STARTUPS ARE 'NOT FOR THE FAINT HEARTED': STEVE BAXTER EXCLUSIVE INTERVIEW PART 1
Written on the 5 April 2017 by Paris Faint and Mia Armitage
TO PUT it bluntly, Brisbane's River City Labs startup guru and Shark Tank entrepreneur Steve Baxter isn't interested in funding 'crap'. Not in the least.
Of the 130 startups which applied for a spot at River City Labs through its recent accelerator program, only six made the cut after going through a rigorous boot-camp process designed to filter out the time-poor and the less dedicated.
On 31 March, River City Labs hosted its demo day to exhibit these startups to a room of active investors.
While going from 130 to six may seem a harsh cull, Baxter acts with a sharp eye and a tough-love demeanour so that his business can support only the most devoted entrepreneurs bent on solving real problems and, in some way, changing the world.
In this exclusive interview, Baxter lets Business News Australia into his unique philosophy on startup culture and securing funding, in addition to letting readers know what it means to be a real entrepreneur.
How many startups were recently invited to join River City Labs through the accelerator?Well, seven. One, basically, got busy with customer work. They made a decision to pull out, which was their decision and probably the right decision, to be honest. We were left with six. We wanted ten, we had the capacity to do about twelve. We want to do thirty companies over three years. We're looking for an even dozen in the next two years.
You said you're not going to allow any 'crap' to come through?Shit, I think I said.
So, does that mean you had some start-ups apply that just simply didn't meet your standards?Yeah, we had about 130 apply, and obviously by definition 123 were crap.
Were there any key areas where some of those start-ups fell down?
Yes, there would have been. I like accelerators because they're serious programs, with competitive entry processes. As a part of competitive entry, you've got to go through an interview process but you've also got to go to a boot camp. Before you even start you've got to dedicate a weekend to us. That filters a lot of people out who basically don't have the time, the dedication that might sound a bit rude but if they don't have the dedication, it's a serious endeavour. So, over a weekend we actually have about 15 people sit down and we talk to them in various meetings and you know, that filters out a lot of people. I think we took 17 into the boot camp and we offered positions to seven.
So, what was it the others couldn't face up to?For the most part a lot just didn't show up, or didn't show up to the whole thing or thought some of it was voluntary which it's not. So, once again, the boot camp process is there to show how I can buy into this process and to also interact with the mentors and various other people that are there. So, I get brought in at the end of it like a shark, and I get to see the last ten or so - of which, this time around, we found seven we liked.
It sounds like self-discipline is a value. Do you see that as a value a lot of startups are lacking?
I'm ex-army so I always say yes. For me, if you've got to question a startup's discipline, they're probably not entrepreneurs. It's almost a binary position point, to be honest. To me it's such a disqualifying factor, there's no grading. You're either in it, or you're not. My own startups were six years and almost ten years a piece. The average time for a start-up these days is 8.3 years. So, if you can't even bother to show up for a weekend, guess what? Why bother.
What we're trying to do is encourage more people to start. I think that of the population of startups which begin a journey, there's a proportion of them which will finish successfully and that percentage is probably the same. We need to get more people trying. River City Labs is about getting more people trying. And hopefully biting off bigger problems, global problems, hybrid problems, tech start-up problems.
Do you see the value of the start-up industry in Australia now as having an opportunity for growth?Lots of opportunity, that's a polite way to put it. We're down here, we need to be up there.
What are some of the challenges that are hindering that growth?What we need is lots of people heading out on the journey who actually are armed with the right information, mindset, skills and the discipline. Then, potentially, there's a capital aspect which we're lacking. Part of this program is funding equity so we're a solution here for very early stage companies. We are working to bridge the divide between the flow of people starting businesses, to getting businesses funded, to getting them operating as a self-sustaining thing.
Do you think that business schools in Australia are giving those students who are graduating the sort of skills that they need in a modern economy, if they were to go out and launch their own start-up?No. Uniformly, no.
Do you see some change happening there?I do. Two years ago; definitely no. In the last two years; getting better. It's amazing what happens when a prime minister comes out and says 'innovation', everybody's like 'oooh'. What we need is for the university sector to produce lots of highly skilled young people and let them the hell go. Take their hands off them. Let them do as they want. That will give us the 'Twitters' and the 'MRIs'.
Something you will have been asked a million times, I'm sure, and that's advice for people who want to be start-up entrepreneurs. If they were to think seriously about launching a start-up, what are the key things that you think would be useful for them to know?
It takes ten years, so the sooner you start, the better. My biggest piece of advice is always just do it. I'm 46 years old, I can't give advice on what's going to work. Don't do what I did, I didn't finish high school, I didn't go to university, that's the dumbest way to do it. I lucked my way through it. The smart way is to go and get skills.
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Author: Paris Faint and Mia Armitage