In March, the NSW Premier Mike Baird, announced that a new Sydney fintech hub called Stone and Chalk was to be created. Since then the hub has been overwhelmed with applications from start-ups, Alex and his team have doubled the initial space and it will now be located at 50 Bridge Street, within the central business district. The Premier also announced that Mr Craig Dunn, the former head of AMP, was to be the new Chairman, and a month later Alex was named CEO.
According to Alex, much of the congratulations needs to be directed to KPMG, Reinventure, H2 Ventures and the Committee for Sydney who have driven the creation of the hub, bringing together both Corporate and Government support. Stone and Chalk is sponsored by over 25 major Australian and international banks and corporates. Companies such as Woolworths, ANZ,Westpac, Amazon, Intel, AMP are all foundation members and have contributed between $100,000 – $150,000 each to support the venture.
After Baird announced the new hub, I wrote a piece about my initial reaction Stone and Chalk the new Sydney Fintech Hub – the banks must be very pleased. Here I raised my concerns around start-ups joining co-working spaces that have been set-up by large corporations. That the corporates/banks are like wolves in sheeps clothing, getting unhindered access to these new disruptors. I really thought it was a great idea, but more beneficial to the banks than the start-ups.
However, after talking with Alex I realised that Stone and Chalk is designed around the start-ups first. The corporate partners do not have any rights to the IP developed within the hub and none of these partners will have any permanent space, it is for the start-ups to decide who they engage with.
It took me a while before I finally understood Alex’s vision for the hub, I kept coming back to the question of what real value does a co-working space provide, apart from rental subsidy and free wi-fi. But then he said think of Stone & Chalk as a multi-layered platform shaped like a pyramid and drew it for me.
Looking from the bottom up, Stone and Chalk is a co-working space for start-ups, but it also provides a forum for mentoring across all major industry sectors with input from highly experienced domain experts including investors and serial entrepreneurs. There will be masterclasses organised on a range of topics that impact a high growth business. While government officials, VC’s, corporates and regulators will be encouraged to spend time in the hub, passing on their knowledge but also getting to interact with the start-up community to improve their services. Once a start-up is at the concept stage then an accelerator program is offered to support the business and get it ready for fund raising. Finally the partners companies will allow the start-ups to access their businesses via API’s and test their models and prove their viability. These partners have no rights to the start-up’s technology, they are only providing a real testing environment.
Alex has a really interesting background, born in Australia he spent his early career in the army and with Lend Lease, then worked locally and overseas with Nokia in the Middle East and for the last 3 years with Barclays in Londons Canary Wharf running key parts of their innovation agenda and most notably creating their Startup Accelerator program which has now also opened in New York. This program was so successful, that it drew attention from Australian companies and VC’s who were in the process of replicating the model here in Sydney. With Stone and Chalk finally in place, Alex and his Australian wife returned to Sydney as the new CEO.
Around the time of the GFC, the UK Government were aware London was seen as the European financial capital however there was little “start-up” business activity. Young political superstars such as Rohan Silva later joined Prime Minister Cameron’s team to develop a fully Government supported tax and immigration incentivised environment in which creative new businesses across all sectors could flourish – finance, technology, art and fashion etc. Prime Minister Cameron himself had publically mandated making Britain the best place to start and grow a business in the world. With unemployment so high, young highly educated and very creative entrepreneurs across the EU, flooded into the UK. It was through the initiatives that he as leading that Alex was invited to meet with and work closely with Downing Street. My understanding from those early days London’s start-up community has gone from around 100 to now over 15,000.
So in my view Alex has one of the more interesting jobs in Australia, a role that has support from major banks, corporates and the NSW State Government. But he made it very clear that to really launch this business model, they need to see genuine buy-in from the Federal Government, in the same manner that he experienced in the UK. That will be at the Prime Minister and Treasurer levels, genuine changes need to be made around tax structures to encourage investment in startups; immigration policies to attract the best startup talent from around the world and open government to competitively allocate even small portions of public spending towards quality Australian technology startups.
Other countries such as Singapore and Malaysia are aggressively setting up new fintech hubs, trying to influence Australian entrepreneurs and VC’s to look to move their operations and capital into SE Asia. Stone and Chalk has a real opportunity to encourage some of our more creative fintech talent to remain here in Australia. Providing a supportive and creative work environment, mentoring and educating their development, and finally providing them direct access to some of the largest companies in the world. It is a big challenge, but Alex has the talent and experience to succeed here. The private sector has legitimised the model and now we need the Federal Government to also provide an attractive business environment in which Australian start-ups have no reason to consider being anywhere else, then we could possibly be seen as the Innovation Nation.