Mating elephants with mice: Q&A with Stone & Chalk's Simran Gambhir
Disruption in the superfund industry is often the elephant in the room. The process is working well, why change things now? Industry Moves met with Stone & Chalk's chief technology officer, Simran Gambhir, who said that while start-ups and corporate organisations can be like "mating mice with elephants", it's important that we open our eyes to what lies ahead. He also shared his predictions for the major industry disruptors, offered his thoughts on the makings of a successful entrepreneur and showed us a Youtube video that completely changed his life.
"I'm a huge fan of nihilism. I think that nothing actually holds any meaning whatsoever." - Simran Gambhir
Can you tell us a little bit about yourself and what you do?
For about half a day per week I am CTO here [at Stone and Chalk], which means companies will come and talk to me about technical innovation, technology architecture or just run their ideas past me. I also design and run the accelerator for H2 Ventures. The third thing that I do is work on my development company, [Ganemo Group]. I just love to build good technology. We build for both corporates and start-ups. The fourth thing that I'm doing is helping KPMG with their new High Growth Ventures arm which will initially target start-ups that are wanting to go to the US, but I want them to stay here in Australia, so I'll try and influence that. I'm also doing my masters in cyber security with the defence force academy. I'm doing it all within school hours, that's non-negotiable.
What attracted you to the start-up space?
The start-up world really fascinates me. I think it's a really dynamic space. People come up with ideas and execute those ideas straight away. In the corporate world there are so many processes and people, in start-ups there is very little that you can't do. Just about everything can be done with a computer and internet connection. You don't need a million-dollar factory, I've always been fascinated about start-ups in that way.
When I was a coder at Fairfax in 1997 there was a specific job seeker website that had started up and I thought to myself, I could do that! So I hacked into the website, cloned all of their information, set up my own site and mimicked all the jobs and design of it all and then I sent out an e-mail to all of the recruiters saying that they were also on my website and asked them to pay. Out of 200 recruiters I got about 10 litigation letters, 20 people to pay and the rest didn't work! I thought that was so easy, it only took me about ten hours, and it got me thinking about the fact that so much is possible with technology and we don't need weeks, months or years to create an idea. Of course I refunded people the money and I shut the company down, but that's where my start-up journey began.
In your opinion, what kind of disruption do you predict for the super fund industry?
I think there is a significant lack of interest in knowing about what your super is doing, especially for people in their 20-30s. As you reach your 40s your start thinking about how much money you've got and try to remember [which superfund] you're with. Up until three months ago I didn't even know who I was with! If I have that attitude at 40, imagine those in their 20s, who might already have $30,000 in their super fund, they couldn't give two hoots.
It's also a known fact that wherever people start as a default, that's often where they will stick because the cost of change is quite high, especially if you don't care. So, one of the best disruptors that I think is coming, is actually making a younger generation care and engage with what they have, even though they can't extract it. A lot of start-ups that come and pitch are focusing on the idea of giving the people control without the ability to extract. They're coming up with ideas that allow a person to select the shares they invest in. If someone could give you control around exactly what shares you could buy, as opposed to three boxes saying: high, medium and low risk percentages - which are really impersonal - that would be a game changer. You could select to buy into a specific mining company or on the other end, not buy into a mining company and opt for a green energy company.
When you're in your twenties, ideology is very strong, so if we can appeal to some of that ideology and give them control, we will be able to create a positive impact.
The other disruptor will come with the crowd funding legislation that's coming out soon. If you've only got $30,000 but you can put some of that into your friend's company, then you've got local impact and something that you can have an influence over. If an individual is investing in their friend's start-up, then it's much more valuable to them. That's becoming possible because they are saying that they will syphon off a portion of your super, say 15%, and allow for it to be invested in crowdfunding. That will be a massive disruptor.
Is Stone and Chalk currently partnering with any super funds?
The Chief Security Information Officer for one of the four big banks once said: "The reason that start-ups can't work with big companies is because you can't mate elephants with mice." That's one of the funniest quotes that I've heard and really stuck in my head. I've had start-ups come to me and say, "Can you just introduce me to ANZ because we've got this brilliant product that we know they'll love and we'll just need to get some of their data." They have no appreciation for the regulation, the privacy, the protection laws around the data that the bank has to have.
It's very difficult for both sides to understand each other. Big companies don't understand the nimbleness, nimble companies don't actually understand the privacy and protection and all that comes with that. What Stone and Chalk does is help start-ups to understand how to partner with corporates and vice-versa.
We're not partnering with super funds at this stage, a lot of the banks and insurance firms are starting to get involved, but the superfunds are not as active yet. That's on the corporate side though, on the start-up side we've got a lot of super fund people coming to us with ideas. This is where we go back to the mating elephants and mice concept, that's how Stone and Chalk can help. We understand that superfunds can't just change their whole strategy because that's an unreasonable thing to expect from a corporate organisation. We want to help them to experiment with new ideas while also helping them to manage the risks. Banks will often experiment with various investments and if they invest in a company and something goes wrong, it's still at arm's length, but it's very different if it's internal innovation that goes wrong. That's 100% their's to own. It's about figuring out what the right solution is for each superfund and figuring out how they can engage with start-ups without risking their reputation. They need to be able to experiment and if it's getting a positive reaction then they will associate their brand with it.
