I turn ideas into profit! What’s next?

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Interview with Aaron Birkby

Aaron Birkby is a crafty entrepreneur, accomplished programmer, successful businessman and a well-known consultant for small businesses and startups. He is the Co-Founder & Director at Silicon Lakes Limited. I met Aaron at the Robina Community Centre with the intention to know more about his personal journey.

Interview with Aaron Birkby
Aaron Birkby

Elena Ornig:

What was your life experience before you settled on the Gold Coast?

Aaron Birkby:

I was born in the country town Forster in New South Wales where my parents had a farm. My parents had migrated from the UK and later went on to set up a drama and language school in Sydney after a short stint when we lived in America for 18 months.

They told me that I should study hard to get a very well paid job and have a decent career. They thought that I should become a lawyer.  I went to university and studied science, physics, mathematics and law. I didn’t enjoy studying law and when I had worked for three months in a law firm to gain some experience, I quickly confirmed that I did not want to be a lawyer.

I graduated from the University of New England (AU) and got my first job at PricewaterhouseCoopers (PwC) as a consultant, which was fun but I realized that consulting major businesses would not be the pinnacle of my career because I saw that the most of these guys didn’t know what they were doing, including my bosses and even the partners of the firm. I got very bewildered and frustrated. So I quit but I didn’t know what I really want to do. I went and got a job with the National Crime Authority, conducting telephone intercepts of major organized crime. I was listening to and transcribing calls, which was a really interesting job. I learnt a lot! It really opened my eyes on how criminals think.  They do have a very different way of thinking. In their eyes, the prisons are the universities to study their craft skills.

That is how they think and how they speak. They do not say that my son is in the Long Bay prison, they say that my son is studying at ‘Long Bay University’. Their mentality is so different and yes, that was an awesome job.

From Sydney, I moved to Canberra for a particular reason. I met my wife when I was very young when we both studied in America, at NASA, and that is where we met.  When she got a job in Canberra, I followed her and got a job at Customs in the intelligence area. I worked with Custom’s and other intelligence agencies’ databases.

Elena Ornig:

Have you ever dreamed of becoming an agent like 007?

Aaron Birkby:

I did! I always dreamt of becoming a field agent because it is a very interesting job. Some of the stuff you get to see is amazing and it would be an interesting career path. I think they should encourage more people to work in intelligence. I had a great career in Canberra and really enjoyed my time there. My first National Manager was an excellent leader. He knew everyone by name and was a fantastic personable man. I would have stayed at Customs long term but my National Manager was promoted and his replacement was the exact opposite personality type. I’m pretty sure that he didn’t know anyone by name. I remember the first meeting I had with him – almost right at the start he asked me how old I was. I told him and he said: ‘I will tell you right now that you will never get promoted again until you are much older. You are too young and shouldn’t even have the position you do have at your age.’ He didn’t know a thing about me or my skills but he made that decision based on my age. That attitude annoyed the hell out of me; so I quit.

Elena Ornig:

Good on you, Aaron. I respect your decision.

Aaron Birkby:

It was the right decision and at about the same time my brother was talking about opening a restaurant on the Gold Coast.  I thought it would be interesting and I decided to go with him.

Elena Ornig:

Just like that? You made a decision and you moved to a different state?

Aaron Birkby:

It’s easy for me to move, I just like to “have a go”. I don’t fear change and I get bored very quickly with things I have already done. I like the thrill of a challenge.

Elena Ornig:

A restaurant is a private business. Had you had any previous experience in operating a private business?

Aaron Birkby:

I had always done a little business on the side. I’ve been a bit of an entrepreneur since I was 16 years old. I started with the basics like lawn mowing in the local area. At school I was selling motivational calendars to motivate peers.  Next, I started writing software to help students learn mathematics and physics at high school.

Elena Ornig:

Writing software at school age?

