Lauren Capelin and the importance of nurturing diversity

0:00 Adam Spencer: Let me tell you about our partner, Teamified. If you need to build a top-notch team quickly, Teamified is your go-to solution. They not only provide fractional CTOs, they can also do contractors and even remote team members tailored exactly to your needs. And whether you're looking for expertise in the Philippines, India, or Sri Lanka, Teamified has you covered. What's amazing is that Teamified uses a blend of AI and human expertise to cut hiring times by 50%, cent. Their platform handles everything from automated onboarding to day-to-day management and even performance tracking. You can also handle rewards and recognition, buy equipment, and order training all through their platform. Simplify your hiring process and get the best talent fast with Teamified. Check them out now and transform your team. Go to dayone.fm/teamified. That's dayone.fm/teamified. Thank you, T-E-A-M-I-F-I-E-D, and get started today. 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. On the episode today, we have—

3:08 Lauren Capelin: My name is Lauren Kaplan. I'm currently Startmate's principal, working on finding the most ambitious founders across Australia and New Zealand.

3:16 Adam Spencer: Can you give us a bit of an elevator pitch on Startmate? Sure.

3:20 Lauren Capelin: Startmate is Australia's longest-running accelerator program, founded back in 2011 with the principle of bringing together founders wanting to raise up their ambition and kind of benefit from a fast track to success by exposing themselves to mentors and best practice ideas and investors, you know, across Australia and New Zealand, but also globally to achieve those aims. So we've invested in over 150 startups across that time, and the total value of all of the startups that we've invested in is, you know, $1 billion at this point.

3:55 Adam Spencer: I interviewed Michael a couple of years ago for a little piece about Startmate. I wanted to tell the story of Startmate and something that I see coming up, and Michael said this as well, I think, but I see this everywhere. The core kind of value of Startmate is founders helping founders.

4:17 Lauren Capelin: Yes.

4:17 Adam Spencer: And that seems to just be, yeah, the core message.

4:21 Lauren Capelin: I think that's right. I think that the core of Startmate, the thing that people don't realize they're going to benefit from is this accountability process to each other, and that is the founders helping founders piece, but it's more just having people around you who care that you are hitting those goals and those objectives you're setting for yourself. And all of the external kind of support and mentorship and even, you know, the investment to an extent certainly helps along that journey, but it's the week-to-week progress that really sets that's a part, you know, an accelerator like Startmate.

4:54 Adam Spencer: Yeah, I really love that value of founders helping founders and that community element. I'm interviewing Nicky Shevak later today and I listened to an interview that he did this last year or the year before and he was talking about how something that they realized, I don't know if he was talking about Startmate or Blackbird specifically, but that community scales a lot better than a person can. So focusing on that, the community element and bringing people together that will help each other scales a lot better. And I think that works really well at Startmate. And this is a great little segue, I guess, into your history because I believe that community is something that you value quite highly as well.

5:39 Lauren Capelin: It is, that's true.

5:41 Adam Spencer: Can you tell us a little bit about where you came from just before before you joined Startmate?

5:45 Lauren Capelin: Well, I guess I would start the story back in 2010, and you know, for the most part, that was the relative dark ages as far as our current startup ecosystem goes.

5:56 Adam Spencer: Yeah.

5:56 Lauren Capelin: And I was on the fringes of it all back then, but I started working with an author called Rachel Botsman, who had written a book describing this socioeconomic movement that she was calling collaborative consumption, that we know better today as the sharing economy. About profiling businesses like Airbnb, TaskRabbit, you know, Uber wasn't even sort of operating at that point, and companies like Lyft were operating under different names like Zimride. So it was very much the, the early days of that trend, and in Australia it was even smaller. Again, obviously we were looking to the, to the global success stories, and you know, even back then Airbnb was only a 30-person company, so it was, it was definitely still early. But the The startup ecosystem here was emergent, to say the least. I think there was groups like Silicon Valley meeting, doing the tech meetups where you'd attract maybe tens of people, maybe there was 30 to 50 people. The kinds of conferences and offerings for people to learn about entrepreneurship were few and far between. And even back in 2010, Startmate was probably a glimmer in Nicky's eye, really, as he was trying to confront this opportunity to help Australia's tech talent and, you know, startup entrepreneurial talent to really make something of what they were working on, because the constraints, um, of our local ecosystem back then meant that people had to go overseas for that kind of, um, support and insight. So yeah, I, I guess I was in the ecosystem meeting entrepreneurs, particularly in the collaborative consumption side of things in Australia. So this the local scene in that sense here was much smaller. And probably the standout successes of that time would be companies like Airtasker, which was founded in 2011. But, you know, back then there was a handful of companies, and the added constraint in Australia being that consumer-facing technology was always a much more challenging business model. It was really difficult to get a business like that off the ground in Australia because we didn't have the density. So there was a lot more success occurring in the kind of B2B space. You know, you had businesses like Atlassian obviously operating through that time and growing. Yeah. Going in success. But yeah, the kind of community-facing technology or the startup technology for consumers was a lot more limited back then.

