SHARK ANDREW BANKS ON WHY AUSTRALIAN STARTUPS NEED TO GET A BIT OF AMERICAN ATTITUDE
Written on the 19 June 2017 by Ben Hall
HE'S a former thespian who borrowed $5,000 on two credit cards to get his first business off the ground in Sydney's Woolloomooloo, and went on to establish two of the world's biggest recruitment companies employing thousands of people.
Now based in the exclusive suburb of Beverly Hills in Los Angeles, Andrew Banks is well placed to evaluate the startup landscape in Australia and the US and understands what it takes to build a business empire from scratch.
The entrepreneur and investor is now one of the five "sharks" on Ten's business/entertainment show Shark Tank, and their job is to either fund or "maul" startups and inventors who are looking to take their ideas to the next level.
Banks himself says he doesn't forget he was a struggling startup in his early years. That $5,000 credit card debt funded a restaurant business while he was an actor and after 18 months of 19 hour days he sold out and headed to Europe with his wife Andrea.
He worked in corporate human resources and returned to Australia and co-founded Morgan and Banks with Geoff Morgan in 1985. It went public in 1995 with revenue of $800 million and merged with TMP/Monster.com.
In 2004, Banks launched Talent2 International which specialised in HR outsourcing and executive search. The company now employs more than 1,600 people in 20 countries and Banks sold his equity in 2014.
Business News Australia spoke with Andrew Banks in Los Angeles and asked him about Shark Tank and the difference between Australian and American entrepreneurs.
Why do you do the show?I have always mentored younger entrepreneurs and have long been an investor in start-ups. So, Shark Tank is just an extension of that but more "mainstream" which I like. By that I mean any Australian family not just a privileged few who have direct exposure to business or investing.
"Australia has the innovation but we still lack the "confidence" that exists in American Society where every kid feels it is their God given right to start a business."
In a small way Shark Tank contributes to broadening the ideas that lead to more start-ups and kids growing up realising that they have options other than "getting a job"
Did you splash the cash on anyone in this series?Yes, there were more deals than ever and at least three could be considered globally relevant and world firsts!
At times, yourself and the other so-called sharks can appear ruthless - are you this tough on potential startups in real life if they come to you and they haven't thought things through?Amusing - I would consider being concerned if one gets one's investment back as prudent not ruthless.
"I never attack the individual, but make no apology for asking the tough questions to make sure the entrepreneurs in question have done their homework and have considered all the issues that separate success from failure."
Then, if satisfied, I proceed but one has to be tough during the investigation process.
What do you look for in an entrepreneur or a start-up? Is it innovation or do you look for someone who's going to be a disruptor?Innovation mostly, as not all great new businesses are disruptive. Many just provide a similar service but "more, faster, better for less" so it's the whole package - the idea, its market potential, the entrepreneur themselves, both competence and character.
So, someone spots you on the street, or grabs you at an event, and they ask you what they need to do to make their business idea a success: how do you summarise that?I ask them to road test their idea in a small market to turn the theory into a reality and so they can make small mistakes and perfect the business model, before they risk everything!
You started and grew two recruitment firms from the ground up into major companies employing a lot of people - what have been the biggest challenges? Raising funds, satisfying clients, retaining your own staff?Raising funds was never an issue as a service business that starts small, generates cash if successful and becomes self-funding - satisfying customers is always a priority and a never-ending journey of creativity.
"But the toughest challenge was very definitely attracting and retaining great talent, which is ironic given that was the very same reason our business existed in the first place!"
By the time you have a business with 2,000 staff the business has a culture which is bigger than any one individual including the Founder, and at that point the retention issue gets easier as each member in the group reinforces the next, and so on.
Series 3 of Shark Tank airs on Ten this Tuesday at 8.30pm.
Author: Ben Hall