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Student Entrepreneurship Programs in South Australia’s Universities and TAFE SA

- A Review and Strategy for Growth

Prepared by Spike Innovation for the Office of the Economic Development Board,

Department of State Development

July 2016

IMPORTANT

This report has been prepared at the request of the Office of the Economic Development Board in the

Department of State Development (“OEDB”) and is to be used solely for the purpose of assisting the

OEDB to develop innovation and entrepreneurship policies and programs. It is not intended for wider

distribution, and may not be relied upon by any third party without the written permission of Spike

Innovation.

Any findings, recommendations or opinions contained in this report are based on information available

at the time of writing. Spike Innovation has not independently validated the information contained

herein and makes no representation or warranty as to its accuracy or completeness.

Commercial-In-Confidence 1

CONTENTS

1. EXECUTIVE SUMMARY ............................................................................................................... 22. BACKGROUND ............................................................................................................................. 43. THE IMPORTANCE OF HIGH-IMPACT ENTREPRENEURSHIP ................................................. 64. THE IMPORTANCE OF A HEALTHY STARTUP ECOSYSTEM .................................................. 65. OVERALL OBSERVATIONS ....................................................................................................... 136. RECOMMENDATIONS ............................................................................................................... 19Appendix 1 – Stakeholder interviews ................................................................................................... 26Appendix 2 – Startup ecosystem best practice .................................................................................... 28Appendix 3 – Adelaide entrepreneurial ecosystem map ...................................................................... 31


1. EXECUTIVE SUMMARY

Entrepreneurship is a vital ingredient for the diversification and growth of the South Australian

economy. This report focuses on high-impact entrepreneurship, in which entrepreneurs start and grow

businesses that are based on technology and can become major competitors in global markets.

These businesses, often referred to as tech startups, have the potential to deliver disproportionate

economic benefits due to their capacity for rapid and sustained growth, their ability to create large

numbers of high-value, high-skill jobs, and their potential to generate large amounts of export income.

If South Australia is to benefit from tech startups it will need to produce a steady flow of high-impact

entrepreneurs and ensure that the companies they form are supported as they grow.

Educational institutions have an important role to play in exposing students to high-impact

entrepreneurship, equipping them with practical skills to form viable tech startups, and supporting

them as they start their ventures.

This report considers the various entrepreneurship education and support programs being delivered

by Adelaide’s three universities and TAFE SA. It concludes that there are some promising programs

and a number of passionate individuals driving Adelaide’s efforts to inspire and teach the next

generation of high-impact entrepreneurs.

However it also finds that there are a number of factors limiting the contribution of the universities and

TAFE SA to growing a vibrant startup ecosystem in Adelaide, including:

• High-impact entrepreneurship is not a strong cultural norm in Adelaide. Many students have

limited exposure to it as a potential career path, leading to a low rate of tech startup formation.

• Entrepreneurship courses are of variable quality and are often delivered by academic staff

with limited first-hand experience of high-impact entrepreneurship.

• Most courses focus on business school students and have not engaged large numbers of

students or researchers in STEM disciplines.

• Many of the entrepreneurship courses teach concepts relevant to small businesses, but with

little emphasis on high-impact entrepreneurship or technology-based businesses.

• There is limited involvement of real-world practitioners (such as successful startup founders)

in design and delivery of courses and programs.

• Student entrepreneurs have limited access to expert guidance to develop and pursue their

startup ideas, resulting in startup founders making predictable and avoidable mistakes.

• Student entrepreneurship courses and programs suffer from a lack of scale, due in part to the

universities viewing their entrepreneurship offerings as a competitive differentiator.

• The Adelaide startup ecosystem is relatively immature and geographically fragmented, and

lacks the necessary supply of experienced mentors, capital and soft infrastructure.

This report makes a number of recommendations aimed at addressing the limitations identified above,

and at providing a solid platform from which to expand and enhance the student entrepreneurship

offerings of Adelaide’s universities and TAFE SA.

The report’s recommendations are as follows:

1: Formulate an Innovation and Entrepreneurship Policy

2: Establish a major startup hub in the city

3: Support the creation of a high-impact technology entrepreneurship subject delivered jointly by

Adelaide’s universities

4: Establish an Entrepreneurs-In-Residence program

5: Implement the recently announced co-investment funds

6: Establish an entrepreneurship program for academic staff, postdocs and postgrad students

7: Establish a high-impact entrepreneurship course and incubator within TAFE SA

8: Establish an overseas startup immersion program for students


Acting on the recommendations in this report will make a significant contribution to increasing the rate

of high-impact entrepreneurship in Adelaide, particularly among STEM students and recent graduates.

It will also provide a much-needed boost to the startup ecosystem that plays a critical role in

supporting tech startups in Adelaide as they grow.

I commend the South Australian government on its foresight in pursuing this important topic, and

encourage all stakeholders to work collaboratively to create the best possible entrepreneurship

education and support programs that will help to grow the startup ecosystem and provide opportunities

for growth of the South Australian economy.

Colin Kinner

Director, Spike Innovation

July 2016


2. BACKGROUND

Spike Innovation has been engaged by the Office of the Economic Development Board to advise the

South Australian government on strategies to boost high-impact entrepreneurship in the State.

The consultancy project focused on the role of the three Adelaide-based universities and TAFE SA in

exposing students to the notion of entrepreneurship, and in providing them with practical skills that

they can use to purse entrepreneurial opportunities as opposed to a traditional career path as an

employee.

It also considered the supportiveness of the startup ecosystem in Adelaide due to the important role

that the ecosystem plays in determining the success of startups and in influencing individual

entrepreneurial decisions.

Terminology used in this report

High-impact entrepreneurs are defined as founders of companies that are based on innovation and

have the potential to deliver significant job creation, economic impact and societal impact. These

companies have the capacity for rapid growth, are serving global markets, and are often developing

and commercialising new technology and new business models as the basis for their competitive

advantage.

The concepts underpinning high-impact entrepreneurship and the role of universities in producing

entrepreneurial graduates are discussed in depth in the report “Boosting High-Impact Entrepreneurship

in Australia: A Role for Universities” produced by Spike Innovation for the Office of the Australian Chief

Scientist in 2015.1

Companies founded by high-impact entrepreneurs are often referred to as “tech startups” (or simply

“startups”). The Crossroads report produced by Spike Innovation for StartupAUS (Australia’s peak

body for startups) defines a startup as “an emerging high-growth company that is using technology and

innovation to tackle a large and most often global market.” It notes that startups have two important

defining characteristics, being potential for high growth (for which the ability of companies to raise

capital from investors is a good proxy) and disruptive innovation, the process by which new entrants

displace established competitors through use of technology and business model innovation.2

Startups are often viewed narrowly, particularly by the media, as being software and internet-based

businesses. Whilst internet-based startups are important, this report takes a broader view of startups to

encompass companies that are based on or leveraging technology in any discipline including biotech,

advanced manufacturing, energy and cleantech.

A startup ecosystem is the complex set of forces that act on startups and have a significant effect on

their ability to succeed.

The participants in any startup ecosystem, and the forces they exert, include:

• Startups, their founders and employees

• Incubators and accelerators – providing expertise and guidance, usually to first-time founders

in the form of mentoring and coaching

• Investors – providing access to capital, networks and guidance

• Customers, in particular early adopters – providing startups with the opportunity to test

whether their products and services meet a real customer need and to gain early market

traction

• Government – which sets the regulatory environment and may also intervene to address

specific market failures or accelerate economic change

• Universities – providing technical talent (graduates) and access to cutting edge intellectual

property and research capabilities

• Advisors and service providers – providing specialist expertise (eg. legal, financial, PR) to

startups as they grow

In the same way as a biological ecosystem determines the fate of the organisms that live within it, the

health of a startup ecosystem determines how easy it is for startups within it to flourish.

1 http://www.chiefscientist.gov.au/2015/10/new-report-boosting-high-impact-entrepreneurship-in-australia/

2 https://startupaus.org/resources/crossroads-report/


The project was initiated by the South Australian Chief Scientist, Dr Leanna Read, and endorsed by

the Premier’s Higher Education Committee. Consequently it benefited from strong support and

engagement from representatives of all three universities as well as TAFE SA.

