It is crunch time for Ollo Wearables’ CEO Hugh Geiger. He has packed his bags and left Australia. The company has moved to San Francisco.
Actually it was crunch time a while back. But the formal decisions around relocating Australian staff to the US – and all the personal decisions that accompany a business migration – have only been made recently.
Geiger has had an incredible ride in the past two years, with amazing highs and difficult, difficult lows. Ollo Wearables (formerly Ollo Mobile) has arrived at a place it probably wanted to get to sooner, but regardless seems a little surprised to be there at all.
That is, the company is in San Francisco, it has backing from the venture funds of at least two multinationals, and is in the middle of another funding round. It is about to announce manufacturing and distributions partnerships.
This is a long way from sitting in Brisbane with a good idea and not much more than an healthy appetite for risk.
So how did Ollo get there? It is worth looking at because every time an Aussie company pulls up stumps and relocates to Silicon Valley or New York or London or some other fabulous and exotic destination, there is an assumption that the move is a proof-point of policy failure. That Australia is hopeless.
I don’t believe this, although it certainly makes the point that this is a difficult and perplexing policy area. Geiger was in Australia recently, so I conducted an exit interview to ask the basics: Why are you leaving and what would Australia need to look like to stay?
Because the Ollo story is fascinating. It has been a star in local startup circles. It kept winning pitch contests. It attracted great media. And attracted the attention of many, many angels (and local VCs).
But the company didn’t relocate to the US because it was a superstar in Australia and wanted to swim in a bigger ocean. It left because it couldn’t find people who understood what it was trying to do, and who had the skills to help do it.
This partly because of the business Ollo is in – it began life to build a one-button wearable mobile device as a safety for the elderly. It was hardware, it was firmware, it was consumer-facing. Basically it was a lot of weird stuff that Australians are allergic to.
So the Ollo case is a little bit exceptional. You can win all the pitch-fests on offer, but you’re still going to struggle in this country if you want to build something in tech.
Geiger goes to a lot of trouble in this interview to make sure he doesn’t come across as bitter (because he isn’t.) It is hard to articulate a reality in this country without coming off as a hater.
For the record: Geiger is no hater. He is engaged and interested and supportive and even optimistic about Australian startups. But it is qualified by reality.
Here are some out-takes from his “exit interview”. For people already involved in the sector – you will recognise the themes.
The pool is shallow. It is a consequence of a small market. The talent pool is shallow. This does not mean people working in the sector do not have talent. It means there are fewer of them. And because there are fewer of them, there are fewer – or they are missing – in important niches.
This is as true of the technical side of the business as it is of the investor side. In fact the talent problem on the investor side and the business advisory side is the bigger problem in Australia.
There are probably 20 to 25 people in Australia who can really drive an outcome for a startup in Australia. That’s a tiny number. If you can’t convince one of them to get on board, or worse, if they say negative things about your company at a pitch event, your startup is going to struggle.
It is a simple reality that the Australian startup sector has gatekeepers. Too few gatekeepers.
The money is not there. The pool of available venture capital dollars is tiny. Ironically this is not a problem that can be solved merely by making more dollars available. Because without very specific, professional and niche investment skills, those dollars are not going to end up in the right place or be adequately leveraged.
There is general agreement about a lack of professionalism among investors in Australia. There is more money than in the past at the very early stage – but the investors aren’t necessarily bringing the business skills or the business networks into the deal.
Network connectivity is sub-optimum. Networks are critical to startups. The Australian networks – the fabled ecosystem – is small and missing many parts as a result. Which makes it clunky.
If an ecosystem is about de-risking – and it is, up to a point – Australia’s clunkiness is obviously an issue. If you have a shallow and narrow talent pool, it adds to the risk. Fewer sources of capital adds to risk.
Ollo Wearables just completed the TechStars program in Kansas City (which was done in conjunction with the Sprint Accelerator. (Sprint is, of course, the third largest telco in the United States. Who knew Sprint is was headquartered in Kansas City? Not me.)
The TechStars Sprint Accelerator was niche-focused on Mobile Health. Of the ten startups in the program, only one was from outside of the US: Ollo. (And virtually all the rest were Ivy league alumni – MIT, Harvard, Stanford etc.) Through the TechStars process, Sprint became an equity investor.
Geiger talks about the top-end accelerators as de-risking engines. The real value in the US of these programs is that the VCs trust the screening process. And so the company is moving over to San Francisco and the funding round is underway.
And through Sprint the company has also built a relationship with Japan’s softbank. In fact through the TechStars program, the company has built solid connections into the right VC interests.
Qualcomm Ventures was already an investor (after Ollo won the OzApp Awards in Western Australia.) Rackspace is still a sponsor of the company, and Robert Scoble is a big fan (after Ollo won the Rackspace Small Teams, Big Impact competition in Australia.)
Since Ollo won the CeBIT Startup pitchfest in Sydney in May last year, it has attracted a lot of interest from potential investors. It has won numerous other awards.
But it could not build the business here. Either it could not get the right money from the right people, or the right people simply were not in Australia.
There is so much about the tech sector in Australia that is right. There is tremendous creativity, and there is tremendous enthusiasm. And as more of our successful overseas tech entrepreneurs and investors return to this country, there is a growing base of core skills.
One day Hugh Geiger will be one of those returning successes. We hope he won’t have lost his appetite for risk when does. I have no doubt that he will be back, because there is a lament about not being about build Ollo here.
But you’ve got to be realistic about these things.
“In terms of a place to live, the US just doesn’t compare [to Australia]. But in terms of building our business, we regret that we didn’t leave sooner.”