From learning to launching with Fulcrum Analytics

Get ready for the insider's guide to local business stories. Welcome to the Business Huddle, your weekly passport into Gippsland's most inspiring businesses. Real conversations, real challenges, real local legends. Let's look at the game plan and get started. And a very good morning to you and welcome to the Business Huddle, your weekly passport into Gippsland's most inspiring business stories where we lift the lid on success, innovation and regional economic resilience. I'm your host, Melanie Kahane, and today we're sitting down with Alec Maddow from Fulcrum Analytics to talk about university students who have become founders of their own businesses. So get ready for an in-depth conversation with Alex coming right up after this. Thank you for joining us. You are with me, Melanie Cahani, and we are the Business Huddle. And today we are going to continue our conversation with Alec Madill from Fulcrum Analytics. We've been talking all things business data, I guess, and how you can use that to improve your business. Just something I hadn't necessarily thought of before. And Alec is a start-up business and a recent grad. Actually, you're still studying, aren't you? Still one semester left. It's nearly done. And I think, you know, because research has shown a little bit now that a lot more graduates are choosing to run a start-up business and be entrepreneurs than get into graduate positions, which I know from previous conversations that we've had, Alec, are becoming few and far between now. And I think Melbourne, it was Melbourne Uni who recently shared that more than 100 grads have started their own ventures. Why do you think that more young people are choosing this path now? It's a great question and something I spend a lot of time researching because I think it's a really important subject to tackle. So graduates are taught at uni that there's a lot of skills and there's a lot of work out there and a lot of moving parts. So when we leave, we've got a world basically like the OIST that's open to us. And traditionally speaking, graduates would go get a graduate position. You know, say for example in my field of business and analytics we'd go to I'd say Deloitte. I was going to say, yeah, where is your preferred employer or where would the graduate program be? So it'd be like KPMG and Deloitte, those sort of. Yeah, and all the way down to like IBM and Microsoft also have those open for more tech side roles. They'd be highly sought after too, wouldn't they? Yeah. Competitive. Yeah. It was an American statistic I found but I would say it translates well here that anywhere from 100 to 80 people are applying for a graduate position at a university. Wow. Now obviously that's a... Is that winning the lottery? Well it is. You know, it's a big blanket statement. So there's obviously other positions that are more appealing than others and stuff like that that would play into it. But yeah, when you start to look at graduate positions they are drying up. Unfortunately as well though, the amount of people that are graduating universities is going to decline in a similar fashion. So it would be interesting to be able to find more data that supports why that would be happening. Yeah. I think in regional Victoria as well, like you know, those big sort of KPMGs, Deloitte, they're all in the city. Like when you're living regionally, like who are those people with those graduate programs? I know we're in the valley. It's all about energy down here but I imagine those positions would be highly sought after too. Exactly. There's very limited positions available and a lot of people that would love to work in them and a lot of talented people but unfortunately there's just not that market to support so many people. So I think a lot of people who graduate looking and go, okay, I'm not going to be able to get into this role. I get knocked back. You know, even applying for other jobs that might not be within their particular scope of specialty, you know, they might go and try and do a generic say work at Coles and Woolies and get knocked back. Yeah, they utilise artificial intelligence to go through resumes before it even gets to a person. Yeah, okay. So if your resume doesn't meet a certain criteria, you might even see a human. Yeah, yeah. That's becoming documented and it's also getting to the point too where AI is starting to connect. Is AI recognising AI in resume writing? That's another side of it. Then the worst part is now big businesses, we're going to pull on Deloitte again, they're using AI to run their business, you know, to fill the holes that graduates previously would have. Yeah. They've probably analysed themselves with their data and gone, we could probably use AI instead of graduates. Well, it catches them out. I'm not sure if you saw that headline a couple of weeks ago from today. There was a report they sent to the government, $440,000, so not a lot of money in the government scheme but to an everyday person still a significant amount of cash. It's a house, yeah. Yeah, it's a house. It was fact-checked by an AI and written by an AI, which normally that would have been done by a graduate or would have had some graduate input. And it still cost a house? Yeah. Well, it was all jargon apparently from what the ABC report was saying that basically it came through and it was just waffle, right? Yeah, yeah. So, you know, like I don't work at Deloitte, I don't know exactly what went on but generally you'd have someone check things, you'd have other people that have, you know, it's like a graduate who would see. Human