Time is ripe for fruitful ventures
BY VAL McFARLANE
Emma Welsh’s first foray into the fruit trade wasn’t a huge success. As a young girl she developed a plan to raise enough money to buy a saddle for her horse by picking strawberries. “I thought I was going to make a fortune!” she laughs.
But after calculating that she had earned $1.50 for three hours’ back-breaking work, she abandoned the plan and didn’t even bother going back to collect her pay.
It’s fair to say her next fruity venture has been more productive. She and childhood friend Tom Griffith founded Emma & Tom’s in 2004, after Tom spotted a gap in the Australian market for additive-free bottled fruit smoothies. They’ve gone from an initial range of just four flavours – developed in Welsh’s home kitchen – to an array of drinks and snacks that’s stocked in cafes, delis and supermarkets across the country. Griffith might describe Emma & Tom’s as “the grown-up version of the kid’s lemonade stand” but it is now a serious player in the Australian market, with plans to expand overseas when the time is right.
And it’s exactly the kind of business that Australia needs, with manufacturing jobs disappearing and the economy over-reliant in the eyes of some on a few big names too focused on the domestic market. The small business sector – which accounts for half of private sector employment – is under pressure too, with more firms going under than launching.
But Griffith (BCom 1986, Ormond College) and Welsh (BAgrSc 1988, Trinity College) are proof that it is possible to succeed with the right product and approach. Both had successful corporate careers after graduation – Tom as a chief financial officer and adviser to the UN, and Emma as a commodities trader and marketer – and both had run start-ups in London before setting up Emma & Tom’s.
That didn’t mean it was all smooth sailing. “The experience we had made us avoid some mistakes but I think it also made us make some mistakes,” says Welsh. They hired people to do jobs they should have done themselves. They were thrifty, but not thrifty enough.
But slowly they found their way around their new industry. “It was like pulling at a thread,” Welsh says. “You just follow along all the things that need to be done – what’s the bottle going to be like, what are the ingredients going to be, what’s the recipe going to be … you just keep talking to people and following it along.”
Relationships have been key. “We’ve learned a lot from talking to other people,” says Griffith. “Really everyone has the same issues and challenges, whether you are selling hamburgers, fruit juice or insurance. It’s about pricing, dealing with new types of customers, what margins should we be aiming to achieve … all the things you just don’t know by instinct.”
A decade on, they still have external advisers. Welsh says: “It’s really important to have people who can look critically at your business to help you see the wood from the trees as well as to make the most of other people’s experiences.
“As an entrepreneur you have to be an optimist and you have to be driven. That can be a weakness because you are so hell-bent on making it succeed, you actually don’t see that you are going down the wrong path.”
Having learned on the job what works and what doesn’t, Griffith is an enthusiastic advocate for the new Wade Institute for Entrepreneurship at Ormond College. Established with a $10 million gift from entrepreneur and Ormond alumnus Peter Wade, it aims to give budding entrepreneurs the tools they need for success.
The teaching will be practical, blending academic study with advice from entrepreneurs like Griffith. Students will graduate with a business plan that is hopefully strong enough to attract venture capital.
Associate Professor Rufus Black, Master of Ormond, says students will come from a range of backgrounds, but will share a passion for creating something with impact: “Finding ideas is not the hard part – turning those ideas into something that will be a successful, competitive business is.”
Some of those ideas will likely come from areas in which the University already excels – medical research or engineering, for example – but Black (BA 1990, LLB(Hons) 1991, Ormond College) is keeping an open mind. “Disruptive players are almost always black swans – they come up with innovative and unexpected ways to meet the world’s needs.”
Between the new Masters and the Melbourne Accelerator Program, which provides a place for entrepreneurs to grow their businesses, Black says the University can make a major contribution to creating a much-needed “entrepreneurial ecology” in Australia.
“Other mid-size economies have recognised that they have got to create the next generation of globally competitive businesses that will provide the future wealth and jobs. We need to do that here. We need a new generation of entrepreneurs,” he says.
“This is a really big issue for Australia. We’ve tended to look to big business or government to provide an economic future – that has got to change.”
That’s a view shared by alumna and entrepreneur Susan Oliver (BBldg 1973). She is the co-founder and chair of female-led angel investor network Scale. Its aim is to develop a group of savvy investors who can support early-stage ventures, particularly those led by women and mixed teams, and it’s working. Since its launch in 2013, Scale has recruited 75 members who have invested more than $3 million in six start-ups. Oliver believes a change in attitude is critical.
“Everybody thought the US was on its knees post-GFC but they hoisted themselves up through their confidence and their ‘can do’ culture. Here we’re doubting Thomases and it can be a reason why our start-ups move to the US,” she says.
She welcomes new additions, like the Wade Institute, to the entrepreneurial landscape. “We need as many players contributing as possible,” she says. “And we also need to recognise that we are a small, small voice in a big, big world and if we don’t work collaboratively and dynamically we are wasting the opportunity.”
She’d like to see Australia follow the UK’s example and allow individuals investing in start-ups to claim it as a tax deduction. “We subsidise real estate investment through our taxes. Why don’t we subsidise technology or start-up investments?” she says.
She’s also wary of government policies that seek to “pick winners” in the entrepreneurial market. “I always feel really doubtful about governments that say they are going to back med-tech, or pharmaceuticals, or whatever else. What that is really saying is that they are going to institutionalise the research base and endow this group of people, whether there is something fabulous there or not. It just makes it bureaucratic and stodgy,” she says.
“There are going to be bursts of energy all over the place and you can’t institutionalise that. You have to allow that burst of energy to flourish wherever it is.”