The era of the standard co-working space is over. Any organisation that thinks it can just provide desks, wi-fi and fresh juice in mason jars or beer on tap is not adding value to the founders they house or the sector they serve.
Innovation hubs must offer their services digitally and work collaboratively to provide integrated and tangible value.
Representation to government, advocacy for members, access to customers, business guidance, growth planning, domain expertise, capital raising support are among the core services that we currently provide to Stone & Chalk members.
Physical workspace is a comparatively shrinking part of our service offering, and this will become commonplace across the industry before long.
The kind of support that startups need right now – and into the future – isn’t just about having somewhere to work. While it is true that the lock down has shut offices and kept most people working from home, this is far from the most severe impact of the COVID-19 crisis on our industry.
The most dire threats come in the form of tighter purse strings by investors, the sharp decline in customer spending, and a confusing and contradictory regulatory framework that frustrates decision-making and makes accessing assistance difficult.
Navigating these kinds of waters is a collective effort. That’s why Stone & Chalk, as part of the Australian Innovation Collective, have made representations to the Federal Government on behalf of our members to institute changes to protect the emerging and enterprise technology sectors from the impact of COVID-19.
Many of the measures designed for businesses in other sectors are not available to founders in the pre-revenue or scale-up phase of their growth. Say a company had zero revenue in financial year 2018, then launched and secured customers in financial year 2019.
Even if their present revenue takes a 50 per cent reduction due to COVID-19, these revenue thresholds would prevent them from immediately accessing JobKeeper as it is currently drafted. Debt financing is simply not an option if you can’t service the debt, and you cannot easily borrow against intellectual property.
While the changes to JobKeeper announced so far allow the Tax Commissioner greater use of discretion when assessing applications will help some established companies, it’s not clear that it will do anything for companies in this and similar positions, who need to make business-critical decisions right now.
These small businesses which have such high-growth potential need appropriately targeted measures from the Federal Government to ensure that they can quickly create badly-needed jobs in the economic recovery phase following the COVID crisis.
Technology startups are phenomenal job creators – far more so than companies of any size in traditional industries whose employment capabilities are increasingly being eaten away by robotics and automation. Every job created by a tech company creates another five across the economy – a multiplier effect three times greater than manufacturing or resources.
Our sector needs to come together to make a compelling and persuasive case for the value of this capability to our policymakers or pay the price of failing to do so. Our sector prizes individual brilliance and exceptional enterprises, and we cannot let go of this. This is what enables visionary advances in technology and drives outsized growth.
We are used to building networks to maximise our impact when it comes to single endeavours and small groups. We must enlarge this thinking and apply it more broadly.
Just as each founder builds a network of designers, developers and investors, our innovation hubs must build networks of champions each committed to “outside-in” innovation.
The time is now for corporates and governments to become “startup ready” and implement fast-track processes in order to successfully collaborate with and procure from startups and scaleups.
Hubs must also carefully curate active investors into their networks along with providing a talent pipeline to provide the skills directly into the new economy. When we build one impact network within another, within another – that is when we are at our most effective as innovators.
This is the only way we are going to build the necessary consensus across government and industry for the changes Australia needs to survive through COVID-19 and progress towards the new economy.
We are not making a case for nurturing or supporting one sector within the economy, but for the preservation of the new economy which will play a large role in shaping Australia’s workforce and boosting living standards over the coming decades.
Our impact network has grown dramatically in the last 12 months. We have reached beyond FinTech into DefenceTech, SpaceTech, CleanTech and HealthTech, taking on new members and providing a broader range of services.
Alone and as part of the Australian Innovation Collective, we are making representations to parliamentary inquiries, as well as helping corporates and government departments understand and implement best practice in startup procurement and outside-in innovation so that startups and scaleups can shape products to the exact needs of customers faster, cheaper and better.
We know that workplaces will look very different after this pandemic – and not just in the tech industry. Already in the past three weeks I’ve seen builders conferring by video on worksites to get instructions from architects, directors conducting board meetings remotely and tech teams engaging in both cross-town and transhemispheric collaboration.
As world-changers ourselves, we know that when the world changes you have to adapt or be left behind. COVID-19 has accelerated many of the changes that were already underway in the way we work as companies and as individuals. It has also added some unexpected and unprecedented difficulties to the way we currently live.
How we as an industry respond to these changes will in large part determine our future course. Will we build networks for impact and use them collaboratively and intelligently for the common good, or will we let ourselves be passed by?
Alex Scandurra is the chief executive officer of Stone & Chalk and a member of the Australian Innovation Collective