Kim Bigg
Hi everyone and welcome to Show Me the Perks podcast episode number 19. I’m Kim Bigg and today we’re talking about how businesses can build resilience and innovation when conditions are tough and without blowing the budget or derailing their day-to-day operations. Joining us today is Ben Colley, General Manager of Stone and Chalk in South Australia where he works closely with businesses across the startup innovation ecosystem. Ben sees up close and what actually works when leaders are trying to protect margins and keep customers low and maintain momentum through uncertainty. Welcome Ben.
Ben Colley
Thanks so much, Kim. It’s a pleasure to be here.
Kim Bigg
Excellent. Now, if you could give us a little bit of a summary. Obviously, Ben is general manager for Stone & Chalk, but for those listeners who don’t know who Stone & Chalk is, if you can give us a bit of a description what Stone & Chalk is and what their role is with startup and innovation community in South Australia?
Ben Colley
Of course. yeah, for the instance who don’t know, Stone & Chalk is the largest innovation community in Australia. So, we have a mission and it’s very clear. We help founders go further faster. Started 10 years ago up in Sydney, we’re a non-for-profit organisation. Today we have three hubs around Australia, one in Sydney, one in Melbourne, and here in South Australia. The South Australian hub is at lot 14.
And what we actually do is provide a home for startups, scale-ups, and innovators to build from. And more importantly, or I suppose on top of that, is we create a community for them to be a part of. And that is a community from day zero, when they’re just getting started, all the way through to scale-up, perhaps through to IPO or some sort of exit event, if that’s what they want or they just keep building, but they’re forever part of the Stone & Chalk community.
Kim Bigg
Fantastic. And Stone & Chalk being at Lot 14 is obviously a big advantage and something that state government I’m sure is loving your work there. How many people or how many small startup businesses do you have in the community at Stone & Chalk Adelaide in terms of Lot 14?
Ben Colley
So in the building today, we’ve got about 180 people and that’s across 54
startups or scale-ups. The smallest is a single founder early in their journey. The largest is probably 15 to 20 people. Maybe they’ve been around three to four years, something like that. At that point, it’s time for them to, shall we say, graduate Stone & Chalk South Australia. That’s where we’re a little bit different. Perhaps Stone & Chalk Melbourne or even Stone & Chalk in Sydney, we really are more of a pipeline that is a partnership with the state government. And it’s about increasing the number of these types of organisations in our state with the end goal of changing the economic complexity of South Australia.
Kim Bigg
And obviously part of your role is to identify innovation within these businesses. How do you look at these businesses or how do these businesses, how do you identify that they have an innovative sort of opportunity within their business model that suggests that yes, Stone & Chalk is a good place for them.
Ben Colley
Yeah, Stone & Chalk is often perceived and rightly so. It looks like a co-working business. It’s a space where you go and rent a desk or rent a small office, but it’s not. Perks, as an example, couldn’t come and rent a desk there. You have to be a South Australian founder of a South Australian technology business with unique IP. So that’s almost like the gate to get in the door. And so when we sit down with founders, it’s like, who are you? What are you building? Why does that matter? And why is that novel? And that is kind of where you identify, are they doing something innovative?
There is a bit of a like, I suppose, framework or even a rubric that we’re supposed to work through. I probably take a little bit more of a liberal approach personally. Are you an ambitious founder and are you building a tech company? That’s what I deeply care about and if you are, there’s no better place in South Australia to build from and get support.
Kim Bigg
And that’s part of your drive of Stone and Chalk is to sort of attract and really take these people out of their garages at home and running, trying to run their business from home and bring them into Stone and Chalk where they get all the support.
Ben Colley
Exactly. I said, I said this before we sort of started, like starting a company is a deeply traumatic, deeply lonely experience and it probably won’t work. Like they are the law of that’s kind of the rules of building a startup.
Kim Bigg
You spend 90 % of the time thinking this will never work. And then all of a sudden 10 % of the time it does. You feel good about it. And then maybe that’s the time where you stone and chalk to support you along the way.
