Sam Mead is the program director of the recently announced Atomic Sky Fusion Founder program. Sam’s a relatively recent arrival to Perth so we got his story and his take on the program.
//SN: So what’s the Sam Mead story?
I was at University in Southampton in the UK, and two friends of mine started a business running flotilla sailing holidays in the Mediterranean. I thought that sounded fun, so I kept hassling them about it and eventually they asked me if I wanted to join them. The idea was to have the holidays as post-university networking or social clubs. So our USP was that anyone who came on these sailing holidays was guaranteed to get along with everyone else on the boats. So we started playing around with different ways that we could do that, of finding out how to make sure that everyone got along on each boat. We looked at online dating, psychometrics, anything in this area that could help. We ended up mashing some techniques together that, almost accidentally, accurately predicted in advance how well people are going to work together. It was uncannily accurate, so accurate that we realised it was completely wasted on sailing holidays. We’d also found a few other problems with the sailing holiday idea, so we had our first “pivot”: we took the technique we’d created and bundled it up in a tech startup and applied it to corporate recruitment. At this point we were just finishing university, so we raised a bit of money, we got a grant from the university of around $70K which gave us a decent runway. At this point there was just two of us, so we moved into my parent’s house in Devon, took over the garage in true startup style, and started working on it. There’s still the remnants of our kanban board taped up on the wall there.
Of course, we went through the money pretty quickly, and realised that North Devon is a terrible place to have a tech startup, so we thought about moving back to Southampton, we even had an offer from the university to put us up on the edge of the city in a science park. But we realised it would be the same problem; being disconnected from the startup community would not help us. So we ended up moving to London, joining the Google Campus, and back-doored our way into Seedcamp, which is one of the bigger accelerators there.
//SN: What do you mean “back-doored”?
Well, my co-founder had been a Kauffman scholar, so had spent three months in Kansas, New York and Boston and then another three months in a placement in a tech startup, which for him was the Startup Weekend HQ in Seattle. So he had an amazing time being sent all over Europe to facilitate events, and got to know everyone in the Startup Weekend organisation, including London. One of the people he got to know really well was the European Co-ordinator for Startup Weekend, and her housemate was the principal of Seedcamp at the time. So we had already applied to Seedcamp when we first got to London, and got knocked back completely, they just didn’t like the idea at all. But then we were introduced through this contact network and got a completely different reaction. To be fair we’d improved the pitch a lot, and we’d worked out this proposal for them, which was “if you let us analyse all the teams that have applied we’ll tell you in advance which ones you’ll pick”. We ended up getting 8 out of 11 right, but one of the teams was a solo founder, and one of the 11 didn’t complete our survey, so really we got 8 out of 9 right, which is pretty impressive. They were impressed anyway, and let us join on a small equity deal with no funding.
//SN: So they don’t give you money?
Seedcamp has three levels of membership. The basic level is that you join the network for 3%, or £24K for 5% ish or £50K for 7.5%. We joined without a cash investment on the understanding that it would lead to us raising a much bigger funding round down the track. Which we eventually did.
//SN: So at this point there’s just two of you, non-technical founders?
Again, we cheated a little bit. We knew we needed a tech co-founder, and we had all the data from the Seedcamp applications, including the unsuccessful ones that had disbanded because they hadn’t made it into the program. So we hunted out the perfect tech co-founder from this list, and got him on board. He’d worked in investment banking for ten years earning serious amounts of money, and just decided he was wasting his life there, walked out and sailed around the world with his girlfriend, came back and joined a tech startup. It fundamentally improved our company, meeting someone with that level of skill willing to risk working for equity in lieu of salary.
Eventually, about a year later, we ended up raising a substantial seed round of £750K, about $1.3million. We had a lead angel who we’d been talking to for a long time, and he introduced us to one of his friends who’d just exited an HR-analytics business, as part of his due diligence to make sure we were on the level. We chatted to this guy a few times and realised he’d make an excellent CEO for us, so we offered him the role. The second he accepted the valuation of our company went through the roof, and suddenly we were able to raise money. We had been trying to raise £250K and struggling, and then suddenly we were sitting on offers totalling £750K.
It was a great move at the time, but as we started working together I came to realise that his vision and agenda for the company didn’t quite match with mine. The rest of the team really felt that we stood no chance without him, so I decided to leave. It was all part of the seed round; if I sold some of my shares then it created some room on the cap table to get some more investors in and the valuation went up. It was a really tough to make the decision to have less involvement with the business, but my girlfriend was here in Perth, I was spending much too much time and money coming here, I knew I loved Australia, and so it seemed like the perfect choice at that point to bow out and head south. Because we had a solid vesting schedule in place I was able to leave as a good founder with no regrets.
//SN: So you arrived here in sunny Perth when?
I’d been travelling back and forth to see my girlfriend for 18 months so I knew what to expect and loved the place, but finally arrived here in July 2014. I had a list of people I’d researched who I wanted to meet, but that was cut short when I snapped my Achilles Tendon playing basketball in August. So I was on the sofa for a month, and then two months in a cast after surgery, and then a month in a boot. I actually did a talk at Morning Startup in my boot on crutches, which was fun. But one of the people I wanted to meet was Andy Lamb, because from my experience in Seedcamp I knew that running an accelerator was an amazing job and I thought I could do it really well. Andy really sold me on what’s happening at Atomic and I started working with them to help out some of the companies they’ve got here.
