The Runway Geelong project is a recent funding winner from LaunchVic. Runway Geelong brains trust Nick Stanley explains what it all means and the opportunities that will flow for startup talent in Geelong.
So what’s a runway?
Like all industries, the startup world is no stranger to jargon. The term ‘runway’ has nothing to do with catwalks or couture. Runway in the startup world means:
The amount of time until your startup goes out of business, assuming your current income and expenses stay constant. Your runway is typically calculated by dividing the current cash position by the current monthly costs (also known in the biz as your ‘burn rate’).
An Example: my company has a burn rate of $100,000 and $1,000,000 in cash on our balance sheet, so we have 10 months of runway. http://www.startupdefinition.com/runway
Getting a handle on the duration of your startup’s runway is critical. It tells your team and your investors how much time you have to execute your plan. It’s something that should be front-and-centre at all times of the startup lifecycle, and should factor into your thinking morning, noon and night.
Another key concept to understand within the context of your startup’s runway is a ‘pivot.’
So what’s a pivot?
As well as being the name of our annual startup conference here in Geelong (www.pivotsummit.com.au) to ‘pivot’ means the change in direction you take before arriving at the best product-market fit that works for your startup.
A long runway can mean more opportunities to pivot, which is a good thing. Most, if not all startups, pivot at least once. Others pivot many times. In fact, you might be interested to learn that some of the most well-known startups started out life as anything but the products you know and love. I’ve highlighted a few notable examples below which you can read about in more detail in this Forbes article.
Twitter – The most legendary pivot in social media history is the transformation of Odeo into Twitter. They feared that they couldn’t gain traction with their podcasting platform and gave employees two weeks to come up with new ideas. They ran with the idea of a status-updating micro-blogging platform conceived by Jack Dorsey and Biz Stone.
PayPal has always focused on payments, but went through many permutations before becoming the preferred online payment system for eBay sellers.
Groupon – in 2007 Andrew Mason created a website called The Point, which was originally a “social good” fundraising site. Mason started Groupon as a side project, which quickly eclipsed The Point in popularity, and became the daily deal tycoon we know today.
Starbucks – started life as off in 1971 selling espresso makers and coffee beans.
Nokia – began as a Finnish paper mill in 1865; the second mill opened on the Nokianvirta river, which inspired the company name we know today.
Flickr – actually began as an online role-playing game called Game Neverending.
All of this brings me to Kyle Vogt. Who is Kyle Vogt, you may ask? Well, Kyle is a guy I met in San Francisco recently who just sold his startup, Cruise, to GM for over $1Bil in cash and shares.
Cruise was the sixth fastest startup of all time to reach the fabled “Unicorn” status. A Unicorn is a startup with a $1B+ valuation pre-initial public offering. Cruise hit that status in under three years. Amazingly, Kyle sold Cruise mid-pivot. In fact, this was key to his successful outcome with GM. They saw the direction of his pivot and they liked it. Meanwhile his runway saw him generating enough momentum and IP behind his earlier concept to justify a meaty and convincing, valuation.
In a lot of ways Kyle was lucky though. And I say lucky, in that he’s lucky he is who he is. He’s a great engineer, a great strategist, really passionate and a great startup technician. (He also wears funny t-shirts, but that’s another story). So Kyle’s lucky that he has all the right startup skills. Like Elon Musk, there’s a few people who are going to succeed no matter what – they were born with the right ingredients to achieve startup success.
For a lot of people though, this isn’t the case. They may not be lucky in that same way, but they might also have some of the attributes, and they might also have that one, single indefinable thing called grit.
Grit is something that I look for when I invest in startups. I think it’s a critical x-factor in startup success. Without grit, you won’t stick, and if you don’t stick, you probably won’t succeed.
So, if you’ve got a good startup concept, some of the requisite skills to make it happen AND you’ve got grit, then Runway Geelong can help.
What is Runway Geelong?
We’re building a program that helps to define the runway for burgeoning startups. It’s really not rocket science…a lot of startup ecosystems have done this, and I’ll be the first to admit that we’re copying that recipe.
Add equal parts seed funding, a drop of free space, a glass of mentoring, two shakes of venture support and it’s all pretty straight forward. So, we’re aiming to have our space ready for our first batch of interns in Q2 2017. From there, we’ll provide participants of the Runway program with a range of different incentives aimed at Startup success:
- Free space with other, like-minded startups
- Connections with global startup ecosystems such as San Francisco, Boulder, New York, Tel Aviv, Singapore, Sydney, London, etc
- Tech services for building MVPs
- Access to freebies like free advertising, free legals, etc
- Startups bootcamps, intensives, etc
- Market visits
And we’re offering all of this in one of the greatest regions in Australia – Geelong! It’s a no-compromise win-win. Program participants will get access to great support, they’ll be part tailored program to nurture startup success with a great work-life balance, no traffic, low cost of living, great schools, the Great Ocean Road around the corner (as well as an unparalleled outdoor lifestyle), and really great coffee!
Runway Geelong is the umbrella name for a range of initiatives we’re bringing to the Geelong startup ecosystem. Runway Geelong received the largest grant under the LaunchVic program – in fact our concept was one of only 18 to receive funding out of a field of 398 applicants.