Aaron Birkby:

When I was about eight years old my parents bought me a Commodore 64 computer.  When I got bored with games I started to learn programming and write my own games; very basic applications. I continued writing programs and software throughout my time at school and university and I even set up a couple of consulting businesses for programmers who were creating websites. None of these consultancies really went anywhere but I learnt a lot. I learnt about a small company’s structure; billing and invoicing and so on.  Before I joined my brother I had had some field experience in running private businesses but I knew nothing about restaurants. I knew nothing about food but I ended up being the head chef of our restaurant.  Honestly, I didn’t know what I was doing!

Elena Ornig:

Give me the name of that restaurant and I will make sure that I will not go there.

Aaron Birkby:

Don’t worry, we have sold it! However, while I was in the restaurant business I wrote software for us to run our business. The main application was based on wireless hot-spots providing Internet access. People who were coming to our restaurant could have free internet credit based on how much they spent on their meal. Remember, at that time there were no applications of that sort. I also wrote the application for our point of sales system, and quickly customers started to ask me about the software. So, I started to sell the software and at the end it had become a business on its own – which wasn’t planned. I was selling the software and then we started building and supplying Internet kiosks. Later we decided to take it to the market. My wife quit her job as a lawyer in Premier and Cabinet in Brisbane, and she and I ran that software business for about nine years. We wrote more software and developed an entire billing system. We ended up with over 2,000 clients in nine countries. It was a really good business and at our peak we had a team of six employees. In 2012 we sold it.

Elena Ornig:

Is this the beginning of a story about Silicon Lakes? You had sold your businesses, were cashed up and you became the Co-Founder & Director of Silicon Lakes Limited?

Silicon Lakes

Aaron Birkby:

Sort of. We had also started and sold a couple of other smaller business in that time as well. One of my clients was Greg Burnett and one day we sat and talked of what we could do together. It was the perfect time for both of us to embrace the crazy idea of helping other startups.

Elena Ornig:

I have had numerous conversations with people who you have been mentoring as business owners and some of the startups participants. They all say that it is obvious that you are driven to help, to guide and to support and they trust you.  Do you realize that about yourself?

Aaron Birkby:

I do want to help others. I have actually learnt a lot of things about myself through my experience with Silicon Lakes and I have found some passions that I didn’t know were there.

In the past, there was something that got me really frustrated. I used to go to workshops organized by people in business coaching and mentoring but these coaches had no real experience in business. It seemed so crazy to me because people were paying a lot of money for these workshops. That is why we are now very selective about who we bring here to coach and to mentor. We only invite experienced people – those who have experienced real success or real failure. I think that this is important because in Australia we generally don’t think well of those who have failed but I think we have to change that. Failure is a way to learn much about a business.

Elena Ornig:

I often hear buzzwords which are so popular in Silicon Valley – ‘fail fast’, ‘fail often’ or ‘embrace failure’ and I believe it has become a popular concept over there.  What are the benefits of failing fast that you have discovered and accepted as a concept for the Silicon lakes organization?

Aaron Birkby:

Generally, failing fast allow you to move to the next idea. To say something is not working then giving it another year can become a failure for the next ten years. With the concept of failing fast you shoot down an idea or development process at an earlier stage and you are free to move to the next one. It is all about speed because we are living at the time when technologies are changing rapidly and new opportunities are coming up every day. You have to recognize these opportunities and if you push something that is not working it means you are losing valuable time, time which you could spend on something that might work.  Failing fast doesn’t mean to jump from one thing to another, it means to learn. There are some people who just fail, fail and fail without learning lessons.  It is hard, and one of the things that Silicon Lakes does for people is to give them an external perspective.

Say you are working on something that you are passionate about and really involved in day to day operations. That can blind you and you can miss the obvious just because you are so tied up in that process. When you participate in our Startup programs – you learn; even if you just sitting among other participants and they talk about what they’re doing.  These simple conversations can give you a lot of perspective through shared experience. The participants share what they did, what worked or didn’t; why it worked or why it didn’t work. You listen and you learn.  Startups are all about collaborative experience and openness.  So, talking about failure is beneficial for anyone who wants to learn. I give advice to Startups everyday but I am also learning about many things by organizing and running Startups. I do practice what I preach.

Aaron Birkby about Startups

When you run a business you are emotionally involved. External mentoring can be very beneficial because these mentors are not emotionally involved and they assess your business with fresh eyes. I can see it working already but we do need to find more people to come to Startups and share their knowledge and experience with starters.

Elena Ornig:

You mentioned to me that Silicon Lakes was meant to be different to what it has become. Why and how did it change and evolve?

Aaron Birkby:

When we first started Silicon Lakes we had the concept of being like a record label in the 90s. The concept we had formed was based on developers who would come in, pitch their idea and we would help them to take it to the market. We started and we learnt that the Gold Coast was a very unique place compared to Sydney, Melbourne or Silicon Valley. The entrepreneurs here tended to be older, with families, children, mortgages and various obligations to day jobs. We are not talking about students who were eating noodles and hammering out their code. We discovered people who could come up with very good ideas based on their previous business experience but they were not software developers or programmers. Quickly we realized that our model couldn’t work without an extensive and expensive technical department.

The other thing we realized was that a lot of people needed to learn about Lean Startup with one to one mentoring, going back to the basic of entrepreneurship. The new way of developing and launching a product means ditching the old methods where one comes up with an idea, goes away and develops it, and then, one year later, takes it to the market. The new way is to come up with an idea and from day one go and get a customer and learn what this customer wants; and then worry about everything else.

We have also tried the training model. We thought we would run training courses but that wasn’t in demand either. When we proposed courses on entrepreneurship we didn’t get enough people to attend – probably because they thought that they did not need these courses. They didn’t see that it had any value for them. So, our entire training model died very quickly. We also had overwhelming feedback that concluded with the clear message that people did not want a theory class; they wanted help with ‘hand holding’ through the day to day business process. We listened and went for the mentoring model where people can come in, talk about their specific problems and issues to the mentors who would sort it out and advise a solution.

That went very well and we received overwhelming interest. Now we are mentoring people. With this model we have also come across the issue of scalability. We just cannot have enough external mentors, doing everything needed, as often as required. So we started to question this model right around the time when we went to the US.

We visited Silicon Valley and San-Francisco and looked at everything, including what and how they operated. We went to Stanford and looked at their business school model. What we learnt was a field based method of learning through practical experience. We learnt that the best way to earn is to immerse yourself into a Startup and learn the entrepreneurs’ skills through experience. When we got back we ditched our mentoring model and set out on the course to draw different types of people together, jam them into a room and let them learn through real experience having the mentors right there to help. This is the current model and so far it works well.

Startup Weekend Gold Coast

Elena Ornig:

I remember coming to GovHack GC in July as one of 30 observers, ending up in the SimPROVAL team where the team leader was Nathan Challen. It was an exciting 48 hour learning experience. What struck me the most was how well the principle of natural self-organization revealed itself.

Aaron Birkby:

It is absolutely phenomenal! The pattern of the Startup Weekend is a big team of strangers that come together and not just do something together but achieve a lot in a short period of time. The advantage for us running those events is in the self-organization. Our role has changed, we were there to guide, to facilitate and to help but the teams made it happen; and this model is very scalable for us. We can reach a very wide audience, appealing to a wider variety of backgrounds, and it works. People were happy, excited and satisfied with their experience – they realized that they were up-skilled in a short period of time. That is why we want to organize more such events (the next one is from 15-17 November ).

In the US we observed a big push towards social enterprise and social entrepreneurship, which indicated a definite mind-shift. There, people weren’t saying that they wanted to make a billion dollars; rather they were saying how they wanted to positively impact the lives of a billion people. There, they already understood that if you come up with an idea that could affect the lives of many people then money will naturally follow.

