Success breeds success, and nowhere is this clearer than in the tech sector.
A healthy tech sector needs some successful exits.
Not only are these departures inspirational for other budding entrepreneurs, the exiting founders will often provide advice and capital for the next generation.
Success also breeds confidence in the sector, which in turn attracts potential investors.
Bootstrapping
Back in Perth after successfully selling Kanopy, her online video streaming business (for universities), Olivia Humphrey is a good example of this virtuous circle.
Having established the business from her home office in Scarborough in 2008, Ms Humphrey moved her family to the US five years later.
She’s since returned, and is bringing all those years of knowledge and experience with her.
The move to the US was not about landing some venture capitalist money from Sand Hill Road (Silicon Valley).
Apart from one local angel investor in Perth, Ms Humphrey has always been self-funded.
“Spending one hundred per cent of my time scaling and growing the business was great for the business,” she told Curtin Ignition this month in a keynote address.
“I bootstrapped. It was what I knew. I didn’t have to spend time wooing and managing investors, as I did not have any. I knew no other way.”
Back in those early days, it was all DVDs.
Streaming would come later.
Cash flow was never a problem for Kanopy, as Ms Humphrey could order the films and documentaries, send them to the universities, get paid, and then pay the supplier.
The 2013 move to the US was for market reasons.
While there are 39 universities in Australia, there are more than 4,000 in the US.
“It was a decision [whether we] stayed in Australia and kept it an Australia-focused business, or moved it to the US and took on the world,” Ms Humphrey told Business News.
“And I remember my husband looking at me and saying ‘I’m not going to die with this regret of yours, let’s try it’. So, we packed up two bags and a baby and moved over.”
Two years later, in May 2015, I was in San Francisco for a tech conference.
I met up with Ms Humphrey and wrote about her early experiences: ‘Kanopy’s video stream has US unis covered’, Business News, May 8 2015.
As she told me overlooking the San Francisco Bay Area, it had been tough going in the first couple of years.
The market was huge, widespread, and the ferocity of the competitive environment came as a surprise.
“In Australia it’s quite friendly and collaborative in many ways,” Ms Humphrey said.
“But in the US there were people genuinely trying to undermine the business. It was mentally tough.”
In one case, the head of the library of a major institution, also on the payroll of two of her biggest competitors, called her.
“He told me that if I wanted to get him on our payroll, here were his costs – which were astronomical – so I politely declined. He said that he would systematically destroy my business and send me back to Australia,” Ms Humphrey said.
That person later hosted a ‘future of video streaming’ session at a major librarians’ conference in Las Vegas, but refused to invite Kanopy.
So affronted by this were librarians that they boycotted the session.
When customers behave like this, you know you are on to something.
“We had a B2B2C model,” Ms Humphrey said.
“The university libraries paid Kanopy, as it was considered a library resource like books and journals, but the students and academics were the real end-users, and the universities only paid if they watched.”
This approach meant the business concentrated on getting the students to click ‘play’.
By contrast, competitors were charging universities for large collections, irrespective of whether the students or professors watched. Later, public libraries were added, as students leaving universities demanded to continue the service.
After a few years, Ms Humphrey thought it was time to take some money off the table.
She found a billionaire investor, and a private equity firm took over a few years after this.
She stayed on to find a replacement chief executive, and in December last year, together with her husband and now seven year old, returned to Perth.
Back in Perth
The timing was incredible, as it happened, as 2020 has afforded Ms Humphrey time to think about what she wants to do next.
She tells me that she’s been impressed with the local startup scene, as there was no such ‘scene’ when she left. One feels Olivia Humphrey is an important new addition.
Charlie Gunningham is founder and principal of digital strategy advisory business Damburst