It follows on from work undertaken by Redfire Consulting Group (“Redfire”) in evaluating a range of

South Australian government-funded economic development programs and making recommendations

regarding the establishment of a South Australian Commercialisation Fund.

We have considered the reports produced by Redfire in November 2015 and January 2016, and

strongly endorse their observations and recommendations. Where relevant, this report offers

commentary on specific recommendations made by Redfire, and their alignment with

recommendations provided herein.

Project outline

The project comprised the following four phases:

1. Review of publicly available information on entrepreneurship courses and programs at

University of South Australia, University of Adelaide, Flinders University and TAFE SA plus

other significant programs outside the universities

2. Meetings with key stakeholders over four consecutive days, including representatives from:

o Institution executive

o Commercialisation group

o Business school / entrepreneurship educators

o Entrepreneurship program managers

o Students and recent graduates

o External stakeholders including entrepreneurs, investors, incubators / accelerator / co-

working space managers

o Industry partners

o State and local government

A complete list of stakeholder meetings is provided in Appendix 1.

3. Delivery of a report with findings and recommendations for action by the South Australian

government, the universities and TAFE SA.

4. Presentation of findings and recommendations to key stakeholders and facilitation of a

workshop to discuss options and next steps.


3. THE IMPORTANCE OF HIGH-IMPACT ENTREPRENEURSHIP

As noted above, high-impact entrepreneurship leads to companies that deliver significant economic

and societal impact through rapid growth in global markets, creation of high-value jobs, generation of

export income and through economic diversification away from low-value and commodity-based

industries.

By way of illustration, the labour productivity (revenues per employee) of Australian medical device

technology company Resmed is $565,000,3

whereas the labour productivity of the Australian

agriculture and tourism industries are $62,000 and $50,000 respectively.

A detailed analysis of the potential economic contribution of high-growth startups is contained in the

StartupAUS Crossroads report.4

Supporting high-impact entrepreneurship is consistent with the South Australian government’s stated

economic priorities, in particular Priority 6 (Growth Through Innovation) which calls for the use of

technology as the basis for building globally competitive high value firms, and creation of an

environment that is supportive of innovation and commercial risk-taking.5

This report is therefore focused on opportunities to produce and support more high-impact

entrepreneurs due to their crucial role in starting and growing the companies that will deliver the much-

needed economic transformation that is sought by the the government and people of South Australia.

4. THE IMPORTANCE OF A HEALTHY STARTUP ECOSYSTEM

This report is focused on the role of universities and TAFE in producing entrepreneurial graduates.

However given the importance of a healthy startup ecosystem it also seeks to identify steps that could

be taken to address barriers to maturation and growth of the startup ecosystem.

High-impact entrepreneurs are a product of multiple internal and external factors. Figure 1 below

illustrates the factors whose presence positively influences whether an individual becomes an

entrepreneur. Although not all are required, the presence of most or all of these factors increases the

likelihood that an individual will pursue an entrepreneurial pathway.

Figure 1: Factors that influence whether an individual becomes an entrepreneur

Of particular importance to South Australia is the fact that individuals assess the the supportiveness of

their local startup ecosystem before deciding whether or not to launch a startup.

3 http://investor.resmed.com/investor-relations/default.aspx

4 https://startupaus.org/resources/crossroads-report/

5 http://economicdevelopmentboardsa.com.au/wp-content/uploads/2013/06/2014_08_11-Vision-SA-where-

business-and-people-thrive.pdf


What makes a successful startup ecosystem?

Successful startup ecosystems repeatedly produce startups that grow to become globally successful

businesses, delivering significant direct economic impact via creation of high-value, high-skill jobs and

indirectly via wealth creation. The common attributes of successful startup ecosystems include:

1. Large numbers of startups

2. Ample supply of entrepreneurs

3. A strong pro-entrepreneurship and risk-tolerant culture

4. High quality incubators and accelerators run by teams with first-hand experience in scaling

tech companies globally

5. Investors willing to invest at the various stages of growth of a startup (seed, Series A, B etc)

6. Collaboration with large companies

7. A supportive regulatory environment

8. Universities actively engaged in the ecosystem via a range of student entrepreneurship

activities

9. High quality advisors who specialise in startups and are often willing to provide services at a

discounted rate (or in return for equity) in order to work with the most promising companies

10. Intervention by government where it is needed

In successful ecosystems the interests of the participants are aligned such that the success of each

participant leads to the success of the startups and the ecosystem as a whole, thus avoiding

behaviours that benefit one entity at the expense of others – such as programs competing with each

other.

Challenges facing Adelaide’s startup ecosystem

Adelaide’s startup ecosystem has grown from a small base over the last few years, but remains

relatively immature compared to those of Sydney, Melbourne and Brisbane. It suffers from a number

of limitations, including:

Limitation Impact

Too few startup founders

Adelaide’s economy has historically been heavily

skewed toward manufacturing and population

servicing businesses. It does not have a strong

track record of producing tech startups, and

currently has fewer startups per capita than other

Australian or overseas cities.

Unable to achieve economies of scale in support

infrastructure

Too few companies achieving global scale

Startup ecosystem has limited interstate and

international visibility

Limited economic impact from startups

Lack of entrepreneurial culture

Due in part to the historical make-up of the local

economy, Adelaide does not have a strong culture

of high-impact entrepreneurship.

Many small business entrepreneurs but relatively few

building scalable companies that can compete in large

global markets

Startup founders pursue smaller opportunities due to

reduced risk tolerance

Many aspiring entrepreneurs never pursue their idea due

to fear of failure and perceived low probability of success


Best practice in startup ecosystem development

A number of books and papers have been written about best practice in economic development as it

relates to growing and supporting startup ecosystems. Three that warrant particular attention are

summarised below given their relevance to the challenges faced by the Adelaide startup ecosystem.

Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed – and What to Do About It, Professor Josh Lerner (2009)

6

• “Set the table” by ensuring that the regulatory environment and culture encourage rather than

stifle innovation and startups

• Recognise that long lead times are needed to achieve tangible economic outcomes, set

realistic expectations and procure a long term funding commitment

• Learn from programs that have been demonstrated to be successful in other regions, and

design new and untested programs only if absolutely necessary

• Focus on a small number of highly impactful initiatives rather than launching lots of small

programs

• Focus on specific market failures experienced by high-growth firms rather then attempt to

cater to many types of small businesses

6 http://www.amazon.com/Boulevard-Broken-Dreams-Entrepreneurship-Failed/dp/0691154538

Fragmentation of startup programs

The soft infrastructure that supports startups

(incubators, accelerators, co-working spaces,

mentoring programs) is geographically dispersed,

and becoming more so as new programs are

added.

Many of these programs compete with each other

for a finite pool of opportunities and resources

Low startup density, limited opportunities for collisions

between startup founders, investors, mentors and

executives in larger companies

Dilution of the valuable expertise found in more mature

startups

No large venue for startup-related events to build a

cohesive community

Lack of co-ordination and collaboration

Limited supply of serial entrepreneurs

The people best placed to guide first-time

entrepreneurs are those who have been

successful in their own startups.

Adelaide has a limited pool of experienced entrepreneurs

to guide first-time startup founders

First-time startup founders in Adelaide are often poorly

advised by those with good intentions but limited

experience in growing technology companies

Limited access to funding

Adelaide has a very limited angel investor

community and does not have a critical mass of

venture capital activity

Startups either fail due to lack of funding or grow so

slowly that they are overtaken by better funded

competitors in other locations

Promising startups leave Adelaide

A number of promising startups have relocated to

other Australian and overseas cities in order to

improve their access to capital, talent and

customers

Notable example: Vinomofo was cited by a number of

interview subjects as one of Adelaide’s most successful

tech startups. It currently has 400,000 members and over

$60m in annual revenue. Vinomofo started in Adelaide in

2011 but moved to Melbourne in 2012 to access funding

and partnership opportunities.


Startup Communities: Building an Entrepreneurial Ecosystem in Your City, Brad Feld (2012)7

• Entrepreneurs must lead the startup community, with government, universities, corporates,

service providers and investors playing a supporting role

• The leaders must have a long-term commitment and the financial capacity to engage in the

long term. These people are generally successful entrepreneurs who have had a significant

liquidity event (exit) and are prepared to give back to the community.

