by Raelke Grimmer
Co-working spaces and start-ups are taking off around the world as more and more people are drawn to the idea of starting their own business and following their passion in an industry they love. I was fortunate enough to have a chat with Imogen Coles, Program Coordinator at Hub Australia, about the benefits of co-working spaces for freelancers and start-ups, the climate for start-ups in Australia and Hub Australia’s Spark program. The latest participants in the Hub Adelaide Spark program showcased their start-ups at an event last night, and we will publish an article about the showcase and the Spark program in the next few days. For now, have a read of what Imogen has to say about Australia’s start-up scene.
When did Hub Australia launch and what is the aim of Hub Australia?
Hub Australia started out as a single hub. It was originally Hub Melbourne. We then expanded to Sydney, and fairly simultaneously we were approached by the South Australian government to bring it to Adelaide.
Hub is a part of a global network of co-working spaces. Our founder, Brad Krauskopf, first discovered the concept of Hub when he was in Madrid. He worked out of Hub Madrid and totally fell in love with the concept and decided to bring it back to Australia.
Hub is also now part of a larger group of spaces called Third Spaces Group, and the message of this group is to grow the collaborative capacity of companies, cities and economies across Australia.
Do you believe that co-working spaces are the future of office spaces?
I think they’re the future of the way we work and a thriving economy. What really inspired me about co-working as an industry was that it adds a solution to creating a stable and thriving economy. I spent some time living in London during the recession and I was completely shocked by the number of really amazingly qualified people who just couldn’t find employment. Co-working spaces provide a micro-economy amongst them. Freelancers contract their services to SMEs (Small to Medium Enterprises) and SMEs find new and innovative ideas that help their companies stabilise on a financial level, in terms of creating a unique value proposition.
Do you think the future of Australian industry is in innovation and start-ups?
The short answer is yes. I think the only way to create a thriving economy is to get new companies off the ground, [companies] that have really solid value propositions and really strong business models that are able to be financially sustainable on their own two feet.
Do you believe there is the funding and support systems in place to nurture this growing industry?
In terms of funding opportunities, it is a difficult one, because it depends what your business model is, it depends what your business structure is, in terms of the types of funding you would be looking for. I would say there are certainly a number of resources that start-ups can tap into, in South Australia especially, the government has gone to painstaking lengths to really invest in supporting the growth of entrepreneurs and start-ups in South Australia. I have never seen a government that is as involved as the South Australian government in that goal and objective.
I know for a lot of people there is kind of a mass exodus in South Australia and often people look to the government as the only solution. I think that the government has been providing more than ample support and I really think it is down to the individual what they make of that.
I think in terms of funding support in South Australia for individuals it is still quite difficult for start-ups to get off the ground.
It is difficult for start-ups everywhere to get off the ground. If your company is not financially viable on its own two feet, then it is never going to be sustainable. There was a joke in that start-up show a few weeks ago that the Victorian government would only give start-ups any private capital once they’d proved that no private funders wanted to fund them. I think that if you have a start-up that is a really solid idea, and there are a number of these in South Australia, I don’t think it is the government’s responsibility to ensure that you have the capital to get off the ground. It never has been previously. If you have a really solid idea, then you will find someone who will want to be a part of that financially.
What do you think about the fact that funding to Commercialisation Australia has been cut and support axed for next year?
There are [still] a number of free programs available, such as Spark and Venture Dorm and I know that Majoran has just received funding to develop out their learning elements. I think in terms of the learning part, you’re pretty well covered and there are certainly a lot of opportunities in Australia to tap into private funding further down the track. I think it is a one step at a time kind of thing, a lot of young entrepreneurs don’t realise this. Blue Chilli, who are a three-prong enterprise, have an accelerator program, they also have their own venture capital (VC) fund, but they tend to look for people who have actually been through whole careers, who have specialised in a specific area. They have their own personal savings behind them to support themselves through the process of getting off the ground, but they also have a VC portion when you get to that point of looking for venture capital where they will match whatever a private investor is going to put into your venture. And there are a number of programs out there like that. They take equity, they only succeed if a start-up succeeds. The infrastructure is there. I don’t feel like start-ups are lacking in infrastructure and opportunities. I think absolutely you have to come to the party with a certain amount of finances behind you. And that may mean working two jobs and squirrelling away cash, and yes, it is hard slog, but at the end of the day you are in a very different position to somebody who just works for another company. You own a company.
