort of almost a sub-ecosystem in its own down in Kensington there. I guess our lens was twofold. One was, you know, how do we integrate what we're doing with the more mainstream part of the ecosystem that was happening in the CBD?

6:27 Adam Spencer: Mm-hmm.

6:28 Joshua Flannery: And the other part was, I think in 2012, around that time, there were 3 universities at least that I knew of that came out with their own version of startup support. I mean, there were entrepreneurship-themed academic classes before that, but to have actual dedicated staff looking after startups that were not part of a sort of academic credit course. That was the year, I think, that they started to come out. So, there was James Alexander down at Incubate on the Sydney Uni campus. There was me in Kensington. And then there was Rowan McCarthy, I think his surname is, down in University of Melbourne with the MAP program. Mm-hmm. I think the three of us all came out with different versions of, of inverted commas, formal startup support programs, whether they be accelerators, incubators, or something in between. That was a kind of interesting time too, because there was this tension between the type of people running those programs, like Ro and James and I were very much you know, about let's collaborate, how do we make the pie bigger for everyone? And yet universities by nature at the time were not exactly collaborating with each other. And there was a bit of an elbows-up culture. So it was a really interesting time where I suppose people at our level running the startup programs were sort of seen by the uni as the breakaway rebels. You know, why are you going across and chatting having coffee with the enemy when we're just trying to connect the dots for the startups that we're supporting. Yeah, and then there's just the piece about not being in the city, which was always interesting, and I think it led to maybe some dislocation from a lot of stuff that was going on in the city, but then at the same time, it justified us investing in a whole lot of great resources for people around our little UNSW ecosystem too. So yeah, it was a really fascinating and fun time.

8:58 Adam Spencer: Why did you take on the role of director at Sydney Startup Hub?

9:04 Joshua Flannery: Yeah, so I had come to the end of about 6 or 6 and a half years at the University of New South Wales. And it had gotten to the point where I think we'd supported something around the number of 700 or so different companies. We had a full suite of programs. So it wasn't just standalone accelerators. It was a proper triaged funnel of companies from different stages and, you know, even a wider funnel of education above that.

9:44 Adam Spencer: Mm-hmm.

9:45 Joshua Flannery: So, I felt like I had sort of graduated from university work in that sense. Sorry, that was a bad pun. And I wanted to sort of do something with a wider impact than that sort of microcosm there. Even though it was huge, it was still limited in, you know, the impact that you could have on Sydney, on New South Wales more broadly. And some of the best or the most enjoyable stuff that I did with Unity of New South Wales was when we did go and collaborate with other accelerators, or we brought angel groups or even other university players to us, or we went to them. And I felt like I wanted to do a lot more of that kind of breaking down barriers and trying to accelerate connectivity on a bigger scale. And that Sydney Startup Hub at the time was sort of screaming, well, that's the role of a hub like that. And so, yeah, I was really stoked to have landed that role. And we did some interesting things. So we—

11:09 Adam Spencer: Yeah.

11:09 Joshua Flannery: We actually brought in a virtual internship program that placed students that were part of the Sydney School of Entrepreneurship. And they were actually sourced from all universities and TAFEs in New South Wales to come through this simulation of working for a startup. And so we picked startups out of Sydney Startup Hub, real ones, and set up real startup-like work tasks. And I think there was, while I was there, there was about 1,500 internships that happened via that program. And that kind of stuff was to me what was missing. So, sort of tying, for example, the talent pool to the big hubs of the startups. There were a lot of individual programs, but nothing really formal that overlaid the sort of state ecosystem. So that kind of thing was what I was motivated to do while I was there.

12:18 Adam Spencer: Can you, I don't know if you can, but can you speak to a bit about the history of how this Sydney Startup Hub came to be? And if not, just maybe why you think it was such an important, why was it so important for the Sydney ecosystem to have that physical place?

12:34 Joshua Flannery: Yeah, yeah, look, so I think this is a question that sort of has many fathers. The initiative itself has many fathers, and so my really oversimplified version of how it came to be was, number one, Sydney rent, you know, space for coworking spaces and anywhere that a startup would would have to pay for anywhere close to the CBD was just ridiculously expensive and getting worse and worse. And so representatives from some of the key players like your Stone Chalks and your Fishburners, they basically got together and lobbied the government Basically articulating that, look, if the government's serious about growing the economy and really believes what they're printing about tech and high-tech companies being the future of the economy, then you've gotta help us out here because it's just not a feasible model for a startup to pay this kind of rent. If we really wanna have that densities that's required for an ecosystem to work properly. And so, I think that was the seed. And then, there was a lot that happened on the government side. Long story short, they landed on this amazingly conveniently situated building, beautiful spot, lots of hidden challenges under the bonnet. I probably shouldn't get into too much of that. But let's just say real estate can be— Real estate ownership can be complicated, and that led to, I think, also a lot of restrictions to do with the hub in terms of, you know, the hours it operates, some of the things it can and can't do, which seem like no-brainers from the outside. But if you're sort of on the other side and seeing the actual real estate contracts and things like that, it's a bit easier to understand that it's actually not necessarily someone in government with their arms crossed saying, "Computer says no." It's actually like, it's a bit more complicated and, you know, it does bear to question, you know, was that the best location because of those restrictions? But, you know, it's hard to say, who would know? I mean, for me— Yeah. The fact that it was right above Wynyard Station and they managed to get those already popular coworking spaces to move in there. They basically growth hacked having a population of startups in one building with multiple brands of coworking space and accelerators. And I think that was always going to be the biggest risk, that it was empty. And so, they at least ticked that box and then there was a lot of other problems that, you know, I think people are talking about now. But yeah, I mean, I think overall it was still the right thing to do and then, you know, retrospect is always good to nitpick on what could be improved.