• The startup community must be inclusive of anyone who wants to participate in it.

• All stakeholders in the startup community should be brought together regularly to ensure they

are interacting with each other.

Why Governments Don’t Get Startups, Steve Blank (2011)8

• Government programs should be tailored to the specific needs of tech startups and not

conflate them with other types of small business.

• Programs should support only those businesses that have the potential to create high value,

high skill jobs, experience rapid growth and lead to wealth creation.

• Government should provide funding, but should not seek to micro-manage the operations of

startup programs or to play a part in decision-making about which startups to support.

• Government should have a clear plan to reduce its support of the program in the medium

term, rather than continue to fund it indefinitely.

Appendix 2 provides a more detailed summary of the learnings from the above publications.

The importance of young entrepreneurs

Having young people become entrepreneurs is important because startups are a high risk activity, and

as a general rule an individual’s risk tolerance decreases over time, particularly once they have a

mortgage, a family and an established career. This is especially true in Adelaide, where

entrepreneurial risk-taking is not a strong cultural norm.

In a number of countries such as the US and Israel, a large proportion of entrepreneurs launch their

first startup during or immediately after their undergraduate degree. For example, an estimated twenty

per cent of all students at CalTech, Stanford and Berkeley form a startup before they graduate.9

Once an individual has had the experience of forming and growing a startup (regardless of whether it

has been successful), they typically have a greater understanding of what is involved, a more realistic

appreciation of the risks, and have picked up valuable skills that will increase their chances of future

success. Many young entrepreneurs find that their first startup gives them the “startup bug” and is the

start of a fulfilling entrepreneurial career.

A startup community that lacks young entrepreneurs can lead to startups that are focused on lower

risk opportunities – including small, domestic markets, or businesses based on early revenue

generating opportunities at the expense of longer term growth, with relatively few truly disruptive high-

risk startups that are tackling large global markets.

A common misconception, and one that arose in discussions with the universities, is that it is

necessary for individuals to have at least ten years’ experience in the workforce before they start a

company. Whilst startup founders span a range of ages, it is not often appreciated that many of the

most successful companies were established by young people, including university students.

7 http://www.amazon.com/Startup-Communities-Building-Entrepreneurial-Ecosystem-ebook/dp/B008UV826U/

8 http://steveblank.com/2011/09/01/why-governments-don%E2%80%99t-get-startups/

9 StartupAUS Crossroads report, page 34


By way of illustration, the following table lists five of the world’s most valuable technology companies

whose founders were university students at the time the company was founded.10

Company Year

founded

Founded by Current value

Microsoft 1975 Bill Gates and Paul Allen (whilst students at Harvard University) A$452 billion

Facebook 2004 Mark Zuckerberg (whilst a student at Harvard University) A$293 billion

Yahoo 1995 Jerry Yang and David Filo (whilst students at Stanford

University)

A$54 billion

Google 1998 Sergey Brin and Larry Page (whilst PhD students at Stanford

University)

A$502 billion

Dell 1984 Michael Dell (whilst a student at University of Texas) A$32 billion

It should be noted that it is more difficult for students or recent graduates to form science-intensive

technology companies (ie. based on proprietary technology arising from research in fields such as

biotech and advanced materials, as opposed to software-based companies) due to the requirement for

deep technology and ongoing research capability, and the greater capital requirements to bring a

product to market.

Nevertheless, young people can be an important driver in the formation of science-based technology

companies as long as the company has the ability to access the required IP, research capability,

capital and industry knowledge.

Figure 2 below illustrates how, for a typical graduate, risk tolerance decreases over time whilst

experience increases. There are pros and cons associated with starting a company in any of the three

identified phases, although it is a commonly held view that recent graduates should not attempt to

form startups due to their lack of experience (phase 1), and they should instead enter the workforce

and gain industry experience first (phase 2 or phase 3).

However, the importance of risk tolerance cannot be overstated, particularly in locations where

entrepreneurial risk-taking is not a strong cultural norm. Currently in Adelaide a lack of risk tolerant

entrepreneurs is one of the most significant factors holding back the development of a vibrant startup

ecosystem.

A lack of founder experience is a partial barrier to entrepreneurship, but one that can be addressed

through high quality mentoring and by building a strong team around the founder. In contrast, a low

risk tolerance is an absolute barrier to entrepreneurship as it prevents the individual from actually

starting the company.

Figure 2: Risk tolerance versus experience

10

http://www.inc.com/larry-kim/these-10-student-founded-startups-are-the-most-valuable-of-all-time.html


This report finds that the benefits of supporting young first-time entrepreneurs (those in phase 1 and

phase 2) greatly outweigh the disadvantages they face due to limited experience, and that the optimal

time for first-time founders to engage in high-impact entrepreneurship is in phase 1, typically within ten

years of graduation.

Increasing the number of young entrepreneurs in Adelaide would not only boost the level of high-

impact entrepreneurship, but also lead to repeat entrepreneurs whose experience as young

entrepreneurs equips them well to continue their entrepreneurial journey later in life.

The risk tolerance of some individuals may be biphasic - ie. their risk tolerance drops in mid-career

due to family and financial commitments, but increases again later in life as they have greater financial

means and fewer commitments. Experience suggests that these people make valuable team

members, but are often not the drivers or instigators of high-growth startups.

The role of educational institutions in producing entrepreneurs

A growing number of universities worldwide have adopted a funnel approach to exposing students to

entrepreneurship and encouraging them to take steps toward actually starting companies. This

approach is now widely regarded as best practice, and is summarised in Figure 3 below.

Figure 3: Funnel approach to student entrepreneurship11

A staged, opt-in approach to engaging students in entrepreneurship training is desirable so that

individuals become more involved of their own volition rather than being forced to undertake

mandatory courses.

11

Spike Innovation, Boosting High-Impact Entrepreneurship: A Role for Universities, page 44


Aspiring student entrepreneurs go through several phases as they progress from awareness to

intention to action, as shown in the following table.

Phase 1: Awareness Exposure to entrepreneurship concepts raises awareness that forming or joining

a startup is a possible career path and piques the interest of some students who

will choose to explore entrepreneurship further.

Phase 2: Knowledge Taking part in educational activities (curricular and extra-curricular) increases the

student’s level of knowledge and enables them to make an informed choice

about whether to pursue entrepreneurship further.

Phase 3: Intent Some students discover a genuine passion for entrepreneurship, which coupled

with increased knowledge, leads to a decision to actively pursue startup

opportunities.

Phase 4: Experimentation Students experiment with aspects of forming a startup in a relatively safe

environment via taking part in university incubators, hackathons, ideas

competitions and internships within real startups.

Phase 5: Action Either during or after their studies, students take positive steps toward actually

forming their own startup.

It is critical that educational institutions enable students to go through the above phases so that they

have sufficient exposure to the notion of entrepreneurship, and sufficient opportunity to “try out”

aspects of startups before they graduate and find themselves in a career trajectory which is difficult to

break out of, and in which their exposure to startups will be much more limited.

International best practice in student entrepreneurship programs is set out in detail in the report

“Boosting High-Impact Entrepreneurship”.12

In summary, the attributes of best practice are:

• Focused on high-impact technology-based entrepreneurship rather than attempting to cater to

all types of entrepreneurship

• Provides students with multiple opportunities for engagement using an opt-in funnel approach

rather than attempting to “inoculate” all students with a mandatory course

• Experiential programs that emphasise learning by doing and encourage concrete action to

pursue ideas

• Based on modern startup methods (eg. Lean Startup) as opposed to outdated approaches

such as writing lengthy business plans

• Encourages multi-disciplinary collaboration, ideally involving a mix of business and STEM

skills

• Engages successful entrepreneurs and practitioners as guest lecturers, mentors and teachers

• Connects students with the outside startup ecosystem rather than operating in isolation

• Available to students when they are ready to engage, rather than as a single event

• Focus on growing the individual rather than their idea, recognising that students will have

many ideas and should not be discouraged simply because their first idea is not viable

• Engage a large number of students in order to have a significant impact on the culture of the

student population and attitudes toward entrepreneurship

• Entrepreneurship is visibly supported by leadership and over time becomes woven into the

fabric of the university and part of the institution’s identity

12

Spike Innovation, Boosting High-Impact Entrepreneurship: A Role for Universities, pages 33-52


5. OVERALL OBSERVATIONS

The Adelaide startup ecosystem

The Adelaide startup ecosystem is growing in size and is maturing, but is currently smaller than those

in Sydney, Melbourne and Brisbane, and appears to be producing relatively few high-impact

entrepreneurs per capita. The reasons for this are likely to include the historical makeup of the local

economy, a lack of successful entrepreneur role models, a risk-averse culture, limited exposure of

school and university students to entrepreneurship, and limited government support to address market

failures.