Ben Colley
Exactly. And so like, because it is so lonely, because it can be so traumatic, there’s, in my opinion, and I’d suggest our community agree with this. And I’d say, even those that aren’t part of our community probably agree with this. You want to do it as best as you can with like-minded people who are on that journey with you. And that’s your immediate team, but it’s also your support network and infrastructure and your support community. And that’s what we actually provide.
Our founders, through our partnership with the state government, they pay a subsidised rate for the desk or the office that they have, but they still pay for it. And the reality is you can get a desk or an internet connection kind of anywhere. You can get it for free in a bunch of places. So what they actually pay for is the community, is to be around these people that are like them and all of the supporting infrastructure, whether that be investors, whether that be suppliers, whether that be government prospective customers. And we are the centre of gravity in South Australia for all of that to come together in one place.
Kim Bigg
Is there an element of supporting their commercialisation to some extent, is that not, you know, that’s definitely part of it?
Ben Colley
And supporting it in a way where there’s matchmaking them with people that can support that commercialisation, i.e. a customer or an investor. But then there’s government grants as well, depending on what you’re doing. And helping them even just navigate that. We know what’s available. Often founders don’t, especially if they’re first-time founders. But then the second part of that supporting the commercialisation journey is personally all I’ve ever done is build startups. That’s what I’ve sort of spent my professional career, if you want to call it that doing. And so it’s having real conversations with them of like, how is this going to work? Every founder thinks their idea is great. They care about it deeply. They can’t understand why people wouldn’t want to pay for this thing. But it’s helping them to recognise, does it solve a problem? Does it unlock an opportunity? Even if that is true, how are you going to distribute that? How are you going to finance this?
If you have a mortgage or family, like how are you going to do these two things together?
Kim Bigg
How big is the market? How many people want this? Or is this just an Adelaide thing? Or is this a worldwide thing?
Ben Colley
And then depending on how you answer those questions or how you reflect on it also influences how you finance it. So it may be that it does solve a problem and there is a customer for it, but it’s probably not, maybe it’s not a global customer and therefore you probably can’t get venture capital. But you might not want that either because that comes with its own pressure and you’re on that treadmill of now raising capital on a say 12 to 24 month cycle. And that’s deeply time consuming and energy draining. But hey, actually there are other ways you might not be able to go to a bank, but there’s things like Tractor Ventures who provide revenue-based financing for startups. There’s government grants to kick off. Or there’s just like the old-fashioned way of get your customer to pay for it. A great way to finance your business.
Kim Bigg
Absolutely.
What do you see, what are the common blind spots when these businesses come to you? Let’s say that you have a startup who’s been going for six months, done as much as they can at home, feel like Stone and Chalk is a good place because they’re starting to hit some roadblocks. What do you commonly see as far as these when they first come in the door?
Ben Colley
That is a long list because ultimately they’re just starting businesses. We brand it a startup and like to me that means something around not only the type of organisation it is, but it’s like almost like philosophical about how you’re building the company and the culture, but ultimately they’re businesses. And so it’s like, what are the ways that a business might not work? They experience all of those, but because they are often in that kind of high growth trajectory, like that’s what they’re aiming for and that’s what we want. Capital, number one, it’s like where do they get the capital to get started? The other is like, how do you get in front of your customer if you’re doing a B2B product? How do you get in front of decision makers and how do you navigate procurement of a large enterprise or a government? Even if they want what you have and you do solve it, it’s just navigating that process can be very time-consuming complex and if you’ve never done it before like how do you do it?
Kim Bigg
So you help sort of So make that path a little bit easier by knowing who the right people are to tell how you’ve got to present it how you pull the information together.
Ben Colley
Exactly and we advocate for them so we have amazing corporate partners with us whether they be government or private enterprise and so they come to us and we can help matchmake them with startups who are solving the problems that those organisations have. And because we’ve kind of curated that list, they can also internally help navigate their own procurement processes and kind of fast-track things or, yeah, take a different lens on, you know, a risk assessment, like what is a real risk, given what this product may be.
