Listen to more episodes of the Industry Growth Centres Initiative podcast, Future Clicks
Transcript
Introduction [00:00]
[MUSIC]
Bernie Hobbs, Host: Welcome to Future Clicks, a podcast about the future of Australian industries, produced by the Australian Government's Industry Growth Centres Initiative. I'm science journalist Bernie Hobbs, and in this four-part series we'll dive into the new opportunities facing Australian businesses, workplace skills of the future, pioneering industries and industry pioneers, and why going global is more achievable than ever. Don't forget to subscribe, and find out where our Future Clicks can lead you and your business.
Ross George, Managing Director, Austeng: When large manufacturing left, there is effectively a vacuum created.
Bernie Hobbs, Host: To go from not just losing everything once as a child, but losing everything again as a mother the second time, and yes, there's nothing stopping you now.
Diem Fuggersberger, Founder, Berger Ingredients: No. Actually three times.
Bernie Hobbs, Host: Three times.
Diem Fuggersberger, Founder, Berger Ingredients: Yes.
Matthew Wilson, CEO, Penten: From the cyber perspective, we had a great market of larger organisations that were very, very good at implementing solutions at scale of problems that we already know how to solve. There wasn't a lot that was going about trying to solve the new problems.
Tamryn Barker, Co-Founder and CEO CORE Innovation Hub: A nation of problem solvers is how I like to think of us.
Bernie Hobbs, Host: Going for growth, it's what every business wants, but how is it possible when the industry around you is constantly changing? This episode, we hear the stories of four companies who've built incredible businesses under less than ideal circumstances, be it changing course after their client base completely disappeared, overcoming a $900,000 debt, or just starting from scratch. We talk about how they seized opportunities, the advice that they'd give to other small businesses, and what skills will be needed in the future.
Interview with Ross and Lyn George, Managing Directors, Austeng [01:50]
Bernie Hobbs, Host: Ross and Lyn George run Geelong business Austeng, a company which has had to adjust significantly following the downturn in the automotive industry.
Lyn George, Managing Director, Austeng: So, things were going along fairly well, we were inducted in the Victoria Manufacturing Hall of Fame in 2009.
Bernie Hobbs, Host: Cheers.
Lyn George, Managing Director, Austeng: You might say disruption was on the horizon. Automotive was one of certainly our largest sectors. We were very much dependent on Ford, and all their supply chain. So, really, we knew that we needed to, when Ford announced their closure, we realised we needed to transition.
Bernie Hobbs, Host: How did that feel? It must've just felt like everything coming out from under you.
Ross George, Managing Director, Austeng: The writing had been on the wall for years. The first indication was sort of 1989, I think, when there was a downturn then. That was when automation started to come in. They ended up producing more vehicles of a better quality at a lower cost with less people. It was quite clear then where it was heading, just completely it plummeted. The gradual decline's manageable, but the catapult off the end of the cliffs was an interesting time.
Bernie Hobbs, Host: To stay in business, you had to try and find new markets. How did you go about doing that?
Lyn George, Managing Director, Austeng: I suppose we really needed to get back to our basics and establish what our unique value proposition was. We decided that really our value proposition was assisting companies building a prototype of full scale production equipment. We really were, I suppose, we called ourselves a tech enabler. We-
[CAR ENGINE REVVING]
Bernie Hobbs, Host: It doesn't sound like the motor industry's gone downhill at all where you are. There's still big, great revving car noises in the background there.
The Key Really Was Collaboration [03:30]
Lyn George, Managing Director, Austeng: Yeah. We really relied on networking, very much getting out and finding what other companies were doing, and joining local industry groups, including the Geelong Manufacturing Council, making linkages with the university, CSIRO. The key really was collaboration. We collaborated with universities and like-minded companies. We collaborated with a local biotech company that had some great technologies in the space of novel short polymer fibres. It was really in the biotech type area. It promoted the growth of adult stem cell production.
Bernie Hobbs, Host: That is quite a leap from manufacturing for the car industry, isn't it?
