Sheryl Frame wears many hats. She's the commercialisation advisor for Accelerating Commercialisation, a federal government program. She's on the board of StartUpWA, Women in Technology WA (WITWA) and Springboard Enterprises Australia. She chatted to Nick Markham about her thoughts on WA's tech ecosystem.
Could you tell us about Women in Technology and Springboard?
Women in Technology WA was formed some years back, I joined the board in 2006. It's primary objective is to support women in the technology sector. We are women focused, but male friendly and we run a number of initiatives. For the women, we run about six programs a year, which are just educational on different topical matters. They're very informal, they're done on a lunch or evening cocktail party basis. We're a not-for-profit organisation, so we do rely heavily on sponsorship. We charge minimal amounts just to cover the cost of the event series, no membership fee to belong to WITWA.
The other key program we run is something called Tech Trails which we run as an inclusion into schools, particularly remote and regional schools, or at risk schools in the metropolitan area. That's aimed at girls and boys, usually in years 10, 11 or 12, depending on what the school wants. We have a full day workshop with the kids, we break them up into different pods and so on, talking about different career choices and the pathways to get to those careers. Professor Lyn Beazley, who was the chief scientist, is the patron of the Tech Trails program.
How many members would the Women in Technology have in WA?
We have about 650 members, as I said, difficult to manage an exact number because you don't have to pay to become a member. That comprises both males and females. When we formed originally it was to support women in the technology sector. What's happened is that there are fewer and fewer numbers of people taking technology as a career choice, ICT as a career choice, and that's why we've widened the whole gamut to include boys at school as well as girls.
How long have you been involved in the tech industry? How did you first get involved?
Too many years to talk about! I started actually in physio therapy, but I never practiced in physio, went straight into ICT as a young person. I started a computer bureau way back when you still had to buy c time on mainframes to get use thereof. I've been involved in it ever since. My main focus is technology as it relates to health care, but really I'm across the board of most sectors now.
I worked for many years for IBM, which gave me a very good background into business, but it also proved to me that I didn't want to be part of this big corporate world. It was during that time that I saw a gap in the market. In those days they were doing a trial-before-buy and they were selling something called DEI (Electronic Data Interchange) software, which was the precursor to e-commerce as we know it today.
I started a business where by default, most of my clients were in the medical sector. I formed a company called Promed, which was a very successful business, we did software for radiologists and software for hospitals and software for pharmacies. With the primary differentiating factor being the e-commerce enabled component. That was really successful. I sold that off to Dimension Data before immigrating here in 2000 to be the general manager of a public listed health care s/w company, which was way before it's time. In those days people weren't ready to let health records go off the doctors premises, so that was not a very successful venture. It was in the era of “dot com”, or in this case “dot bomb” companies.
I then went on to get involved with another start up, called Express Rx, the pharmaceutical dispensing machine, once again was very successful. Followed by another start up delivering x-ray images back to referring doctors. That was sold recently to Telstra. Then ultimately got involved in Accelerating Commercialisation and its predecessor Commercialisation Australia, to help other start ups and give back to the community.
You've had experience with successful tech companies and now do you view your role as giving back and being able to mentor early stage companies?
That's what I really enjoy about Springboard Enterprise, initially an American initiative aimed at helping women in technology based businesses, penetrate the market, raise capital, et cetera. It was brought to Australia by a lady called Wendy Simpson OAM, about three years ago. Wendy brought it to Sydney, and of course it was in grave of danger of becoming an Eastern state program only. Two years ago , I brought it to WA and I've since been elected to the board.
The objective is to help companies that are just starting to be revenue positive or, who want assistance in raising further capital, or who want help in specific areas and who want to enter into overseas market places. We can provide them a springboard into the US.
In the first year that we brought it to WA, four of the eight companies that attended were WA based, so that was a really nice percentage. This year (2015) we've had two WA based companies attend the boot camp, two out of 10 were from WA.
In your opinion, what are the critical factors for the growth of WA’s technology sector?
I think we're seeing a huge number of ideas emerging but the entrepreneurs don't have the money to self-sustain to the point that they have a product that they can take to market or even an early stage prototype. We're in desperate need of seed funding in the early stages to get companies from the idea to the basic prototype/ MVP stage. Accelerating Commercialisation is doing a great job, post R & D, where they already have a prototype, but we're seeing a huge number of applications come to us and they just don't have the funds to build that initial prototype or MVP themselves. Unfortunately, we can't help them.
Whilst the R & D program is really great for the research side of things, there's still the problem of the companies having to fork out the money before they get 45 cents on the dollar back. Without the support of “fools, family and friends (the FFF group) , they just don't seem to find the money anywhere else.
Now when you talk of technology, I'm not only talking of ICT, I'm talking about things like biotech and medical device development and the wider range of technology.
This lack of access to early stage funding seems to be an ongoing issue, throughout Australia, not just in WA.