8:19 Adam Spencer: Yeah, can I just ask from your point of view around 2010, 2011, could you see any support infrastructure at that time or any government support? What was there then?

8:32 Lauren Capelin: Yeah, that's a great question. I think there was always an awareness from state governments at the importance of the development of these industries. But I would say that their, their practical support came a little bit later with, you know, things like supporting Stone and Chalk as one of the larger co-working spaces in Australia. Now there's, I guess, a network of them, but in Sydney to support the fintech ecosystem. But that didn't happen until 2015. I would say that it was a lot more of the private private individuals and then maybe some corporates who got particularly involved. So the launch of Fishburners, and that may have had state government support actually, you know, things like that, the creation of those co-working spaces, I would say were the very first real efforts to support this growing ecosystem. Obviously Optus, I believe, had a pretty big role in supporting Fishburners financially back then as well. And without those kind of destinations for startup founders to congregate and find their community, I think we would've, you know, been a lot further behind than we are now.

9:33 Adam Spencer: So, your role when you were working alongside Rachel Botsman, would you say you were operating in the startup ecosystem at that point?

9:43 Lauren Capelin: Well, I think my answer to that is that essentially what we ended up doing was operating in the startup ecosystem more at a global level. I was spending a lot more time in, you know, the San Francisco and New York and London, ecosystems as well as, you know, second-tier ecosystems like Paris and, and, you know, other European cities and even South America, there was a lot more momentum, particularly in the collaborative consumption side of things globally. And I would say it was dwarfed in Australia by other kinds of technology businesses that were emerging. And, and again, back to my point around consumer technology not really having had a moment back then. So there was definitely sharing economy type, and, and, and I think sustainability-focused technology. So companies like Sendle, which was originally 2share, a lot of the sustainability-focused consumption reduction, those kinds of businesses that were really building a, a subset of, of the larger tech ecosystem. But I would say that it wasn't getting the main stage attention until, you know, later on 2015, 2016, when businesses like Airtasker really show that they weren't going anywhere in that consumer technology in Australia actually did have a chance of getting a foothold and building a critical mass of users.

10:59 Adam Spencer: I do want to talk about all those other ecosystems that you, you know, have experienced and relate them back to the Australian ecosystem. But just first, out of curiosity, what was the catalyst to switch or transition from, you know, the sharing economy or collaborative consumption kind of space to the fintech space where you worked at GreenVenture?

