In part one of Business News Australia's exclusive interview with Queensland's Chief Entrepreneur, Mark Sowerby (pictured) told us about the 'tsunami' of talent coming through and what to do, and what not to do, when trying to get venture capital.
Now the founder and former MD of Blue Sky Alternative Investments (ASX: BLA) gives us the lowdown on how he knows whether someone is going to be a success or a failure, and why it is not okay to 'learn from your mistakes'.
What traits do you look for in someone when you're looking at start-ups? What do you want to see?
I really like to test their conviction. A lot of people, I feel you can tell that they're having a punt or that they're doing something because they have to or it's just not because it's in their DNA, so we're always trying to test whether it is in their DNA.
Was it that they really wanted to do this and have the conviction? So, what were the big decisions they made along the point to when they decided they needed capital?
"Typically, it's the ones that drag themselves up by the bootstraps
and fight over many years, where partners stay together,
where they got to know each other well before they did it."
We look for this rather than the ones with the approach of 'let's have a punt raise some money and see what happens and if we lose the money so be it'.
I mean, I think that's a horrible attitude and I hate it.
Do you ever tell people: 'look this just isn't going to work.' Have you ever been in that situation?
Yeah, that's what people told us about Blue Sky, and they're still saying it. I mean it's incredible to me, so yes I think you're going to get that all the time but I rarely say that to people.
The two words I hated most were 'sounds good'. You know I hated that and I hear it all the time: sounds good. I'm like 'no, no, it IS good', so you're always sort of fighting that so I try not to tell people that something is a bad idea.
I'm more interested in the structure, you know. On our regional tour, a reporter asked me my top five things for a start-up and the first four were all about personal growth, development, testing yourself, value, substance, character, strength, conviction, and none of it was about the idea.
I was just going to ask you if you had two minutes with a start-up would they be the things you'd press upon them, those things you just said? That's what I talk to them about.
"Human beings are what they are, so I always found
even with the Blue Sky journey I would say we've got a
really interesting and highly talented third wave into our business."
We've become big enough to attract better people and I would say to them 'you know, don't do this because' and they would typically still do it anyway and people are like kids. They just want to experience stuff themselves.
So, finding ways to give people experience and experience those things if you tell them, they're just going to go 'are you sure' and say 'yeah, I'm with you on that, (not really').
So, you think learning by mistakes is important?
You want to avoid that if you can. I let them learn from a small mistake and go 'okay, now I know what that looks like'.
I don't want to do that because the price is often high and usually building the business you have soft spots.
It's actually a bit like yourself where you should, rather than focusing on your strengths, actually what you should do is eliminate your weaknesses.
And if you do that you get a stronger foundation to keep growing and you do that by nipping problems in the bud early and it's the same as personal development as it is building a business.
They're always the same. I always think five and six scenarios beyond and go 'OMG, that could lead to this, this, this and this' and suddenly I see those people and I go 'oh, I better kill this dead' so I think just trying to teach people those things is challenging.
You said you'll only do this for one year, this job, would you extend do you think?
I'm here to tell the story about Queensland which I'm really proud to do. But no, a year is enough and I did want to retire to spend time with my boys and I'm not spending enough time with them, so that holds true and it's just the timing. It is what it is.
Final question for you, do you have any involvement still with Blue Sky and would you ever consider going back into big business, or so-called big business?
"With Blue Sky, there's no chance of me going back in there,
and I think as the founder you eventually
become the most dangerous person in the room."
Plus, I'd be part time and making part time decisions and I'll think I know everything and there will be things that I wouldn't want to do.
So, no I won't go back in there. But really, it's a business that's structurally and incredibly strong and it's growing at 50 per cent per annum.
Everybody thinks they want to do it and they're going to kill it. That's Queensland talent genuinely taking on the world and winning and I'm really proud of them.
I think they're a wonderful group and they deserve the right to run it and the last thing they want is an insane person like me around being annoying.
I just need to trust them and let them run and we kept a lot of our shares and we kept them for a reason. One is because we want to support them and secondly because it's smart.
Top Picture Credit: Glenn Hunt
Business News Australia