I think there's far more early stage funding in the other states to what we have in WA. There's very little government funding available in WA and I think the investors that we see here understand mining and they understand property investment. They know how long they're in for, what kind of return to expect, but they don't understand things like information technology or biotech. Those are foreign and it's really hard for us to get investments in those sectors at the early stages.
There is only vc fund, YUUWA, and it is fully invested at this stage.
For the whole WA landscape to have no local venture funders, it's quite a shocking revelation.
There are a lot of people who are trying to enter into the capital market here. We've seen Go Capital and Pantheon and all those people enter in the last three months, but I haven't seen too many of them doing a successful investment. A lot of them have come in here to pick up shell companies and do reverse listings on the stock exchange, IPO’s s or something of that nature. The companies that need funding are too early for that sort of initiative.
All the research says access to early stage seed capital is one of, if not the most important factor to get a technology ecosystem self-sustaining.
Absolutely! A lot of the guys with the good ideas are entrepreneurs, they have no business background, they have got no idea what's involved in commercialisation. If they were to go on any of the incubators that would help them tremendously, but again, there's a cost factor associated with all the incubators here.
When we're talking about the WA ecosystem, who do you see making the very important contribution from a personal perspective, to the growth of WA's ecosystem?
I think the work being done by Spacecubed is phenomenal. Since Spacecubed started it has been a catch-all and so has Morning Startup for all the very early stage people. They've provided a wonderful facility. They're very necessary, very important to the ecosystem and have made great contributions. The problem again is, lack of funding with only companies that can afford to be in those spaces being there, and we're still losing a whole lot of Innovators.
The other ones like Amcom Upstart seem to be doing a very good job, they've only run one, but it seemed to have been very successful. The one being run by KPMG was hugely successful. I think why this was so strong because they actually engaged with industry. All the companies that were selected to participate, and there were just eight of them, of which SKRYDATA who is an applicant of mine was one, were all introduced to potential customers and had strong industry engagement, besides the fact that they were all awarded 50 thousand dollars at the end of it, which helps a lot.
Certainly, that access to a customer base, that is beyond what you typically get, is so powerful for an early stage company!
That's what we found with Accelerating Commercialisation as well. We get a number of companies that apply to us, they need money, but more important to them than the money is the advice and guidance that they're getting. They really don't know where to turn, they don't know how to get market engagement. The fact that we can provide that guidance and support through our expert network is seen as a very strong plus.
What opportunities do you see for greater collaboration between entities and the community?
I think at the moment confusion reigns supreme. Everybody's competing for the best new start up. There's no really clarity in WA because it's grown so very quickly, should they go to ICWA, should they go to Spacecubed, should they go to Atomic Sky? Who's going to provide them with what? In most cases, it's the luck of the draw. Dependent on who they meet, they'll get pointed in one direction. I think where StartupWA will really come into it's own is being able to have a definitive map of who can support what areas and what type of companies. Being able to refer people more intelligently to the right places to get support, so they don't become an “also ran”.
So you're talking more about, it's grown to the stage where you need to start having specialists, areas of work etc?
Yes. Programs like Ignition are really, really good, but there's no filtration at the beginning, so when they run Ignition you've got somebody who's developed a little home use product or fashion item in the same room and the same group as somebody who's developed a new technology for mining. I think we're getting to the stage where the numbers will support specialised incubators, that address specific vertical markets. That's how I see things evolving.
Similar to Right Pedal Studios in Brisbane. It's directly built for gaming and for people who are making games. It's funded by Steve Baxter and it's very specialised.
You need that, we need something specialised for gaming and virtual reality. We need something for mining, we need specialised stuff for biotech, no one-size-fits-all.
Moving on, what events have had a positive or negative impact on the ecosystem as it is today?
I don't think anything's had a negative impact on the system. I think everything we're doing is very positive. I think as long as we're running events and educating people, that's really good. I think bricks and mortar facilities, like the Innovation Centre WA per say, is not providing any great service. Where it comes into its own is the programs that were being run there. Unfortunately those seem to have to come to a little bit of a grinding halt at the moment. When they were running education sessions every Thursday, they were connecting a lot of people. It's a pity to have seen those dropped off.
Certainly, the Innovator of the year program seems to be a very good one, with lots of companies aspiring to apply for that. I think just the kudos of being a finalist for the WA innovator of the year, or the WA Incite awards, or the WAiTTA awards or any of those programs are really strong and the companies strive for that recognition and endorsement.
Yes, it seems there's a number of different awards that you could aim for but how do you leverage it?
The big problem we have in WA is the distance. Things like Biotech is always held on the Eastern seaboard none of those really large, national events ever get run in WA.
It's great to see the Oz App Awards come through, that was very interesting and very powerful for WA.
It's a very powerful thing for WA. Not many of the entrants into the Oz Apps actually convert back into a commercial business. It is a very exciting thing, but when you're looking for commercial opportunity, how many of those really convert into businesses?
I think Canva came originally from the Oz App Awards.
