Published on the 27/07/2015 | Written by Beverley Head

Australian organisations looking to leapfrog the competition by leveraging new companies should treat them with kid gloves or risk being cold-shouldered by the entire startup community…

Since returning to Australia to head the new fintech hub Chalk & Stone, which opens its doors next Monday (August 3), Alex Scandurra has heard some “shocking stories” of startups attempting to partner with enterprise customers only to find themselves royally done over.

Scandurra said he had had a number of conversations with entrepreneurs who had taken their ideas to large companies in the hope or partnering with them or selling a solution, only to find that the company had then taken the concept and developed a product or service themselves. He put enterprise Australia on notice: “There is no better way to kill your reputation than to do that. We are a small community and we know one another.

“If you don’t get it right, startups will see you as someone not to work with and focus on those organisations that are startup ready.”
Scandurra was a panelist at an event exploring innovation in the financial services sector organised by the Australian Information Industry Association, recently held in Sydney.

A white paper on innovation, released at the event, noted that in the last three years the Australian startup ecosystem had undergone something of a transformation.

According to the paper; “It has proven its legitimacy as a source of game-changing innovation and companies have finally realised that digital disruption of transitional corporate business is a reality that cannot be sidelined.”

Alfred Lo, lead principal of the Optus Innov-8 investment fund, which has invested around $US250 million in global startups to date, said he is “bullish on the opportunity for corporates in Australia to work with startups.”

But like Scandurra, Lo warned that corporations need to treat startups carefully.

“There is a risk of corporations treating startups like vendors. But they don’t make mature stage products, you can’t treat them like a normal enterprise vendor, you have to work with a startup as a partner,” he said.

Scandurra also tied the health of the startup community to the nation’s overall economic fortunes, saying that innovation was a global race.
“If Australia and Sydney are not the creator of the disruptor, then we will be the colonised, not the coloniser,” he said. By partnering with startups it was possible for established businesses to get access to the “first line of sight” to the future, according to Scandurra.

“For large organisations, particularly in financial services, it’s a really difficult cultural change to make. But if you can do it you will be a huge winner.”