The speed to innovate is preoccupying businesses. Enter Slingshot, an accelerator company that matches big business with start-ups and is now focussing its attention on HR. Amanda Woodard spoke to the CEO, Karen Lawson.
Amanda Woodard: Accelerator businesses are a relatively new phenomenon in Australia. Can you give us a bit of background about what Slingshot is and the landscape in which it has arisen?
Karen Lawson: Seed accelerators really started in the US and they do five things.
The most important is that you have a venture capital fund, so you’re able to seed invest into start-ups. Then you should have a curriculum of education, a mentor program, provide co-working facilities, and at the end of those, there is a demonstration day.
I like to think of it as a Maslow hierarchy of needs, that the accelerator is the pinnacle of support and service, and probably defines the highest level of success for any kind of start-up, if you can get into an accelerator program.
What Slingshot does that’s different is that we’re a corporate accelerator. So, we only run these programs when we have a corporate client. A way to think about us is as a professional matchmaker between the strategy of the corporate and where they’re looking to go in two to three or five years, and then outsourcing innovation and crowdsourcing that, and finding the best start-ups in Australia to help that corporate innovate and grow their business.
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Why do you think large corporations have come to this conclusion that what they’re doing internally isn’t enough? That they need some kind of injection of entrepreneurial spirit in order to equip them for the 21st century.
As a CEO, you have to make decisions every day about your resources, where you spend time, effort, money, people. You have finite resources as a business, so it’s not possible for you to work on every new product, or new idea. You’ve got to prioritize them and that has an impact on your ability to scale and to innovate. Whereas, if you look externally, there are unlimited resources. Start-ups are working on thousands of ideas. So, how do you tap into all the innovation, disruptive technologies, that are out there in the ecosystem? Because if you don’t, the chances are you’re going to be disrupted.
(Want to know how to orchestrate innovation within a company? Read our guide.)
Why is it happening now?
Firstly, the barriers for entry for start-ups have really come down. The cost to build and run a start-up 10 years ago, was in the tens of thousands, if not millions. But today, with cloud technology, you can start a new business relatively cheaply; and then, you layer on to that the millennials and Gen Ys. Their aspirations are not working for a corporate entity anymore. They’re entrepreneurial and the chances are the best people, the best talent, is outside. So, if you don’t have a way of tapping into that, then I think it’s going to be very challenging for any organisation to be leading in their field.
What are the characteristics inside a corporate, to embrace this idea of engaging with start-ups, and with Slingshot?
The first thing is leadership, from the board and from a CEO, is really important. I often say to people, “try and find a schizophrenic CEO”. I mean that kindly, but it’s about finding a unique leader who is able to manage the existing organisation but also looking at disruptive innovation and has a strategy for engaging externally with what’s happening in that start-up landscape. It has to come from the top. We’ve worked with organisations that are still at a very early stage of understanding how to do innovation. And so, they’ve outsourced it.
We’ve also worked with organisations that have trained a lot of their leaders and staff, and may have run internal incubators or hackathons, and they’re much more mature in terms of their innovation journey. Running an external accelerator isn’t something that you do on a whim. It’s a multi-year strategy. So, we only work with companies on a three-year basis, because we find that they learn and develop through that process.
Let’s talk about the new HR technology start-up initiative. Why HR? What is lacking in HR that Slingshot has observed?
We’ve seen FinTech and Retail tech – there are lots of different verticals that accelerators are trying to support and grow. I spent two years as CEO for CareerOne, which is the second biggest job board in Australia. I would spend a lot of time with leaders across Australia and I think they all know that if you don’t have the right people, it doesn’t matter what technology, solution or service you have. The chances are it’s going to be difficult for your business to grow and maintain a leadership position, unless you have a really great strategy around people.
And yet, things haven’t changed much from the days when people looked for a job in the newspaper. Yes, they’re looking online, but I think the way that we find people, match people into roles is a very different world now, and we’re starting to see some really disruptive technologies happening, but I think it’s just not mainstream.
How far has the HR tech initiative progressed?
The first step for us is to find corporate clients, and then we build the themes, and look for different types of start-ups that meet their strategy. Onboard for HR tech, we’ve got a consortium composed of Hudson and Seek. The themes are around casualisation of the workforce, the candidate experience, looking at disruptive data and technologies, and also around employee insights. And it’s great to see some really exciting businesses come forward.
I read that 80 per cent of the start-ups that had applied to the Slingshot program, overall, not just in HR, are still up and running, which is quite an impressive statistic.
Yeah, we’re really proud of that. Around the world, the failure rates of start-ups is about 90 per cent, so it shows that the business model that we operate works. The best analogy is thinking about a family, raising a child. It’s challenging. We are raising new businesses, and often they [only] have an idea, and maybe a PowerPoint deck. Sometimes they have a minimal viable product in market. Sometimes they even have revenues. Why we’ve been successful is because our curriculum has been developed over a number of years. It’s now taught in universities. We’re teaching the fundamentals of how you build a business, how you understand product-market fit, and also getting them investor ready. You can have a great business, but if you can’t articulate it and pitch it, it’s going to be challenging to get customers.
This article originally appeared in HRMagazine.