The economy is in a rocky place, inflation is at an all-time high and central banks around the world are feeling the pressure to maintain stability. But it isn’t all doom and gloom. A strong US dollar has led to a skyrocketing appetite for Australian exports. Our people and products have never been in higher demand. So is now the time to launch or commercialise an idea? Or is it maybe the perfect environment to back a winner?
Someone who knows about capitalising on a downturn is Leigh Jasper. A country kid from Rutherglen, Leigh rode the wave of new internet businesses, survived the dotcom boom and bust and eventually sold his business (for a record amount) to Oracle. Leigh joined us at our latest VC Catalyst alumni event in October for a fireside chat with entrepreneur, business veteran, and VC Catalyst Facilitator and Lead Academic Professor Colin McLeod to unpack his life, career and observations as both an entrepreneur and now investor. Their robust discussion was followed by a stimulating Q&A with our alumni about critical topics like the turbulent investment space and lack of female representation.
But first up, introductions, Leigh Jasper is co-founder and former CEO of Aconex, the world’s largest provider of online collaboration solutions to the construction and engineering industries. He and co-founder Rob Phillpot sold the company in 2019 to Oracle for $1.6 billion in what was Australia’s largest technology M&A transaction. Leigh now serves as CEO of Saniel Ventures and is a non-executive director of SEEK Ltd, Salta Properties, Buildxact and the Burnet Institute. He, much like us, is passionate about the Victorian startup ecosystem. So much so that he also chairs the LaunchVic board.
Given the breadth of his dual entrepreneur/investor experience and deep knowledge of the Victorian startup ecosystem (he’s been in it from the very beginning), Leigh knows a thing or two about successful businesses, and successful investments. Here are his pearls of wisdom.
Finding opportunities in turbulent times
Economic uncertainty generally results in a lower appetite for risk, however in the right context, a high-risk appetite can really pay off. This was the case with Leigh’s investors, whose capital during the dotcom crash helped keep Aconex afloat while his competitors struggled to maintain cash flow and so went out of business. Aconex (and its investors) then held a much stronger position once economic conditions returned to normal – a competitive advantage that is hard to replicate. This wasn’t just true for Aconex. In the US, startups like Google, Amazon and eBay convinced their investors to stay in the game, giving them a huge head start on their competitors. The impact of which remains obvious to this day.
This is a lesson for not just entrepreneurs, but for investors, who should look for and chase opportunities in all economic conditions. Leigh says: “Getting through this period (of volatility), it’s the best time to build a business… it’s an environment that weeds out the weaker businesses. But if you are in a position of strength, it’s a great time to get your efficiency metrics going, really focus on your operations and setup for the next phase of growth.” It’s also something we teach in VC Catalyst, the management of risk in venture capital investing is often different to traditional investing where guaranteed returns are expected.
Relationships are key
Leigh credits his success to a handful of key relationships. Particularly his relationship with co-founder Rob, “I think we complimented each other in terms of what we did within the company. But I think we’re also happy to let each other make the mistakes you have to make as a founder.” By giving each other the space to fail, the founder dynamic flourished. But it’s not just inside the startup that matters, the relationship between founder and investor is just as important. Leigh recommends giving founder relationships the time to grow and not just assuming your first impressions paint an accurate picture of the founder (from a pitch for example).
He says, “I assumed founders would operate like me, but every founder’s different. And so the minute I think, ‘that’s what a founder would do,’ that’s what I would do as a founder. But it’s not always what other founders would do. It’s important to get to know people and really test the waters.” Keeping your brain’s hardwired biases, originally designed to keep us alive when we were hunter-gatherers, in check is another integral part of successful relationships (read expert Professor Jill Klein’s take here).
Lead the charge to change the system
Our startup ecosystem must be fair and equitable to realise its full potential. The lack of female representation in the startup ecosystem was a key focus of our alumni’s Q&A and formed an important part of the event’s discussion. Addressing this lack of representation across the startup ecosystem is a big job that everybody must play a role in. This includes everything from female founders accessing early-stage capital, to having more women at the table inside funds, higher involvement in decision-making and making impactful policies on a macro level. As educators of the ecosystem, Wade Institute plays an important role too. 57% of VC Catalyst alumni are women and it’s a key focus of all our programs.
Another way this work is happening in Victoria is through LaunchVic’s Alice Anderson Fund, of which Leigh says, “Women tend to raise less than men, but the [goal] of the Alice Anderson fund is to top that up.” The fund works with investors in the sector to “nudge the scales a bit towards women.” We can also ‘nudge’ the scales by reforming a broken system. For Leigh, this could mean taking a look at risk structures, “I think something that we need to do as a sector is to encourage women to take more risk and enable the structures around them to do that.” A more equitable startup ecosystem will lead to better outcomes for everyone and a stronger, more innovative economy for the future.
Invest in learning
Continuous learning is a mindset we all subscribe to here at Wade Institute, and Leigh is no different.
“We say to our executive team and the entire company, we expect you to make mistakes. Obviously don’t make the same mistake a dozen times, but make mistakes. If you’re not making mistakes, you’re not pushing the envelope and not trying to drive the business forward.”
This provides employees along with founders (and even investors) the space to learn and grow. Leigh stresses the importance of being both a humble entrepreneur and a humble investor. One who is willing to listen, take on advice and learn. For investors, this means taking every investing experience as an opportunity to learn.
And as for Leigh himself, “I’ve made heaps of mistakes and I’m going to keep making them.”
Learning and continuous improvement is important for all investors. It’s why we offer ongoing learning and networking opportunities for VC Catalyst alumni. Masterclasses and fireside chats run all year-round. Want to learn more? Visit the VC Catalyst program page or speak to our program director.