Lyn George, Managing Director, Austeng: It is. You're right.
Bernie Hobbs, Host: It's not something you would have seen coming at all, and yet within a short time through those connections and collaboration you've got an entire new market opportunity.
Ross George, Managing Director, Austeng: Yes. The real leap for an Asperger’s engineer like me was, so the engineering while it's in a different space, in a way, wasn't that different. We as engineers, you try and identify the underlying problem, look for possible solutions, hypothesize which ones will work, test the hypothesis. If that works, you can do the engineering, and you can do the design. That doesn't matter whether you're making short polymer fibres or solving an engine with a crankshaft.
Ross George, Managing Director, Austeng: The big difference for me was the schmoozing, the networking, the public speaking, the advertising, the websites, all that non-engineering stuff that just drives you crazy and works ridiculously well.
Bernie Hobbs, Host: That must drive you even crazier.
Ross George, Managing Director, Austeng: Yeah. That's right. It goes from bad to worse. It is learning a new skill, because I dealt with engineers from one week's end to the next. The language you talk to engineers is a completely different language to what you're talking with our customers who are running start-ups who are money people, or chemists, or scientists.
Bernie Hobbs, Host: Lawyers.
Ross George, Managing Director, Austeng: Lawyers. Yeah. That's right. The things that they're interested in, and the things that you need to communicate to them are completely different to what you talk to engineers about, and try and understand what their needs are as well. It was learning a brand new language.
Working with the Advanced Manufacturing Growth Centre (AMGC) [05:44]
Bernie Hobbs, Host: You've gone from auto to stem cell biotech, to textiles, back to biotech in two international agreements there. That's not a really negative outcome, is it? You've... in talking about, you said Ross, about moving away from high volume for larger manufacture to advanced manufacturing. I guess the AMGC, you've worked with them in your business journey. How did you find out about them, and what's their involvement been?
Ross George, Managing Director, Austeng: The AMGC have got a really, really nice set up in my view. The people that they've got understand industry. They've really done a fantastic job of putting small amounts of money into, very well targeted, into really good ideas and passionate people. They've been able to do that because they've got people that actually understand the business and understand the industry.
Bernie Hobbs, Host: Man, this is some really exciting stuff, and it's all come about because of the failure of the automotive industry, or the exit of the automotive industry from your area, having to rethink the business and chase new markets and act on these opportunities.
Ross George, Managing Director, Austeng: In our business you get people walk in and they say, "I've got this really great idea." You go, "Oh." When we were busy with our previous work, and we were as guilty as the next people, we just weren't giving them any airtime. When large manufacturing left, there was effectively a vacuum created. Two of the projects we're working on, both of which are going gangbusters, actually had been sitting in people's bottom drawers for 10 and 15 years. They knew it'd work, but they just couldn't get any airtime and any traction.
Bernie Hobbs, Host: Because everyone was so busy with the car industry.
Ross George, Managing Director, Austeng: Exactly. History may show that the leaving of the industry is a blessing in disguise, because it's enabled all of these really smart clever ideas which Australia should be good at, which is that boutique, high value‑add, smart, relatively small, easy to transport solutions, developing all of those, rather than being a medium value, high volume space, which was obviously large manufacturing.
Lyn George, Managing Director, Austeng: Obviously, because Australia per capita isn't short on ideas. Per capita they have the highest application for patents, but traditionally is bad at commercialisation.
Bernie Hobbs, Host: You're really stepping in and helping fill that gap with the early manufacture capacity.
Lyn George, Managing Director, Austeng: Yeah. We thought we really need to get into this space.
Ross George, Managing Director, Austeng: Our start-ups we're working with that have got good structures and good people with a good story, they tell it well, are finding money.
[MUSIC]
Interview with Diem Fuggersberger, Founder, Berger Ingredients [08:30]
Bernie Hobbs, Host: From $900,000 in debt to a multimillion dollar business. Vietnamese refugee Diem Fuggersberger is the founder of Berger Ingredients, which delivers all natural, locally sourced, and nutritiously balanced meals to Australian children and households, notably through their product line Coco & Luca’s Kitchen.