Notwithstanding, Adelaide is producing some high growth-potential companies that are creating high

value jobs and entering international markets, and that have the potential to grow to become globally

significant businesses. Examples include:

• Jemsoft – An artificial intelligence and computer vision company specialising in security

applications. The company has created 16 new high-skill jobs in the last 18 months and grown

to around $1 million in annual revenues. The company has received funding from the Venture

Catalyst program at UniSA.

• Makers Empire – Developers of a 3D design and printing app for teachers and schools. The

app is currently used by over 30,000 students worldwide including in 28 primary schools in

South Australia. The company has raised money from investors in Adelaide and Sydney and

received grant funding from the South Australian Micro Finance Fund and the federal

government’s Accelerating Commercialisation program. Last year it took part in the Mass

Challenge accelerator program in Boston, and now has offices in Adelaide and Boston. The

3D printing market is estimated to be worth $20 billion.

A significant number of entrepreneurs have left Adelaide to access capital, talent and markets that are

currently not available locally. Examples include Vinomofo (moved to Melbourne in 2012) and Happy

Inspector (moved to Sydney in 2012 and then to San Francisco).

Several of the startup founders interviewed stated that they were actively considering relocating to

Sydney, Melbourne, San Francisco or New York for similar reasons.

The challenges facing the local startup ecosystem include a lack of early stage capital and a shortage

of experienced entrepreneurs who can provide guidance to first-time entrepreneurs.

Entrepreneurship activities – universities

The Adelaide Entrepreneurial Ecosystem Map (Appendix 3) shows that a large number of programs

exist, although the most relevant ones for the purposes of this report are the entrepreneurship courses

and programs delivered by UniSA, University of Adelaide and Flinders University.

Entrepreneurship education

It is clear that in each of the institutions a number of highly capable and passionate individuals are

driving the institution’s efforts around student entrepreneurship.

However most of the university entrepreneurship courses are not focused on high-growth, technology-

based companies, instead mainly teaching and supporting other types of entrepreneurship (such as

small business and social enterprise).

An opportunity exists to extend the offerings of the universities to focus on high-growth, technology-

based companies. Doing so would ensure that a larger number of students are exposed to high-

impact entrepreneurship, and that those with an interest in pursuing a startup are able to receive high

quality support.

Adelaide’s universities are delivering a growing number of undergraduate and postgraduate degrees

in entrepreneurship. Although reflective of an increased interest in the topic, these degree courses are

unlikely to have a positive impact on the practice of high-impact entrepreneurship, since much of what

entrepreneurs need to know can be taught in short, targeted courses, and experience in other

locations suggests that the students who enrol in degrees in entrepreneurship are almost never the

students who would actually consider starting a high-growth company.


Teaching of entrepreneurship is a secondary activity for academic staff as it competes with producing

peer-reviewed academic papers and their standard curriculum teaching. Australian universities all face

a similar dilemma in balancing the need to produce academic output with the need to have high quality

entrepreneurship teaching that is informed by deep engagement with the outside startup community

and not solely by academic research. It is understandably difficult for lecturers to deliver courses that

align with the real world when a large proportion of their time goes into academic research. This issue

is particularly pertinent in high-impact entrepreneurship where it is recognised that best practice is

largely driven by practitioners, with research often lagging behind.

Perhaps the most critical issue that arose in discussions with the universities was the fact that student

entrepreneurship courses are increasingly viewed as a competitive differentiator in attracting domestic

and overseas students. Each of the universities is developing new offerings focused on student

innovation and entrepreneurship. This is an encouraging development, but a lack of collaboration in

development and delivery of student entrepreneurship programs is leading to fragmentation of efforts

and producing small-scale programs that are disconnected from the external startup ecosystem and

only able to engage a subset of the local population.

Startup support programs

Many of the startup support programs delivered by the universities are small (both in terms of the

support they provide and also the number of individuals they engage) and consequently struggle to

deliver value. For example, the Venture Catalyst program at UniSA provides valuable early stage

funding ($50,000 per company), but has only supported two companies per intake and is not

resourced to deliver significant support to student startup teams beyond provision of funding and a

desk.

Venture Catalyst is only available to teams connected with UniSA. It is understood that the program

was offered by the South Australian government to all three universities, but that only UniSA took up

the offer. The fact that the pool of applicants is limited to one institution greatly reduces the scope of

the program.

There is an opportunity for the universities to achieve greater impact through collaboration, and to

work with the South Australian government to create programs that operate at a scale where they can

be truly impactful.

Many of the programs appear to engage generalist mentors with traditional business backgrounds,

and relatively few with experience in high-impact entrepreneurship (ie. starting, growing and exiting

high-growth technology-based companies). Generalists are of limited value in guiding first-time

entrepreneurs through the process of building high-growth businesses, and consequently many of the

entrepreneurs appear to be making predictable and avoidable mistakes due to a lack of sound

guidance.

Feedback from several individuals in the startup ecosystem indicated that there are some highly

capable mentors in Adelaide, but for the most part they do not engage with the university programs

because of a perception that the programs are too broad (ie. not focused on high-growth companies,

as noted above), are isolated from the wider startup ecosystem, lack the resourcing to achieve

significant impact, and often accept low quality teams into the programs.

Geographic dispersion and competition

There is a significant geographic dispersion of courses and programs, even within each institution.

This is exacerbated by having multiple campuses.

Student entrepreneurship is becoming a topic with much national visibility, and the universities are

each using their entrepreneurship courses and other programs as a differentiator to attract students as

well as to be seen to be engaging in the entrepreneurship arena. This competition has the undesirable

consequence of limiting the reach and scale of each institution’s programs, reducing the scope for

collaboration, and further fragmenting the startup ecosystem.

Science-based opportunities

Interest in entrepreneurship is increasing among students, but appears to be relatively dormant among

academic staff. Relatively little effort has gone into encouraging academic entrepreneurship or

addressing the cultural and practical barriers that prevent most academics from starting or joining

spin-out companies to commercialise their research.


There also does not appear to be a clear distinction between the needs of startups based on cutting

edge technology and unique intellectual property and those of companies building apps and web-

based businesses. Both are important, but the timescales, funding needs and commercialisation paths

for technology-heavy companies are substantially different.

Prioritising High-Impact Entrepreneurship

A visitor to the web sites of the three Adelaide-based universities could be forgiven for concluding that

entrepreneurship is not a strategic priority. In fact it is difficult to find any mention of entrepreneurship

at a strategic level other than in connection with teaching of entrepreneurship courses.

In contrast, a growing number of universities have made a clear and visible commitment to

entrepreneurship and have followed through with substantive courses and programs aimed at

encouraging and supporting student entrepreneurs.

For example, the University of Twente in the Netherlands features on its home page the statement

“THE MOST ENTREPRENEURIAL UNIVERSITY”, which is a reference to its being voted the top

Dutch university in creation of economic and social value from scientific knowledge. In the

Netherlands, commercial knowledge transfer is recognised as a core task of universities, alongside

education and research.

Figure 4: The University of Twente home page

Similarly, the National University of Singapore has made student entrepreneurship a visible priority, as

evidenced by the fact that in the university’s “NUS at a Glance” publication, two pages of the 16 page

document are about student entrepreneurship at NUS.


Figure 5: Excerpt from “NUS at a Glance”

The University of Waterloo Strategic Plan 201313

contains 61 references to entrepreneurship and calls

for Waterloo to solidify its “global leadership in all forms of entrepreneurship education and practice”.