eyes. Yeah. They go into their job, they go, oh, let's fact-check this. Let's make sure that this is fine. Yeah. That's generally what graduates would do a lot of the time. They work within the team and work their way up. Yeah. So now that's not always the case. Like that's just one instance but just to provide an example. Yeah, yeah. So that then comes to the point of why do they start? Okay, we can't find a position. Yeah. But also to the money. Like graduate positions, some of them only pay $60,000 even in the city. Yeah. You go to the CBD, you're not going to get paid more than $60,000, $70,000. Yeah. Well. Times have changed. I think when I was a graduate I was, like, happy to, like, get $40,000. Yeah. But when you look at it from a graduate position who, say, for example, you want to go work in, like you said, the city. So let's talk, say, Glenferry or Hawthorne or Richmond, somewhere like that for our side of the region, right? Yeah. You know, on $60,000, $70,000, even paying rent, how could you afford to live in a city and go work at $60,000 a year? And do you want to commute from the trains from here? It's, like, a two-hour trip. Yeah. Four hours a day. I did seven months in the CBD working at a bank as a credit analyst. Yeah. And, yeah, two hours a day in, two hours a day out. Yeah. And that's if the trains run on time. That's if you don't get bus replacements and run another hour or so. Yeah. Well, it's all fine and dainty that we have fixed-cost public transport out of the region into Melbourne. Yeah. You still have to wear that time. Definitely. And four hours on a train every day is not my vision of fun. I feel like in London people do it, but I think, you know, we're in Melbourne. We're in Victoria, so maybe it's not for us right now. So, I guess, Alec, if you were going to give advice to a student or a later-in-life learner listening right now who has a business idea but isn't sure they're ready, what would you say to them? See, this is a really interesting question that I had a lot of time thinking of, too. Yeah. You're never ready. Yeah. All right. If you've got an idea and you want to do it, you've got to commit, you know, and it's not going to be like you see in the movies where, like, oh, I've had a stumbling block. Oh, and then life comes great. No, you might stumble for 12 months. Yeah. I've known of businesses that weren't profitable for two years from founding. Yeah. Did you mention a stat before about the failure rate of businesses? Yeah. So it varies year to year, but roughly 60% to 80% from the data I've seen from the ABS tells us that we have, within the first 12 months, an ABN will open and close. Okay. So that generally means a business has started, run for 12 months or less, and then they've wound up. And that's, you know, I think, you know, for everyone out there who's got a business idea at the moment and they're not sure they're ready, that's quite sort of terrifying to them. So how can we make that better? Well, and that's the thing where it comes down to the principle of what do you do, all right? So for example, someone that's, say, pool and a cafe owner, all right, they'll do coffees. That's what they do. Okay. They might be the best coffee shop. They might be the best price. Whatever. Whatever your thing is, you need to make sure that people actually want it, all right? Yeah. So it's no good going out and going, I'm going to start making fake eyelashes for dogs. Yeah. Might not have a market regionally. Yeah. Maybe internationally. Regionally. Internet. Globally. Globally there might be something. Yeah. But yeah, so having an idea is fantastic. Yes. But having a principle and a way to deploy it in your workplace, have a process for it. So say, for example, we've got someone, you know, AI, we talk about that a lot. Yes. You know, there's a lot of people who are very clever in the valley and they want to get into AI. So okay, cool. You want to run an AI business out of here or doing things like that. What's your process? What do you actually, like, what's your start, middle and finish? Don't go, oh, I'm going to have people come pay $60 a month for an AI subscription to tell me where the best coffee places are or the most popular. Yeah. Okay. Well, does that actually exist? Is there a market for that? Yeah. That's that demand side of things, isn't it? Yeah. Like you can have the best idea, you know, I've heard it before, you can build the best car in the world but if you don't actually have a market for someone that wants it, then it doesn't matter. Yeah. It's like most things, something's only worth what someone else will pay for it. Yeah. That's why you see more Toyotas on the road than Mercedes, not just because they're a cheaper car but, well, they've got more value for money. So Toyota's brand is built around that. Mercedes still makes a lot of money. Yeah. So does Toyota. Yeah. But they fill different niches. Different value proposition as well, yeah. Yeah. They claim those, you know, high cost and yeah. Yeah. It's like Kmart versus, you know, your high street store. Yeah, exactly right. Yeah. If you, the market share that they pick up. So, yeah, I suppose the idea is fantastic. You know, you go, I've got this brilliant idea. It's awesome. Yeah. Who's your market? How are you going to do it? And how are you going to deploy it? How are you going to, like physically what is your step by step guide to going, here's my service or product and here's where I will get money for it and here's where I will make profit because if you don't make profit, you're not a business. Yeah. I think competitor research as well, one of my