BRW (formerly Business Review Weekly) is an Australian business magazine published by the Fairfax Media group. It regularly compiles lists which rank corporations and individuals according to various criteria, similar to Fortune magazine in the United States. BRW provides news and commentary on the economy, business and investment in Australia. The magazine reports on successful business strategies, investments and entrepreneurialism. Cover stories and features concentrate on ways to make money and improve businesses. Each week BRW focuses on a sector or topic relevant to business people or investors.Deborah Knight, Channel 9: BRW’s Young Rich List is out this week and the tech sector is set to dominate again. But the boom in online education is helping many under-40s cash in, in a very big way.
Jack Delosa, founder, The Entourage: Determination, persistence, a very strong work ethic. I think the biggest challenges for anybody starting out in business is probably there is no roadmap and we often go into business far more optimistic and naive than what we will be in a couple of years.
Knight: 27-year-old Jack Delosa is part of the new breed of Australian entrepreneurs. A university dropout at 18, he borrowed $20,000 from a bank to start his first business.
Delosa: When we start a business or when we start doing anything worthwhile in life, there is often a massive gap between where we want to be and where we currently are.
Knight: He now runs business education company The Entourage and his goals are high – aiming to make it the world's leading entrepreneurial institution. He’s also a debutant on this year”s Young Rich List with a fortune of $25 million.
John Stensholt, AFR reporter: Online education is a big one for entrepreneurs. People are making a lot of money out of that. The big trend on the Young Rich list this year is that everyone is getting a lot richer. There’s a record amount of wealth in the Young Rich.
Knight: A key trend to emerge on this year’s list is the divide between men and women. Only six of the top 100 are female – including model Miranda Kerr and singer-songwriter Sia Furler.
Stensholt: I think that’s extremely disappointing and it shows you that there’s a really big challenge for the entrepreneurs of Australia. It’s a particularly big issue in the technology sector, but I think it’s a challenge for corporate Australia to have more women in leadership roles and it’s certainly a challenge for entrepreneurial women to grow their businesses as quickly as possible, too.
Knight: Serial entrepreneur Catriona Wallace is an advocate for women in the tech sector.
Catriona Wallace, CEO, Flamingo Ventures: It is very difficult for women tech entrepreneurs in Australia.
Knight: While not a rich lister, she believes breaking down barriers is crucial for making the industry more appealing to young women.
Wallace: In Australia it’s still 80 to 90 per cent of the tech and the start-up community is male. I do think it's difficult. It is definitely a boys club.
Knight: Despite the volatility in global equities, Australia’s young rich are increasingly looking towards the sharemarket for funding to grow their wealth. Around 15 of the top 100 have either listed or are planning a float.
Stensholt: There’s plenty of people on the Young Rich that still want to get on the ASX and it shows you that they’ve got confidence in their own business plans and also in the merits of going public still.
Knight: The healthy appetite for emerging companies is also helping many young entrepreneurs raise funds at an early stage, with strong interest from both private equity and venture capital funds. But while success is one thing, there’s always the next challenge.
Delosa: I’ve heard it discussed that the Young Rich List isn’t the real one; it’s not real until you get to the proper one. It’s not a goal of mine, but we’ll see.
Knight: And the BRW’s Young Rich List for 2014 will be released in Friday’s Financial Review Magazine. Well, Ruwan, you’ve made your debut on this year’s list, a cool $22 million to your name – well done. Is making the list something you’ve always aspired to?
Ruwan Weerasooriya, founder, Rewardle: Not really and truth be told I sort of tried to get off the list because, well, I don’t want to pay more for a plumber who Googles my name for the rest of my life. And yes, because I turned 40 this year and I thought that would actually get me nudged off – I was told in no uncertain terms that I count for this year’s, so there I am, on the list.
Knight: You are indeed, and Rewardle is your current business offering, it’s your digital offering of a loyalty card – it’s your third business venture. Is Australia a good place to actually start up a new business? Because the thinking, I suppose, is that if you want to raise funds, you head offshore to Silicon Valley.
Weerasooriya: Yes, look, I certainly think it is – and have found the market to be receptive to the ideas and developing the businesses.
Knight: Because you’ve gone to the ASX.
Weerasooriya: Correct, so Rewardle listed a few weeks ago on the ASX and what we saw was that there was a palpable shift late last year where some of the speculative mining money – and so, again, tapping back into my WA roots – there was an opportunity to take tech opportunities to some of those investors who are looking for growth opportunities.
Knight: So tap into some of that money that’s sloshing around. And Mike, the government is actually actively trying to encourage start-ups and innovation, too. Are they doing enough?
Mike Smith, columnist, AFR: Well, that’s right. Tony Abbott recently announced tax cuts for employee options schemes, so this is really good for young entrepreneurs trying to set up new businesses and incentivise their staff. That would have helped you a lot, I imagine, when you started. Is there anything else the government should be doing?
Weerasooriya: Look, on the employee options scheme, it wasn’t so relevant to us. It certainly had some challenges, but we worked around those. Our business model with Rewardle isn’t one like a global software player that’s looking to try and compete for talent in other markets. So I think if there were ways the government could assist those software start-ups really looking to take on the world is to try and have an options scheme that’s more comparable with other markets like North America and Europe.
Knight: And there are countless failures for every success story. Is there something that is key for every business, every start-up, to take on to become a success?
Weerasooriya: Look, I think you need strategy, talent, capital and a market who wants what you’re selling. But I think Australia’s a really strong market, with respect to those technology opportunities. I think we’re innovative. I think we’ve got a great adoption of technology across business and consumer and there is now capital available via ASX VC, which has come in leaps and bounds in the last 10 years as well for entrepreneurs to go to. One thing I point to is a lot of the VCs – if you see how the Silicon Valley particularly talk about business models with inherent network effects – so businesses where, once you get critical mass, they actually defend themselves, and certainly from my point of view it would be to look for business models along those lines, so that you don’t get gazumped by a US technology company from Silicon Valley beaming in their tech over the internet, like a Netflix if you look at the video on demand challenges that will come in that sector.
Knight: Great advice, You’ll be Googled not by plumbers, but by potential start-ups.