LtM ep12 - Australia’s Deep Tech Ambitions With Phil Morle, Startup Pioneer and Partner at Main Sequence Ventures

08/10/20 • 36 min

Getting innovation from lab to market is not an easy feat, and few countries do it well. Australia’s research output, for instance, punches way above its commercial applications (e.g. #10 in the SJR ranking and Nature Index).

Are there ways to accelerate that transformation? Australia set up Main Sequence Ventures (@mseqvc) as a AU$240M (about US$170M) deep tech fund backed by the CSIRO and private investors, to target that opportunity notably in domains such as ag-tech, synthetic biology, quantum and space (the CSIRO is the Australia’s federal government agency responsible for scientific research).

This podcast is hosted by Benjamin Joffe, Partner at SOSV, a global early stage fund focused on deep tech. SOSV runs multiple accelerator programs including HAX (intelligent hardware) and IndieBio (life sciences). To hear about new episodes, sign up to the newsletter or follow us on twitter at @LabToMarket.

For other episodes on foreign deep tech ecosystems, check out India and Japan.

OVERVIEW

In this episode, Phil Morle (@philmorle), partner and long-time pioneer of the country’s startup scene (wikipedia), explains the commonalities he found between entrepreneurs and scientists, how the fund extended its investment domains and helps compress development timelines.

He closes with thoughts on the tough year it has been with fires, drought and Covid, and how returns and impact now go hand in hand, from responding to new threats, feeding the planet, to delivering healthcare at scale.

Before Main Sequence Ventures, Phil had three lives:

He spent a decade as a theatre director, learning how to create things from scratch.
Another decade with startups including as CTO of Kazaa — the then-dominant P2P file-sharing service,
And another as the founder of Australia’s first Silicon Valley-style startup incubator, called Pollenizer, where he also advised numerous organizations including the CSIRO (Commonwealth Scientific and Industrial Research Organisation) on setting up their own incubators.
He was then tapped by the CSIRO to set up a fund to support the translation of Australian research into commercial applications, including the output of CSIRO’s 3,500 scientists.

Among the lessons learned:

How he got scientists to grow an entrepreneurial mindset.
How to look for early proof points for the whole company.
How spending too long in the science exclusively sends weak signals into the market.
How deal creation is more valuable than mere deal assessment and de-risking.
How they designed a plant-based meat company, assembled a team, and got a product to market in 9 months only.
How bridge-building between scientific domains, business expertise and geographies is crucial to startup success.
How Covid-19 has lit a fire in the innovation ecosystem.

PREVIOUS EPISODES

For other episodes on foreign deep tech ecosystems, check out India and Japan.

OVERVIEW

Before Main Sequence Ventures, Phil had three lives:

He spent a decade as a theatre director, learning how to create things from scratch.
Another decade with startups including as CTO of Kazaa — the then-dominant P2P file-sharing service,
And another as the founder of Australia’s first Silicon Valley-style startup incubator, called Pollenizer, where he also advised numerous organizations including the CSIRO (Commonwealth Scientific and Industrial Research Organisation) on setting up their own incubators.
He was then tapped by the CSIRO to set up a fund to support the translation of Australian research into commercial applications, including the output of CSIRO’s 3,500 scientists.

Among the lessons learned:

How he got scientists to grow an entrepreneurial mindset.
How to look for early proof points for the whole company.
How spending too long in the science exclusively sends weak signals into the market.
How deal creation is more valuable than mere deal assessment and de-risking.
How they designed a plant-based meat company, assembled a team, and got a product to market in 9 months only.
How bridge-building between scientific domains, business expertise and geographies is crucial to startup success.
How Covid-19 has lit a fire in the innovation ecosystem.

PREVIOUS EPISODES

Previous Episode

LtM ep11 - Funding Science Fiction That Works From The MIT Media Lab, With Habib Haddad and Calvin Chin From The E14 Fund

Habib Haddad and Calvin Chin are the Managing Partners of the E14 Fund, an early stage deep tech fund that invests exclusively in startups from the prolifically inventive MIT Media Lab community.

For another episode covering Boston & Cambridge’s deep tech ecosystem, check out John Ho (Anzu Partners) on Breakthrough Industrial Tech.

INTRODUCTION

There is a bit of mystery shrouding the MIT Media Lab. If you’ve watched the movies Minority Report or Disney’s Big Hero 6, if you’ve used a touch screen, an e-reader, AR/VR devices, or played the game Guitar Hero, you’ve been touched by innovations from the Media Lab and its alumni.

The Media Lab is especially renowned for its interdisciplinary research. Its departments have names such as molecular machines, synthetic neurobiology or tangible media (if you stick until the end of the podcast, you will hear about a very curious project mixing wearable computing, emotions sensors and video).

In this episode, Habib and Calvin describe:

The journey that brought them to create the E14 Fund in 2013 (and why it’s named this way).
The importance of the community built around the Media Lab and the fund.
How they work with founders, supporting them sometimes years before it’s a startup ready for investment,
What differentiates the best founders from others,
What simple question you can ask founders to determine their ability to navigate both the short and long term,
How deep tech startups can be both less capital intensive, and more capital efficient than many think,
Why attracting, training and keeping foreign scientific talent in the US matters,
We end with some ideas on how to grow the investment in deep tech, and why this sector inevitably matter a great deal.

REFERENCES MENTIONED

E14 Fund
MIT Media Lab
Figur8: musculoskeletal health analysis. Founder: Nan-Wei Gong
OPT Industries: Computational manufacturing platform for functional materials. Founder: Jifei Ou
ThurWave: 3d imaging with mm waves. Founder: Matt Reynolds.
Whiplash: a movie about drums, and much more.

PREVIOUS EPISODES

Next Episode

LtM ep13 - How Khosla Ventures Invests In Deep Tech, with Kanu Gulati and Rajesh Swaminathan

Khosla Ventures (KV) has been an active investor in deep tech for 15 years. In this episode they share ideas on how they select sectors to invest in and prioritize and retire risk, how to best support startups, and what investors need to enter the deep tech field (hint: it's not a PhD).

OVERVIEW

Kanu Gulati and Rajesh Swaminathan are Investment Partners focused on deep tech at Khosla Ventures. The firm was founded by Vinod Khosla -- co-founder of Sun Microsystems (acquired by Oracle for US$7.4 billion in 2009) and former General Partner at Kleiner Perkins -- with the goal of ‘Reinventing Social Infrastructure with Technology’, to elevate the entire planet’s quality of life without destroying it.

Over the past 15 years, KV has raised over $5B across 6 funds and invested in about 400 startups including Impossible Foods, Rocket Lab, DoorDash, OpenAI and many more.
They invest mostly at early stage — signing checks ranging from a few hundred $k, up to $50 million — and without shying away from the high technical risk of deep tech.

After an introduction and examples from KV’s portfolio, the conversation goes into:

Why it is crucial to prioritize risks and retire them in the right order.
The 12 different technologies that can move the needle for the climate crisis.
Their approach to detecting startups from centers of excellence.
What sectors KV focuses on, including climate tech, hyperlocal and bio-manufacturing, hardware acceleration for AI, and more.
What investment and operating partners do.
How they support their portfolio in particular with recruiting (white paper). Vinod Khosla even calls himself a ‘glorified recruiter’!
How conviction, immersion, patience and staying power matter more than a PhD to start investing in deep tech.
How more engagement between financial and corporate VCs, building more forums and reducing inefficiencies in the deep tech ecosystem could help.