11:19 Lauren Capelin: Great question. So I worked with Rachel for 5 years from 2010 to 2015, and it was this recognition from my side that at least in Australia, the, yeah, the collaborative consumption or sharing economy ecosystem wouldn't be, you know, a large enough or significant enough pillar of the broader tech ecosystem here. And was seeing the success that, you know, I guess splitting out from the sharing economy, fintech as a trend or as a theme, which had a lot to do with decentralizing finance or distributing power in some of these previously strongly held institutions and industries. That was definitely a thematic that came out of the collaborative economy. And we saw, you know, peer-to-peer lending being one of those key business models that emerged really strong through that. So when I was looking at, you know, a shift away from the collaborative economy and the reason for that being that I think the direction of the collaborative economy more broadly was definitely getting into highly venture-scale-focused businesses that were going global, as opposed to what some of the initial opportunities were for it to be much more hyperlocal in those opportunities and to achieve a relative scale, but perhaps not the venture-backable scale that other companies might be able to achieve. I really just wanted to explore a vertical that had more of that scale opportunity, but that had, I guess, that retained a level of integrity in doing that, because I think there was some of that lost along the way in the collaborative economy. So I looked to what was being more successful in Australia, and the fintech ecosystem was starting to form, and it was as nascent, I would say, as the startup ecosystem was back in 2010. There was 20 to 30 companies of significance across the country back then. But the bridge for me was the peer-to-peer lender SocietyOne, which we had seen as part of the collaborative economy to date, being one of the more prominent and successful fintech startups in Australia by that point. And, uh, Re:Inventure, one of the companies that initially invested in SocietyOne as a fintech-specific venture capital fund caught my eye because they were really driving the growth of that subset of the startup ecosystem and really building out the fintech community to be the significant thing that it is today, I would say. So I, um, yeah, I approached them with the idea of building a portfolio community for their investments, thinking that, you know, fintech as a common thread and the fact that they actually had investment from Westpac Bank meant that there was a link between all the startups. that might not necessarily be the way other venture funds were investing. There was a lot more connection and commonality in this space. So that was the choice to jump into the fintech ecosystem in 2015.

14:16 Adam Spencer: Right, awesome. Going back to, yeah, you mentioned, you know, London, Silicon Valley, the other ecosystems that you were involved in. Looking at those ecosystems compared to the Australian ecosystem today, what are some of the biggest, differences that you, you've seen? And, and also, what do you think makes the Australian startup ecosystem or innovation ecosystem unique in comparison to those others?

14:42 Lauren Capelin: Yeah, I think at the time it really was the density of those environments from a, I guess, entrepreneurial activity perspective. Like, there was so many more people working in, in that space, proximity to capital to grow these businesses, a lot higher risk appetite for that early-stage investing. I think back in 2010, 2011, there was really nothing to speak of in the Australian ecosystem of that kind. We'd been so burnt by the, you know, the dot-com boom and bust that there was little appetite to, to take these kinds of internet businesses or technology businesses seriously. I think So yeah, the proximity of innovation and the kind of communities forming around these new ideas. There was lots more coworking spaces. I think even the role of accelerator programs was, was pretty important in different places. That may not have always looked like a kind of 3-month course, maybe more just like a co-located work environment and access to mentors and things like that. Certainly, you know, globally, obviously Y Combinator has had an impact across the board, but I think there were local ecosystems replicating that same kind of function. And yeah, I think that, that, that density also contributed to a more willing population who were ready to test these kinds of startups. And that might have been consumer-facing, you know, more willing to download the new app and give it a try and provide feedback, not just write it off, but even the business community. I think that's where the lag has been for Australia. Australia because we have had a strength in the kind of B2B or enterprise technology layer. The willingness of our business community to be innovative and to adopt new technologies and to take those kinds of risks has certainly grown over the last 5 or so years, but took a long time to, to really help the businesses get off the ground.

16:37 Adam Spencer: Yeah. Do you see any unique, you know, competitive advantages that our ecosystem has that we should be leaning on harder?

16:46 Lauren Capelin: That's a, it's a really good question. I think there are some challenges that we have, you know. There was a level of complacency, I would say, in our economy for the longest time, you know, even, even with the collaborative economy kind of coming off the back of the global financial crisis and the, the challenges that created for people looking to supplement their income and, you know, maybe, you know, make money off, off assets that they had, all that sort of stuff. Those were the drivers of the collaborative economy globally. And in Australia, we really didn't even feel the impacts to the same level. So I think that has been a disadvantage for our ecosystem. I think the advantages today are really related to our relative way of life and, you you know, the kind of economic environment people live in here. I guess it's being shaped a little bit by COVID right now in the sense that it may not be the best place to live because people are, you know, generally in all kinds of lockdown up and down the East Coast. But that has become a really attractive thing for lots of tech companies to stay based here as opposed to, you know, trying to compete for talent and space and, you know, paying huge amounts of rent, both home and office space rent globally. But again, in a COVID era, a lot of this, you know, a lot of these advantages aren't necessarily relevant anymore. I think we have, you know, excellent education and that is leading to some really promising new startups emerging. Mm-hmm. You know, we have great science and research and development capability here. It's just that we have lacked the support financially and otherwise for a lot of those things to get to scale, but I think that's changing quite quickly as well.

