The Entrepreneurs' Big Question: Could Steve Jobs Have Succeeded in Australia?Published: October 25, 2011 in Knowledge@Australian School of Business
The recent death of Apple co-founder Steve Jobs both saddened and inspired the business community, prompting much debate and deep thought about an entrepreneur and innovator who seemed indispensible. But could the figurehead creator of so many user-friendly devices, including the ubiquitous iPod, iPhone and the new must-have, the iPad, have thrived in an Australian context? Martin Bliemel, head of the Centre for Innovation and Entrepreneurship at the Australian School of Business, considers Jobs' entrepreneurial smarts and what helped him to get the business of technological innovation and marketing so right. Australia may be producing many technological talents, but what needs to change Down Under to ensure, like Jobs, their creativity survives and thrives? Bliemel has convened a group of experts for an upcoming event to figure this out, as he tells Julian Lorkin of Knowledge@Australian School of Business.
An edited transcript of the interview follows.
Knowledge@Australian School of Business: First, let's take a look at Steve Jobs. What can we learn from him?
Martin Bliemel: I guess Steve Jobs had the good fortune of meeting Steve Wozniak (co-founder of Apple), but also had the creative insight to say: "This technology that Wozniak is building is good for the audience that he's targeting." A lot of the technologists could possibly assemble it themselves, but Jobs also knew the business side of things. So he said: "If this has value to one audience, perhaps it has value to another audience. Can we package it and commercialise it in a way that appeals to a larger audience, and to the masses eventually?"
Knowledge@Australian School of Business: Jobs obviously had a lot of conviction as well. After all, he dropped out of college after just one term.
Martin Bliemel: That's right. A lot of times once these ideas catch, the entrepreneurs do end up transitioning from whatever their previous occupations were to full-time management of the business itself. It's a bit of a myth that entrepreneurs start right off the ground. Sometimes they have full-time jobs and then do entrepreneurship on top of that as a side project. If that project works, then they'll switch completely. When Jobs started going around pre-selling Wozniak's product, it generated interest, sales and revenue, so that he could build Apple without taking any equity, at least at the start.
Knowledge@Australian School of Business: Jobs always said that he wasn't afraid of failure. He must have had a lot of conviction to drop out of college and carry on selling those computers?
Martin Bliemel: That's true. Often failure is a relative thing. A lot of the more creative entrepreneurs will find a way to take risks but contain them in some way. They'll run experiments as we do in a laboratory environment. And they'll say: "Okay, I'm going to run this experiment for two months. If it doesn't work out, here's a criteria by which I'll cancel it." And then they will shift gears to another project. Some will take bigger risks than others.
Knowledge@Australian School of Business: Although he was a risk-taker, Jobs wasn't entirely suited to the corporate environment. After all, he ended up leaving the company for an extended period before coming back. Is that also common amongst entrepreneurs?
Martin Bliemel: There is a myth that entrepreneurs and managers take different risks but the reality is that they take roughly the same risks. What drives people to become entrepreneurs is not the risk-taking side of things, but the quest to be their own boss and to make decisions based on what they'd like to do. Even that's a bit of a myth because they're still at the mercy of the customer to pay their rent, buy their groceries and support their families.
There's considerably more flexibility for an entrepreneur to go out and pursue his or her own goal but, in reality, they are just catering to a much more diverse group of stakeholders. Instead of fitting within a hierarchical environment or into a structured corporate environment, entrepreneurs' stakeholders are their shareholders, their investors, consultants, employees, family members of the employees, customers, suppliers ... it's much more diversified.
Knowledge@Australian School of Business: When we look at Apple products, the 'i' in the iPhone, for example, people often said it stood for being an interactive phone but Steve Jobs had a different idea, didn't he?
Martin Bliemel: I actually did a quick search on where the 'i' came from. It sounds like it came out of nowhere. Some people attribute the 'i' to Internet but the genius of the 'i' in the branding is that the 'i' means a lot of things to a lot of different people. It could be identity, ideas, innovation ...
Arguably I would say it stands best for iteration and integration. The iPhone brought together a whole lot of different functions. Your phone isn't just a phone: it's your mobile browser; it's a GPS device; it's your address book ... It integrates a lot of different ideas. And to get that right – as there were a lot of computing products out there at the same time in the market – Jobs probably had to go through a lot of iterations. Think of the dimensions of the iPad. It is smaller than a regular A4 sheet, but how did it get to be that size? There were other iterations that were bigger, that were smaller. So there was some interim testing that most of the public was not privy to. Apple iterated and iterated until they got the product right.
Knowledge@Australian School of Business: At the Centre for Innovation and Entrepreneurship, do you see a lot of people to whom you want to say, "Go through more iterations. Get the product right"?
