November 2, 2023
Scan the room or scroll the social feeds and you’d be forgiven for thinking the technology industry was built by the youth of today.
This is a sub-section of the market that judges books by their cover, lazily claiming age matters in the pursuit of entrepreneurialism and innovation. Nothing more than bravado on steroids.
There’s no crime in living vicariously through entrepreneurial geniuses such as Mark Zuckerberg (started Facebook aged 19), Bill Gates (started Microsoft aged 20) or Steve Jobs (started Apple aged 21). But know that they are outliers – the exception and based on extensive academic evidence, certainly not the rule.
The average age for starting a business is 45.
“Your 40s is a great time in your life to start a business,” advised Dale Rankine, a Brisbane-based seasoned entrepreneur and venture builder. “You have life experience. It’s not even about business experience or technology experience, it’s just life experience.”
Rankine launched Reekoh in April 2015, a cloud-centric platform which targeted a then early-stage Internet of Things (IoT) market in Australia. The endeavour was supported by John Orrock who operates Future Now Ventures – a boutique venture capital firm who was the start-up’s primary investment backer.
From starting the business in his early 40s, Rankine then scaled operations and eventually sold more than eight years later to Autodesk, completing the transaction in September 2023.
“As an older founder, you have a little bit more in your toolbox to deal with all of the craziness that happens when you’re starting up,” Rankine said.
“You are better equipped to deal with the personal battles of being an entrepreneur in terms of the resilience, the self-belief and the credibility. You believe in yourself just that little bit more also, which matters.
“After learning some great lessons in your young career, this is the time to put that into value creation.”
According to National Bureau of Economic Research (NBER) findings, successful entrepreneurs are middle-aged, not young.
Based on the data – published under the title of ‘Age and High-Growth Entrepreneurship’ – the mean founder age for the one in 1,000 fastest growing new ventures is 45. Findings are broadly similar when considering high-technology sectors, entrepreneurial hubs and successful firm exits.
“Everyone thinks you have to look and act like a 20-something who raised $100 million from Silicon Valley,” Rankine qualified. “But in actual fact – if you look at exit success – you’re more likely to succeed as a 40 or 50-something than a 20 or 30-something. My entrepreneurial spirit hasn’t gone anywhere.”
Before entering the technology market, Rankine was a professional musician touring the country and recording albums.
“I didn’t have a job that earned me enough to pay tax until I was 27 so I was already a late starter,” he said. “I didn’t have a lot behind me in that sense.”
Undeterred, Rankine pressed on and embraced the start-up scene in Brisbane, bouncing between companies before taking on the mobile software market during the mid-2000s, creating content for devices as part of an incubator environment.
“We would have these pitch nights and I remember being very unsuccessful at being taken seriously while I was pitching,” Rankine recalled. “I was clean shaven at the time and would regularly receive feedback that I didn’t look old enough to run a business and have kids.
“So I grew a beard to make myself look older. We were pitching to old money in Brisbane and not technology money in Silicon Valley so people started to respond.”
In hailing from an entrepreneurial family, Rankine has been involved in start-ups or private ventures in one form or another for more than 25 years, having first built websites during the mid-1990s.
“My wife and I always say that between us, we’ve had nine companies and three kids,” he joked. “We have three daughters – two of them run their own businesses [hence the image credit] and the other is very commercially savvy.”
While the family were not afraid to remortgage their house to reinvest in themselves, Rankine acknowledged that over time, the conditions for being a founder change significantly.
“Later on in life, you have a little more capital and assets,” he shared. “Maybe your kids have gone through school and are no longer the money pits that they once were. Given my kids are adults now, that signals a different stage of life for us.
“That goes against the stereotypical T-shirt start-up image with a pool table and fridge full of Kool-Aid. I know many people who have started later and they’re doing great so I would definitely encourage it.”
Forget building a business, trying building a market
Reekoh launched during the “frothy days” of IoT, a time when industry experts predicted the connection of millions and billions of devices. Similar to artificial intelligence (AI) today, this was the peak of the hype cycle with grand projections about how the world would be changed.
Starting out in a segment still some distance away from being considered mainstream is challenging. No longer is the task simply centred on creating a strong value proposition as an entrepreneur – don’t forget to build the market as well.
“The problem that we were trying to solve wasn’t painful enough in those early days,” Rankine acknowledged.
“Do you have a mild headache or a migraine? If you have a mild headache, you can either just put up with it or take a couple of off-the-shelf pills and get on with life. But if you have a medically debilitating migraine, you require specialist help. We weren’t meeting people with migraines at the start.”
Existing during the initial days of companies blindly spinning up IoT pilots and proof of concepts – or “pilot purgatory” as Rankine put it – was exhausting.
Despite promise and potential being in abundance, the commercial reality and viability of the venture naturally came into question. But not by Rankine.
“There’s a school of thought around failing fast if your product hasn’t achieved a market fit yet,” Rankine accepted.
“The entrepreneurial kind of thinking can be to move on and cut your losses after a few years. If you haven’t educated people that much then it’s obviously not big enough of a problem to solve. So stop investing more money in trying to convince people.”
An entirely valid approach, just not applicable to Rankine.