The shift from money to impact has shifted the focus to ‘let’s solve a really big problem and improve peoples’ lives’. Also, we observed the change in general enterprise where the incubators and accelerators are now focusing on non-for-profit business models.  In addition, the tech startups are traditionally male-centric and when, in the US, they move towards social enterprise and creative spaces they got a lot more of female participation; and that is something we were keen to bring back and practice here.

We are no longer tech-startup focused, and we want to help anyone starting anything. It could be a business, it could be a charity or it could be a non-for-profit organization. When you look at startups you see that there is a focus on an idea but we want to shift away from that and bring back more focus on people, on the entrepreneur.

Elena Ornig:

What exactly do you mean by a focus on people?

Aaron Birkby:

We want to focus on the actual entrepreneurs. If an idea failed, that’s fine as long as the entrepreneur has grown and gained more knowledge and experience. These entrepreneurs can go on to the next idea and if the next idea fails they go to the next one. We are still a startup incubator but not a tech startup incubator – we are an entrepreneur’s incubator. We are helping entrepreneurs to become better entrepreneurs.

As you see we went through lots of business model change in Silicon Lakes.

Silicon Lakes location

 

(Silicon Lakes is located at Robina Community Centre. Have a question? Contact Aaron Birkby directly via aaron@siliconlakes.com.au )

Elena Ornig:

How many startup events has Silicon Lakes already organized?

Aaron Birkby:

We’ve had many events but the first, AppComp, launched in August 2012 was just a one day event where entrepreneurs were invited to pitch their ideas for new mobile applications. Then we had a couple of social events, a launch event, the training courses, we had GovHack 2013 and one Startup Weekend. It was a huge undertaken, as we were a small team of just 3 directors running everything.

Our calendar for next year will be based on one event per month. We changed our event calendar in order to match the process of taking an idea through to execution. Each event will emphasize a particular segment of the whole process and the first one in February will concentrate on the idea – what is a good idea, how to come up with a good idea and what to do next with your idea.

The cycle is based on the fast fail and fast success model and through that model you can clearly identify if your idea has legs or not. This model is based on the steps through the whole process and it is very flexible. Some people might choose to attend a particular monthly event to acquire some specific knowledge but the ideal is for people to work through the whole program.

Elena Ornig:

Can you summarize the benefits of everything that Silicon Lake is offering?

Aaron Birkby:

There are so many benefits and even I am not sure if I can list them all. The most obvious one is learning by experience. When you get into a Startup Weekend where hundreds of people come together to form a number of teams the things that you learn by communicating with others could be a technical skill, a business skill, a sales skill or other skills. In this process everyone learns something new. Even as a mentor and organizer of these events, I am always learning something new. It might be a new piece of technology, a new way of coding or a new thought-pattern around a customer acquisition. Altogether, without failing, you are in a process of up skilling.

Another key benefit is networking where you meet people you would otherwise not meet. Networking can provide you with a lot of benefits like new leads, new contacts, improve your reputation and bring new ideas; or you might find new support for whatever you do.  It breaks the barriers for people with established businesses who don’t have too much time to get out and communicate with other businesses and sometimes fear competition. Here, the mood and the environment are different. It is based on sharing, collaboration and openness. Here people talk, share and collaborate getting some reality checks on what is happening.

Elena Ornig:

What about results? How many success stories have you got?

Aaron Birkby:

Out of the previous events we have had three teams that are still working and going forward which is a very good result. Out of 10 ideas, three have commercial value. Two out of the three stand a very good chance to get even more traction. One of them is goStandby (Nathan Challen) and another is the Rehydrate bracelet system (Steve Dalton). The initial golden nugget or the ideal outcome of any early startup is when an idea becomes a commercial product.

Elena Ornig:

A few days ago, I interviewed Steve Dalton and I asked him about the Startups. He said that we needed to encourage the younger generation to participate in such events. What do you think?