Now, Diem, your story it's very powerful and a very strong story. You've experienced a lot of trauma, firstly in your childhood fleeing Vietnam with your family, living in a refugee camp, and then not finding it easy adjusting to life in Australia. You've gone on to extraordinary success and facing other challenges as well. What impact do you think your childhood experiences have had on you as the person you are?
Diem Fuggersberger, Founder, Berger Ingredients: You know, all these things has made me who I am today. It's given me the resilience to hang in there for the long run, because I really think if you have the right purpose and you have the right substance and you have the right vision of why you do things in the first place, you'll get there. I think if I look back at my childhood, where all the things you've mention, and the thing that actually changed me the most was in 2009 when we lost over $27 million. I was homeless.
So, by that time I just had two babies. I didn't know about running a business. I think that changed me. I think after that day, I didn't have any fear anymore, because I have two more kids, so I become like a lion. I had to do something to protect my kids. I just started an ABN on the 20th of August 2009.
Bernie Hobbs, Host: That was for Berger Ingredients.
Diem Fuggersberger, Founder, Berger Ingredients: Berger Ingredients, which I co-founded with my husband. I had no idea how to run a business, but it was a necessity to –
Bernie Hobbs, Host: You just had an idea or a thought.
Diem Fuggersberger, Founder, Berger Ingredients: Well, I said to my husband, he's got a very unique asset of innovation and development and research, and I said, "Werner, you've got a very exquisite skill that not you can find." I said I've got 15 family members, so we got a tribe. If one person can't move a mountain, but a whole group of people can move the mountain, so I had to ask my mum to mortgage her house for me.
Back then, I already owe my family $900,000, so I said to them if they want the money back then they need to lend me more money. I had to sell every single thing I had that was valuable to start the business. Whatever I do it's always been inspired by my family. That's where I look first. The brand was born due to Coco and Lucas which are my family members. From my great-grandfather to my grandfather, he's always said, "Diem, what you come by is honesty, your purpose, what you stand for, and your honesty."
I want to be an Australian brand. I want to be Australian manufacturer, Australian-owned. I only want to export. I don't want to import. I only hire Australian workers. I want to pay Australian tax.
Bernie Hobbs, Host: That's an incredible story, and to go from not just losing everything once as a child, but losing everything again as a mother the second time. There's nothing stopping you now.
Diem Fuggersberger, Founder, Berger Ingredients: Actually, three times.
Bernie Hobbs, Host: Three times.
Diem Fuggersberger, Founder, Berger Ingredients: The first time in Vietnam where we lost our house to the communists. Two days later we lost everything to the pirates on the sea, and then I think all that was hurtful, but it wasn't as bad because when I was 37 that I lost everything, with that debt, with two kids, homeless, I think that really hit me. I think if I've gone through that, I can go through anything.
Working with Food Innovation Australia Ltd (FIAL) [12:25]
Bernie Hobbs, Host: I think I would not take you on in any challenge. Now, in this incredible journey that you've had with Berger Ingredients, you've got it now to a position where it's in a massive number of stores, you're exporting. It's just terrific. You've worked with FIAL as part of that journey. How have they helped you grow your business?
Diem Fuggersberger, Founder, Berger Ingredients: FIAL has helped me in a number of ways, because I really think for a brand like mine, a brand that's owned by one person, it's very important to be aligned with government. I find that especially when I'm selling to retailers or I'm selling to export, if you don't have FIAL, FIAL is a very prestigious governing body that's been supported by the Federal Government.
I think when you're overseas and you haven't got a name, and you're under the FIAL stand, it just gives the buyer, or a big company who is wanting to take me on as distributing my product, it gives them a bit more robust and security that I am being recognised by the government, and that means I'm a good brand. I'm an established brand, and I'm a trusted brand.