Martin Bliemel: Absolutely. There are cases in point. For instance, Pandora, the online music service, went through about 300 pitches before they finally found somebody who followed their idea, who bought into what they were pitching. Some entrepreneurs will pitch and adapt much sooner than the guys from Pandora did. Some entrepreneurs will adapt right away and other ones will say stubbornly: "No, this is the idea, believe in it or not, join me or not. It's up to you." They're less flexible. But the better ideas that we see out there take a lot of different advice and feedback on board. It's not uncommon at all for entrepreneurs to pitch their ideas a hundred times.
Knowledge@Australian School of Business: Is there a common reason for failure among entrepreneurs developing high-tech ideas? You must see some that you know are not going to work in their original form.
Martin Bliemel: Definitely. That's quite often when they've over-committed themselves to the technology; developed it too far to a point that it's now too costly or too complex for anyone to understand other than them and they might have been better off doing something much simpler.
I think (photo-sharing application) Instagram, for example, created a much more complex system. And they realised, through the platform they were building, that people were just interested in sharing photos. So that's the platform they built.
That's actually also the way (image hosting site) Flickr developed. They started with an online gaming company and realised people inside the online game were using it as a chatting platform to share photos. So they said: "Let's leave everything else aside. Let's strip out the complexity of this entire product/concept/business and just focus on one thing. Just focus, focus, focus. Get that done, get it right and get it out there."
Knowledge@Australian School of Business: But once you've got the right product, how do entrepreneurs then actually get the cash together, and the marketing, and get their product on the shelves?
Martin Bliemel: That's a very, very social process. There aren't well-known directories. "Here are the investors that you should talk to." The Australian Private Equity & Venture Capital Association has a list of known venture capitalists, but it doesn't tell you the idiosyncrasies of each of those venture capitalists, such as who else they have invested in, how much capital they have at hand, what their preferences are. You have to find that out person-to-person.
Knowledge@Australian School of Business: There ought to be a more organised system for doing this. Surely the government should be stepping in?
Martin Bliemel: They can ... but there's another question about whether they should as well. Currently the government's quite good at supporting other eco-systems that support the entrepreneurs. For example, Fishburners, a local co-working, co-location facility for entrepreneurs, just received some government funding. The government funds the people who organise the network for the entrepreneurs. They don't directly pick and choose which entrepreneurs should succeed.
In other cases, such as the Australian Technology Showcase, the government does get directly involved with the entrepreneur and does help pick and choose which of them should be sent overseas to help facilitate relationships with customers or suppliers.
Knowledge@Australian School of Business: What else can the government do?
Martin Bliemel: The government could lean on the superannuation funds to set aside a little more capital for the venture capital industry. For example, in other countries, such as the US and in Europe to some extent, superannuation funds try to differentiate themselves by having a component that goes into high-risk capital. Now that's a way for them to possibly get more returns but also lose some of that money. If my superannuation fund loses 5% or 10% of that money, it barely makes a dent in the funds that I have with the superannuation fund. But if they make huge returns, then I'm more likely to put more money into that superannuation fund versus another one. If the superannuation funds in Australia set aside 1% and put into the venture capital industry, that would increase 30-fold the current venture capital industry.
Interestingly, Accel Partners in the US has put as much venture capital into Australian start-ups as the entire venture capital industry together over the last year. That shows that there's potential here, so much so that foreign venture companies are investing in Australia. But perhaps the local funding industry is not quite where it could be.
Knowledge@Australian School of Business: Is this because maybe in Australia we're not generating enough high-tech inventions or enough innovators?
Martin Bliemel: There's certainly a rise in supply of high-tech innovators. Some of the investors will push back and say, "Well, wait a sec. I have money, I don't see the innovations happening." So there's a need to create a market for innovators and investors to meet each other.
There are more forums starting up, such as Sydney Angels and the Innovation Bay and also TiE Sydney (The Indus Entrepreneurs) Sydney. They're getting much more active this year. They've just had a pitch competition two days ago, too, for which three UNSW students won prizes.
Knowledge@Australian School of Business: Do you think Steve Jobs could have succeeded in an Australian environment?
Martin Bliemel: That's a question that could easily be up for debate. On November 2, we're having a Meet the Entrepreneur event downtown that starts by asking, "What is the role that the government, industry and the entrepreneur should have in fostering more Australian innovation?" We're bringing together some very successful panellists from government, industry (generally) and from the venture capital industry to discuss, "How do we get more companies like Atlassian (the software development company started by Scott Farquhar and Mike Cannon-Brookes while at the University of New South Wales)? How do we get more of these big success stories here in Australia? And, does geography matter?"
Knowledge@Australian School of Business: Martin, thank you very much.