Innovation Bay, a pioneering community group in the tech sector, powers collaboration and innovation. Founded in 2003, it began as a platform for founders to connect, exchange insights, and glean knowledge from peers. Over time, it has transformed into a multifaceted network bridging the gap between angel investors, venture capitalists, and entrepreneurs across various stages of their journey.
With distinct communities tailored for investors and founders alike, Innovation Bay fosters collaboration, learning, and collective growth within the tech ecosystem. It is the leadership of Phaedon Stough through which the platform drives the organization’s mission to cultivate a thriving startup community. This article sheds light on the pivotal role of Innovation Bay in nurturing and shaping the startup landscape, offering valuable insights into the industry dynamics and the collaborative spirit driving innovation.
Phaedon’s journey in the tech sector has critical moments that led him to establish the renowned community group. His entrepreneurial spirit took flight at the age of 26 when he founded Mitchellake Group, a venture that flourished to nearly 100 employees and $20 million in turnover. While speaking of his formative years, Stough recalls, “During those 15 years, as a founder, I was faking it until I was making it.”
In 2003, a pivotal encounter with Ian Gardiner sparked the inception of Innovation Bay as an exclusive founders club. Stough recounts, “We decided to set up Innovation Bay as an invite-only founders club to share intimate and honest stories from founders on their founder journey.”
What began as candid conversations evolved into pitch dinners by 2009, fostering connections between seasoned tech founders and early-stage entrepreneurs. Stough’s vision expanded globally with the launch of Innovation Bay in San Francisco in 2013, which aimed to foster collaboration among Australians and Kiwis in the Bay Area.
In 2020, Innovation Bay underwent a significant transformation, transitioning into a membership structure comprising distinct communities tailored to various stages of the startup journey. Reflecting on this evolution, Stough emphasizes, “We wanted to make a bigger impact, not only within our community of founders and investors but all across Australia and NZ.”
Founded over two decades ago by Phaedon Stough, CEO and Co-Founder, Innovation Bay has been instrumental in shaping the Australian startup landscape. In an exclusive interview with Asia Tech Daily, Stough shares insights into the evolution of Innovation Bay and its profound impact on the tech ecosystem.
Having worked in various locations like Sydney, Melbourne, San Francisco, and London and specializing in technology-based executive search projects, how has your global experience influenced your perspectives on the tech industry and entrepreneurship?
Anything is possible. Our limitations are created internally, and within the cultures we create. I’ve seen so many crazy (at the time) ideas succeed through tenacity, drive, and an incredible ability to execute. San Francisco has a pay-it-forward culture and a sense that anything is possible. They back big ideas, whereas, in Australia, we seem to cut those ideas down. But I think that’s all about the change.
The annual Aurora Retreat on the Gold Coast seems like a unique opportunity. Can you share more about the goals of this retreat and how it benefits both VCs and the startups that pitch?
We have a rapidly growing venture community. Currently, our Aurora community represents partners from over 91 different funds. I remember a time when I was one of the 60-ish investors who invested in Blackbird’s first fund. Now, to see 91 different funds in the market, all coming together to collaborate, learn from each other, and build meaningful relationships is nothing short of inspiring. The goals of the retreat are to drive collaboration, share experiences, and build relationships. We know that a collaborative venture community will be a successful one.
How do the partnerships with Advance Queensland and the Office of the Queensland Chief Entrepreneur contribute to the overall ecosystem, and what kind of support can startups expect from these collaborations?
The support we get from local governments makes a huge difference to us as a business. There’s also a domino effect at play here because, as a result, our members, their businesses, and the ecosystem at large all stand to benefit from these kinds of strategic government partnerships. We are still a small business, and their support makes these events possible. Queensland, NSW and Victoria are leading the country in terms of support for the tech ecosystem.
Excitingly, we’re currently in talks with the WA and NT governments; they’re seeing the value that a thriving startup ecosystem will bring to their state. We’ve also partnered with the NZ Government to bring events to NZ shores, and we think there’s a great opportunity for other APJC governments to do the same. We’re expanding our membership into Asia (areas like Singapore) and hope to connect with governments in the region for their support for the ecosystem. Those that don’t, we think, will quickly be left behind economically and socially.
As Innovation Bay turns 20th year, what key milestones or achievements are you particularly proud of, and how has the organization evolved over the years?