Aaron Birkby:

I absolutely agree with Steve. In Australia we are so focused in an education system which aims to achieve one thing – get a job. We do not have avenues for experiencing entrepreneurship. We do not have avenues for experiencing entrepreneurship. I would love to copy what Harvard University is doing.  They have a program where they take a student out and send him to a startup saying: ‘Go and search. Go and become an entrepreneur and see what you can do!’ The other thing they do is to say: ‘Here is a $100. Go and setup a business.’ Of course not every idea will come through but some will and they are the ones that can change the world.

We need to practice that too. We need to take students out of the classroom and send them to learn how to create a business and launch a product. That, they can learn through events like Startup Weekend. I would love to see it happened in high schools or even from earlier ages. Also, the universities need to do that too because I can see how Australian universities are failing to prepare people for the real world.

Elena Ornig:

What if your organization approached the Government and discussed how it could be set up as a program. Do you think that is possible?

Aaron Birkby:

That is absolutely what we would like to do, but I am not sure that Governments are the answer. I had a few informal chats with universities already and have talked about such a model. We also have an idea for an accelerator program, bringing external mentors and students together similar to the format of the Startup Weekend but for a longer period of time. I think it is a fantastic model but it needs funding to make it happen. I think we should at least give it a shot.

Elena Ornig:

I have also interviewed Dr. Clarence N. W. Tan who is an investor and has already invested in nine companies. His opinion on commercializing ideas on the Gold Coast is to find a niche that would fit a range of specific criteria. Would you agree?

Aaron Birkby:

Australia is very small by population which is spread out around a huge territory and therefore we do not have density. That makes it harder for small businesses to try the launch their product or services here. In the US, if you are in San-Francisco and have set up your business as a corner store – you have a massive population pool immediately around you. If you launch a new business you will be sustainable just based on that one factor – population density. Let’s look at another example like sport. We have a couple of sport startups in our incubator, and even if you add all the teams in every sport code in Australia it would be about just a small percent of the customers that could be generated by just one sport code in America. So, if you are a sport startup and the majority of your customers are overseas, how do you stay here? I do believe that there is an element of need to get out of the building or the country and go where your customers are.

There are some businesses that you can build here and operate globally but I think we do need to look more to overseas opportunities. I think to look at just Australia is a mistake for some businesses because it means ruling out a massive part of the market.

Elena Ornig:

What if these businesses have headquarters here and pay tax here but reach their customers via the Internet?  Could this formula work for startups?

Aaron Birkby:

I love the model where you are an Australian startup and somehow your investors are from the US but you spend that money here. Getting everything developed here with your team is fine but you still need your sales people in the overseas markets where your customers are. But if you can make it work where you spend most of your investment money here – then I love that model. It is true that some startups are doing it. They have the main office in the US and get investment there but keep a lot of their employees back here, in Australia. I think that is fantastic. Let’s take the easy investment money, spend it locally, but do business globally, and the taxes are still coming back here… The problem is it is not easy.

Elena Ornig:

We have at one time discussed the possibility of bringing people together who are already here on the Gold Coast, love to live and work here and if we could make them work together we might create substantial commercialization of the Gold Coast businesses. What do you think about that now?

Aaron Birkby:

It is a good point. I want that to work and I am passionate about that. To launch a global business on the Gold Coast is a very attractive proposition.  The Gold coast has a perfect environment. We have great weather, we have a low cost of living and it is much cheaper to start up business here than in Sydney or Melbourne. Government is moving towards removing red tape, we have a very proactive Gold Coast City Council which is supporting innovation and startups. We have a more relaxed type of people here and surprisingly we have a lot of talent here. Population wise we cannot compete but in terms of talent we are up there even internationally.

We have great developers and entrepreneurs here. We have got the perfect storm, we have all the ingredients but how do we pull it all together is the question. Where is our billion dollar team? That is why the startup events become a valuable tool. If all we do is to facilitate these entrepreneurs to come here, learn how, acquire practical experience and collaborate – that could generate a great outcome.

Silicon Lakes Co-Founder

What we need right now is at least one startup that can create an unprecedented buzz globally. We have good results and it is happening and it is the beginning of a success story but it needs to go on to that next level. Once we get there, the Gold Coast will look attractive to anyone external.