The Waterloo region benefits from having been the birthplace of Blackberry Limited (originally known

as RIM), and despite having a population of only 500,000 its startup density (startups per capita) is

second only to Silicon Valley.14,15

The University of Waterloo has a long history of encouraging and supporting entrepreneurship. It has

80 staff engaged in supporting student entrepreneurship and runs over 30 entrepreneurship courses

and programs including incubators, accelerators and seed funds.

13

https://uwaterloo.ca/strategic-plan/sites/ca.strategic-

plan/files/uploads/files/c002637_strategicplan2013.sept3_.lowres_final-s.pdf 14

http://blog.compass.co/waterloo-the-david-vs-goliath-of-startup-ecosystems/ 15

Thanks to Rob Chalmers, CEO of ARI, for providing insights on Waterloo following his visit in 2013


Figure 6: Excerpt from University of Waterloo Strategic Plan


A notable Australian example (although one that is still some way behind international benchmarks) is

the University of New South Wales, whose recently released Strategic Plan16

includes Innovation and

Entrepreneurship as a strategic goal, as set out in the following excerpt:

Figure 7: Excerpt from University of New South Wales Strategic Plan

In the plan UNSW lists among its measures of progress “The number of technology start-up

companies created by our staff and students.”

UNSW has also released an Innovation Statement17

which sets out its plans for student innovation

and entrepreneurship, including an aim to keep UNSW as a national innovation leader and to build on

its current position as having the “biggest student startup program in Australia”.

Ensuring communications match reality

Clearly the objective of the above examples is not to suggest that Adelaide’s universities should

simply add a section about “entrepreneurship” to their outward-facing communications. These

examples are provided to illustrate that by global and even national standards Adelaide’s universities

have some way to go in making entrepreneurship a visible priority.

In all of the examples listed above, the messages delivered about student entrepreneurship do in fact

match the reality of the institution’s substantial commitment to student entrepreneurship.

In the case of UNSW the list of student entrepreneurship programs includes:

• Undergraduate and postgraduate courses that engage entrepreneurs and practitioners (such

as Atlassian founders Mike Cannon-Brookes and Scott Farquhar) in delivery

• The Michael Crouch Innovation Centre, a dedicated centre to support student innovation and

entrepreneurship

• Multiple student entrepreneurship clubs

• A venture incubator space in the School of Computer Science and Engineering

• A Centre for Innovation & Entrepreneurship in the Business School

• A Startup Games competition for students that runs over four weekends

• MBA student internships within local tech startups

• A dedicated student startup mentoring service provided by three full-time staff

• Pro-bono legal advice for student and alumni entrepreneurs

• FounderLab, an on-campus product development team for non-technical student startup

founders

16

https://www.2025.unsw.edu.au/sites/default/files/uploads/unsw_2025strategy_201015.pdf 17

https://www.2025.unsw.edu.au/sites/default/files/uploads/UNSW%20Innovation%20Statement.pdf


6. RECOMMENDATIONS

Despite a number of high quality programs there are several challenges facing South Australia in its

efforts to boost high-impact entrepreneurship, as discussed in the preceding section. The

recommendations below are intended to address those challenges and are informed by initiatives

underway in other states as well as overseas.

Recommendation 1: Formulate an Innovation and Entrepreneurship

Policy

The South Australian government currently lacks a clear narrative or strategic policy direction relating

to innovation and entrepreneurship.

An Innovation and Entrepreneurship Policy for South Australia should emphasise high-growth,

technology-based businesses and provide a substantial long-term funding commitment to enable

implementation and growth of impactful programs.

The government recently announced a substantial funding commitment to an establish an early

commercialisation fund and a venture capital fund to support startups. This funding will be an

important ingredient in growing the tech sector in South Australia. However it is crucial that the

government recognise the multiple other market failures that are limiting growth of the tech sector and

act to address them. In particular there is a strong case for government to support initiatives to

produce more high-impact entrepreneurs and provide better support and guidance to them. Doing so

will ensure that the co-investment funds have an adequate pipeline of opportunities to consider – both

in terms of number and quality.

A suite of startup-focused policies and programs would maximise the impact of the government’s

investment in innovation and ensure the continued growth of the startup ecosystem in South Australia.

A number of state governments, notably Queensland and Victoria, have sought to accelerate the

growth of their respective startup ecosystems via a range of policies and programs targeted

specifically at tech startups. In Queensland these programs are delivered under the Advance

Queensland program which has funding of $180 million over four years, and in Victoria via the newly

formed LaunchVic which has funding of $60 million over four years to support the growth of the state’s

acceleration, incubation and co-working capabilities.

The NSW government has also flagged its intention to release a comprehensive innovation policy in

the coming months, building on its existing commitment to develop the White Bay Power Station into a

world class startup and innovation hub on Sydney Harbour, and its recent commitment of $25 million

to establish the Sydney School of Entrepreneurship, a joint venture between several NSW universities

and TAFE NSW that will provide practical training to large numbers of high-impact entrepreneurs.18

It is expected that other states will follow this trend as they seek to position their economies for

continued growth.

Any new policies developed by the South Australian government will need to be cognisant of federal

government programs and dovetail with the federal government’s National Innovation and Science

Agenda.

Next steps:

• Engage with the local startup ecosystem, business community, universities and other

stakeholders, and the national startup advocacy group StartupAUS, to identify priority areas to

be addressed in a South Australian Innovation and Entrepreneurship Policy

18

https://www.industry.nsw.gov.au/media/media-releases/2016-media-releases/2016-media-releases/nsw-

budget-$25-million-for-new-sydney-school-of-entrepreneurship


Recommendation 2: Establish a major startup hub in the city

It is widely recognised that startup density is an important factor in growing successful startup

ecosystems. Research by Richard Florida and others19

highlights the importance of bringing

entrepreneurs and people who support the startup ecosystem together. High startup density is

achieved when startup founders and other participants in the ecosystem (investors, advisors, mentors

etc) work in close proximity and benefit from frequent “collisions” which enable them to rapidly share

learnings and build highly effective networks.

The current geographic dispersion of startup activity across Adelaide and Tonsley is diluting the

potential for South Australian startups to operate in a high startup density environment.

Furthermore, there has so far been limited scope to co-locate startups with other ecosystem

participants such as angel investors, venture capital funds and service providers.

A city-based startup hub could become the focal point for South Australia’s startup ecosystem. Such a

precinct could act as a hub into which other programs connect as spokes (such as NVI and the BioSA

Incubator).

The Adelaide Startup Hub should have the following attributes:

• A space of at least 2,000m2 with the capacity to expand to at least 5,000m

2 – allowing for

growth, economies of scale and co-location of synergistic groups such as angel investors, VC

funds, service providers and government economic development professionals.

• Centrally located – to ensure maximum utilisation and visibility.20

It is highly unlikely that

Tonsely could fill this role due it its distance from the city and geographic separation from the

rest of the ecosystem.

• Not on a university campus – in view of the fragmentation that arises when universities run

sub-scale and competing programs, and in recognition of the fact that their roles will continue

to revolve around research, teaching and engagement with existing industry.

• Incorporates a sizeable events space that can be the default location for startup-related

events and meetups.

• Structured commercially so that startups are able to access the space and programs at below

commercial rates – to ensure startups are not excluded due to high costs. This could be

achieved by allocating suitable space to startup hub operators (incubators and co-working

spaces) at subsidised rates. The Startup Hub would ideally be seeded by inviting Majoran

Distillery (Adelaide’s main startup co-working space) to be anchor co-working space operator

and ensuring it is accommodated on terms that guarantee its long term financial viability.

• Focused narrowly on high-growth technology-based businesses.

• Engages startups spanning all sectors including ICT, advanced manufacturing and biotech,

and allows for co-location of startups that require specialist facilities such as biotech labs via

having a presence at both the Startup Hub and dedicated facilities such as BioSA and

Tonsley.

• Actively engages angel investors and venture capital fund managers by providing them with

work spaces and meeting facilities in close proximity to startups.

• Focused on delivery of value-adding programs and not just provision of office space.

• Enables startups formed on any university campus to articulate into the Startup Hub to receive

intensive support and mentoring that universities are not well resourced to provide.

