Robyn Denholm

Global Chair,
Tesla Inc.

Robyn is the global Chair of Tesla and has been on Tesla’s Board of Directors since 2014. She has extensive experience as a senior technology executive and non-executive director in Australia, the US, and Europe.

Robyn Denholm

Having spent the better part of the last 20 years building my career in the heart of the San Francisco Bay Area, I am often asked to reflect on the things the Silicon Valley business ecosystem does that Australia can adopt to thrive. I think it comes down to a quote from one of America’s most famous founders: “With great risk comes great reward.” No, not a startup founder, but rather Thomas Jefferson who in 1776 took a world changing risk with his peers and founded the United States of America.

The willingness to take risks continues to permeate through the US and is a core part of the ideology in the ‘home of the brave’. American founders take heart that their audacious ideas will be treated seriously by the best and the brightest. Should they fall short of their ambitions, they can wear their scars with pride, knowing that investors (particularly in Silicon Valley) will value it as a lesson learned, rather than treat failure as a black mark. A continuous learning culture is a very real asset in any business.

This risk appetite enables founders to not only create companies that challenge the status quo but grow them to be immensely successful. I’ve been fortunate enough to work with 3 such founders.

At Sun Microsystems, founder Scott McNealy (and his co founders) thought that there must be a better way of computing than a mainframe, and went on to develop the Unix workstations that put compute on the desktop. From this idea Sun Microsystems grew to a global phenomenon and became the “dot in Dotcom”.

At Juniper Networks, Pradeep Sindhu thought there must be a better way of routing things around the internet and developed a fundamentally different way of doing this, inventing a purpose built processor and operating system. Juniper Networks challenged giant companies with their mission to “connect everything and empower everyone”.

Elon Musk has founded and co-founded several companies including Tesla, where I have been on the board of directors since 2014. The mission of Tesla is to accelerate the world towards sustainable energy. Tesla is doing that by producing amazing electric vehicles, and scalable residential and commercial clean energy generation and storage products, providing better alternatives to the current fossil fuel powered vehicles and energy generation.

Today these 3 examples appear to be obvious success stories, but the reality is each have overcome tremendous hurdles and changed industries with bold, risky concepts. There is in the US a willingness from a range of stakeholders, investors, consumers, suppliers and board members to support companies that are taking monumental risks, and in my opinion it is the only way that we’re going to have an impact on big issues. From addressing the transport demands of congested and urban cities to challenging the world order on climate change, tackling major world issues through technology is a high-risk, high reward scenario.

There’s no question the rewards are out there. And the risk of failure is very high. But by making failure as acceptable and manageable as possible, the downside is minimised while the upside remains there for the taking. That tips the whole equation towards high value outcomes. To be clear I’m not advocating to abandon legal/regulatory or ethical responsibilities as reputation is everything in business, but rather to take strategic or business risk.

Risk taking is fundamental to a vibrant startup community and by definition an innovative and growing economy, but it is not fully ingrained in the Australian mentality. Yet. Maybe it is that we have become complacent as a result of 25 years of unprecedented uninterrupted economic growth! It’s not the Australian way that I remember from my childhood, where “having a go” not just on the sporting field but in starting your own business was more the norm.

As a country and a startup community we have much to be optimistic about. Over the last decade we have made significant strides in fundamental ingredients necessary to enable innovative startups to be born and thrive. We have a phenomenal education system, we have made significant inroads in having ready capital for new ventures, and we have some great role model entrepreneurs who have given future generations home grown icons to aspire to be. However, there’s one thing holding us back: our appetite for risk.

In order to take Australia to the next level in a global digital economy, we need to see corporations, investors, board members and governments embracing risk. That means investing in long-term R&D, partnering with innovative young companies, and becoming swift adopters of technology. Too many are coasting, maintaining the status quo or improving only incrementally. It’s holding us back.

Nowhere is this clearer than on R&D. Australia still consistently underperforms OECD averages when it comes to gross R&D spend, and our R&D rates are dropping. In an era where technological advances are more economically valuable than they’ve ever been, we are reducing our capacity to generate them. There’s an important onus on leaders across all areas of the economy to fix that slide.

According to the Global Innovation Index, Australia has recently fallen out of the world’s 20 most innovative economies, coming in at 22nd. At the same time, and in my view not unrelated, Australia is experiencing its weakest economic growth rate since the Global Financial Crisis in 2009, and is forecast to slow at approximately twice the speed of other developed economies – shrinking from a growth rate of 2.8% in 2018 to 2.1% in 2019.

To continue to grow our economy and build the society we want to live in, Australia needs to embrace the notion that taking smart big risks can bring great rewards. In an age where technology is changing everything, we need to do more to understand how we support the growth of a thriving, globally competitive Australian tech sector. And we need to promote and celebrate those founders, investors, companies, board members and governments that continue to reward risk to change the world. By doing so we will encourage the next wave of our bright young minds to not take the safe career route but to reach for the stars and in the process create an even better Australia.