“Going Global and Being Focused: are two things I care deeply about”
Mick Liubinskas, Entrepreneur in Residence at muru-D wants Australia’s startups to be more ambitious.
Mick Liubinskas is a technology entrepreneur, investor, and industry leader. For the past 18 years, he has cofounded 12 technology startup companies, including Pollenizer with Phil Morle. This is why he started his talk at SydStart 2015 by saying that he’s very frustrated at the fact that though Australia is a big country, it’s a tiny market.
“What the cause of this is, that I see, is far too many small pitches, far too many entrepreneurs lacking ambition, perspectives,” Mick said. He also declared, “No more .com.au.”
According to Mick, too many companies are dying in the trough of sorrow, because they’ve got local traction, and they think maybe they’d go global one day, but they never do. “I want you to go global, day one,” he said.
- Australia has a big geography, but a small market. Other countries are so small they have no option except to go global.
- Global niches are huge.
- There are a lot more early adopters globally.
“If you get a happy customer in Sydney, your business is worth two percent of the global potential of that business. No more.”
When you say you’ve got traction in Sydney or Australia, international investors hear, “I’ve got great traction in Fiji.” There are some local investors who have local experience and local value to add, but they’re never going to take you global, and they’re not going to give you an international valuation, Mick said.
“You can’t get Silicon Valley or Beijing valuations on local proof.”
If you’ve got global customers and local investors are saying, “No, you’re valued at two million dollars,” you can just say, “Well I’m just going to go overseas.”
“If you say ‘I want $1m’ — that’s a bad idea.”
Never pick a round number like that. It sounds like you just made it up. Say you want to raise $1.2m. It sounds like a lot of work for too little money. The investor would like to give you $5m. Then you’d have to give the investor a $1B exit. Mathematically, it’s very difficult to achieve that in Australia. This is why Mick is adamant that you must go global.
“Go global, but be focused.”
If you’ve got the .com and you put up on the Web, you can’t just see what comes back. “It’s not going to work,” said Mick. “You don’t get all the customers in the world at once, you still have to be focused.” He recommends starting by making one customer in a big market, in one location, happy with one product, and grow it.
Start with the smallest monopoly first, Mick said. You’ve got to be going towards the bigger market, but you’ve got to start with the smallest. You’re starting a brand new business — 99 percent of what you need to know to run that business effectively, you don’t know yet, and you can’t know until you do that test.
How do you focus?
- Pick a small, starting customer segment. Start with the people who need it the most, with aggressive focus. Here’s what Investors love to hear: “I have one segment that loves me. There are 1000 other segments out there.” What they don’t want to hear is: “I have one customer and 1000 segments. Can you bet some money and we’ll go win them all.” What happens when the first segment hates you? Mick has a direct answer: suck it up; move on to the next tiny segment.
- Have a much smaller product. Features are not the answer, Mick said.
To sum it all up, Mick’s advice to startups is to have the smallest working product, in a small segment that needs you a lot, in a big market. Go global, but be focused!