• Resourced with one or more Entrepreneurs-In-Residence (refer Recommendation 4) – to

ensure the Startup Hub is providing entrepreneurs with high quality guidance and advice.

The Adelaide Startup Hub has the potential to address fragmentation, acting as a “centre of gravity”

for the startup ecosystem and bringing together key players – including entrepreneurs, investors,

mentors, larger companies, students and service providers.

19

http://www.boundlss.com/blog/casual-collisions-spontaneous-meetings-serendipity 20

Recommending a suitable location is beyond the scope of this report, although it will be appreciated that

possible CBD locations could include the RAH site and some of the empty buildings on North Terrace.


A similar approach has been taken in the development of startup hubs in central locations in Brisbane,

Sydney and Tasmania, as summarised below.

Brisbane

• A 2,700 m2 startup hub “The Capital” being developed on the Queen Street Mall with $5

million funding provided by Brisbane City Council and capacity to house up to 200 startups

• Will house Fishburners (a startup co-working operator that originated in Sydney), Happy

Panda (a co-working space for larger tech companies) and a large events space for startup-

related events.

• A second startup precinct is being established in Fortitude Valley (city fringe) with $4 million

funding from the Queensland government and capacity to house up to 500 startups

• Tenants in the 5,000m2 space will include River City Labs (Brisbane’s main existing startup

co-working space, relocating) and CSIRO’s data innovation group, Data61

Sydney

• White Bay Power Station site to be converted into an innovation district occupying 9 hectares

on Sydney Harbour

• Expected to house multinational technology companies, incubators, accelerators and several

hundred startups

Tasmania21

• Two new startup spaces to provide workspace, training, and mentorship: Macquarie House in

Launceston, and the former Mercury newspaper building in Hobart

• Funding of $500,000 provided by Tasmanian government including for creation of an

investment fund to support startups in the hubs

• Supported by University of Tasmania, TasTAFE, and Startup Tasmania

The Adelaide Startup Hub could catalyse the relocation of some of the key existing programs to

operate from a central location, although it should be appreciated that some existing programs can

and should continue to operate independently of the Startup Hub, and there should be no reason for

the Startup Hub to attempt to consolidate all existing programs into one offering.

Development of an implementation plan for the Startup Hub should be informed by solid data and

analysis of the existing startup and entrepreneurial ecosystem – including a breakdown of startup

activity by sector and location. A number of such analyses have been undertaken by specialist data

analytics firm Boundlss who have published insightful reports on the startup ecosystems in Perth22

and

South-East Queensland.23

The establishment of an Adelaide Startup Hub may be eligible for funding under the federal

government’s incubator support program.24

Next steps:

• Commence ecosystem mapping with external assistance as required

• Engage relevant stakeholders from the South Australian government, the startup community,

universities and TAFE SA to identify a suitable site and develop a high-level implementation

plan

21

http://www.startupdaily.net/2016/03/tasmanian-government-allocates-funding-innovation-hubs-hobart-

launceston/ 22

http://bit.ly/1VGCBCx 23

http://bit.ly/1rMaB44 24

http://www.innovation.gov.au/page/incubator-support-programme


Recommendation 3: Support the creation of a high-impact

technology entrepreneurship subject delivered jointly by Adelaide’s

universities

Adelaide’s three universities lack a student entrepreneurship subject that squarely focuses on high-

growth technology-based ventures and is delivered to science and engineering students.

Whilst the Venture Dorm program (Flinders University) and the Tech eChallenge (University of

Adelaide) partially address this gap there is an unmet need for a high quality course that exposes

large numbers of STEM students to high-impact entrepreneurship concepts and supports them

through the early phases of starting new ventures.

Arguably the best Australian example is the Technology Venture Creation subject delivered at the

University of Sydney’s Engineering Faculty. The course was created in 2008 by Matt Barrie (an

experienced serial entrepreneur, currently CEO of ASX-listed company Freelancer.com) and taught

for several years by Matt and Bill Bartee (a serial entrepreneur and venture capital investor) with guest

lectures provided by other experienced entrepreneurs from Australia and the United States.

The Technology Venture Creation course was based on entrepreneurship courses delivered at

Stanford University and complements other entrepreneurship programs at the University of Sydney,

including the Incubate student incubator.

Provision of matching funds to encourage the universities to create and deliver such a course would

be a good investment, particularly if funding was tied to a commitment from the three universities to

collaborate to create a single high quality course that could be delivered across each institution.

Importantly, the course should act as a catalyst to encourage students to actually start a company

during or immediately after the course, rather than simply learn about startups as a hypothetic

exercise.

The course should have the following attributes:

• A semester-long course with a single common curriculum delivered to students of all

universities

• Experiential, involves development and execution of viable startup ideas in teams, and with

emphasis on application rather than theory

• Available to students in all disciplines but with an emphasis on STEM students

• Utilises shared resources such as experienced mentors and guest presenters (including

Entrepreneurs-In-Residence as outlined below in Recommendation 4, complemented by

visiting entrepreneurs brought in from interstate and overseas)

• Delivered at the Startup Hub jointly by staff of the Startup Hub and the universities

• A satellite version of the course could also be delivered on each institution’s campus as long

as it utilises the core curriculum and leverages the shared teaching resources

• Awareness of the course among the student population is raised by guest talks, hackathons

and other events at each university as a means of identifying those students with the greatest

interest in taking the course

• Does not seek to engage every STEM student, but aims to teach several hundred STEM

students per year from across the three universities

• Participation is actively encouraged via explicitly incorporating high-impact entrepreneurship

within each university’s statement of graduate qualities

Next steps:

• Workshop with senior executives, entrepreneurship educators and STEM discipline leaders at

the three universities to develop a high-level implementation plan


Recommendation 4: Establish an Entrepreneurs-In-Residence

program

The Adelaide startup ecosystem lacks a deep pool of experienced entrepreneurs who can guide the

next wave of startup founders. Like most Australian cities, Adelaide suffers from the chicken-and-egg

problem of having very few successful startup founders who can inject their experience back into the

startup ecosystem as mentors.

An Entrepreneurs-In-Residence (EIR) program would address this gap by engaging internationally

experienced entrepreneurs (including Australian ex-pats) who have successfully started, grown and

exited technology companies.

EIRs would be based in the Adelaide Startup Hub and engaged across the entire Adelaide startup

ecosystem, including working within the university and TAFE sector and contributing to delivery of

courses such as the one outlined in Recommendation 3. An ideal mix would be one permanent EIR

and multiple EIRs making shorter visits spread over the course of the year. Having multiple EIRs

would allow for a diversity of skill sets and domain expertise (including in science-based companies)

as well as access to a broader overseas network.

A small cadre of high quality Entrepreneurs-In-Residence within the Adelaide Startup Hub would have

a significant positive impact on the local startup ecosystem by helping first-time startup founders to

short-circuit the learning curve and by facilitating access to global networks.

The program would present opportunities for interstate collaboration and pooling of resources, given

that Brisbane currently runs a visiting entrepreneurs program25

and Sydney is proposing to establish

such a program.26

Next steps:

• Engage relevant stakeholders from the South Australian government, the startup community

and interstate EIR programs to identify suitable candidates and develop a high-level

implementation plan

Recommendation 5: Implement the recently announced co-

investment funds

A lack of early stage capital is one of the greatest impediments to success of startups in Adelaide, and

is also acting as a barrier to startup formation and retention. A co-investment fund would stimulate

greater levels of early stage investment by angel investors and early stage (seed and Series A)

venture funds.

Based on recommendations made by Redfire Consulting Group, the South Australian government has

committed to the establishment of a $10 million Early Commercialisation Fund and a $50 million

Venture Capital Fund to address this market failure. We strongly endorse the rationale for establishing

these funds.

We also support the approach proposed by Redfire to implementing the funds, and offer the following

suggestions based on first-hand experience:

• The government should resist the temptation to make active investment decisions, but should

instead co-invest alongside pre-approved investors with minimal due diligence. The

government should reserve the right not to invest where the company does not pass basic

due diligence, but otherwise investment decisions should be speedy and aimed at taking a

passive role.

• The fund should not be rounds-based, instead allowing for decisions to be made when

needed alongside commercial investors.