“That works in fast-moving B2C markets with consumers but in the enterprise B2B market, we were comfortable with that level of pace,” he affirmed.
Drawing on a background in enterprise sales – there goes that damn experience again – Rankine and his team understood that sales cycles are long and progress takes time at the big end of town. Given this business wasn’t planning to sign-up 100 users on a credit card for $5 each, waiting was an acceptable option.
“We’re enterprise software guys, not IoT hardware or industrial guys,” Rankine added. “That was our playground but we weren’t slow in terms of the product, we were taking nuggets of information and feedback along the way to furiously build and enhance.”
The sales cycle may have been long but the learnings were fast-paced – “it still took a lot of patience and self-belief though”.
Bad decisions during the launch stages were naturally made – and lots of them – but through an unrelenting level of conviction, Rankine was prepared to hold the line.
Even though the fail fast culture advises the opposite, the old-adage that good things come to those who wait rings true in this instance. Sometimes, waiting for the market to catch-up to your vision is no bad thing.
“No organisation was at a point of scale or using anything other than what could be bought off-the-shelf, which were very bland and generalised IoT platforms,” Rankine said.
“Register a device, view it on a map, click on it and access the data. That was it but we knew connecting physical assets that were now digitised to enterprise applications in an enterprise world made sense.”
It would be disingenuous to suggest that acquisition wasn’t a primary objective of Rankine when launching Reekoh – knowing an exit path is just as valuable as looking ahead from the starting line. But alongside targeting an immature market, the first round of IoT acquisitions also passed the blossoming start-up by.
During 2016 alone, the market invested more than $90 billion in IoT-related acquisitions.
SAP acquired Plat.One – an enterprise-grade software platform specialising in IoT – as part of a $2.2 billion expansion into the market. This would help build the foundations for the launch of SAP Leonardo.
Other notable transactions included the purchase of Jasper Technologies – an IoT start-up – for $1.4 billion by Cisco. This was in addition to General Electric Digital snapping up three industry IoT specialists – Meridium, Bit Stew Systems and Wise.io – plus Nokia taking control of Withings for $193 million.
“We were too small to catch that wave but we knew that other waves of similar nature would be coming,” Rankine shared.
“Unless you were Google or Salesforce, middleware was a tough space to be in because you’re the plumbing and not an experience layer with a sexy dashboard,” Rankine noted.
“But we fundamentally believed that there was a big play in that middle space and while we knew a hyperscaler like Microsoft or Google wasn’t likely to come and buy us, we recognised the value we could bring to a vendor with a narrower industry focus. Which was exactly how it turned out.”
Don’t think scaling is a ‘nice problem to have‘
Waiting for the industry penny to drop can take a toll on any founder but actually spinning up at speed to address demand once it arrives represents a difficult type of challenge.
On paper, it’s a nice problem to have – customer after customer consuming your product or service. Remember, this was always the dream, to not only be needed but to have your idea validated by a receptive market.
Dream on. Scaling is hard, if not harder.
“I thought it would be easier, fun in fact,” Rankine admitted. “Great, we have customers and real use cases with global resellers signing on – this should all just kind of happen. But it didn’t and it doesn’t.”
Scaling into an industrial market focused on digital transformation signalled a shift away from IoT to delivering an industrial integration cloud platform.
This was physical assets, such as an IoT on a truck or a 40-year-old sensor on a conveyor belt in a manufacturing facility. That’s where the market was and Reekoh was entering as a new player with strong growth ambitions.
“We underestimated the complexity and behaviour of that market,” he said. “We were dealing with some massive incumbent industrial software vendors and customers who – in the early stages – were very cloud averse.”
Reekoh’s headcount hovered around a dozen employees for a long time, operating as a small and nimble outfit. After peaking at 45 staff just before COVID-19, the business was robbed of the ability to aggressively scale due to knock-on impact of the pandemic.
“Then we were trying to scale in a very different world,” Rankine recognised. “Some challenges were forced upon us but we were also the architects of our own downfall in a way.”
Oh and one more thing, don’t tie market validation to your self-worth as an individual. That’s a dangerous road to go down.
“When I started out, I saw all of my ventures as an extension of myself,” Rankine said. “I always saw that success or failure was a direct reflection of me and what I was capable of, or not capable of. Don’t take any of it too seriously, in a sense.”
Life experience offers perspective however and over time – notably during the past few years – Rankine has shifted gears to save his sanity and protect his mental health.
There’s no benefit to believing the hype or listening to haters. Likewise, zero value exists in taking either end of the feedback spectrum on-board from a personal standpoint.
“Build a healthy boundary between who you are and the idea that you have,” Rankine advised. “That will stand you in good stead over a long period of time, regardless of what trajectory your start-up or idea takes.”
Mental health is now a common conversation in the founder world, even if most can be assigned as just lip service, brand washing and personal profile building.
“But at a personal level, maintain a healthy sense of who you are and your relationships with the people that are important to you, outside of this thing,” Rankine said.
Yes, pour your heart and soul into the mission and leave no stone unturned but understand the impact of experiencing endless ups and downs along the way.
“The rollercoaster ride is brutal and if you’re riding that 24/7, you just won’t survive,” advised Rankine, who just turned 50 at the start of this year.
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