Kim Bigg
And what is after they’ve been with Stone and Chalk for a while, and this is really something for listeners to think about once you get past the initial phase of let’s say money is not the main issue. Obviously, it will always be an issue for startups to make sure they’ve got enough funding. Let’s imagine that the funding is sort of okay for the next year or two, and you’ve got someone sitting there at Stone & Chalk going, right, I need to work my way through. What are the key issues that normally come up? Is it access to talent? Is it access to a global market? Is South Australia’s sort of innovation startup ecosystem strong enough to be able to support these things, what is it that normally starts to break after they’ve been with you for a few months and they’re in theory they’re on the steady but they’re looking to take their business to the next level or take their, you know, commercialise their innovation?
Ben Colley
Yeah, completely. I suppose there’s something about the founders that as you start to scale, you bring in team members, you’re, it’s no longer just you or no longer just you and your co-founder or your first employee. And so you have to start to mature as a leader and as a business, like what are the systems and processes that scale the operations of this organisation and what does it mean for someone else to perhaps sell this product? There’s no better person generally to sell a product than the person that created it. They just have this innate passion and understanding of it, but that’s not scalable. So it’s like, how do you teach someone else to do that? And it’s fine to teach one person who gets to mimic you and be in your shadow all day. But all of a sudden, if you have maybe a sales team of three or four, because you’re at that next stage, like, how do you do that? And so we do what we can to help.
Peer learning occur between our founders but also bringing in experts to actually show people how to run a sales team, how to set up fit for purpose, HR infrastructure for your company. So there’s that side of it. The second side would be, there’s a reality that the South Australian market is not very big. And that can be an incredible advantage to get started. You can navigate it relatively easily, and you can use that to get your first one, two, three customers perhaps.
But then to go beyond that, it’s like, okay, well, what does it mean to start selling nationally or ideally internationally? And then you start running into conundrums around like, well, do you put boots on the ground? And who is that? And how are you making that investment? Should you invest in a Southeast Asian office or a Sydney office? And these are difficult trade-offs where there’s no right answer.
Kim Bigg
And often if you’re going to find someone who’s, you know, an innovative founder of a business. You know, the fact that they are innovative probably means that they’re deep thinkers, heavy thinkers, you know, the person who creates such innovation, innovative ideas and can think so laterally is quite possibly not the same person who’s capable of commercialising and taking this thing to the next level. How does the founder work their way through that in terms of they have a magnificent idea, but they’ve got to almost be vulnerable enough to give up some parts of developing the product. You talk about processes and so on and building the right processes. How do they go giving that up? I can imagine that’d be a difficult phase for them to go through.
Ben Colley
Yeah, completely. And we have the complete gamut there. So we have academic founders. They come out of research, out of university.
I’ve got one team that comes to mind. Nerdy types. Deeply technical. One founder has taken the CEO role, and one has taken the more CTO technical role. And that’s reflective of the business needs, both of those roles, but also what is their kind of personal persuasion and what are they a bit more interested in as they start doing it. I’ve seen founders step down as CEO and bring someone else in.
And I’ve seen that in two ways. I’ve seen external, like literally hire someone to now be the CEO, cut them in, give them some equity. And then I’ve also seen a bump up employee to become CEO, because the founder has that self-awareness that like, they are not the CEO anymore. They’re not the best person for that job. And then finally, I’ve seen just like, the founder turned CEO who just levels up and they just recognise that they’re at another level now, another stage of the game requires a new skill set, and they’re going to personally acquire that skill set and step into that role. kind of there’s a famous, there’s a famous article and I share it all the time, every team I’ve ever been a part of it called giving away your Legos. And it’s this idea of like letting go when you’re in a fast-growing scaling company. So much of that is about letting go of what you’re doing and giving that to someone else. Delegation is like another framing of it.
But it’s because when you’re scaling, there’s infinite problems and opportunity. So it’s not that you’re making yourself redundant and have nothing to do. You’re making yourself redundant to then focus on this next set of problems, next set of opportunity.
Kim Bigg
And that found a process of shedding, basically shedding off your all of your roles and then starting again and then completely lockstep up, lockstep up each time you create it.
Ben Colley
But you need to be self-aware enough to go like, that’s also what I want to do because that’s not for everyone.
