How are Australian universities like shopping malls?

Possibly the weirdest headline I’ve ever written but here’s how.

5 min readSep 13, 2024

A young entrepeneur recently asked me if I had an opinion on why Australia has no venture funds run by university students, and whether I thought Australian universities might back a student-run venture fund.

No, I don’t think so, not in the foreseeable future. Why?

You know how tech investors are meant to have a few things that they believe that most other people would disagree with? Well, here’s one of mine: I don’t think most Australians understand what Australian universities really are.

Believing an Australian university exists to educate people is like believing Scentre Group (which owns Westfields) exists to sell you a movie ticket and a new pair of jeans.

I can explain.

Scentre Group generates revenue by leasing commercial retail space to retailers in their Westfields malls. Their key metric is revenue per square metre (RPSM).

To increase RPSM, Scentre Group needs to find better ways to drive consumers into a Westfields and to increase the amount of time (and hence money) they spend inside. That’s why you can buy a pair of jeans, see a movie, waste your time at Medicare and eat mass-produced food off a damp plastic tray elbow-to-elbow with a hundred random strangers to the soothing vibes of middle-of-the-road pop and screaming toddlers.

But just because we all buy jeans and see movies in Westfields, doesn’t mean Scentre Group is in the business of selling jeans and movie tickets. Scentre Group is in the RPSM business. Scentre Group’s two most valuable assets are their brand, and their properties.

Now let’s look at an Australian university and observe the simularities.

The core business of an Australian university is also RPSM. The two most valuable assets are the brand, and the property portfolio.

Yes, their brand! I know most Australian universities do terrible brand marketing but they also obsess about their rankings, they invest heavily in brand marketing, and they keep building new, iconic showcase buildings on campus designed by some of the world’s leading architects.

If they didn’t believe those shiny new buildings were lifting their brand value, the building you study in would much more closely resemble a Westfields (or maybe a Bunnings!).

So Scentre Group and Sydney University both have the same primary assets: brand and property portfolio. They have a similar revenue model too.

Scentre Group leases retail space to, say, a jeans retailer and a cinema chain. An Australian university leases study space to the parents of a fee-paying student (or to the government which is lending money to the student to pay their fees).

As a student, you take up space in a university’s student accommodation, lecture theaters, labs, tutorial and recreational spaces, and your lease term is usually three, four or six years. You’re the tenant.

Scentre Group wants the retail brands and entertainment choices which generate a higher RPSM. But it’s not their mission to help you into a new pair of Levis. They want to make the folks at General Pants pay more for retail space in a Westfields because they’re more likely to sell more pairs of Levis there.

A university wants you to study whatever subjects your parents will pay more for. Entrepreneurship doesn’t usually rank highly but Business is somewhere on the top 10 for most parents. However it ranks below Medicine, Dentistry, Vet Science, Law and Engineering.

Walk around a university campus and observe: which faculties have the biggest, most impressive buildings? There’s a direct correlation between the impressiveness of the faculty buildings and a parent’s propensity to pay a higher RPSM.)

It’s not like entrepreneurship is entirely absent from Australian university campuses, but at many Australian universities it’s not even a School, it’s more of a strand of Entrepreneurship-Lite running through many programs. If it has its own building, it’s unlikely to be large, or designed by an internationally-renowned architect, and it’s most likely to be used by students across all disciplines.

Entrepreneurship on campus may have staff, incubator programs, accelerator programs, and even small grant and early-stage venture funds, and they mean a lot to the people who care about them, and they’re better than nothing at all, but when you zoom out and consider what a university really allocates people, money and floor space to, it’s clearly not a top three priority.

Entrepreneurship is to an Australian university as Howards Storage World is to Westfields; some customers want something to store their shoes in, and knowing that you can get some shoe storage is one of the many reasons you might choose to go to Westfields instead of a Stockland or GPT mall, but it’s not core to what Scentre Group does.

So if a university is in the RPSM business, why would they support any entrepreneurship activity on campus at all? The answer is that the appearance of providing an entrepreneurship education is a useful part of the marketing mix to the parents of a fee-paying student who may also be considering other sandstone-league Australian universities, or the international competitors with a reputation for entrepreneurship, like Harvard, Stanford, and MIT.

If a veneer of entrepreneurship is part of the marketing mix, wouldn’t a deeper commitment to entrepreneurship be even more effective? Wouldn’t a student-led venture fund be embraced by the university bold enough to host it? Maybe, but it also comes with a greater degree of risk to their brand: what if it goes wrong? What if the businesses started by student entrepreneurs fail? What if student investors lose money and parents complain?

As you know, entrepreneurship is an inherently risky thing; entrepreneurship without risk is just business-as-usual. Universities have a low risk tolerance, especially to something that might tarnish the brand.

Will Australian universities always offer just a thin veneer of entrepreneurship education? The future is always hard to predict, but I don’t see Australian universities choosing to change soon. Maybe one or two of them will stumble into a stronger reputation for a great entrepreneurship education, decide customers (parents) seem to like it, and start leaning-in to it.

I don’t know if an Australian university would try to ban students trying to raise capital for a student-led venture fund but I can’t imagine them actively supporting it, or becoming an investor.

But does a student-led VC fund need to be supported by the university it’s founded in? No. There’s nothing to prevent some high-net-worth students from trying it anyway, especially if they start as an angel syndicate. They would have to wait until they’re at least 18 years old, and would have to meet the sophisticated or wholesale investor requirements.

Meantime, shout-out to Galileo Ventures, which isn’t student-led or primairly student-funded, but has a great track record for backing startups founded by student entrepreneurs.

Footnote: student-led venture funds worldwide

According to ChatGPT, there are many student-led VC funds and student-involved programs designed to attract investors around the world, particularly in the US:

1. Dorm Room Fund (USA)

https://www.dormroomfund.com/

2. Rough Draft Ventures (USA)

https://www.roughdraft.vc/

3. University Venture Fund (USA)

https://www.uventurefund.com/

4. Contrary Capital (USA)

https://contrary.com/

5. Peel Ventures (Canada)

https://peelventures.co/

6. Oxford Seed Fund (UK)

https://www.oxfordseedfund.com/