- Moving into a membership structure and scaling that to just under 250 amazing members and corporate supporters, such as Google Cloud.
- Expanding our internal team
- Expanding into other global regions outside of Australia – New Zealand, Singapore and plans afoot to plant ourselves even further afield
Beyond networking, how does Innovation Bay actively contribute to shaping the startup landscape in Australia, and what role do you believe it plays in fostering innovation?
In three key ways,
- We bring founders together into very unique peer groups that:
- Learn from each other in a specific way to drive growth and accelerate success.
- Support each other through the ups and downs, removing isolationism and burnout.
- We bring our investors together to,
- Share their investment thesis and drive the quality of investing,
- Invest in early-stage companies. Last year, we invested in 10 companies. Over the last three years, we have invested in close to 25 companies.
- Building community. If you look at Silicon Valley, its success is a product of a network effect. We are building that same structure across Australia and NZ, leveraging the same key element – that of intimacy of amazing people who want to collaborate because they have relationships that provide a network of trust.
With the move to agnostic deal flow, how do you anticipate this change impacting the dynamics of Innovation Bay’s pitch events, and what benefits do you foresee for both founders and investors?
We have seen more dollars invested since the move to agnostic deal flow. The reason is that the quality of the founder’s presentation has increased. It’s very hard to align a theme and timing of the raise. We are not simply focused on the best founder raising at that current time.
Looking ahead, what is the long-term vision for Innovation Bay, and how do you see it influencing the growth and direction of the Australian startup ecosystem?
Put simply, this drives the success rate of founders and investors within our community. Our community will outpace the rest of the market in terms of investor returns by acting as a collaborative network. We will see more “Canva” style successes, which will drive innovation across the country and position Australia as Asia’s leading ecosystem in which to start a company and raise funds. It will also see Australian companies going to the US market to raise funds much later due to the capabilities of the Australian venture market.
We are capping each of our membership communities at 150 members, based on Dunbar’s theory around the number of real connections. That means we have 350 spots left to fill. Most of those spots will be founders, as our VC community is almost full. That vision will see a collaborative ecosystem of 600 founders and investors working to spearhead innovation in the region.
For individuals aspiring to become investors, what advice would you give them as they enter the dynamic world of startup investments?
- Find a community where you can build your investment thesis through collaborative learning.
- Build a portfolio; don’t put all your eggs in one basket.
- Learn how to support a founder. That is, and always will be, the key piece of IP in an early-stage investment, the founder.
In the startup world, risks are inherent. How should new investors approach risk management and navigate the uncertainties associated with early-stage investments?
Diversity of investment is critical. Too many unplanned things can happen, and the rate of success in the early stage is low. You need to understand that it is a high-risk asset class.
Networking is crucial in the investment landscape. How can new investors effectively build and leverage their networks, and how does Innovation Bay facilitate this process?
We do this in many unique ways to drive meaningful relationships. Bringing people together in a way that drives vulnerability is critical. Don’t just focus on deals – focus on allowing your community to share experiences openly and honestly. This alone will drive relationships that will outlast you.
For early-stage founders looking to pitch to Innovation Bay, what advice would you offer to ensure their pitches stand out and resonate with the investor community?
Purpose! As Simon Sinek always says, start with your why. Investors want to see this first and foremost in any company they are investing in.
Mentorship is vital for startup founders. How can early-stage founders within Innovation Bay effectively engage with mentors to accelerate their growth?
Less mentors, more peers. We have found that founders learn the most from other founders at a similar stage. We lean away from offering “advice” in our community. We provide a framework where founders share experiences that enable other founders to develop key insights.
Phaedon Stough’s climbing and fly fishing pursuits offer him a state of flow, rejuvenating him and fostering unique insights crucial for his leadership role. Balancing leadership responsibilities with personal life remains a constant challenge, but he prioritizes family, recognizing them as the cornerstone of his endeavors.
Reflecting on memorable moments at Innovation Bay events, Stough emphasizes the profound impact of the community’s spirit. As he navigates the journey alongside dreamers and entrepreneurs, he finds inspiration in their resilience and unconventional paths. These experiences, etched as cherished memories, encapsulate the ethos of Innovation Bay, where connections forged, and stories shared transcend mere networking, shaping a collective narrative of innovation and camaraderie in the startup ecosystem.