16:07 Adam Spencer: It seems to me that most of your career you've been jumping between Australia and Japan.

16:12 Joshua Flannery: Yeah.

16:12 Adam Spencer: Can you, just drawing on that, you know, unique perspective, What do you think we're doing really well in our ecosystem here in Australia?

16:21 Joshua Flannery: Yeah, yeah, so I think we are doing the talent side very well. We're normalizing the idea of an entrepreneurial career path pretty well. It's not sort of seen as dodgy as it once was if you're working in a startup now. And so, I think there's a lot of talented people that, you know, maybe 5, 10 years ago would never have thought it, you know, a legit career option to go and work for a little startup that was unproven. And I think we have done a good job at changing that positioning and sort of combining that with the whole future of work rhetoric and, you know, people working portfolio jobs. Portfolio careers and more often than not one of those jobs that they're working is to do with startups now. So, I think the kind of human resource piece of the ecosystem in Australia probably punches above its weight given the relatively small population we have. Yeah, that I think is our strongest piece.

17:37 Adam Spencer: And on the flip side of that—

17:39 Joshua Flannery: Yeah.

17:40 Adam Spencer: A, either A, like what are the gaps that you observe just generally, and B, what can we learn from the Japanese ecosystem?

17:50 Joshua Flannery: Yeah, so ironically what Australia is good at, Japan isn't very good at yet. Going into startups as a career is still outrageous to some. You know, I think it's to do with risk mitigation-led thinking. That's sort of embedded in the Japanese culture. You know, it's, it's a much smaller segment of people that are comfortable working in startups. But what they do have that knocks us out of the water is massive, massive corporate participation in, in the startup ecosystem in many different ways. Billions and billions going in from corporates into the innovation ecosystem, whether that be via corporate venture capital funds or mergers and acquisitions. So many opportunities to do pilot proof of concept programs with conglomerates that, you know, many of which are bigger than the biggest of our corporates. They've got lots of capital moving around. They are missing, I think, that earlier stage angel investment piece. It's there, but it's much less developed. But yeah, I think just the fact that they've got so much cash and, you know, companies that have startup M&A in their strategies, in their corporate strategies, it makes Japan as a market really attractive even to foreign startups. So, there's a lot more startups coming from around the world into the Japan market. And that, I think, in turn is raising the bar for the local startups in terms of being competitive on a global level because the competition's coming to them. Whereas I feel like that is— Yeah. Still developing in Australia. I don't think Australia's made up its mind whether it really wants foreign startups to come in yet. We're still focused on creating and growing our own best. So I guess there's just different levels of maturity in different parts of those ecosystems, which is interesting.

20:17 Adam Spencer: I wanna ask you the advice question. What one piece of advice would you give a brand new founder that came to you that would help them not fail?

20:31 Joshua Flannery: If you're just talking about a fundamental skill to practice and to sort of nurture and try and get as good as you can at, it's just really proactive listening. And I think it sounds like a no-brainer and it sounds like something you should be doing anyway for all relationships in your life. But it's just amazing how many people are not very good at really trying to listen and read the person on the other side of the table in business context, especially in startups. And because we focus a lot on perfecting our pitch and our elevator pitch and, you know, our VC pitch and, you know, articulating our business model canvas and all that stuff, sometimes what happens is people just, they start to confuse listening with waiting for the other person to stop talking so they can speak. And it's just, I mean, it's really, it sounds like something you would tell a child, but it really is a skill, like to, I think, listen properly and digest and don't rush to jump on what you wanna say. So I think if it was a first-time founder, I think if you're good at that, you're already ahead of a lot of your competition.

22:09 Adam Spencer: Just to wrap up the interview today, the last question isn't really a question, it's an opportunity, I guess. This ecosystem series that we're trying to put together here, I want everyone from all corners of the ecosystem to hear it, policymakers, academics, founders, investors. And just keeping that in mind, that those are the people that we want to hear this story, what would you want to tell them? Like, what's top of mind? What's the conversation you think that we need to be having maybe that we aren't?

22:39 Joshua Flannery: Yeah, so I think the big thing for me is global perspective in everything we do. So, I mean, for years and years, there's been a lot of rhetoric and even programs and grants from governments, universities, private sector around startups thinking globally. And thinking about global opportunities while they're acting locally. But I don't think that there are enough role models, or at least those role models and case studies of how people have done that and what it actually means have been shared with the ecosystem. And so what we end up doing is creating brilliant little solutions to very local problems.

23:34 Adam Spencer: Mm-hmm.

23:34 Joshua Flannery: Whereas we are a relatively small country in terms of population, and because we're also a relatively rich country, we can be distracted by early traction of revenue without really digging into, you know, how global is this problem that I'm solving. And if I want to make the next Atlassian or the next you know, Canva, do people outside of my little ecosystem and my country have the same issue? So I just hope that there are ways that we can help the next generations of founders to get out of Australia during the process of testing their ideas and validating their MVPs.

24:25 Adam Spencer: Yeah.

24:26 Joshua Flannery: Because I think, you know, it's time now that we start as the norm creating like true global startups looking at global customers, you know, in a systematic way.

24:44 Adam Spencer: I hope you enjoyed that interview. More interviews are on the way. Follow the podcast wherever you're listening right now. Stay tuned for more interviews with many, many more amazing people from the Australian startup ecosystem. Thanks for listening and see you next time. Bye.