18:45 Adam Spencer: Jumping back a little bit in time, 2015 up until today at Startmate, where you are now, what are some of the big movements you, you observed in those last 5 or 6 years in the ecosystem?

19:00 Lauren Capelin: Yeah, I mean, the fintech ecosystem growth is really quite phenomenal. As I mentioned, when I joined Rianventure, they were the only primarily fintech-focused venture fund, and in fact they cropped up in the absence of an appetite for investing in fintech across the venture capital ecosystem. There was a willingness to take on the the challenges that come with investing in fintech. And in fact, the structure of many of our venture funds, the regulatory framework they exist under, the ESVC LP framework, the early-stage venture capital limited partnership framework, has a whole bunch of carve-outs that make it difficult to invest in fintech. So there was a lot about the environment back in 2015 that made it hard for fintech to thrive. And the other aspect of that being that most fintech initially was a domestic opportunity as opposed to a global opportunity, whereas most of our venture funds were focused on the global opportunity, knowing that to, to succeed, uh, from Australia, you would need to, to see the, the whole world as, as a potential market. But as I said, there was about 30 companies involved, and the regulatory environment was still very challenging. And it was through the formation of things like Fintech Australia, which I was involved with as Simon Cant from Reinventure was the founding chair, and I later sat on the board myself for a couple of years, really focusing on building out the enabling environment from a policy perspective, but also just generally gaining the well-deserved awareness of what fintech founders and fintech businesses across the ecosystem were achieving. And that included everything from building significant competitive companies to our incumbent financial services businesses like Afterpay, but also significant partnerships and integrations with the incumbents, which also was a testament to their success where there was so much reluctance from incumbent businesses to actually partner and leverage technology. I think fintech is one of those industry verticals where there has been a lot of success in that sense, and I think has been a— yeah, a huge contributor to its success over the last 5 years or so as well.

21:08 Adam Spencer: I can feel, you know, your excitement and passion for this space, and I'm just curious, like, what draws you to this, you know, helping startups, talking to founders, investing?

21:20 Lauren Capelin: Yeah.

21:21 Adam Spencer: What gets you out of bed? Why do you do it?

21:23 Lauren Capelin: That's a great question. I have always been motivated by the idea that things can be different to the way they are now, and you know, not just difference for difference's sake, but improvement. And I think the startup ecosystem globally, but then in Australia, has created so much net positive benefit, and there is still so much to do. I am just so in awe of individuals who have an insight that can lead to the creation of a billion-dollar company or the creation of a huge opportunity for an underserved population of people, the way that they can change our way of life, you know, generally for the better. Of course, there's, there's a flip side to all these arguments, but, you know, the reason I made the jump from fintech and from Reinventure to Startmate was to be back at the real coalface of all of that. I think back in 2010, there was a sense that that was quite an exhausting place to be because we had to sift through a whole lot of very vanilla ideas and very, um, you know, not hugely impactful but copycat-type businesses. Oh, this is happening in the US, I'm gonna do one of those here. And it's taken us a few cycles to get to— a few cycles and a few incredible success stories to spawn that next generation of founders who have a little bit of experience behind them or more unique insights that come from, you know, exposure and, and involvement in a particular space. And we are doing things that are more interesting all the time. We're innovating in areas that have previously been off-limits for various reasons and actually, you know, creating real value and making real change in those places. And I just love to be there to see these people unhatch and to support them however I can, even if it's just through, you know, through Startmate. I see my role as being to believe in them and what they're trying to do and try to put them in the line of the right kind of support to help them get to that next level. It's a really lonely place to be at that early stage, and you need as many believers around you as possible. And yeah, that's the place that I think I can add the most value, all things considered. So that's what gets me out of bed.

23:36 Adam Spencer: Follow— following on from that, what do you think we're doing really well today?