Kim Bigg
Yeah, and difficult as well to continually evolve and change your role from startup founder to next phase to next phase might be Start up in South Australia, then it goes to national then it goes to international Do you have the skill set to actually continue to evolve as a CEO
Ben Colley
Exactly. The same principle would apply to really any business if you got a CEO of any industry here in South Australia and they have 20 or 30 people. And then you grab one in Sydney who maybe has a thousand people. And then you grab one in New York who has 10,000. Those CEOs are doing very different jobs despite the fact that they that same title. It’s like a fractal of that. It’s the same principle, it’s just that it’s compressed in timeframe.
Kim Bigg
Yeah, absolutely. How do you talk it through? How do they know when to let go? Do you talk that through?
Ben Colley
Yeah, it’s interesting. That’s interesting, actually. So probably personally, I have that conversation. So I’m feeling new to this role. I’m only six months in. But prior to being the general manager here in South Australia, I was a resident at Stone & Chalk, South Australia for a while with one of the startups Team Gauge. And then prior to that, I was actually a squatter at Stone & Chalk. The team at the time turned a blind eye.
Kim Bigg
Isn’t you just turned up? just started.
Ben Colley
I just work there. You’re not encouraging the listeners to start doing this. No, you know what I am. I take it very much an open door policy. Like that is how we build a world class ecosystem is we have open doors at lot 14. went to Stone and Chalk, South Australia within lot 14. If you’re interested in what we’re talking about or intrigued, come down any day, anytime, just come check it out. And that is how you build a world class ecosystem, is having the diverse set of characters involved. The reason I share that though to answer your question is I personally, I’ve been born and raised in Adelaide, went to uni here, had my first corporate job. I lasted 11 months as a grad and then I left and all I’ve ever done is build startups. And so I am deeply drawn to the founder experience and can relate to them. So I have a pretty honest conversation with them that probably a lot of my team wouldn’t and it’s probably not appropriate for them to have But so it’s like if they’re a blocker to their own company I will tell them, now at the end of the day though It’s their company like it’s they have to choose what to do. And so yeah, they may not want to take it to another level, but there’s actually nothing wrong with that as well They may be content with where the business is at and their role within that business.
Kim Bigg
So their choice at end of the day completely
Slight tangent here, but same sort of thing. These business owners are developing all sorts of innovation and otherwise they bring you to the table there. In the background and to the side, there’s all this AI just sort of permeating through industries. How do you support these startup businesses to navigate the world when it’s changing, you know, the environment, if you like, is changing around them constantly. And I suppose an add on question to that, what element of AI is, you know, are there just AI businesses or businesses trying to leverage off the AI sort of revolution that’s sweeping through the world within Stone and Chalk?
Ben Colley
Yeah, it’s, I mean, it’s truly incredible. I’m very biased and I’m very, I have a particular kind of optimistic persuasion, but I’m almost of the opinion this could be analogous to like the creation of electricity. Like, and we’re at the beginning of that. And it’s sort of like, if you can run out the thought experiment of like, what would that have been like when someone turned on the light bulb and showed someone else and then connected something else to electricity and you just start seeing it sort of permeate around like, what can you do with this thing?
And it becomes nearly unlimited with what you can do with it.
Kim Bigg
Your mind’s not big enough to be able to handle what it can do.
Ben Colley
Correct. And nor could anyone that was around at that particular point in time fathom what we now do with electricity, turning on the light switch is just like, it’s not even table stakes. It’s just like you don’t even think about it. This could be a version of that where it’s like, if we have created this general technology that mimics the human mind to some degree and there’s you can argue about how well it does that or does it do that? But if you can sort of enable me to use that example was like what can you create? What can you create with a human mind or something that mimics that sort of the possibilities?
Kim Bigg
Probably not just one mind but lots of people’s minds kind of what AI is
Ben Colley
Super intelligence, now So that’s sort of a bit of a personal opinion
For our businesses or our startups and scale ups, I suppose the founders, the fact that they are founders, they almost by definition are wired to be interested or chasing or like they can’t sit still. And so they are already adopting this stuff through their businesses. The way I think about it, there’s kind of two versions of that. There’s how they adopted it operationally in just the way they run their business.