They did, and they've done phenomenally well, they also went through Springboard. They're one of Springboard's success stories.
Companies like Canva, also a WA company, started off here, did fantastically well, moved to the states. We're going to see that presence in WA go. Sensear also a WA initiative, started off very well and very strongly here. I'm hoping they won't lose the presence here totally because of the mining industry, but with the mining slump in WA at the moment, they're doing far better in the US.
We've seen a great brain drain. There's another company that I'm working with now, actually a company that's based in Queensland, called Ivvy , they're going through SpringBoard. She said if she doesn't move to San Francisco in the next six months, her business is not going to grow in the way that it could so there's no question that she has to relocate to the states. Based on sheer volume, we've seen a lot of that happening.
Do we always have to view it as a bad thing? If you get these people being widely successful elsewhere, but then 15 years down the line they come back to WA with all this fantastic international experience and huge pots of money that they've made.
That's wonderful if you can attract them to come back and help the community and be investors. Hopefully this is going to become known as the place that you can innovate and where there is funding. If you actually analyse the landscape at the moment, mining is in the doldrums, we've sold most of the agricultural land in WA to China. We don't have a manufacturing industry here, so what are we going to do to create jobs if we don't turn to innovation?
I think we're very vulnerable right now, so innovation is where it's at. You can't afford to lose good people who are going to elsewhere and look for jobs, just to make ends meet, because there aren't any in WA.
Can you give us a hero story of WA?
I think one of the companies you need to talk about is One Atmosphere and Tim Lyons. Tim is the gentleman who's developed a system called Pegasus. If a helicopter crashes into water, there's no way that it can right itself, so most often helicopter crashes into water results in death. Our military helicopters are not allowed to fly over water because they don't meet the safety requirements, and he's developed something called Pegasus which is a flotation device that rights the aircraft so that they can get the crew and cargo out safely.
He's done really well, he's won a contract with Defence and he's got a grant from us at the moment. If you jump onto his website you'll see all about it. He needs to get air worthiness certification for each aircraft. Whilst Defence are paying for the certification of their helicopters, AC is supporting him to do allow for the certification of commercial helicopters in parallel.
Another success story we've got in the technology sector is a company called Get Trakka. The founder is a gentleman called Ian Hamilton. If you know the mining environment, what happens is the teeth on all the excavators and buckets are the most vulnerable parts of the equipment. As they dig into hard ore, gold rock or whatever, they can break off. If they fall into the crusher, that costs the mine a huge amount of money and it brings them down to a halt until they can fix and repair the crusher.
He's developed RFID tags and software that predict wear and tear on the teeth, and can track them at any stage so the minute they come loose or fall off they can stop the equipment, before it does damage.
The other amazing Medical technology coming out of WA is a technology called Cell Excel. That's a heart patch for heart repair in children, (paediatric surgery). Now the traditional heart patch in use until now calcifies very quickly, and they have to keep replacing it as the child grows. This patch is made of a material that grows as the child grows and doesn't calcify. All those repeat “hole in the heart” repair surgeries are now no longer necessary.
There's also Fast Brick, this is a machine that can lay all the bricks in a house and build an entire house in two days. It's amazing technology, and that's here in WA and we don't want to lose that one.
Let's touch on some of the roles the other Australian cities play in the WA community.
There's just so much more on offer there than there is here. Really there's more opportunity to gain investments in the Eastern states, lots of companies have to move across if they want to seek distribution channels, investment. The only advantage we have is the geographic location of Perth, when we're dealing with Asian countries. A lot of our manufacture is done in China, (we can’t compete with our high labour costs) but which in itself is a problem because the question of IP protection.
Do you see Asia as being a very strong positive of WA for the future, of having access to such a huge market really very close to our doorstep?
It's both a positive and a negative. It's positive because it's a huge market. Chinese manufacture is being done at a far lower cost. Many of our innovative companies are coming up with new technologies and having prototypes and the products built in China in preference to them being built here,which, I suppose is a negative. It's the only way they can do it to keep the price down.
From an IT perspective, whilst you have developers in China and India who work at far lower rates than developers here, and because they're on similar time zones, it does provide quick turn around. Again, positive and negative in both.
The down side of outsourcing to Asia and using people with different cultures is that they do have different business cultures too, different priorities, and different ideas on time, and although they speak English, it is not always the same way we speak in Australia. Not always ideal, but the cost factor outweighs all the others.
My last question for you is, what are the risks that you see in WA's technology ecosystem developing over the years?
It's evolved unbelievably in the last three years, it's grown at about four times the rate it did in each of the preceding years, since I've been here in 2000. The big danger is there's insufficient funding to sustain the innovation here. We're going to have a brain drain, we're going to lose those people and they're going to go elsewhere. Innovation itself has been given birth to by the lack of other jobs, to a very great extent. If they can't find a way of making money and they can't get the innovations to market, it's going to kill the goose that lays the golden egg.