competitors doing and maybe like from that, you know, they're not sure they're ready, you can maybe do it on the side. You know, keep a job or keep, you know, a part time job while you're still building this and working on it and then I guess when you're actually ready, you can go, okay, I'm going to let that other side go and this is my 100% full time venture now. Yeah. Well, scary. It is. It is. You have to take that step. You know, Melanie, from a marketing perspective that you need to test the market. You need to go. So for example, you're working at a job that you're not really liking but you get to talk to people. Yeah. Swipe the idea to these people when they come in. Yeah. Right? And they go, oh, no, I wouldn't do that or no, my brother's son's girlfriend would love that. Yeah. You know what I mean? Like it gets to that point where it's like if you have an idea, test it. If you believe in it, you need to commit to it. Yeah. And I think a lot of those businesses that wind up, some of them wind up because they've changed company structure. Some of them wind up because they've gone broke. But a lot of it I think comes down to not so much the idea is bad but maybe even the implementation, the way that they've gone about it. Like I said, testing market, testing things like that. Yeah. Would you bring somebody like yourself and what you do in the analytics space into someone who is thinking of starting a business just to sort of test that market, run the numbers? I know we sort of from a marketing perspective, we look at the size of the market, who your target audience might be, how to speak to those audiences, what they want. But your sort of where you come from is like looking at that sort of macro data and maybe distilling it. So if there was somebody out there that's like I really think I've got a great idea, I'm just not sure if I'm ready. Is there like a sanity test that they can do using business analytics to say, to give them a predictor like this could be successful or maybe this isn't or maybe you could pivot and do it this way because this is more successful. A hundred percent. Yeah. Business analytics doesn't discriminate between any type of business, whether you're starting, whether you're floundering, whether you're successful. Absolutely. Yeah. So someone who came to me for example and said hey, I've got this idea, will it work? It's like all right, well let's build a budget. What do we need to sell these things for to make a turn of profit? Because the thing with business and I think something that people misunderstand about business is just because you make 10 doesn't mean that you'll be cost effective at 20. Yeah. And vice versa. So say for example someone decided they wanted to make wooden chairs. Okay, what's your equipment? What's your set up cost X, Y and Z? Yeah. This is what you need to sell them for. Okay, cool. Is there market demand at that price? Then what we can do is we can take that data and yeah, exactly. We can go okay, let's go into the antique furniture store, right, and let's talk to people and show them a photo and say hey, would you buy this for $120? Yeah. And then you just do the groundwork. There's a really great book if anyone was looking to actually be cost effective with marketing and market demand. Yeah. Guerrilla Marketing is what I used. It's a fantastic book. Seth Godin? Yeah. Yeah, it's a fantastic book. They've got an updated version for the 21st century as well because it was written by him. He's a legend in marketing circles but yes. Oh yeah, fantastic and it's not just a great marketing book. It's a great business book. Yeah. Because it's got a lot of wisdom. This tale is written by someone who's done a lot of things and it talks about if you can't afford it then find an alternative. Don't just give up. Yeah. Find an alternative. One reference from the book was the West Coast in America when they've had like the punk rock band start up in the 80s. Yeah. They didn't have, these kids didn't have money to go marketing on the radio so they built flyers and then stapled them to the power poles to get people to come to their concerts. Guerrilla Marketing is still a thing. Sometimes I've spoken to clients of mine and if they can't afford to go to a trade show where it's $30,000 to set up a six by three trade stand, we always joke about we'll just go out to the front and hand out brochures. That's good. Exactly. Cost effective marketing and because you don't if you can't afford it you probably don't need it. Okay. You know what I mean? Like if your business can't afford that then you might not be at that stage where you need that sort of six by three stand. The brochure at the front is where you're at. Yeah. And that's where the thing is, you know, when you talk about building a business it's not a Hollywoodised version of oh well, you know, build it and they will come. Sometimes that works, generally not. You know, Facebook wasn't built by releasing an international social media app. It started at one university. Yeah, yeah. And then it grew. Yeah. Now we can get into all the technical stuff but that's what happens and that's where it comes to if you're going to have this business idea you need to start somewhere tangible that's manageable and like you said, at that macro level you can look at it but then you can also distill it down. You go okay, what's working, what's not? And that's where business analytics steps in, right? Yeah. So say you do your market research, you go oh okay, we've done our guerrilla marketing. Yep, we have a market here. Cool. All right. Let's do a production run. Let's do what we need