FIAL has helped me like for example when I was at the FHA [Food Hotel Asia]. If I was myself, I would have so much work organising my products to get there, all the collateral. FIAL has aligned me with buyers. They look after my stand. They bring in the matching buyers for me. I just feel that I have that mental support that I'm not alone. From FIAL I also enter the 50 most innovative company of Australia for 2017. I was selected, so it gave my brand a lot of profile. For 2018, I feel so lucky that I was also being part of the judging panel.
Bernie Hobbs, Host: Wow.
Diem Fuggersberger, Founder, Berger Ingredients: Yeah. My journey with FIAL, I have to say, it's been a godsend for me. I'm very appreciative.
Bernie Hobbs, Host: Well, I'm sure they'd be feeling exactly the same way. You are a dog with a bone and will not let it go.
[MUSIC]
Interview with Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub [14:40]
Bernie Hobbs, Host: Tamryn Barker is the founder of CORE Innovation Hub, a co-working space in Perth providing collaboration and demonstration opportunities to help develop innovative solutions to challenges in the resources industry. Tamryn, a couple of years ago you founded Core Innovation Hub. Now, it looks like any other super-cool workspace for inner-city creatives, but what actually goes on there?
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: So, CORE is situated within our partner space, which is a space called FLUX. You're right that it's a super-cool space. I think they're up for one of Qantas business travel awards for best co-working space in Australia, which is awesome.
Bernie Hobbs, Host: Nice.
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: So, we take a floor of that. We're focused on the resources and energy sector, and the purpose is to take the model of co-working, and collaboration, and innovation hub, the density of ideas, opportunity, skills.
Bernie Hobbs, Host: Bringing the people together.
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: Exactly. Right in the heart of the CBD. What makes us different is that sector focus, and we've also got our work cut out for us in the sense that the resources and energy sector is not traditionally the most open, collaborative space to work in. There's a lot happening in the sector that is shifting and changing. There's been a good opportunity for us to be a part of helping that process.
The Impetus – Anecdotes, Fear and Opportunity [15:57]
Bernie Hobbs, Host: Yeah. So what was the impetus for you to start CORE Innovation Hub?
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: The impetus behind starting CORE was, I guess is three factors. One anecdotal, one out of fear, and another out of opportunity. I suppose a good recipe for an entrepreneurial idea to take effect. An anecdote came from a conversation I had with an international delegate from Schlumberger who was positioned or seconded in Perth for a short period of time. His responsibility was identifying new technologies to bring in to the pipeline of Schlumberger's work and business.
He said to me, "If I walk down the street in Houston, I know where to go if I want to meet the clever, cool start-ups working on technologies and new capability. In Perth, I would have no idea where to go." That for me really made me think, "We're not representing like other innovation hubs around the world." That was the anecdote.
The fear came out of an analysis that we did. We did an analysis of start-ups in Western Australia, homing in on resources, so mining, oil and gas, and construction, which is in the tens, and tens, and tens of billion dollars of gross state products per year. Something like 25 start-ups were focused on that space in the last two years prior. That was ...
Bernie Hobbs, Host: Not a lot.
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: ... what struck fear in our heart, thinking, "How are we going to ensure a pipeline of new enterprises to ensure that Australia being a technology lead for resources and energy?" That was the fear part. Then, of course, it was around 2015 when commodity prices, both oil and gas, and mining commodities took a tumble. So therein was the opportunity for us to talk about collaboration.
What can you do outside of your organisation knowing that there won't be an opportunity necessarily to go back to the boom time? What can be done to push or pursue pathways for innovation that is open and available to companies?
A Nation of Problem Solvers [18:00]
Bernie Hobbs, Host: It sounds like a perfect storm for you with that appetite for innovation coming along at the same time. Now, you did just say there about this fear of Australia losing its edge as a real technological lead in that sector. Why is it so critical that we maintain and grow, I guess, in innovation and collaboration and commercialisation on a global scale?
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: It's a good question. Well, we want to maintain our wonderful way of life. We want to maintain just prosperous living, but I think in more practical terms the challenges facing us in the future, we're going to have shifting and more complex challenges coming our way. We want to be a society, an economy that is able to address and handle those challenges as they shift and evolve.