Why do you think that only 13% of start-ups are founded by women and how can we increase that percentage?
At Stone and Chalk, to take a guess, I'd say we only have 3-4% of female to males. I think it's not very inviting to women at the moment because people seek familiarity and belonging and some people might come into this space, see that there aren't many women and not feel comfortable. I think strong women break that barrier and they will lead the charge.
In time, I think it will get better because a diverse opinion is a good thing to have. In my personal opinion, I think there should never be quotas. A quota is the most demeaning thing that you can do. Even if a woman has earned her right to be in a specific position, if that company has a quota then she might always be thinking, "Am I just here because they needed to fill the quota?" But they're not, they are there because of their skills and ability. I think what we need to do is provide both the environment and opportunities for women to be able to earn their place and it should be the same treatment that a man would get.
"I probably listen to around 500 ideas per year and I'd be lucky if I come across at least one unique idea."
How many of the start-ups that you come across end up being successful?
Probably only around 5% will get their product to market and then of those I'd say only 1% of those become really big, or even less. If you're talking about Uber or Airbnb style ideas, it's only a very, very small percentage that will make it because there is a lot of luck and timing involved. People assume that these are people that 'made it' but that's not always the case. You know, Psy, the man that did 'Gangnam Style'? He was a sensational viral hit, but not many people know that was a $30 million marketing campaign by Sony, they made many of them and that was the one to 'make it'. It looks like it went viral but it was actually a very carefully orchestrated plan. Start-ups are not dissimilar. For the ones that look like they organically 'made it', it's because they've had hooks into a lot of marketing power. It's not as simple as a person from the street just 'making it'. It's a case of it's not what they know, it's who they know.
How can you tell if someone is suited to being successful in the start-up world?
It's not hard to tell who's got it in them. I've got a four-week rule. When I meet someone for the accelerator I'm the easiest person to fool. I get more excited about people's start-up than they do. If people can sell water, they can sell anything! But then, what I'll do is say: "I'm going to meet you in four weeks and the only question that I'm going to ask you is, 'What have you done in the last four weeks'." 90% of the start-ups that I tell that to will come back to me in four weeks and try and tell me about things that they did six months ago. Those are the ones to drop out. They are passionate but there is intermittent commitment. They're not ready to go for it. If they are ready, the movement in those four weeks is substantial.
People come and say to us, "I want to change the world" but in the process of changing it they want to have that billion-dollar company. It's a little contradictory. I have no problem with that belief set but I still like to call it out. As long as they are on-top, they don't actually want anything to change. They want to change their world, not the world.
What has been one of the most interesting pitches that you've listened to in your time?
I probably listen to around 500 ideas per year and I'd be lucky if I come across at least one unique idea. One of the most fascinating ideas that I heard was a very simple one. It was about high-school students that were struggling to understand maths. They created a program that allowed students to take a picture of a question, send it out into a portal and then another person would explain how to get to the solution. They can't wait until tomorrow to ask the teacher, the time to learn is there and then. The reason that I loved it was because there was no language barrier and they had a lot of mathematicians in third world countries that would earn around 50c or $1 for each question that they answered. I think it cost the student around $2 to ask the question. So these people in third world countries were often quitting their day jobs and doing this because they were making more money.
What's the best piece of advice that you have received so far?
I'm a huge fan of nihilism. I think that nothing actually holds any meaning whatsoever. So I can live every moment just for what exists. I think that's truly liberating. I come from a fairly spiritual family and I used to believe in a lot of that stuff, but when I actually thought about it, my education was in a five minute Youtube video. I think if you watched it you'd be a nihilist too.
Who has had the biggest influence on your life/career so far?
I don't have a hero as such. There are many different people that have helped me with many different things. I'm still in touch with people that gave me a job at Fairfax back in 1997. I really respect Patrick Collins who worked there as Technology Manager at the time. He was switched on, very easy to respect and had a very good sense of humour. Once, we got an e-mail from a spammer from the US who had brought the domain johnfairax.com and he said to us, "If you don't pay me 10,000 we will turn this domain into a porn site." So Patrick brought the domain for his name and said: "If you don't pay me 10,000, I'll turn you into a news site."
At Stone & Chalk, Simran is a technology innovation and advice resource to over 100 startups at the fintech hub. Simran is the founder of Ganemo Group and a consultant to KPMG Australia's High Growth Ventures arm and mentor-in-residence for H2 Ventures where he's responsible for identifying some of the most innovative startups around the world the accelerator can invest in. He is a founding member of The Australian Transformation and Turnaround Association and was formerly chief technology officer of News Corp's digital arm.
Hear from one of Stone & Chalk's residents here: Fintech startup offers new way to pay for content.
