The deep tech entrepreneurial journey in Australia
This week we are diving into the world of deep tech with Sally-Ann Williams, CEO of Cicada Innovations. Supported by their founding shareholders – ANU, UNSW, USYD and UTS –, Cicada Innovations is bridging lab-to-market gaps and helping tech founders through the challenges they face in the process.
Look into the future of emerging technologies in Australia and the role Cicada Innovations is playing to make the country a global leader, and discover the common pitfalls deep tech founders face and how a pragmatic commercial mindset can make all the difference.
In this article, we summarise part of that conversation, but you can listen to the full interview in our podcast:
In her role at Cicada Innovations, Sally-Ann Williams has been the lead supporter of deep tech startups, translating cutting edge ideas from the lab to market and paving the road to success in deep tech entrepreneurship.
Just to kick off the conversation, I’d love to understand a bit more around how Cicada Innovation started and essentially what you do to support deep tech startups.
It’s quite a big story to unpack, but I will try to give you the snapshot. Cicada Innovations is just over 23 years old this year, and we were originally founded with this great vision to revolutionise and reimagine a precinct in Sydney that had been used originally for our rail infrastructure networks.
This precinct area is where the carriages for Australia’s rail networks originally were built in. In our building, where Cicada is housed, we have a beautiful, old, but fancy shed, which is heritage listed now, where the engines would be put into the carriages and sent out into the rail network.
We like to think of ourselves as the home of the last industrial revolution and we are certainly the home of the next industrial revolution.
With that vision in mind, there was a lot of federal and state government support, from the universities and, more importantly, from the local council, to create a precinct that would be a gathering point, a facilitation place and an intersection between industry, academia, and community to build businesses of the future.
23 years later, we have over 45 businesses in our Sydney site, and they’re doing everything in the deep tech sector from health, AgTech, we are the home of the National Space Industry Hub. We have quantum companies, semiconductor companies, new materials companies, hydrogen companies, we have some companies working on infrastructure. Poetically, we have someone working on rail infrastructure, taking trains that can be 50-years old and turning them into smart infrastructure. We support those companies, here and in our two other sites, with everything they need.
Like a chicken incubator for eggs to hatch, we support the companies with the right environment, the exact temperature: a little bit of pressure, a little bit of coaching and mentoring, connections to capital, … Everything that they need to thrive and survive.
We have helped over 360 odd businesses, thousands of jobs, 1.8 billion raised, but the thing that makes me the happiest is building businesses that thrive and survive and go on to reinvest in the architecture of deep tech businesses in Australia.
You mentioned a few different types of companies and sectors. How do you decide which startups to work with or to support? Is there a process or is it based on the idea?
It depends on the sector and the timing, but there’s a couple of key things that we look at:
- What is the fundamental problem they’re trying to solve and is it a big problem? Because if it’s a problem for 100 people, the reality is it’s going to be very difficult to make a business case for that.
- Are they coachable? Are they willing to grow? Do they care more about solving the problem than they care about their own ego in it? So many people want to become founders and CEOs. And I always ask why because it’s a miserable journey. They are going to have very high highs and incredibly low lows. It’s absolutely lonely at the best of times, and it’s tough. When the answer is that they are obsessed by the problem and the need to bring it to the market, then they are the right person.
- What science and engineering do they have underneath the hood? Do they have some protectable IP, or do they have the ability to build on some protectable IP? If they don’t have that at the outset, the journey is really long.
- Are we the right ones to help them? I don’t think a lot of incubators and accelerators ask that question of themselves. We ask ourselves: Are we the right ones or is there somebody else that would be better placed for them?
If our vision and our mission is about creating the deep tech future for Australia, we need to know and recognise our part, as well as to know and recognise everybody else in the ecosystem’s part and play the mediator role when other organisation is, more suitable for a specific case.
Depending on the answers that we receive from each different organisation, the outcome of how or whether we work together or not changes.
There are many challenges around commercialisation and partnerships, and sometimes the translation from lab to market can take a long time. Are there any unique challenges that you have observed in the deep tech space?
There are some common challenges, and I think this is where putting on a very pragmatic commercial mindset helps you navigate it.
Something that we see all the time is that deep tech founders typically underestimate the amount of refactoring they have to do as they go from lab to market.
When you take a prototype and you scale it, everything breaks: The science breaks, the engineering breaks, the optimization breaks, the cost breaks, … Everything is harder and takes longer than people think. We just need to be realistic about it.
I have coached many deep tech founders and the conversation usually goes like “I know you’re going to say “I told you so”, but we scaled this from this to this and everything broke”. I will always answer that it’s normal, they just have to fix it for the next scale. That is really hard when you are turning something into an actual usable product that can meet the regulatory requirements, the customer’s needs, and be easily adopted and implemented. That is going to take time and it is going to keep breaking. So be pragmatic about that, and listen to your coaches.
I think the second thing that deep tech founders often underestimate is the cost of that. You really have to understand where you are going to get your money from. And don’t just think about your first round, but also about what it’s going to take over time and understand what your strategy is to get to that place: What dilutive and non-dilutive capital can you take? How do you get strategic investors who are going to not only put in money, but also unlock customers and collaboration opportunities?
I would say for every scientist and engineering founder out there: Please do a basic bookkeeping and financial course. You do need to understand your books and cashflow and that is something that makes you different.
The other thing deep tech founders religiously do is forget about who their customer is.
Understanding who your customer is in every context is important. Building in partnership with them, having that paid trial early, and focusing on those friction points of adoption. Not creating the perfect product that is going to have 27 features, but the thing that just solves the one big pain point they have.
Interested in more insights like this?
Head now to our article Building Europe’s deep tech ecosystem: The role of universities to explore the challenges, opportunities and the role of universities in Europe’s deep tech future.
Learn more about ArcLabs incubator’s focus on tech-driven research and development and its commitment to meaningful engagement in our article Incubator Spotlight: ArcLabs Research and Innovation Centre.
Stay tuned for the next episode on this series and don’t forget to follow and rate us on your preferred podcast platform!