• The fund should absorb the current SA Microfinance Fund and the Venture Catalyst program.

25

http://startupqld.org/vep/ 26

http://sydneyyoursay.com.au/tech-startups-action-plan


• Funding decisions should recognise the value of founders having undertaken a startup

education program, but this should not be a requirement. Not all startup founders will benefit

equally from taking a course, and as the startup ecosystem matures it should be expected that

fewer founders will have major skills gaps that need to be addressed through education.

The federal government’s National Innovation and Science Agenda did not include a co-investment

fund. Other states have considered such a model, with Queensland having recently launched its

Business Development Fund – a $40 million co-investment fund for startups.

Next steps:

• Act on the recommendations contained in the implementation plan developed by Redfire

Consulting Group for the establishment of the above co-investment funds

Recommendation 6: Establish an entrepreneurship program for

academic staff, postdocs and postgraduate students

Currently researchers and postgraduate students have limited opportunity for involvement in

entrepreneurship, and very few have taken the leap to form a spinout company to commercialise their

research.

An entrepreneurship training and incubation program for researchers and postgraduate students

would be a valuable way to expose those with deep science skills to the notion of high-impact

entrepreneurship, and provide a pathway for science-based opportunities in the form of spinout

companies.

Such a program should be based on the Lean LaunchPad developed by Steve Blank (Stanford

University) and Jerry Engel (UC-Berkeley). The Lean LaunchPad has been delivered worldwide,

including to more than 1,500 researchers in the National Science Foundation in the US, and has been

impactful both in encouraging spinout formation and in improving the commerciality of research efforts.

Similar to the technology entrepreneurship course outlined in Recommendation 3, the course should

act as a catalyst that encourages researchers to actually start a company rather than engage in a

purely hypothetical exercise.

A South Australian Lean LaunchPad program should have the following attributes:

• Not tied to any one institution, but delivered at the Startup Hub as a central program that can

be accessed by all of the universities

• Involvement of university commercialisation arms (or preferably one consolidated

commercialisation entity) to ensure the teams can secure required IP rights

• A mix of MBA and Masters / PhD students and research staff to form multidisciplinary teams

around science-based ideas

• Utilises shared resources such as Entrepreneurs-In-Residence and delivered jointly by staff of

the Startup Hub and the universities

• Delivered with support from BioSA which currently is the State’s primary agency supporting

life science-based companies. BioSA already has strong high-tech industry links and can

provide deep industry expertise.

• Visibly supported by university senior management so that academics are encouraged to take

part in the program

In order to address practical and cultural challenges, the universities should give consideration to

adopting a leave of absence policy to enable academic staff and research students to pursue startup

opportunities (whether or not directly related to their research) and return to their academic post or

studies without penalty.


A good example of a multi-institution science-focused entrepreneurship initiative is the ACE Venture

Lab in Amsterdam,27

a collaboration between the University of Amsterdam, VU University, Amsterdam

University of Applied Sciences and the Amsterdam School of Arts.

Next steps:

• Workshop with senior executives, entrepreneurship educators and STEM discipline leaders at

the three universities

Recommendation 7: Establish a high-impact entrepreneurship

course and incubator within TAFE SA

TAFE SA has to date had limited engagement in high-impact entrepreneurship.

A high-impact entrepreneurship course and incubator focused on IT and web development students

would enable TAFE SA to expose students to startup opportunities and support the growth of globally

scalable ventures.

Such a program could be financially supported by the South Australian government and could

leverage the soft infrastructure already in place (such as Venture Dorm at NVI) and the Adelaide

Startup Hub and EIRs once they are in place.

Next steps:

• Engage relevant stakeholders from TAFE SA, the South Australian government and the

startup community in an exploratory discussion to flesh out the idea and develop a high-level

implementation plan

Recommendation 8: Establish an overseas startup immersion

program for students

Australian universities lag those in many other countries in exposing students to high-impact

entrepreneurship. Consequently graduates of Australian universities are less likely to form startups

than graduates from universities in many other countries.

An overseas startup immersion program for university students would be an effective way of exposing

students to the entrepreneurial culture in startup hotspots around the world such as Silicon Valley, Tel

Aviv and Stockholm, and imparting a sense of what can be achieved.

A similar immersion program has been running in Brisbane for two years28

and has been found to be

highly impactful. The ten-day Startup Catalyst program has received funding support from the

Queensland government, universities, corporate sponsors and philanthropists – who together cover

the entire cost of delivering the program (approximately $8,000 per participant). Based on its success

to date the program is being expanded to deliver multiple trips commencing in 2016.

A relevant overseas benchmark is the National Overseas Colleges (NOC) program - an internship and

overseas immersion program that places 200 students per annum from National University of

Singapore as interns in high-growth tech startups in hubs such as Silicon Valley, Beijing, Stockholm

and Tel Aviv for up to a year in parallel with studies at local universities such as Stanford and KTH

Royal Institute of Technology.

Any such program in Adelaide should leverage the existing work of the New Venture Institute which

already takes Venture Dorm winners on a mission to the US.

Next steps:

• Engage relevant stakeholders from the South Australian government, the universities, the

startup community and similar programs interstate to develop a high-level implementation

plan.

27

http://www.ace-venturelab.org/ 28

http://startupcatalyst.com.au/


APPENDIX 1 – STAKEHOLDER INTERVIEWS

I would like to acknowledge the generosity of all involved in giving up their time, and Ms Jane Liew in

the Department of State Development who co-ordinated the stakeholder meetings.

University of South Australia

Professor David Lloyd – Vice Chancellor and President

Professor Jana Matthews - Director, Centre for Business Growth

Professor Tanya Monro - Deputy Vice Chancellor, Research & Innovation

Professor Allan Evans - Provost and Chief Academic Advisor

Dr Stephen Rodda - CEO, UniSA Ventures

Ms Jasmine Vreugdenburg - Manager, Innovation and Collaboration Centre

Dr Peter Balan - Senior Lecturer, Business School

Professor Simon Beecham - Pro Vice Chancellor, IT, Engineering and the Environment

Professor Marie Wilson - Pro Vice Chancellor, Business and Law

University of Adelaide

Professor Warren Bebbington - Vice-Chancellor and President

Professor Noel Lindsay (Director, Entrepreneurship, Commercialisation and Innovation Centre)

Dr Allan O'Connor - Academic Director (Post Graduate), ECIC

Dr Scott Gordon - Lecturer in Entrepreneurship & PhD Director, ECIC

Zrinka Tokic - eChallenge Program Manager, ECIC

Dr Gary Hancock - Academic Director, Undergraduate Program - ECIC

Professor Robert Hill - Executive Dean of Faculty of Sciences

Professor John Beynon - Executive Dean of Engineering, Computer and Mathematical Sciences

Mrs Leah Grantham - Director of Stakeholder Relations

Associate Professor Carolin Plewa - Business School; Sub science council committee

Robert Chalmers - Managing Director, Adelaide Research and Innovation

Flinders University

Professor Colin Stirling - Vice-Chancellor

Professor Robert Saint - Deputy Vice-Chancellor, Research

Anthony Francis – Managing Director, Flinders Partners

Margaret Ledwith - Innovation Partnerships Director, Flinders Partners

Professor John Roddick - Dean, School of Computer Science, Engineering & Mathematics

Matt Salier - Director, New Venture Institute

Dr Pi-Shen Seet - Associate Professor - Flinders Business School


TAFE SA

Robin Murt – Chief Executive

Jen Rodger - Executive Director, Education

Scott Dwyer – Senior Lecturer / Co-ordinator, Cookery, Hospitality and Tourism

Nigel Blake - Educational Manager, Cookery, Hospitality and Tourism

State and Local Government

Dr Leanna Read – Chief Scientist of South Australia

Ms Julianne Parkinson - Executive Director, Office of the Economic Development Board of South

Australia

Ms Jane Liew - Policy Officer, STEM and Entrepreneurship Skills, Office of Science, Technology and