There are different pathways for doing that now, especially if we're looking at a context of digital capability. Companies can grow very, very quickly on the basis of a new skillset. I'm talking robotics, automation, artificial intelligence, things that were not possible especially in the sector before where you're looking at an innovation pipeline of, I think, 20 years.
Now, companies can grow in scale and have a big impact. We want to be a society that's ready for that. A nation of problem solvers is how I like to think of us.
Disruption and Opportunities [19:10]
Bernie Hobbs, Host: I think that's how we all like to think of ourselves, and hopefully we're driving that to be and remain the reality. Now, at the hub you've got a unique position, because you're across a number of different businesses and organisations. From where you sit, what kinds of trends are you seeing?
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: I think it's quite clear that the sector is very aware of the disruption that is going to come from automation technologies. We're in the business of creating opportunities out of that adversity.
For us we've got a very, very clear position this year. Which is to deliver a skills program in collaboration with industry, so co-creating a professional skills development program to take experts in the sector, so geologists, geophysicists, those with a specific technical skill and training them up to have data science capability to future-proof, if you like, their role in the organisation and the sector.
Bernie Hobbs, Host: Absolutely. Just finally, I guess, and more generally, what are some new and emerging opportunities in your opinion for small businesses in Australia?
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: I'm hearing the majors saying, and it's been for a little while now, we can't do this on our own. We know we have to go outside. They don't just mean to go outside to the tier-one supplier. They're actually meaning well beyond our traditional supply chain. I think that is a flag for get ready to the smaller businesses. Get ready to understand and be prepared to learn more about big businesses' culture so that you can be ready to engage with it.
Tamryn Barker, Co-Founder and CEO, CORE Innovation Hub: Then, of course, we've got spaces like us and lots of other initiatives across Australia that are fostering that.
[MUSIC]
Interview with Matthew Wilson, CEO, Penten [20:56]
Bernie Hobbs, Host: Digital technology now pervades every aspect of our lives. According to Lloyd's of London, cybercrime costs the world a staggering $400 billion US annually. The risks are clear, but so are the opportunities. Within the next decade, the Australian cyber-security industry has the potential to triple in size. With revenues expected to soar from just over $2 billion to $6 billion by 2026.
AustCyber was established to help the domestic cyber-security industry grow and become more capable and competitive, and to establish Australia as a leading force in the rapidly growing global cyber-security market.
One person who connected with AustCyber early on is Matthew Wilson, who recognised the value of the initiative. Matthew Wilson is CEO of Penten, a cyber-security company in Canberra that has grown from four employees to 44 within three years.
Now, Penten, it's a cyber tech company. Can you tell us how it came about?
Matthew Wilson, CEO, Penten: My fellow founders in Penten really came out the back of a successful start‑up exit in 2012, and came together about three years ago realising that there was still a lot of problems that needed to be solved. There was a gap in the market that we knew that if we could bring together the right hardware and software and industrial design teams, that we could go about solving hard government problems, and fill that gap that we saw.
Bernie Hobbs, Host: What was the gap?
Matthew Wilson, CEO, Penten: Primarily the Australian market especially in solving government problems has been traditionally very much focused on implementing solutions that have been tried and tested in other nations, specifically the US and the UK, and sometimes a little bit more broader than that. The challenge with that is the problems that we face in the cyber space, they move very quickly.
So waiting… When we think about procurement cycles for government, and even for some enterprise organisations, they can be quite long and slow. So, if you're waiting for a foreign government or an overseas government to be able to solve the problem and bed it down, and solve that solution and then think about implementing it and forklifting it over and implementing in the Australian context, to be frank, it just takes too long.
We had a great market here. From the cyber perspective, we had a great market of larger prime style organisations that were very, very good at implementing those systems and implementing solutions at scale of problems that we already know how to solve, but there wasn't a lot that was going about trying to solve the new problems. To be frank, cyber is actually all about the new problems.
