Virgin Startup Program founder Ian Mason on the two things startups need to help them scale

The founder of Virgin’s Startup Program says he can see a lot of potential in Aussie founders but he believes more support is needed locally to help startups move beyond the “small business” stage.

Ian Mason is the former head of development for the Startup Program, which was founded five years ago as a way to offer entrepreneurs from any background and with any level of experience a way to get a business off the ground. The program offers founders loans of between £500 to £25,000 ($900 to $45,500) and has issued $35 million of funding to date.

Mason says Virgin founder Richard Branson — who he describes as “humble, kind, and completely bonkers” — gave him a simple brief for the project when it started.

“Richard gave us the best brief in the world,” Mason tells StartupSmart.

“He said, ‘I want to create a program to support all entrepreneurs, off you go’. It was a lovely blank piece of paper.”

Currently, the program operates in the UK and is available to any founder with an EU passport. The program isn’t in Australia yet, but Mason is testing the waters for a potential launch through a partnership with QUT Creative Enterprise Australia (CEA).

The two organisations have teamed up to offer the winner of CEA’s most recent Creative3 pitch competition a spot in Virgin’s Startup’s StepUp ‘mini-accelerator’. Participants in CEA’s Collider accelerator will also have access to an array of experts from Virgin’s Startup Program.

Mason, who’s been Down Under for two months now, says the Startup team is also exploring the possibility of launching the popular loans program in Australia, saying there’s a number of similarities between the two countries that lead him to believe the program would be just as successful locally.

“There’s a lot of opportunities here in the food and drink sector which has been pretty huge and has traditionally done well in the UK, and we’re interested in some of the new tech concepts coming out of the agriculture sector,” he says.

Social ventures not “weak”

Mason says both Virgin Startup and CEA have an interest in helping out entrepreneurs building businesses with a social purpose, an area he says can sometimes be seen as “weak”.

“People say social enterprises often have weak business models, but I don’t agree with that at all. Richard [Branson] always says to do well you need to do good, and we’re seeing a lot of social ventures in the US becoming solid businesses,” he says.

Experts in the space have previously observed the number of social enterprises in Australia as somewhat low, with program director at Cambridge University’s Centre for Social Innovation Belinda Bell telling StartupSmart last year she believed social entrepreneurs in Australia were reluctant to label themselves as such due to the stereotypes associated with the description.

“There’s plenty of socially motivated capital about, but many entrepreneurs are cautious about talking about their true social motivation when seeking investment because they think it will decrease their chance of landing funding,” she says.

“That’s always a bad idea because there’s nothing worse than getting an investor who’s not on the same page.”

Mason agrees social ventures in Australia have a ways to go yet until they’re on the same tier as ones in the UK, but he thinks a strong focus on creative entrepreneurship goes hand-in-hand with the social sector, and predicts both areas will boom over the next 10 years.

Startups need help to scale

Having been part of the UK startup scene for over 15 years, Mason says Australian startup founders are very similar to ones in the UK in terms of both their dedication and humbleness.

“But that said, I think that the support available to Australian startups is a good few years behind where London is right now,” he says.

Mason says at any one time in London there are more than 57 active accelerator programs, whereas in Brisbane you’d be lucky to have five in a whole year. There “absolutely” needs to be more support for founders, he says, but questions if it should come in the form of more accelerators or more focus on scaling up businesses.

Getting startups to scale into larger companies is a problem in both the UK and Australia, according to Mason. In the UK, 3.7% of all businesses employ 10-49 people, compared to around 20% of businesses in the US, says Mason.

“It’s fundamentally similar in Australia. We’re simply not good at taking startups and turning them into scaleups, and that absolutely needs to happen here too,” he says.

Bridging that gap comes down to two things says Mason: knowing your customer, and knowing how to sell.

“I think the first issue is that startups don’t actually know who their customers are. They get so focused on what they’re doing that they might not realise they’ve lost sight of who their customer is, and they’re not actually selling to the right people,” he says.

“The second thing is that most founders don’t know how to sell, and I was the same. It’s not a skill that’s taught in any entrepreneurship course, but all founders absolutely need to have it.”

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