Interview: Alan Jones

JEREMY FERNANDEZ: Alan Jones is an entrepreneur in residence at the start-up company Blue Chilli.

He is also advised the Catalyser program and joins us now in the studio.

Alan Jones, thank you for joining us.

ALAN JONES, BLUE CHILLI ENTREPRENEUR-IN-RESIDENCE: Thanks for having me.

JEREMY FERNANDEZ: We saw there a range of ideas ranging from apps to burgers.

When w're talking about start-ups, are those just really the beginnings of a small business particularly when you're looking at starting up a burger joint, rather than what we traditionally think of start-ups being, being quite high-tech?

ALAN JONES: Yeah, I think the primary goal of the Catalyser program is to take refugees and recent migrants who come to Australia, hoping for a new beginning, and helping them find a way to start anew, that doesn't result in underemployment or reliance on social security for too long.

If we can show the rest of Australia that instead of just finding employment for these people, we might be able to create viable businesses, which create employment opportunities for other people, I think we have tremendous case studies to show the rest of Australia that skilled migration and refugee migration - the two really important principles on how Australia was built and how Australia should continue to grow.

JEREMY FERNANDEZ: As we saw there, hope is a big factor in all of this. Is that hope well placed when you are going out and making such a big risk?

ALAN JONES: I think one of the things that entrepreneurs in general have learnt from the tech start-up industry over the last 10 or 20 years is how important it is to actually go out and find a problem which is worth solving, by learning from a customer.

So, the old way of being an entrepreneur was having belief in yourself, having some original inspiration and going out and seeing if you could find customers prepared to pay for that.

But what we've learnt from the tech start-up industry is it is much, much better to go out and learn from the customer what problems they actually face, figure out which of those problems is commercially viable to solve and then take a solution to that problem to market.

JEREMY FERNANDEZ: That is actually quite different from the Silicon Valley model, where you are trying to service a technological goal, versus here, where you see people trying to service an actual need, something they have experienced directly.

ALAN JONES: The interesting thing about technology is it lets us address a global market, or address a local market in a much more engaged and frequent manner.

But the essential principles, underlying principles of what we Lean Start Up methodology apply to creating any kind of business, whether it a services business, or a manufacturing business, or any kind of business.

JEREMY FERNANDEZ: Many entrepreneurs say Australia's policy and funding environment really zaps the potential and the life out of so many start-ups. They say it is just so difficult, that you are betting off going elsewhere, even overseas. Has that been your experience?

ALAN JONES: My experience stretches back to about 1995 in Australia and on the one hand I'm proud of how far we've come in that period of time.

We've built an industry around it. In 1997 we could have fit the Australian entire tech start-up industry in this studio.

Now we have an industry with about $2 billion of venture capital behind it, a number of accelerator companies around the company, private, commercial, university.

We have what used to be the CSIRO now heavily engaged in commercialising Australian research and development and so very, very proud of how far we've come.

But at the same time, we have come less farther than other OECD nations.

JEREMY FERNANDEZ: Why is that?

ALAN JONES: It's taken a long time to get to this point. The Australian economy has been reliant on resources and agriculture for a period of time, and then professional services industries, like banking and telecommunications, and so on and so forth.

We are only just starting to notice that those industries aren't going to sustain the amazing growth we have had over the last 20-30 years for very much longer.

We need to pivot now, we need to change, look for new industries to adopt.

JEREMY FERNANDEZ: So from your point of view, is the end of the mining boom a good thing to refocus on the potential of start-ups, and to perhaps draw more funding into it and make people realise that perhaps there is another way, another comparable industry?

I have heard one prediction that hopes one entrepreneur saying that they expect start-ups to become a bigger industry than mining has ever been to Australia.

ALAN JONES: I think, really what is going to happen is the mining industry will plateau or take a downturn from time-to-time. It is going to continue to follow that sign wave of commodity prices.

The tremendous opportunity before us as a technology nation is that there a zero export cost to exporting technology.

We can land ones and zeros, we can land software. The only market around the world for the same price we sell it here, for the same cost of export.

So it's really just a question of do we want to continue to be an economy which is held to ransom by changes in commodity prices or do we want to be able to establish in the world's most geographically isolated OECD nation, do we want to get into the business of exporting a zero cost to other nations?

JEREMY FERNANDEZ: You say there has been some significant growth in the 20 years that you have been doing this. Where's that growth coming from? What sort of ideas are getting ahead more than others?

ALAN JONES: The first wave of Australian tech start-up industry was all about changes in the media industry. How we display advertising to customers, how we report on that to advertisers and how we collect the revenue from that.

I was an early hire with Yahoo. I was one of the brought the Yahoo brand out to Australia originally and that's basically where that generation started.

There was a second generation, that we call software as a service. So one of Australia's most valuable companies, one of Silican Valley's most valuable companies is is Atlassian. That is the poster child of that generation.

And now we are starting to see innovations in fin tech, in artificial intelligence, in autonomous vehicles and transportation, and machine learning and that is going to be the next great wave of development.

So it really just a question of how much we want to take advantage of those booms. We have the IP, we have the resources, we have the opportunity to develop the capital and we have the opportunity to develop the talent.

JEREMY FERNANDEZ: But you know, money speaks particularly in this environment. How easy is it to get the funding and the investment to get these ideas off the ground?

ALAN JONES: Well, to an extent we need to rely on venture capital from overseas markets to come to Australia and help us grow our local venture capital.

JEREMY FERNANDEZ: So the market here is too small for that?

ALAN JONES: Well, the Australian venture capital market is growing rapidly as well but it is a global market. So, our ideas will find investment capital wherever they get the best valuations and at the moment, that is often overseas.

At the same time, we are also seeing Australian corporates, Australian large corporates, get behind a number of these ventures.

So we are running a program at the moment for female founders of Blue Chilli, where we've got some of Australia's biggest companies supplying some of the capital and a lot of the support for those companies.

We see a lot of potential opportunities there in Australia.

JEREMY FERNANDEZ: I want to ask you where you see the future going, particularly as artificial intelligence becomes more prominent in new ventures. Automation becomes prominent. Where do you see the big ideas going, the ones that do get the support, that sort of venture capital support for the investment getting off the ground?

ALAN JONES: So there is a lot of talk right now about how automation is going to change the factories and warehouses and distribution and logistics and about how it is going to take away a whole sector of employment in developed nations.

That is certainly true and that is important. We need to look at how to adapt to that change.

I think another important change that not enough people are thinking and talking about is what artificial intelligence is going to do to professional industries, professional services industries.

If you send me an email asking if we can meet sometime next week for a coffee, for instance, I'm going to CC my personal assistant Clara and she is going to respond to you and say look here is some times on Alan's calendar when he can meet with you next week, choose one of those times or let me know if there is another time that work for you.

You go back and forth with Clara to negotiate that meeting and then she sends me a meeting invite and sends you a meeting invite and you will never guess that Clara is an AI.

So the future is already here. It is just not very evenly distributed, right and when you think about how much it costs for somebody to employ an executive assistant, I pay about $100 a month for my executive assistant.

So we will see in a lot of sales roles, a lot of customer service roles, we will start to see artificial intelligence take on a lot of the employment opportunities and professional services in Australia.

And so, again, it is just a question, do we want to own some of that IP and profit from that growth and perhaps plough some of that growth back into developing other areas of the Australian economy or are we always going to be customers?

JEREMY FERNANDEZ: Alan Jones, it is good to have you with us. Thank you.

ALAN JONES: Thanks Jeremy.