Bernie Hobbs, Host: There's no shortage of them.
Matthew Wilson, CEO, Penten: There aren't.
Bernie Hobbs, Host: As you say, they're coming up all the time. If there's that big lag in adopting the new, appropriate technologies, that's only going to increase our risk and our exposure.
Matthew Wilson, CEO, Penten: It is. There's also a little bit more than that as well. Yes, from a national resilience perspective, absolutely, a vibrant domestic cyber industry is something that protects the nation and drives resilience within the nation. Also, this is a market that's growing quite significantly. It's one of the fastest growing market segments within ICT. There aren't any natural dominant players.
You might think about the US, or think about Israel, but the truth of the matter is the market's growing at that rate, but the problems are opening up and creating niche opportunities for other nations and companies to create centres of technology and industrial excellence to fill those gaps. From an industry that is creating opportunities, it's genuinely a place where there's a rising tide.
Working with AustCyber [25:04]
Bernie Hobbs, Host: Great. Now, you've worked with Growth Centre, AustCyber.
Matthew Wilson, CEO, Penten: I have. Yeah.
Bernie Hobbs, Host: What's your work with them involved and what have you gained from it?
Matthew Wilson, CEO, Penten: As I mentioned, I've been involved in the industry for quite some time, and when I started to hear about first of all the cyber policy, in the first place, the industry policy that supported it, and then the building and the Growth Centre, don't get me wrong, I was a little sceptical.
Bernie Hobbs, Host: It's good to be honest.
Matthew Wilson, CEO, Penten: Well, I was. Then I started to think about where we're at as an industry. This was an industry that was faced with great advantage. We are a wealthy nation. We have a very strong and capable defense and government sector that invests heavily in protections. We have a strong banking system and strong banks, which, again, push money into this sector. There's clearly a very strong resources and utilities sector within the nation.
From a customer base perspective, there was a really strong consumer base for a high cyber style tech, cyber technologies. Yet, as an industry we hadn't really got out of first gear. There were very few examples of organisations that had really taken on and taken off. I'd seen over about 20 years lots of organisations come and go. For me, I looked back at it and said, "Well, if the industry's failed to do this, yet the opportunity is clearly there, the customers are clearly there, maybe the market just needs a little bit of help. Maybe it needs a little bit of organisation."
Started to pay a lot more attention to what the growth network [AustCyber] was doing, and then decided to get involved. We were really lucky in allowing us to, in fact, use them as a platform to be able to launch our product and communicate and engage at a scale that we could never have done as a small organisation.
What I've seen AustCyber do directly for individual companies like ours, but also for the industry as a whole is going about educating that consumer base of government decision makers and procurers and enterprise procurers to know that there is this talented group of engineers and companies in Australia that are really willing and able to solve the problems that they've got.
Bernie Hobbs, Host: Are you saying effectively that AustCyber is, meaning that it's not just big businesses that can play in the cyber-security area. They're enabling smaller businesses to really have access, and really be taken seriously in the sector?
Matthew Wilson, CEO, Penten: I think AustCyber are looking across the entire gamut of the industry. It's certainly not necessarily true to say that all the focus is on smaller organisations. The truth of the matter is this industry needs, cyber needed more participants. It needed more organisations. It needed more smart people with great ideas to go out there and grab hold of some of the opportunities that were sitting in front of us. By the very nature of that, when it's an immature market a lot of the organisations are going to be small. To be frank, we're all rapidly growing. From Penten's perspective, we were four people three years ago. We're 44 now. We'll be 50 by 30 June [2018]. It is a sector that is genuinely one of opportunity.
Bernie Hobbs, Host: Fantastic. Thanks for listening. The Industry Growth Centres Initiative is an industry-led approach supported by the Australian Government to foster growth and help create the jobs of the future. Don't forget to subscribe to receive the latest episodes, and find ‘Industry Growth Centres’ online and on Facebook for all the latest news and opportunities for Australian businesses.
End [19:46]
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