//SN: How does the Perth scene compare to the London scene?
Well, when I first started looking for it I thought there was nothing here. There was no centre, no buzz. Everyone I met was a “wantrepreneur” who hadn’t actually started anything. However, since I got involved with Atomic it’s really changed my perspective because we get an awful lot of people coming through that are doing something. So I think the scene here is thriving, there’s a lot of people here with a lot of ideas, just going about them in slightly the wrong way. There’s two main problems in Perth that I can see:
- The quality of life is too high, so people aren’t hungry. Why would you leave a stable job where you earn decent money in one of the nicest places in the world to risk everything in a tech startup?
- Because people have money, they have the idea and then they build the app, just by throwing money at it, without doing any of the work that should go before it, like finding out if it’s something that there’s a market for. It’s a total waste of money. We’ve had people come through here who’ve spent hundreds of thousands of dollars building apps that no-one wants.But apart from that, I think the ecosystem is good here. The entrepreneur ecosystem generally is great, maybe less so for the tech startup ecosystem. But there’s lots of good signs that it’s getting better, and I hope we can help with that.
//SN: How is Fusion planning to help?
Fusion is a reaction to a couple of things, firstly that “build it and they will come” mentality that we see a lot of, which I mentioned above. It’s too common here and is just a waste of potential. Secondly, it’s an attempt to scale the Atomic Sky model: we get a lot of people through here that need mentoring, need tech, need support, and there’s only so many we can take on at the same time. There’s been days where I’ve had the same conversation three times in one day to three different people explaining the basics of startup thinking. It’s been obvious that if we could get these people in the same room at the same time it would not only help us to get the message across, but they’d also be able to help each other.We see a huge market for it. There are people spending anywhere from $50K to $100K on app development that is totally unnecessary. So we know people are willing to spend money on their ideas. The key thing we think we need to get across to people is that they’re not just building an app. They’re building a company that sells an app, and that’s a whole different thought process. The info session we held to announce Fusion was really good. We filled this room, and afterwards the interaction with the attendees showed that we’d managed to reach some of them, so hopefully we’ve saved a few hundred thousand dollars being thrown away.One of the other reasons for Fusion is that if we’re going to unlock the money that’s available in Perth then we need, in Andy’s words: “more founders and better founders”. We need to put more opportunities in front of investors, and those opportunities need to be lower risk. So if we can help founders during our program to validate their ideas properly and get some research behind it, and have us as a advisory service, then when we make the introductions to investors at the end we know we’re reducing their risk and increasing the odds of a successful startup and a successful investment.
//SN: There’s a few other programs starting at the same time, how do you fit in with them?
We sort of see ourselves as the filler in a Founder’s Institute and Amcom Upstart sandwich. One of the questions we had at the information session was if people could apply for Upstart and Fusion at the same time. And the answer was “yes!”; we see membership of Fusion as a really good use of the money that Upstart provides. The value we add here is entirely complimentary to the mentoring that Upstart provide.Likewise with FI, that the learning people do there is based much more on developing the entrepreneur rather than the business, so once someone has been through FI they’re in a really good place to start a business and bring that to Fusion where we will concentrate on helping them develop that business.
//SN: That sounds great, nice to see more collaboration going on. Has the program actually started yet?
Yes, the program has started, we’ve been accepting applications for a month, and we’re working towards our first cohort. Deadlines for applications close on the 8th May and we’re planning on starting the first cohort through the program in the week beginning the 18th of May. But those dates aren’t set in stone and if we have to delay we will, or if we fill the program before then we’ll start sooner. We’re looking for 20 people, ideally 10 teams of 2 people each, but we’re flexible about the exact numbers.
//SN: So what’s the goal?
We do have a specific goal which is to increase the number of startups that are getting decent-size seed funding, six-figure funding. We will be doing a proper Demo Day at the end of the program where people will be pitching to investors and aiming to get investment. We think this is vital to growing the startup economy, getting the cash flowing into tech startups from investors, and to do this we need to put better propositions in front of the investors.Apart from that, I have a personal goal, which we can’t really measure but I think is really important. I see everyone arrive here focused on their idea. I want to see them leave focused on the customer. This is one of the biggest problems I see with the scene here, is that everyone thinks their idea is brilliant and they’re working on how to make their idea seem better, instead of understanding what their customer wants and making that. So from a qualitative perspective, if I can make that change happen during the program then I’ll be happy, and I think that’ll definitely produce more investable propositions.
//SN: What does your ideal candidate look like?
The program is shaped by my experience in Seedcamp, and as a consequence of that I’ve seen companies at a wide range of stages go through the program and benefit from it. So we don’t really have an “ideal candidate” profile, but anyone who is planning on spending a lot of money on developing their product should definitely do this first because we can save them a ton of money. Spending $4500 seems like a lot of money to spend on a program, but in the context of spending tens of thousands of dollars on development then it’s a definite saving, it will multiply the value of a development dollar by an order of magnitude at least.
//SN: Thanks Sam, we hope the program is a great success and I look forward to reporting on multiple alumni getting seed funding.
If you would like to apply for the Fusion Founder Program, head to their site here: http://atomicsky.com.au/fusion/