23:43 Lauren Capelin: What I'm most excited about right now, and the kind of next layer of what gets me out of bed is the, the sheer volume of people involved in this space right now, the mission-driven way that founders come back in and support the next generation. I mean, that's the principle that Startmate's built on and what Nicky referred to as the, you know, the way that the community can scale so much faster than anything else. It's not about creating something, getting rich and retiring, or, you know, living on your yacht. Yeah. Anymore. It's, it's like I created real value and I learned so much through the process and wow, there's people coming up behind me who are going to create even more value and how can I be a stepping stone for them or put them in the path of success. I think we are doing that so well and the tidal wave of people lining up to be part of that is immense. You know, Startmate's trying to catch a lot of those things in different ways whether that be through through our fellowship program and having, you know, coach operators, you know, people with operating experience supporting the next generation of operators, or, you know, our first believers learning how to make early-stage investments in those next founders so we can push that belief out a layer further. Or, you know, in our accelerator, obviously, just supporting these founders through our experience and networks and access to investment. So I think we are doing that incredibly well. I think there is a high degree of motivation across the ecosystem for that concept of a rising tide floats all boats. We do have the tall poppy syndrome as a cultural phenomenon in Australia, but I think the startup industry is one of those places where it's the least visible because we know how somebody else's success has its knock-on effect for the rest of us.

25:34 Adam Spencer: You know, you are involved with, in touch with a lot of founders, I'm assuming on a daily basis or even on a weekly basis. You know, if a founder, brand new founder came to you tomorrow, what one single piece of advice would you give them that would slightly increase their chances of success in this very daunting world?

25:58 Lauren Capelin: It's a great question, and I think I would answer with, you know, what I think sits at the heart of the Startmate Accelerator methodology. It's like, what's the thing you can test today that gives you a little bit more clarity or a little bit more confidence or a little bit more support? It's like, how do you not sit on this thing in your mind for the next 6 months waiting for that opportune moment to strike? How do you make some part of it real tomorrow and galvanize yourself and, and, you know, get that support around you to take the next step and the next step? These successful businesses are a compilation of tiny little steps, and that's where momentum comes from. You know, the more of them you can make in quick succession, the easier they become over time as well.

26:46 Adam Spencer: Yeah, that's great. See, I ask everyone this same advice question and I feel like I need to implement every single one of those answers.

26:56 Lauren Capelin: I feel like I need to implement it as well. It's very good advice to give, but you know, it takes a lot of practice. It's not as easy as it sounds to put yourself out there and make mistakes, but you know, that's where the supportive community comes in.

27:09 Adam Spencer: And the last question I have isn't really a question, it's— I just want to I wanna give the last couple of minutes here, last few minutes to you to speak about whatever is top of mind for you. Like, what are you thinking about constantly? And also keeping in mind that, you know, we want founders, we want policymakers, we want investors, we want everyone from all corners of the ecosystem to hear this story. What do you think that they need to hear?

27:32 Lauren Capelin: Yeah, I love that question. And the thing that I think could set Australia's ecosystem apart if we do this right, is that real acknowledgement that the startup ecosystem is for everyone. There is, you know, in Silicon Valley, still very much a kind of person you probably see attached to or associated with the ecosystem. And I think maybe that's changing in pockets, but by and large, there's a, there's a type. Uh, and I think what we're really trying to do in Australia is make everyone feel like they they have a role to play. We actively want different viewpoints, different backgrounds and experiences. Like, I always like to talk about the fact that I'm a creative writing and theater studies major who has found a place in this ecosystem, and I, I take it very seriously that people with those kinds of creative backgrounds have an important role to play. But it also extends to how we think about who's investing. And how we think about who's hiring and building and all of those sorts of things, we need to make sure that it is a representative ecosystem. So however we can disseminate that message and, you know, keep the barriers low to participation in whatever form, even if you're just an evangelist and a fan, that's okay. Even if you're not a builder or a, you know, an investor.

28:56 Adam Spencer: Mm-hmm.

28:57 Lauren Capelin: There's so much that that can be done. And I think the worst thing we could do is keep building up walls and, you know, increasing the participation barrier and making people feel excluded, excluded or outsider. So I think, yeah, everyone from policy to entrepreneur to investor has a role to play in keeping that clear.

29:20 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.

29:36 Lauren Capelin: Bye.