Do they have an agent that’s answering support tickets? Are they using it to record and transcribe meeting calls or sales calls and distribute the notes and things like that?
So there’s the operational component. And then there’s like how deeply they have embedded AI in the product or service that they actually offer to their customer base. And we have the full gamut. So we have startups that have been with us for a few years and they are kind of retrospectively adopting AI in various components, latest feature release, all of them are building on kind of some version of cloud infrastructure from whether it Google or Amazon or Microsoft, and they’re kind of using AI because that’s just part of those systems, but they’re integrating it into what they offer.
Then we have people that are sort of, you know, both writing code with it, it’s now part of their kind of coding team as like an agent or a supporting tool and all of their next gen feature releases or the next version of their product, are kind of AI native to some degree. And then we have businesses that are brand new. And I’ll mention one that just, comes to mind, Super IT. Two founders, Chris is the South Australian founder. Their business is called Super IT, as I said, and it’s AI agents for IT managed services. So if you’re in a large corporate and you email your IT department to do something,
on the receiving end of that. Imagine if that was an agent, understood your security policy, understood your IT infrastructure and just actioned it real time. That’s what they’re building. So AI is just integrated deeply into their business because that is what they sell.
Kim Bigg
And in a sense, being the entrepreneurs that they are or startup, they almost have a predisposition that AI comes naturally to them or more than most anyway.
Ben Colley
Yeah, I would completely agree. And one of the things we’re actually discussing is an internal Stone and Chalk team in South Australia is maybe there’s an opportunity to educate our founders and support them around IT risk and AI influences that and how their customers or prospective customers are going to be looking at it. They can come with the latest, most innovative product and platform and you know, they talk to me and I’m like, that sounds fantastic. Love that. And then you go and talk to the IT team or the procurement team of a bank and all they see is more risk.
And so you may actually be shooting yourself in your own foot by offering the latest technology. And so bringing in experts who can help them navigate that and understand what is it that your prospective customer is going to, what’s the lens they’re going to take when you present this product.
Kim Bigg
If you ever wondered whether, I mean, this is sort of a reference to our existing sort of clients and businesses and listeners. I mean, they start up people, founders, if you like, would be incredible inserted into a mature existing business that maybe lacks a bit of innovation and so on. how do you, I don’t know if you’ve ever thought that through. I mean, I guess the bigger and larger a business you get, the more difficult it becomes to maintain innovation. These people live and breathe innovation. Do you have any comments around what existing businesses can do or mature business can do to maintain their innovation sort of edge and ultimately maintain some resilience in business?
Ben Colley
Yeah, definitely. I mean, there’s sort of two answers to that. You know what? There’s more than two. There’s a long list. There’s the classic of corporate innovation.
And there’s different versions of that that I’ve seen play out with large organisations. Do you have kind of the skunk works thing where you find some of the most innovative people in your organisation and set them up in a separate room or a separate physical site? And that has both worked and not worked. Do you do it through setting up your own like CVC or corporate venture capital fund and like you directly fund innovation, but you kind of get first access to it now to either acquire it or procure it or whatever it may be. So much of innovation, I believe is like cultural. It’s like your risk appetite, your curiosity, your openness to just try things and fail and accept failure is not as like a negative thing, but it’s just a learning exercise. And then there’s a large organisation that obviously has more to lose. It’s doing that in a realistic, intelligent, considered way, but ultimately still doing it, which largely, I think often it doesn’t get done. But from a Stone and Chalk point of view, that is also exactly what we do. So, I mentioned sort of when you asked me what is Stone and Chalk, like we’re a non-for-profit. The way we are funded, sure founders and startups and scale-ups pay us for a desk or a small office, but primarily we’re funded through government partners and corporate partners. And those corporate partners largely pay us to support them with their approach to innovation. And we have various ways that we do that. And there’s different price points for that kind of corporate partnership. But if anyone’s interested in that, like that is literally what we do day in, day out. And so we would love to support any of your clients who are interested in that, whether that’s on an adhoc kind of basis or whether there’s a more kind of intimate partnership we can come up with.