What does this mean for young entrepreneurs who don’t have a career behind them, who can’t find work elsewhere and want to start something of their own in order to get some work and experience behind them? They may not have the savings behind them because they have not had the opportunity to work. Are there any programs you know of which support these young people?
Spark is certainly one of those. The program provides a number of connections and experiences and PR etc. It’s stepping stones. Blue Chilli, they specialise in tech start-ups and they’re looking for people who are going to be the next Facebook. They’re very large scale. If you talk to any entrepreneur, they won’t have just had one venture. They will have had several.
There are two tracks to becoming an entrepreneur. One is the “wantrepreneur” track, someone who has gone through a corporate career, who really knows their niche, and they see a gap in the market and they go okay cool, I’ve seen a gap in the market, I’m going to create a solution for this gap in the market. And that is mostly what Blue Chilli looks for.
Then there is your serial entrepreneur. Someone like one of our mentors, Michael Macolino, he has had numerous companies. I think he started off detailing people’s cars, and very quickly realised he could earn more money doing that and running that business than he could working for someone else. He started working for himself when he was in university, he now still works for himself, he has had several very successful companies. He himself has never sought funding to my knowledge. He worked his way up from a simple concept, that would pay the bills, through to a more developed and unique business.
Do you think there is a mindset among people entering the start-up industry that it is their right to have access to funding rather than putting their own financial resources into their project?
I don’t think they are going to do very well if they do have that mindset. You need to figure out a way to be sustainable on your own. You need to be choosing to take on funding not because you’re desperate, but because it is the right choice for the business and it is going to take the business to the next level. A desperation mindset is what will kill a company. The only time I would ever consider taking on funding in my own venture would be if I was willing to part with equity in return for that and if it was really going to make a difference to the business.
Apart from the Spark program, what other program does Hub Australia run?
Spark is our focus at the moment. We are looking at launching a national entrepreneurship program next year, the details of which are still in development. Previously we have run a couple of learning programs ourselves, Business Club and Inside the Mind of the Entrepreneur. Business Club is essentially a TedTalk style presentation, followed by a Q&A with a network portion. Then we’ve got Inside the Mind of the Entrepreneur, which is high profile, really successful entrepreneurs who are generously looking to share their expertise. People get the opportunity to be in a room with really successful entrepreneurs and hear a bit about how they did it. They are great examples of how you can grow to a large scale starting off small. We had Shane Yeend who ran Imagination Entertainment. Huge, multibillion dollar company, and he started off running a wedding video company in Adelaide. It is these stepping stones of an entrepreneur. Yes, you might have an amazing concept for a business, but if it is not financially viable for the market you are working in, then it might not be the right time. It might be a great concept, but you might be ahead of the curve, or it might just take a bit longer to put the structure and foundation in place so that you will be able to seek private investment.
What does Hub Australia offer as a co-working space that perhaps other co-working spaces don’t?
I think for Hub it is that curated serendipity. We have staff that really focus on the professional community we have within our co-working space. It’s the fact that you’re not just going to sit down in a space and only receive the connections that are around you. Our main value proposition is as a community and as connectors. We have staff within the space that will introduce you to people, our business catalyst’s whole role is to know the community, know what their skillset is, know where your business is at and be able to connect people accordingly to ensure your business is growing. We have seen a number of teams and companies grow in that way. Pozible Crowdfunding started in our space as a two man band, and they’re now a team of over fifteen and they have their own premises, they got too large for us. And they’re all over the place, they’ve launched in China and they’re in San Francisco. We have a really big focus on growing teams, and we reward that growth by giving a small membership discount the more members of your team you bring on board, and help encourage and support that growth.
To find out more about Hub Australia and their co-working spaces and programs, visit http://www.hubaustralia.com