Research, Department of State Development

Andrew Rasch - A/Principal Policy Officer, Office of Science, Technology and Research, Department

of State Development

Paul Daly – Advisor, Entrepreneurship and Innovation - Adelaide City Council

Dr Meera Verma - Acting Chief Executive, BioSA

Startup ecosystem

Chhai Thach – Director, Majoran Distillery; Director, Furio

Steve Barrett - Director, Majoran Distillery; Director, Furio

Carly Thompson-Barry – Director, SASS Place

William Chau – Founder, Simpliate

Nick Boniciolli – Managing Director, SnapMe Media

Brett Jackson – Executive Director, Innovyz

Shane Cheek – Partner, Acumen Ventures

Will Tamblyn – Founder, VoxieBox

Gavin Smith – Founder, VoxieBox

Harry Lucas – Founder, Grape Brain

Petros Kyriacou – Founder, Grape Brain

Simon Schmidt – Founder, Vinnovate

Jerome Lienert - Founder, myEvidence

Emily Rich – Founder, Jemsoft


APPENDIX 2 – STARTUP ECOSYSTEM BEST PRACTICE

1. Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed – and What to Do About It, Professor Josh Lerner (2009)

29

Professor Josh Lerner is a global expert on economic development policies and programs with a

specific focus on innovation, entrepreneurship and tech startups. He is Professor of Venture Capital

and Private Equity at Harvard Business School and Principal of consulting firm Bella Research Group

through which he has advised numerous city, state and national governments around the world on this

topic.

A key theme in Professor Lerner’s work is that governments can have an effective role in stimulating

and supporting innovation ecosystems and startups, but that a large proportion of programs that have

been put in place around the world have in fact been of limited (or negative) value.

Lerner argues that governments should follow several core principles in establishing and implementing

economic development policies, as summarised below, in order to maximise the effectiveness of their

efforts.

1. Set the table: Ensure that the regulatory environment and culture encourage rather than stifle

innovation and startups

• Whilst the federal government must ensure tax laws and the regulatory environment

are conducive to startups, cities and states also have economic levers available to

them which can have a significant impact on attitudes toward innovation and tech

startups.

2. Recognise that long lead times are needed before tangible economic outcomes are achieved

• Many good programs have been prematurely cut due to unrealistic expectations about

timeframes to achieve economic impact. Economic development agencies need to

proactively set expectations about timeframes and procure a long term commitment to

funding of important projects – certainly beyond annual budget cycles, and ideally

beyond election cycles.

3. Learn from programs that have been demonstrated to be successful in other regions

• Governments are often tempted to devise new programs without first looking to see

what has been demonstrably successful (or unsuccessful) elsewhere. Costly mistakes

can be avoided and learning curves can be short-circuited by replicating programs

that have worked elsewhere, and modifying as needed.

4. Measure, evaluate, and review programs on a regular basis

• Governments need to be prepared to change or cancel programs that are not

effective, and to add new programs as the needs of the ecosystem change. Such an

agile approach can be challenging in a political environment where the government is

open to criticism for any perceived or actual program failures, and requires that the

government focus its communications on outcomes rather than specific programs.

5. Avoid the temptation to launch lots of small programs

• Many governments have launched startup programs that are sub-scale and have not

had a material impact on the ecosystem. Sub-scale programs do not just struggle to

deliver meaningful economic outcomes, but also expose government agencies to

criticism that the programs were more about public perception than about actually

creating economic impact.

6. Focus on specific market failures

• The most effective startup ecosystem programs are those that address specific

ecosystem gaps and clearly articulate the types of companies they are seeking to

support, rather than taking a generic approach that attempts to support a wide range

of businesses with diverse needs.

29

http://www.amazon.com/Boulevard-Broken-Dreams-Entrepreneurship-Failed/dp/0691154538


7. Focus on the needs of entrepreneurs

• Numerous cities have created innovation districts that have in substance been

primarily real estate projects. By placing too much emphasis on the physical

infrastructure these projects have often neglected the needs of entrepreneurs and not

delivered the value-adding programs and services they need, resulting in under-

utilisation of the space and poor economic outcomes.

2. Startup Communities: Building an Entrepreneurial Ecosystem in Your City, Brad Feld (2012)30

Brad Feld is a successful entrepreneur, investor and startup advisor, and one of the leaders in the

startup ecosystem in Boulder, Colorado. Boulder is unusual in that it has one of the highest startup

densities (startups per capita) in the world, and an extremely high startup success rate – despite

having a population of only 102,000.

In his Startup Communities book Feld sets out the “Boulder Thesis” which describes the conditions

that enabled the rapid growth of the startup ecosystem in Boulder, and which have been shown to

apply to any emerging startup ecosystem. The thesis comprises four principles:

1. Entrepreneurs must lead the startup community

• Government (along with universities, corporates, service providers and investors) are

vital parts of the ecosystem, but need to play a supporting role and not attempt to

directly drive the growth of the ecosystem.

2. The leaders must have a long-term commitment

• Building a vibrant startup community takes a decade or more, and it must therefore be

led by individuals with a long term vision and the financial capacity to engage in the

long term. These people are generally successful entrepreneurs who have had a

significant liquidity event (exit) and are prepared to give back to the community.

3. The startup community must be inclusive of anyone who wants to participate in it

• The community should not be allowed to become a “boys club”, to select for a narrow

set of demographic attributes, or to favour any particular operators. If it is working well

it will be highly inclusive whilst naturally excluding bad actors.

4. The startup community must have activities that engage the entire entrepreneurial stack

• The ecosystem will be strengthened by regularly engaging entrepreneurs, investors,

corporates, service providers, universities and government and bringing them

together via events, workshops etc.

3. Why Governments Don’t Get Startups, Steve Blank (2011)31

According to Steve Blank32

, one of the world’s leading experts on designing programs to support tech

startups, many government programs have failed because they have attempted to support too broad a

group of businesses. He sets out five attributes of government programs that are effective in growing

and supporting tech startup ecosystems:

1. All aspects of the program, including design, content, staffing and mode of delivery, are

tailored to the specific needs of tech startups.

• Tech startups have very specific needs, and programs that are useful to small

business entrepreneurs are of limited relevance to tech startup founders, and vice

versa.

2. The programs do not provide support to a large number of diverse businesses in an effort to

create jobs, but focus narrowly on those businesses that have the potential to create high

value, high skill jobs, experience rapid growth and thereby lead to wealth creation.

30

http://www.amazon.com/Startup-Communities-Building-Entrepreneurial-Ecosystem-ebook/dp/B008UV826U/ 31

http://steveblank.com/2011/09/01/why-governments-don%E2%80%99t-get-startups/ 32

http://steveblank.com/2011/09/01/why-governments-don%E2%80%99t-get-startups/


• This is consistent with research by the Kauffman Foundation33

in the US which found

that the 4% of companies with the highest growth are responsible for creation of over

70% of all new jobs.

3. The agency delivering the program recognises that tech startups are a capitalist exercise and

that successful programs will unfairly support a small subset of all companies. They do not

embody “fairness” or patronage, and must be prepared to exclude companies that do not fit

the program’s goals.

• Cities and states need to articulate a clear economic justification for supporting a

small number of companies (those with the highest growth potential) to the exclusion

of a much larger number (those that do not have the same capacity for growth).

4. Government supports the program, but does not seek to micro-manage its operations or to

play a part in decision-making about which startups to support.

• The people best qualified to manage the program and employ a rigorous startup

selection process generally come from the private sector and often have been

entrepreneurs themselves.

5. Government has a clear plan to reduce its support of the program in the medium term, rather

than continue to fund it indefinitely.

• Economic development programs to support startups are inherently not financially

self-sustaining or profitable. However, programs can be designed in such a way that

they either become redundant (having addressed the specific market failure) or can

operate long-term through achieving significant scale and attracting support and

sponsorship from corporates, universities and other levels of government.

33

http://www.kauffman.org/what-we-do/research/firm-formation-and-growth-series/the-importance-of-startups-in-

job-creation-and-job-destruction


APPENDIX 3 – ADELAIDE ENTREPRENEURIAL ECOSYSTEM MAP

www.spikeinnovation.com.au

Spike Innovation is a specialist consulting firm that provides strategic advice to supporters of tech startup ecosystems – including incubators, universities and government agencies. We advise on growth of startup

ecosystems, including program design and implementation, and provide practical training for entrepreneurs and intra-preneurs based on lean startup principles.

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