Kim Bigg
Yeah, yeah, absolutely. No, that’s fantastic. It’s really interesting to think about it through that lens. How do you, and sort of final question if you like, the South Australian sort of ecosystem or startup system, I guess, I don’t know how long ago Lot 14 started, I’m gonna say about 10 years ago, Lot14. Not even. Not even, maybe eight years ago.
Ben Colley
Yeah, it was about 2018, 2019.
Kim Bigg
Yeah, so it starts eight years ago, give or take, not even, seven years ago. How do you rate the South Australian ecosystem, maybe even, know, how has it evolved since that has come on? I think South Australia is perhaps given you grew up here, you probably know, it wasn’t always considered the most entrepreneurial state, I wouldn’t think. Do you feel like that’s changed with the advent of Lot 14?
Ben Colley
Without a doubt has it changed and has it matured and become better? And Lot 14 is one thing that has contributed to that. Obviously, it’s a large capital investment.
It’s very public in terms of like it used to be the old Royal Adelaide Hospital site. It’s in an incredible world-class location. It’s alongside other world-class institutions like the Australian Institute of Machine Learning. We’ve got the university merger underway. The campuses are next door. We’re on the cultural promenade. So I’m very thankful and proud that governments of both persuasions have like invested in it and supported it.
I think realistically, when I have this conversation with people, these numbers are arbitrary. But let’s say South Australia and Adelaide is five to seven years behind Sydney and Melbourne in terms of the maturity of their ecosystems. I was living in Melbourne in sort of 2012, 2013, 2014, when it was probably the premier startup ecosystem in Australia. That has definitely now shifted to Sydney. The two big drivers of that from just a company name point of view would be Atlassian and Canva. And that is part of how this culture and ecosystem works is you have these big winners and the big talent, the capital, the playbooks, the example of what you can become like when you have to be one of those that filters down.
Kim Bigg
Yeah. And there’s talent within those organisations which spawn off new.
Ben Colley
Exactly. But you know, in comparison to then some of the greatest ecosystems in the world, Tel Aviv or San Francisco is obviously the big one. We’re probably 30 to 40 years behind. That’s okay. Like that is, that’s sort of the nature of the reality we live in. But what I’m super bullish on is the opportunity that we have in the next 10 to 20 years to really start to accelerate. And you do have this kind of exponential growth potential. And there’s a couple of things I’ll just quickly mention that I think makes South Australia really uniquely placed.
We don’t suffer from the same complexity and challenges of a big city like Sydney and Melbourne, let alone those others, still a very beautiful liveable place that you can navigate.
We had net positive migration post COVID; we’re the only state. We did have this influx of talent that COVID drove that have now resettled that kind of classic story of you come back to Adelaide to settle and have a family. There’s a bunch of people here that came back five, maybe seven years earlier.
But they’re now here, they’re based here, they’re not going again. We have the largest university merger in the world underway. And you have something like AUKUS, which is going to bring huge amounts of capital into this country, but specifically this state. And when you tie all of those together, as well as the probably political stability that we’re going to have in the government right now, that’s really exciting. That’s interesting. That doesn’t guarantee anything, but it’s the right mix of ingredients in my eyes for us to really take advantage.
Kim Bigg
And that’s ultimately all you can really do is try to create the right environment to allow everyone to flourish and it sounds like for good luck to us and yourself that people had the foresight seven or eight years ago to create an area to allow these types of things to flourish. And I hope you’re right. I hope things go the way they feel like they are going in South Australia. in a few years to come, we’ll look back on it and think, yeah.
Maybe we’re not seven years behind Sydney and Melbourne. Maybe we’re closing the gap.
Ben Colley
Maybe we’re ahead. Yeah. Yeah.
Kim Bigg
Well, exactly. Fantastic. Well, thank you very much for coming in to speak with me and speak on the Show Me the Perks podcast. Really appreciate it. It’s given me an insight into how the startup world is going in South Australia and in Adelaide in particular. And yeah, just interesting your perspectives on how that can flow into businesses by startup in and sort of mature existing businesses as well.
Ben Colley
It’s been a pleasure, Kim.
Kim Bigg
Thank you so much, Appreciate it.
Ben Colley
Cheers.
