B2B Talent mobility platform BenchOn has raised $650,000 in seed capital to meet market demand for its software solution to employee underutilisation, estimated to cost the Australian economy $305 billion each year in lost productivity.
[Related: Can ‘For-Profit’ businesses still have a Social Impact? BenchOn’s founder provides answers and Why the startup ecosystem needs more non-technical entrepreneurs, not stereotypes]
Founded in March 2016 by BlueChilli startup accelerator alumni and former military man Tim Walmsley, BenchOn helps businesses avoid cashflow problems and the loss of valuable employees during downturn periods by matching their idle staff to short-term contracts with other companies. In the past 18 months, the Brisbane-based company has processed over $50million worth of contracts across a variety of industries including defence, IT, construction, mining, engineering, cyber security and logistics.
In conversation with Dynamic Business, Walmsley discussed his plans for the seed funding and the scope of the employee underutilisation problem in Australia. He also revealed how battlefield tactics helped him in business and how BlueChilli has helped him avoid ‘landmines’ and keep his startup dream alive.
DB: What prompted you to undertake a seed round?
Walmsley: Market demand for our service. We are now working with a number of global enterprise clients and also recently started a pilot program with one of Australia’s largest corporate organisations. Doing so meant we needed to scale and so investment was critical for this to happen. Developing the tech side of our platform to support this exponential growth is another factor. We have had a very strong start to 2018, so I am pleased we have done this.
DB: Who did you secure funding from and why?
Walmsley: The funding round was made up of angel investors, high net worth individuals and follow on investment from our current investors. We took a tact of only looking for investors that would add something to the company via experience, networks or advice and we are very happy with the result. We now have top industry experts on our board and some very passionate investors who are already creating some amazing introductions and strategic plans.
DB: Where will the funding be applied in BenchOn?
Walmsley: We’ll be using the funding to hire key staff across tech development, marketing and operations, and to support platform scale and functionality through tech development, including new data insight features for our clients. We’ll also undertaken a national marketing campaign – being across 10 industries in just 18 months means it is critical that we have visibility in front of companies who really need our service.
DB: How problematic is employee underutilisation?
Walmsley: Employee underutilisation rates are much bigger than everyone thinks. Current research puts the figure at $305 billion each year just in Australia and it is affecting more industries as they increasingly become contract-based. This problem doesn’t just affect businesses, it affects the staff, industry stakeholders and the economy as a whole.
Business owners find themselves between a rock and a hard place where they either have to let their staff go in the downturns to survive or they keep them on and risk financial ruin as the ’benched’ employee soaks up the available cash-flow. By letting staff go, they are also letting go of their capability, corporate knowledge and productivity.
Staff experience reduced job stability with many being forced to become independent contractors or consultants. Imagine the culture in your business when your employees are never sure when their head is next on the chopping block.
Industry suffers from increased cost of consulting support as prices are inflated to cover the cost of underutilisation periods and overhead. It also suffers from an erosion of the foundation of industry being small businesses.
The economy suffers from a reduction in full time job creation as more and more staff are forced into freelancing or independent consulting. This creates increased risk of people falling through the cracks and requiring Government assistance.
DB: How is BenchOn securing buy-in from businesses?
Walmsley: What is exciting about BenchOn is the potential for the platform to reimagine how businesses manage their employee productivity and the overall positive social impact that the business model is already producing. We have launched the ‘1000 Job Pledge’ where BenchOn in conjunction with industry is pledging to create 1000 new full-time jobs. We take this very seriously and see it as a pledge which sets the economic conditions for businesses to be able to hire new staff and keep them. It is the large end of town pledging to support small businesses in maximising their productivity so that they can reduce their overheads, increase cashflow and use that cashflow to grow their team. It’s an exciting new job creation concept and I can’t wait to see what benefits it produces in industry in the long term.
DB: How did BenchOn spin out of your Defence career?
Walmsley: The defence industry is heavily affected by peaks and troughs of work as well as a growing talent shortage in specialist areas. With around 4000 companies in the industry, it’s no wonder that businesses can’t find who they need when they need it. I took the experiences and conversations that I had with multiple business owners and employees and built a platform that is designed to make life easier for both parties. Defence also has some of the most restrictive and time-consuming contracting processes in Australia, so our processes were designed to meet those requirements, and in that way less restrictive industries can take advantage of those greater protections.
DB: Has this background shaped you as an entrepreneur?
Walmsley: My time in the military prepared me well for life as an entrepreneur, which is strange when you think about it. Defence teaches you ‘how’ to think, not ‘what’ to think so it doesn’t matter the issue or task you come up against, you have a mental process on how to assess it, mitigate it and create an action plan to meet it. I still use my military appreciation process when conducting strategic planning. You simply change ‘Enemy Assessment’ to ‘Competitor Assessment’ and you change ‘Environment Assessment’ which looks at the lay of the land and change it to ‘Market Assessment’. The rest still lines up – ‘Mission analysis’, ‘Analysis of your capabilities’, ‘Course of Action Development’, ‘Course of Action Analysis’ and ‘Decision and Execution’. I’m constantly amazed that it works just as well in business as it does on the battlefield.
DB: What role has BlueChilli played in BenchOn’s fortunes?
Walmsley: As a non-tech founder, the BlueChilli accelerator was exactly what I needed. Firstly, they have a step -by-step guide to taking your business from idea to scale. As a military man, I loved the idea of following the ‘bouncing ball’ to ensure that I didn’t miss anything. It gives you a quality guarantee that the business has been set up right and you won’t step on any ‘land mines’ later on. Secondly, they taught me the lean development approach in developing my Minimum Viable Product (MVP). Before I was introduced to BlueChilli, I had system engineered the platform that I wanted to build and took it to an IT developer whose solution was way more expensive than I had hoped. I thought that was it. The idea was over. Then I met BlueChilli. Without them, it either wouldn’t have happened or would have been a very long road to get off the ground. It only took 6 months from our first meeting for me to have a working product out in the market generating revenue.