to do. And we can actually all the way down to the 10 tax, budget out exactly to the cent what it's going to cost. You know, you can punch in and create formulas to know okay, if I have an order for 100, how much material do I need? What's my loss going to be in product that I bought? Blah, blah, blah. And then we can even calculate things like shipping costs to make sure we get the best shipping costs. So say for example, you know, a truck's going to cost you 10 grand to get the material in. Or you can get a container load from Indonesia in or whatever, which is not ideal. But if you're trying to get a business up to get things working, that's what happens. You know, if you build furniture, like we go back to the timber furniture idea, where you go we build Australian only 100% hardwood timber, that's great. But can you even get the timber now? You know, our logging's been closed down at this side of the forest. Yeah. So that market idea might not fit. And that sucks. Yeah, yeah. It really sucks because we've got some really great enterprises here that could really help with something like that. Yeah. But that's the reality that the regions face. You know, you were talking before about regional challenges. Yeah. That's one of the things is that, you know, we are seeing these industries that we've had for hundreds of years, some of them, start to disappear. Yeah. It's incredibly sad. It is. And finally, I guess, what's next for Fulcrum Analytics? Have you got any exciting plans on the horizon? So exciting plans, it probably depends on your definition. But what I'm looking forward to doing is just keep going where I'm at. I've only been doing this now for about half a year. Nice. Did have to pump the brakes there for a minute. Yeah. And we had some family things that came up that required full attention. Yeah. So be polite. And yeah, so I had to pump the brakes there for a couple of months. But, you know, Christmas is approaching and the New Year's nearly here. So I'm hoping to get out and start talking to people and, you know, get some things planned for the New Year to be able to work with them. And, you know, business is a journey. So I'd like to be with them not just for the start but for their whole business. Yeah. Yeah. Awesome. Well, Alex, thank you. Alec. Sorry. I keep saying Alec. Alec. Do I do that all the time? Thank you so much for joining me today on the Business Huddle. If listeners want to go and check out what Alec does and how he can help you, what's your web address, Alec? Fulcrumanalytics.com.au. All right. You could probably Google it. I certainly did. Thank you so much for your time this week and I look forward to seeing you at some more business chamber events and, yeah, around the traps. Awesome. Thank you very much for having me, Melanie. It's been so awesome to be here. Thank you again. Thank you. Every Friday between 11 a.m. and 12 noon, Gippsland FM presents the Red2U regional news program produced and presented for the visually impaired. We will read news items of interest including the death and funeral notices from the La Trobe Valley Express. For an up-to-date weekly account of news events in the region, join us every Friday from 11 a.m. for the Red2U program. Only here on your community connection, 104.7 Gippsland FM. ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ And that was Matthew Wilder, Break My Stride. You're listening to Gippsland 104.7, Gippsland FM. And thank you for joining me. I'm Melanie Kahane. We've been talking to Alex Mattel from Fulcrum Analytics about all things business startup and what analytics actually is and what it means for a business. Lots of data and lots of interesting points there. This week I am going to leave you with my pro tip, which is I guess whether you're a student, a later in life learner or just someone with a fantastic idea, maybe don't wait for perfect to launch. With Alex's journey starting his venture while navigating studies and obviously the regional challenge, it really shows us that the market is the ultimate classroom. Instead of spending months or even years perfecting a business plan in isolation, the sophisticated move is to create an MVP or a minimum viable product as they call it in business land or even just a service outline. The point isn't to be flawless. The point is to get your idea in front of a small group of ideally customers quickly. Their real world feedback is your market research and it will be infinitely more valuable than any amount of planning done behind a desk. Use that early feedback to iterate, refine, turning your initial spark into a validated business. So stop overthinking, start testing, launch small, learn fast and let the market tell you what's next. Thank you for listening to me today. I'm going to leave you with a little bit of Dua Lipa, cold heart. Enjoy the rest of your weekend and I will see you next week. It's a human sign when things go wrong When the scent of her legs is endless and strong Cold, cold heart Caught on by you Things looking better, baby Just pass it through And I think it's gonna be a long, long time But what the hell brings me back, can't you find I'm not the man, I think I am at home, oh no, no, no And this is what I should have said Well, I thought it through, I can't sit here Cold, cold heart Caught on by you Things looking better, baby Just pass it through And I think it's gonna be a long, long time But what the hell brings me back, can't you find I'm not the man, I think I am at home, oh no, no, no And this is what I should have said Well, I thought it through, I can't sit here Cold, cold heart Caught on by you