We speak to Jon Tanner and Jason Senn, co-founders of Codec Ventures, about commercialising intellectual property, how to market to new regions, and the current challenges facings startups and scaleups in a cash-sensitive COVID reality.
For many industries, the coronavirus pandemic has made investors tighten their purse-strings and entrepreneurs reassess whether now is the right time to come to market. We sat down with Jon Tanner, CEO and founder of MitchelLake Group, which has been advising startup, scaleup and enterprise clients for almost two decades. We were also joined by Codec Ventures co-founder Jason Senn, who helped Google reach 30 new markets globally and increased user adoption by the millions across multiple product segments.
IP commercialisation throughout APAC – it’s a big topic of conversation among organisations trying to navigate these uncertain times. Considering your experience in commercialising IP, what are your thoughts on the current landscape?
JON: Both Jason and I have slightly different histories and perspectives that have collided at the same place. My day job for nearly 20 years has been to help find executive leaders for companies and ventures entering new markets – particularly in APAC, also back in the US – so I have a long history in the talent–leadership space. I’ve helped companies like Dropbox, SurveyMonkey, Square, Stripe, Etsy and Pandora, whereas I think Jason has had a different experience, but he worked for companies like Google and even startups before that where he was the leader of channels, sales, partnerships and market–expansion activities from that perspective.
So our view is that it actually takes a broad range of perspectives and services, and it takes a village to make that successful market move in terms of entry and scale. We see some of the key elements needing to be brought together more cohesively, with talent, distribution and capital being three of the main levers.
JASON: I’m very focused on the cultural aspects as well. When you enter a new market or you try to grow your footprint, there are many ways that you can do that. But a lot of it is relational to the market you’re trying to enter. So you’re coming up with the market fit, the ecosystem and the people you need to be relevant in the market you’re trying to enter.
When you look at the challenges of commercialising IP across a region, how big is the difference between being a startup and a scaleup?
JON: Some scaleups coming to this region might have some initial penetration of brand and customer. So if you’re a scaleup in markets where you already have some traction, that’s helpful. But for earlier-stage companies or those that are perhaps a bit more stealthy, you do have to work to localise your front office and your connections in the market. And to Jason’s point, you need to understand the culture and business rituals that are inherent to each market.
Daltrey has global aspirations, but right now we’re a startup headquartered in Australia. So we’ve been focusing on having strong, anchored relationships established in our home country, but also seeing how we can piggyback off that strength for partnerships in other regions. What are your thoughts on that?
JON: In most jurisdictions there is support for startups, particularly over the last three to five years, in terms of the IP economy. My experience is that we’ve always entered new markets. We went to the San Francisco market out of Sydney, where we were originally based. We opened in Melbourne, then in San Francisco, then in Singapore, then in London. In every instance, it was because of clients encouraging us or we were following clients into those markets to expand our relationships.
I definitely agree that it’s a critical starting point, particularly for B2B players. The other thing is to figure out whether you’re entering a destination market or a hub market. What I mean by that is a reference to what ASOS experienced, and I think Spotify and Groupon had similar experiences. Australia is a really good market economically, especially in Melbourne. Some things work really well there; it’s a good market from a destination point of view. It’s concentrated, well-connected, and people grasp onto new tech and ideas and media fast – it’s very much aligned with the US and Europe. But it’s not a great hub market because of its spread-out geography.
So you’ve got to decide what you want. Do you want to hit revenue and accelerate that quickly to prove outside your home market? Then Australia is a good option. If you want to connect to the region in a way where most of the head offices in your channels are concentrated, then Singapore can be a really good option for that strategy. So it’s slightly different forces.
JASON: It also depends on how you want to go to market. It’s just as easy to create a relationship that is ‘one–to–one’ as ‘one-to-many’. And so if you can find the fishing boats instead of going after the big fish, sometimes you’ll get further quicker. You can get more reach, more breadth and more access. There are different ways to go to market and to grow into the market, and a comprehensive strategy should have a bit of both.
Cash flow is a major issue for a lot of companies right now. How should startups and scaleups be preparing for those conversations, given they likely quite different to what they expected 12 months ago?
JON: A lot of companies are under stress in the current economy. But if you’ve got a proposition or model that’s workable – if you’ve got a strong story, then great. I think everyone else is probably more focused on extending their runway to get clear of this pandemic. They want to give themselves time to work out of it, whether that’s a partial rebuild or a slow comeback to normality.
For most companies, it’s probably going to be about weathering the storm and then sitting back and looking at the fundamentals. And that’s what we’ve done on the MitchelLakes side of the business. I personally think there is good opportunity for capital raising in the next calendar year if you’re a startup, because most of the companies we deal with in this sector are solutions to some of the problems we’re experiencing right now. They’re about distributed communications, e-commerce, automation, personalisation and being able to create efficiencies and work remotely. All of that should be very interesting.
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