Elena Ornig:

We have concentrated on America but what about Asia?

Aaron Birkby:

We have a great opportunity to trampoline into Asia. If you are an Australian or overseas startup wanting to target Asia, then you should seriously base yourself on the Gold Coast. Here, you are in the same time-zone with Asia, the flights to Asia from here are much cheaper than elsewhere, and we speak English here, making it easy for English speaking startups. It is a perfect spot. I think we need to position ourselves like that as well. It is an opportunity we are currently missing.

Elena Ornig:

It is indeed a perfect spot. The only objection I can see is that our average salary per/hour is AU$18.00 where the American average is about AU$7.00 which makes it less attractive for business owners and investors to operate here. Can it spoil the perfect formula?

Aaron Birkby:

Overall it could but we have an advantage for technical developers. If you launch your startup in Silicon Valley you would pay a lot more for software engineers because they are in high demand and the cost of living there is much higher than here. You have to pay a programmer on the West Coast of the US at much higher rate compared to here.

At the end of the day any work can also be outsourced for cheaper rates. There are a lot of stigmas around outsourcing and I think it is because people do not really understand to what extend outsourcing is valuable for a business. Startups are always cash poor and outsourcing can be a good option. So, I think we should be outsourcing a lot more if it is the difference between success and failure. It means that we are not keeping all the money here but if outsourcing leads to overall success then we should be doing it.

Elena Ornig:

Now, the new way of funding creative projects in Australia can be done through Kickstarter. What is the difference between Kickstarter and the Silicon Lakes startups program?

Aaron Birkby:

We help startups get to the market through every means and to some of our startups we do recommend the Kickstarter platform. However, it is not the ideal platform for all of them. If you have a new creative idea or something innovative with a community feel to it – you can be very successful with the Kickstarter or any other crowd funding platform. There you can get revenue without giving up equity and you can get a lot of customers by pre-selling your product before actual production. Creative enterprises work quite well with this platform and some of the new technologies do as well, but if your startup is based on a business application for industry such as the mining sector – it will not work on the crowd funding platform. Generally, Kickstarter or similar platforms work as a channel to market and that is it.

Elena Ornig:

The next startup Weekend is just around the corner. Would you like to give a message to the people who are planning to participate and of course to those who know nothing about it?

Aaron Birkby:

The next Startup Weekend is from 15-17 November – so, come and have a go! It doesn’t matter what your skills are, what your background is and it doesn’t matter what you think you will get out of that experience. Just come along and get involved.

There are a few reasons why you should attend. First up, it’s a heap of fun. Second is your own personal gain of learning something new, both from hands-on experience, your team mates, and our mentors. The third reason is that you may just end up part of some awesome new startup that actually goes on to become a global company. The fourth reason is, if you want to support local startups, even if you do not want to get into a team, then come along for the numbers to show local Council and the State Government that you are supporting local business growth and innovation. By coming along, you will show your support for future job growth here on the Gold Coast.

We also need some volunteers to help us to run the event, helping with catering, keeping space clean and helping people with general information about the event. We are also looking for mentors, particularly business people and entrepreneurs who have accumulated real experience. We ask them to come and to help the startups get traction.

You can also come as an observer and stay one day or buy the ticket and stay for the whole weekend. This is the one thing I really want to emphasize – you don’t have to be a programmer or software developer to get involved. Some people might worry that they have nothing to offer but my point is that everyone can contribute. At the end of the day, these startups are developing businesses that you can be a customer of in the future and therefore your personal opinion has real value. Come and express your opinion!

Elena Ornig:

People do love to quote and I cannot recall any quote that you have mentioned. Have you got a favorite quote or maybe a phrase that you really like?

Aaron Birkby:

I do have one phrase: ‘What’s next?’

It has meaning for me. For me it means moving forward in continuous momentum and also, once I have decided something – I execute it and put it out of my mind.

Aaron Birkby on Twitter

Aaron Birkby on LinkedIn

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