The Secrets of Tech Success According to Appster

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Josiah Humphrey

Josiah Humphrey, a co-founder of one of the most notable of the new breed of Australian digital companies, Appster, tells Matthew Hall about the challenges of ‘making it’.

“Don’t over-analyze things,” says Josiah Humphrey, CEO and co-founder of Appster.

Counterintuitive business advice from a 25-year-old may seem a recipe for disaster to many entrepreneurs and bosses. Normally, that would be right. But Humphreys is no normal 25-year-old and doesn’t have normal advice.
According to the Australian Financial Review, Humphrey and business partner Mark McDonald, 24 years old, have a combined net worth of $58 million and change. The Melbourne duo (Humphreys was born in New Zealand and moved to Australia as a teenager) are an entrepreneurial phenomenon with a brilliant idea and thriving multinational business.

Instead of developing their own latest great idea for an app, Appster provides wannabe entrepreneurs with an in-house team and tools to develop their own app for market – at a relatively reasonable price that the company claims reduces the financial risk of launching a startup. In other words, they are not building the railway – they make their millions from providing the nuts and bolts for the railway.

“If you have an idea for a mobile app or a web app or you want to create the next Uber, we’re the perfect partner for something like that,” pitches Humphrey.
Humphrey and McDonald founded Appster in 2011 with $3,000. In five years, the company has grown from 11 employees in a Melbourne office to 350 staff in Australia, India, and the United States with projected revenues of $100 million by 2018. Other people’s ideas have made Appster in demand. Importantly, the path to Humphrey and McDonald’s $58 million is that Appster has no outside investors – the pair own 100 percent of the company, unusual for start-up companies.

Humphrey and McDonald met online as teenage entrepreneurs. Humphrey was a straight A student at high school but convinced his parents the entrepreneurial career he was destined for was better served with real world experience. He dropped out of school and sold digital products and ran a lead generation business at 15. He also briefly traded options.

After meeting in real life, the new friends made a trip to Sydney for a Tony Robbins speaking event and, inspired, plotted their own course from a McDonald’s restaurant in Melbourne’s CBD. Their plan: rent an office in a Melbourne skyscraper next to Google and IBM then figure out what to do. It sounds ridiculous. It was.

Mark McDonald

“A lot of people will over-analyze things,” reflects Humphrey. “If you look at us, revenue was not great but we went and got an office. That is a stupid thing to do but then it was also, ‘OK, this is real. We have to take things seriously.’”
The business grew. In 2013, Appster opened an office in India and the next year moved its headquarters to San Francisco. The reasons were simple: India has talent and San Francisco and neighbouring Silicon Valley are the centre of the tech universe.

“If you look at the top five mobile app development companies – and luckily we are one of them – they all have back end offices in India,” says Humphrey. “But the difference with all those companies is that one of the founders is Indian.
“I’m very grateful today that we managed to pull it off but if it wasn’t for our naivete we wouldn’t have considered doing something so crazy. If I knew then what I know now there is no way in hell we would have opened an office in India. It was really tough. But at the same time, it is a great competitive advantage for us in the long term. Innocence and naivete can be a gift.

“If I put a job out in Australia I’m probably going to get 20 responses,” he explains. “If I do that in India, I’m probably going to get somewhere between 300 and 1,000 responses and I’m going to be able to pick the cream of the crop from that. Companies like Google and Expedia are all going to have backend technology in India. There is brilliant talent there.”

Speaking at his San Francisco office, Humphrey is aware how he may come across back home after Appster’s success. He outlines the differences in culture between Australia and the U.S., and he’s not talking about tipping, guns, and talking loudly.
“Everyone in the US is encouraged to chase their dream,” he says. “Everyone is trying to make it. They are trying to hustle. In Australia, you have tall poppy syndrome and you are almost looked down upon for having a dream. That is the biggest [cultural difference] and I don’t know how that can be solved.”

Humphrey says that while Australian entrepreneurs have been successful in recent years (see breakout at right), the country’s economy will benefit from business and government taking the technology industry and start-up sector more seriously.

“We are seeing a little bit more conversation around innovation in Australia,” Humphrey says. “People are saying, ‘Holy crap, we just can’t take stuff out of the ground and resources be our only contribution to the world’s economy.”
“Venture capital is becoming accessible in Australia but if you compare it to the VC or even angel investment industry in the US, Australia is not even close. That comes down to culture, too. The appetite for risk in the US is so much greater. Until we do the same in Australia, it just makes things difficult for entrepreneurs. Hardly any of the major success stories coming out of Australia are because of VC funding. We really have to work on how we can have a lot more money going into start-ups in Australia.”

Enough gloom. Does Humphrey have advice for entrepreneurs who want to kickstart a brilliant new idea?

“You’re not going to get anywhere sitting around a table talking about the idea,” he says. “If you have the ambition, get out there and get started. If you go well and can scale, focus on hiring the best people possible. You’re not going to be able to achieve your dreams as one person. People say that Mark and I are so incredible but, really, we just hired great people who are just so much better than us.”

From our Summer 2016/17 issue: