Why we kept our startup in Australia(macropod.com)
macropod.com
Why we kept our startup in Australia
https://macropod.com/blog/why-we-stayed-in-australia/
85 comments
The feeling I get is that it's more about being distant from the "startup" world of SV, which is something of a religion. Investors here are more interested in businesses. A startup is a particular kind of small business - and if you are going to invest in a business, you want it to be sound.
Just a guess. I work for a 'startup', but I'm nowhere near the money machines. I've just always been amused at watching people discuss startups like they're completely unrelated to the more mundane world of small businesses. :)
Just a guess. I work for a 'startup', but I'm nowhere near the money machines. I've just always been amused at watching people discuss startups like they're completely unrelated to the more mundane world of small businesses. :)
You raise a great number of points here that I can really relate to especially the reliance on the product selling itself. I am pretty sure that this is a mistake, but it is hard to try and compete against all the noise when you are running a lean startup.
Interestingly I'd say a lot of your points are true for the investors here in the UK.
Investors want to see growth, they want a business/marketing plan, ideally they want traction...overall they're simply more cautious than our American cousins.
Investors want to see growth, they want a business/marketing plan, ideally they want traction...overall they're simply more cautious than our American cousins.
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In other words, lifestyle businesses, i.e. businesses that plan to direct nearly all profits and investment capital to the founders / employees / other expenses while the investors end up getting nothing (unless they do something extractive to the company e.g. via seizing control and extracting value for themselves via that) -- versus "non-lifestyle" where the company optimizes for a big exit through which investors can be compensated.
Remember, tech startups nearly never pay dividends. Making a ton of profit but no exit = good for founders and employees, big problem for investors.
Remember, tech startups nearly never pay dividends. Making a ton of profit but no exit = good for founders and employees, big problem for investors.
There is nothing wrong with lifestyle businesses :)
The problem basically comes about because almost all startups here are forced to bootstrap for a long time before they even get the possibility of raising funds from an investor. If as a founder you have managed to get your business to profitability by bootstrapping why would you take on any outside investor who you expect will try and screw you over?
The problem basically comes about because almost all startups here are forced to bootstrap for a long time before they even get the possibility of raising funds from an investor. If as a founder you have managed to get your business to profitability by bootstrapping why would you take on any outside investor who you expect will try and screw you over?
You are right, there's nothing with lifestyle businesses, but the previous comment is still correct: they aren't good or investors. If you can bootstrap one and only need to take on small amounts of funding (i.e. via a business loan or from family members), then they are fantastic, but if you are trying to seek larger sums from outside investors the are problematic for the reason mentioned.
There is a bit of a chicken-and-the-egg problem with startup here in Australia. Without a viable investor infrastructure founders won’t create the sort of businesses that will generate returns for investors (i.e they will create bootstrapped lifestyle businesses) and without the right type of businesses being created investors will avoid putting their money into start-ups since the type on offer are the lifestyle businesses that they can’t get the money out of. Someone needs to break this cycle and they only side that can do it is the investors - they need to start putting money into really early startup and supporting the types of companies that will generate returns for investors.
> If as a founder you have managed to get your business to profitability
Because in Australia (and NZ, Canada, etc) founders and employees tend to be waiting for privately owned residential real estate to move up in value, a "lifestyle business" in these places doesn't need to get to profitability, it only just needs to keep the founders and employees in a job. Any outside investor that evaluates such a business is already being screwed over by the founders as soon as they start talking.
Because in Australia (and NZ, Canada, etc) founders and employees tend to be waiting for privately owned residential real estate to move up in value, a "lifestyle business" in these places doesn't need to get to profitability, it only just needs to keep the founders and employees in a job. Any outside investor that evaluates such a business is already being screwed over by the founders as soon as they start talking.
Companies like Atlassian have shown what can be accomplished in Australia. When it comes to funding, Australia is one of the richest countries on earth, with a median adult net worth higher than the US, Japan and Germany combined, and twice that of Norway and Switzerland.
Obviously the VC funds are different, and nowhere near the scale that they are in the US or China right now. Still, there is a lot of wealth in Australia seeking investment opportunities.
It would seem to make perfect sense to stay domestic and contribute to building up the tech scene there.
There are problems with the generalizations in the article though. The author talks about American entrepreneurs being, basically, obsessed with get rich quick schemes, and that outcomes are more binary in the US - that's mostly a Silicon Valley cultural thing. There are tens of thousands of successful tech companies all over the US that have grown themselves slowly, are great businesses, but are not unicorns, and are not an all-or-nothing proposition. Why didn't the author look at other tech start-up cultures in the US as an alternative? Alternatives exist in every major city. I get that, in that scenario, it makes as much sense to stay in Australia - so then why mess with Silicon Valley at all, by now it's pretty blatant what it's all about. That contradiction left me confused.
Obviously the VC funds are different, and nowhere near the scale that they are in the US or China right now. Still, there is a lot of wealth in Australia seeking investment opportunities.
It would seem to make perfect sense to stay domestic and contribute to building up the tech scene there.
There are problems with the generalizations in the article though. The author talks about American entrepreneurs being, basically, obsessed with get rich quick schemes, and that outcomes are more binary in the US - that's mostly a Silicon Valley cultural thing. There are tens of thousands of successful tech companies all over the US that have grown themselves slowly, are great businesses, but are not unicorns, and are not an all-or-nothing proposition. Why didn't the author look at other tech start-up cultures in the US as an alternative? Alternatives exist in every major city. I get that, in that scenario, it makes as much sense to stay in Australia - so then why mess with Silicon Valley at all, by now it's pretty blatant what it's all about. That contradiction left me confused.
"If I were starting Atlassian today, I wouldn't have stayed here"
- Scott Farquar, CEO of Atlassian
http://www.computerworld.com.au/article/557248/atlassian-ceo...
Besides, Atlassian is now officially a UK company.
Australia is indeed a rich country. Lots of funding is probably available. Laws seem simpler than in Europe. I don't know whether Scott is comparing Australia to UK/US or to other more latin countries like Spain or France.
- Scott Farquar, CEO of Atlassian
http://www.computerworld.com.au/article/557248/atlassian-ceo...
Besides, Atlassian is now officially a UK company.
Australia is indeed a rich country. Lots of funding is probably available. Laws seem simpler than in Europe. I don't know whether Scott is comparing Australia to UK/US or to other more latin countries like Spain or France.
> I don't know whether Scott is comparing Australia to UK/US or to other more latin countries like Spain or France.
Both Spain and France are European countries.
Both Spain and France are European countries.
> Australia is one of the richest countries on earth, with a median adult net worth higher
Certainly true if you take the net present value of the resources buried beneath the huge outback and apportion it against the low citizen count. Canada has the same geography and demographics so would be in the same net worth per capita situation. If you instead use the demand from potential immigrants and supply of unused and repurposable land to measure net worth, you'd get a similar result. But to compensate against the risk of invasion, both countries have had to become the 51st and 52nd states of the USA from the defense perspective.
Certainly true if you take the net present value of the resources buried beneath the huge outback and apportion it against the low citizen count. Canada has the same geography and demographics so would be in the same net worth per capita situation. If you instead use the demand from potential immigrants and supply of unused and repurposable land to measure net worth, you'd get a similar result. But to compensate against the risk of invasion, both countries have had to become the 51st and 52nd states of the USA from the defense perspective.
Who the hell would invade us? There's no-one even close. This is pretty bizarre
Australia is one of the richest countries in the world because we imported a decent work ethic and have lots of natural resources. We also core very highly on "great places to live" lists because we all live close to the beach.
It's awesome here, and if we can just get rid of the catholic idiot in charge and get someone in who understands about the intertubes and the NBN and why investing in tech is a good idea then we're all set :)
Australia is one of the richest countries in the world because we imported a decent work ethic and have lots of natural resources. We also core very highly on "great places to live" lists because we all live close to the beach.
It's awesome here, and if we can just get rid of the catholic idiot in charge and get someone in who understands about the intertubes and the NBN and why investing in tech is a good idea then we're all set :)
> Who the hell would invade us?
"You may not be interested in war but war is interested in you." - Leo Tolstoy
"You may not be interested in war but war is interested in you." - Leo Tolstoy
Unfortunately the investment culture in Australia is a lot more risk averse. There are exceptions, but raising money for new tech here is much harder than it should be given the relative strength of our economy.
For bootstrapped companies of course this is less of an issue, the high cost of living and small local market are more of a problem. The beauty of software, though, is we can sell online into the large (and culturally-similar-enough) US market, which is where most of my customers have always been.
For bootstrapped companies of course this is less of an issue, the high cost of living and small local market are more of a problem. The beauty of software, though, is we can sell online into the large (and culturally-similar-enough) US market, which is where most of my customers have always been.
Yes the key to success in Australia is bootstrap and export. Now the dollar has come down from its ludicrous level to just somewhat over valued this is more viable. I do still miss the days when I got A$2 for ever US$ though, but it is better than in 2012 when I was getting A$0.90 for every US$.
> have shown what can be accomplished
That was never the proper question. The proper question is what's the relative difference in the magnitude & probability of success, between the different regions. This matters, because success is so extremely difficult to achieve in startups already.
> outcomes are more binary in the US - that's mostly a Silicon Valley cultural thing.
It's an investor thing, not a cultural thing. If the business doesn't reach an exit, then the investor (nearly always) gets absolutely nothing, no matter how many millions the company is profiting per year. Tech startups generally never pay out dividends. All that money goes back to the employees and other expenses. Nothing to the investors. Never exiting = equivalent to the company imploding as a completely failure, from an investor's financial perspective.
> stay domestic and contribute to building up the tech scene there.
If startups want to build up their ecosystem, the more effective approach is to go to where the money is, get the money, and THEN take that money and success back to their home community. Exactly as the Skype guys did for Estonia, or as many founders have done for Israel. #1 get the money #2 bring it back. 2 optimized steps, not a single step.
This small town concept of just guilt-tripping the poor desperate founders to never leave their home town out of loyalty simply hurts everyone. It's backwards thinking like this that keeps the smaller towns smaller and less successful.
That was never the proper question. The proper question is what's the relative difference in the magnitude & probability of success, between the different regions. This matters, because success is so extremely difficult to achieve in startups already.
> outcomes are more binary in the US - that's mostly a Silicon Valley cultural thing.
It's an investor thing, not a cultural thing. If the business doesn't reach an exit, then the investor (nearly always) gets absolutely nothing, no matter how many millions the company is profiting per year. Tech startups generally never pay out dividends. All that money goes back to the employees and other expenses. Nothing to the investors. Never exiting = equivalent to the company imploding as a completely failure, from an investor's financial perspective.
> stay domestic and contribute to building up the tech scene there.
If startups want to build up their ecosystem, the more effective approach is to go to where the money is, get the money, and THEN take that money and success back to their home community. Exactly as the Skype guys did for Estonia, or as many founders have done for Israel. #1 get the money #2 bring it back. 2 optimized steps, not a single step.
This small town concept of just guilt-tripping the poor desperate founders to never leave their home town out of loyalty simply hurts everyone. It's backwards thinking like this that keeps the smaller towns smaller and less successful.
> The author talks about American entrepreneurs being, basically, obsessed with get rich quick schemes, and that outcomes are more binary in the US - that's mostly a Silicon Valley cultural thing.
That's true, but the US VC isn't going to fund you to move to Portland or Austin or Boulder. I'd love to be proven wrong though.
That's true, but the US VC isn't going to fund you to move to Portland or Austin or Boulder. I'd love to be proven wrong though.
Most of the capital is effectively controlled by large pension companies, advised by a small number of pretty traditional consultants, and little goes into VC.
This (Used to work for the largest of them all) and one of the slowest internet speeds of the western worlds.
Almost everything in Australia is a monopoly: kmart, target, the biggest grocery chain are all owned by one company. 90% of the internet infrastructure is owned by a single company. Yet people dont react because real estate exposure.
Two companies. It's more duopoly rather than monopoly but they track each others prices to ensure they aren't offering anything cheaper than the other.
I can strongly relate to this experience too. As the founder of Ortask, my company is not successful by Silicon Valley measures, but it is successful in my terms because it makes me very happy.
For example, I’ve learned so much by deploying my two products, doing marketing myself, and am currently developing a new breed of test management tool that integrates other of my own technologies that actually help with managing testing (IMO, current test management tools are simply glorified DBs with dashboards) — something I have been very passionate about for years.
Also, I have never identified (or agreed) with the new mentality in the US for creating companies a-la Amy Hoy. At the worst case, such “strategies” teach you how to steal someone’s idea and build something for which you feel no passion, just to become rich.
I wish them and their company the best and hope it grows in a way that keeps making them happy.
Thanks for posting this article!
For example, I’ve learned so much by deploying my two products, doing marketing myself, and am currently developing a new breed of test management tool that integrates other of my own technologies that actually help with managing testing (IMO, current test management tools are simply glorified DBs with dashboards) — something I have been very passionate about for years.
Also, I have never identified (or agreed) with the new mentality in the US for creating companies a-la Amy Hoy. At the worst case, such “strategies” teach you how to steal someone’s idea and build something for which you feel no passion, just to become rich.
I wish them and their company the best and hope it grows in a way that keeps making them happy.
Thanks for posting this article!
"in the US you have to talk a lot of bullshit. No matter what your company looks like, you have to talk as if it’s the next Facebook. You have to pretend you’re a Unicorn even when you know you’re not. I never once met a founder that when asked, “how are things going?” could give me an honest answer. Everyone is killing it, smashing it and blowing shit up. You have to be moving fast and break things. It’s all a million miles an hour and to hell with the consequences. There’s no room for words like “considered”, “mindful” or “deliberation”. You move now, or GTFO. It’s as if everything and everyone is in a Hollywood production."
For what it's worth, this is a "post-unicorn" phenomenon. San Francisco has been overrun with entitled assholes as it has become the trendy new place for get-rich-quick schemes. It wasn't that long ago that it was considered insane by investors to put a company here (for good reasons, actually: it is insane to have a company here. People now just arrogantly want to change the existing city to fit their greed, rather than go somewhere more practical.)
A lot of the people who were doing startups before the Rise of the Unicorns -- many of whom are now famous and powerful people -- were, frankly, lunatics. I wouldn't say that they were modest, exactly, but they also weren't exclusively focused on money -- it wasn't clear that anyone was going to make any money! Maybe I'm being romantic, but it seems like there were more interesting people, doing interesting things, and hoping to have a good time along the way. There was more thought, because there was less money, and people had to be careful.
Today, the interesting people are fewer and further between, and the question is less "how can I make something great?", and more "how can I get investment?" Nobody gives much of a shit about anyone else, because if there are any externalities, hey, that's just "disruption", bro. It's awful, and has probably destroyed the culture that produced those unicorns in the first place.
For what it's worth, this is a "post-unicorn" phenomenon. San Francisco has been overrun with entitled assholes as it has become the trendy new place for get-rich-quick schemes. It wasn't that long ago that it was considered insane by investors to put a company here (for good reasons, actually: it is insane to have a company here. People now just arrogantly want to change the existing city to fit their greed, rather than go somewhere more practical.)
A lot of the people who were doing startups before the Rise of the Unicorns -- many of whom are now famous and powerful people -- were, frankly, lunatics. I wouldn't say that they were modest, exactly, but they also weren't exclusively focused on money -- it wasn't clear that anyone was going to make any money! Maybe I'm being romantic, but it seems like there were more interesting people, doing interesting things, and hoping to have a good time along the way. There was more thought, because there was less money, and people had to be careful.
Today, the interesting people are fewer and further between, and the question is less "how can I make something great?", and more "how can I get investment?" Nobody gives much of a shit about anyone else, because if there are any externalities, hey, that's just "disruption", bro. It's awful, and has probably destroyed the culture that produced those unicorns in the first place.
Running a technology company from Australia is totally insane (this is coming from some who has done exactly this for the last 15 years). Unless you have a family reasons for staying then leave right now.
On the positive side Australia is a great place to live, just a massive up hill struggle as a place to build a technology based business.
On the positive side Australia is a great place to live, just a massive up hill struggle as a place to build a technology based business.
I'd like to mention another local success story. Hidden away in Fisherman's Bend in Melbourne is Blackmagic Design (http://www.blackmagicdesign.com). 99% of sales are overseas and they compete with the likes of Canon and Sony. The company was grown organically without any external funding, and does engineering and industrial design in-house. This is not an easy thing to do (hardware is expensive to develop!) but it can be done.
disclaimer: I used to work for Blackmagic
disclaimer: I used to work for Blackmagic
I have always been impressed by Blackmagic. Yes the key to success here is to bootstrap. If you go down this path Australia is one of the better places in the world to do it.
Some other bootstrappers from Melbourne:
* PayDirt - http://paydirtapp.com/
* Cycling Analytics - https://www.cyclinganalytics.com/
Other products developed in Melbourne (I am unsure of the levels of VC):
* Aconex construction workflow - http://www.aconex.com/
* Redbubble - http://www.redbubble.com/
* Realestate.com.au - http://www.realestate.com.au/
I don't always understand the hype about investment. If someone is giving you their money, you are giving up sovereignty. If you can build something that earns enough to continue growth, then you can afford to make some mistakes.
Edit: Formatting
* PayDirt - http://paydirtapp.com/
* Cycling Analytics - https://www.cyclinganalytics.com/
Other products developed in Melbourne (I am unsure of the levels of VC):
* Aconex construction workflow - http://www.aconex.com/
* Redbubble - http://www.redbubble.com/
* Realestate.com.au - http://www.realestate.com.au/
I don't always understand the hype about investment. If someone is giving you their money, you are giving up sovereignty. If you can build something that earns enough to continue growth, then you can afford to make some mistakes.
Edit: Formatting
Don't forget FastMail! https://www.fastmail.com/ - we don't make a giant deal about being from Australia since most of our business is from overseas as well.
I think it's hard to find funding because all wealthy people in Australia made their wealth in mining. If you want to open a coal mine in the middle of the Outback, you will find investors easily - Just show them the report on soil composition; they'll get it instantly. If you want to start a tech company; good luck.
Not to mention that the current federal government is pretty hostile to tech- and research-based industries.
They seem to be hostile to reality.
This is similar to the complaint you hear from startups in Hong Kong: it's hard to find funding because all wealthy people in Hong Kong made their wealth in real estate.
The other big issue is that startup people in Australia don't support other startups.
They don't have the time to even listen or try out new products, give feedback even when requested.
I have even asked for explicit feedback and that hasn't been forthcoming. Obviously people get support from within their own groups but anyone outside it is largely ignored.
They go to listen about disruptive startups and maybe talk about it but no doing and no encouragement for the doers. They do pay a decent amount of cash to attend workshops on innnovation / disruption though.
Even the so called experts won't know a disruptive idea if it bit them in the rear. Plus you see the same "experts" parading as mentors in the usual circles. The appetite for risk is very low. Have a gawk at the startups funded by couple of accelerators, the same tired ideas. I have been to enough meetups to discover the lack of hustle in Australian startups. They talk a good game though.
They don't have the time to even listen or try out new products, give feedback even when requested.
I have even asked for explicit feedback and that hasn't been forthcoming. Obviously people get support from within their own groups but anyone outside it is largely ignored.
They go to listen about disruptive startups and maybe talk about it but no doing and no encouragement for the doers. They do pay a decent amount of cash to attend workshops on innnovation / disruption though.
Even the so called experts won't know a disruptive idea if it bit them in the rear. Plus you see the same "experts" parading as mentors in the usual circles. The appetite for risk is very low. Have a gawk at the startups funded by couple of accelerators, the same tired ideas. I have been to enough meetups to discover the lack of hustle in Australian startups. They talk a good game though.
I spend huge amounts of time listening to and giving feedback on new ideas and startups.
But I've come to recognise this tone... are you sure you want actual feedback, which is usually negative, or do you want people to just agree with you that your idea is awesome?
Remember, truly disruptive ideas do look unworkable to other people [1].
If you're really a "doer" and you really have a disruptive idea, then you don't need encouragement and you will get nothing but negative feedback. Your next step is to figure out how to make your idea happen on your own and prove everyone wrong.
1: http://www.paulgraham.com/swan.html
But I've come to recognise this tone... are you sure you want actual feedback, which is usually negative, or do you want people to just agree with you that your idea is awesome?
Remember, truly disruptive ideas do look unworkable to other people [1].
If you're really a "doer" and you really have a disruptive idea, then you don't need encouragement and you will get nothing but negative feedback. Your next step is to figure out how to make your idea happen on your own and prove everyone wrong.
1: http://www.paulgraham.com/swan.html
I have to say I am guilty of this. I don’t spend any time mentoring anyone and I probably should.
On the positive side I don’t both going to listen to any of the so-called experts.
On the positive side I don’t both going to listen to any of the so-called experts.
Reasons?
There are so many but here are a few:
1. Lack of real VCs. 2. Lack of non-predatory Angels. 3. Lack of a start-up culture. 4. Risk adversion from everyone especially customers. 5. Geographical distance. 6. Cultural cringe towards anything developed in Australia. 7. Time zone difference. 8. Overvalued currency. 9. Cultural obsession with real estate speculation as the way to get rich.
1. Lack of real VCs. 2. Lack of non-predatory Angels. 3. Lack of a start-up culture. 4. Risk adversion from everyone especially customers. 5. Geographical distance. 6. Cultural cringe towards anything developed in Australia. 7. Time zone difference. 8. Overvalued currency. 9. Cultural obsession with real estate speculation as the way to get rich.
> 4. Risk adversion from everyone especially customers.
Yep. In the US technology is a competitive advantage. In Australia it's a scam designed to separate idiots from their wallets.
Also experience outside Australia doesn't count. A multibillion dollar company uses your stuff on all their servers? Yeah but who in Australia?
I live in London right now. It's somewhere between the US and Australia in terms of views, with the advantage of tech, media finance and politics being in a single city.
Yep. In the US technology is a competitive advantage. In Australia it's a scam designed to separate idiots from their wallets.
Also experience outside Australia doesn't count. A multibillion dollar company uses your stuff on all their servers? Yeah but who in Australia?
I live in London right now. It's somewhere between the US and Australia in terms of views, with the advantage of tech, media finance and politics being in a single city.
I agree for the most part. I wrote a follow up post that goes into some of these issues as well. https://macropod.com/blog/funding-a-startup/
These things are hurdles, but there are hurdles everywhere you go. You trade lack of VCs here for more competition for VCs there. You trade lack of startup community here with higher dev payrates there. It's all trade offs.
Things like timezone, distance etc are only an issue if you're selling in the US only. Smart Aussie companies sell into the Europe and Asia as well.
The Aussie dollar is shit at the moment, so I don't agree with that. It's a great time to be selling in USD.
These things are hurdles, but there are hurdles everywhere you go. You trade lack of VCs here for more competition for VCs there. You trade lack of startup community here with higher dev payrates there. It's all trade offs.
Things like timezone, distance etc are only an issue if you're selling in the US only. Smart Aussie companies sell into the Europe and Asia as well.
The Aussie dollar is shit at the moment, so I don't agree with that. It's a great time to be selling in USD.
> You trade lack of VCs here for more competition for VCs there.
No, some places are just vastly better than others for certain things. Everything doesn't always just balance out as if nature forces there to be a balance.
"Everything balances out so here is equal to there" is one of the biggest lies that small towns tell their ambitious people.
https://en.wikipedia.org/wiki/Just-world_hypothesis
No, some places are just vastly better than others for certain things. Everything doesn't always just balance out as if nature forces there to be a balance.
"Everything balances out so here is equal to there" is one of the biggest lies that small towns tell their ambitious people.
https://en.wikipedia.org/wiki/Just-world_hypothesis
The A$ has certainly improved in the last year, but we went through a sustained period of the massive overvaluation. I still think the A$ is too high given our cost base - it should be below 70c.
Of course it can be done (both of us are proof of this), it is just much harder than it should be. Australia could be such a great place to build a startup with just some relatively small cultural changes. I should get more involved to make this happen :)
Of course it can be done (both of us are proof of this), it is just much harder than it should be. Australia could be such a great place to build a startup with just some relatively small cultural changes. I should get more involved to make this happen :)
I found risk aversion in Australia to be incredibly pervasive across all aspects of business. I started a boutique software company in Sydney back in '06 and was fortunate enough to have partners that weren't risk averse. That risk aversion blinds people to opportunity and when it's as pervasive as it is in Oz it's a huge, crippling disadvantage.
The sad thing is Australian are actually quite willing to take on massive risks - we just need to be willing to do this in business. We don't have to change our entire culture, just open our eyes.
Many of these points are spot on. Thankfully 8 seems to have turned around for now; with such a small local market most tech companies are exporters and this has been crippling for many. There has also been an improvement in culture in the past 10 years, but it's a slow process.
Yes 98% of my sales are exports. One positive is that people overseas seem to have a positive opinion of Australian tech so at least you don't face the same obstacles as selling within Australia. Of course even setting up a phone call is a logistic nightmare.
I have a positive opinion of Australian tech because I was one of many back in the day who learned a lot from Lions' Commentary on UNIX 6th Edition, with Source Code (https://en.wikipedia.org/wiki/Lions'_Commentary_on_UNIX_6th_...). This put the University of New South Wales on the map, and of course Australia as well.
Since then, I've noticed you've got a research institute that does a lot of wireless stuff, it or another has done some major L4 microkernels, and I happily pay Fastmail for my email service.
Since then, I've noticed you've got a research institute that does a lot of wireless stuff, it or another has done some major L4 microkernels, and I happily pay Fastmail for my email service.
Besides 5 and 7 that's everywhere pretty much apart from the US
You gotta play with the cards you're handed.
You gotta play with the cards you're handed.
Most of the same points also apply to Ireland :(
What I'm appalled in Ireland is how people are negative about it.
1 - Company bureaucracy is one of the most lightweight in Europe (make that the world) http://www.doingbusiness.org/rankings
2 - European time zone. Not bad for doing business in the US or China/Japan
3 - It is part of EU and the potential consumer market is the whole of it. Localisation may be an issue though, still, the UK is a huge market as well.
The biggest thing people lack is ambition.
1 - Company bureaucracy is one of the most lightweight in Europe (make that the world) http://www.doingbusiness.org/rankings
2 - European time zone. Not bad for doing business in the US or China/Japan
3 - It is part of EU and the potential consumer market is the whole of it. Localisation may be an issue though, still, the UK is a huge market as well.
The biggest thing people lack is ambition.
Oh please :rollseyes:
I have been running a small business here since 2006 or so. Do not get me started, yes getting a business setup is easy but the fun begins when you realize you are in for a lot of "fun" with taxes and Revenue and other bureaucracy and red tape.
The tax system actively penalizes you for starting a business by for example reducing your tax credits, removing welfare support for when things fail, and whats worse is how you get treated by state beuracrats with cushy public service jobs they view all private businesses with disdain and treat you like shit. For example Revenue ALWAYS treat every case as if you are guilty of whatever you are accused and then you have to spend time and money to prove your innocence, instead of you know running a business.
I am not negative after all this time running a business here, I am simply bitter and disillusioned. Anyone wanting to start a business here does not realize how much of their time and money will be wasted for no good reason.
I have been running a small business here since 2006 or so. Do not get me started, yes getting a business setup is easy but the fun begins when you realize you are in for a lot of "fun" with taxes and Revenue and other bureaucracy and red tape.
The tax system actively penalizes you for starting a business by for example reducing your tax credits, removing welfare support for when things fail, and whats worse is how you get treated by state beuracrats with cushy public service jobs they view all private businesses with disdain and treat you like shit. For example Revenue ALWAYS treat every case as if you are guilty of whatever you are accused and then you have to spend time and money to prove your innocence, instead of you know running a business.
I am not negative after all this time running a business here, I am simply bitter and disillusioned. Anyone wanting to start a business here does not realize how much of their time and money will be wasted for no good reason.
This is not a coincidence when you see what percentage of the Australian population is of Irish decent.
> 6. Cultural cringe towards anything developed in Australia.
This is endemic in New Zealand as well. "Hey, let's ignore this perfectly good solution in favour of asking an American!"
This is endemic in New Zealand as well. "Hey, let's ignore this perfectly good solution in favour of asking an American!"
Don't forget visas.
1. Lack of real VCs
Venture Capital, shock horror, is not the only way to raise capital. And we have extraordinarily low interest rates.
2. Lack of non-predatory Angels
What are you basing this on!
3. Lack of a startup culture
Absolute garbage. We have hundreds of startups. Hell, all of them are looking to get purchased and ruined by some huge U.S. tech giant (hi, EMC!). In Sydney alone you can go into North Sydney, Crows Nest, St Leonards or North Ryde to find them.
As the author said, they are not founded by people working or partying themselves to death (well, some are), but that doesn't mean they aren't startups.
4. Risk aversion
Startups here take risks all the time. But your view of being "risk averse" opus probably coloured by the fact that you think a business can only be a success if it's made it in 3-5 years. Australians tend to want their businesses to survive long-term, so they adjust their position on risk accordingly.
5. Geographical distance
Big deal. Plenty of Aussie startups have overseas offices. Software development startups utilise the Internet extensively.
6. Cultural cringe
Possible.
7. Time zone differences
This is only a problem for people employed outside our Timezone. You realise that a good majority of emerging South East Asian markets are close to our TZ? And if you know what you are doing you can make time zone differences work for you?
8. Over valued currency
Yeah, we're one of the few countries in the world to escape the GFC largely unscathed. Our high dollar can be an issue... Except when you realise that the U.S. Dollar and the UK dollar are far higher than our currency.
9. Real estate speculation
I hear yourain. This is a real problem in Australua, but it has little bearing on startups.
Let's look at our positives:
1. Highly educated workforce
2. Stable government
3. More relaxed culture as we have less disparity between the rich and poor than somewhere like the U.S. - often mistaken for laziness, when in fact we work just as hard and often harder than other cultures. And we have universal health care, a decent industrial relations system, reasonable welfare systems for those who are disadvantaged, a properly regulated banking sector, strong consumer laws, and lots of other things that make for living here actually pretty awesome. Heck, we're stable because we got so many things right over the past few decades.
4. Technology obsessed populace with cash to spare
5. Highly connected populace no longer concerned about technology (risk averse my arse)
We do things differently here. That makes us different, not impossible to do business with.
Venture Capital, shock horror, is not the only way to raise capital. And we have extraordinarily low interest rates.
2. Lack of non-predatory Angels
What are you basing this on!
3. Lack of a startup culture
Absolute garbage. We have hundreds of startups. Hell, all of them are looking to get purchased and ruined by some huge U.S. tech giant (hi, EMC!). In Sydney alone you can go into North Sydney, Crows Nest, St Leonards or North Ryde to find them.
As the author said, they are not founded by people working or partying themselves to death (well, some are), but that doesn't mean they aren't startups.
4. Risk aversion
Startups here take risks all the time. But your view of being "risk averse" opus probably coloured by the fact that you think a business can only be a success if it's made it in 3-5 years. Australians tend to want their businesses to survive long-term, so they adjust their position on risk accordingly.
5. Geographical distance
Big deal. Plenty of Aussie startups have overseas offices. Software development startups utilise the Internet extensively.
6. Cultural cringe
Possible.
7. Time zone differences
This is only a problem for people employed outside our Timezone. You realise that a good majority of emerging South East Asian markets are close to our TZ? And if you know what you are doing you can make time zone differences work for you?
8. Over valued currency
Yeah, we're one of the few countries in the world to escape the GFC largely unscathed. Our high dollar can be an issue... Except when you realise that the U.S. Dollar and the UK dollar are far higher than our currency.
9. Real estate speculation
I hear yourain. This is a real problem in Australua, but it has little bearing on startups.
Let's look at our positives:
1. Highly educated workforce
2. Stable government
3. More relaxed culture as we have less disparity between the rich and poor than somewhere like the U.S. - often mistaken for laziness, when in fact we work just as hard and often harder than other cultures. And we have universal health care, a decent industrial relations system, reasonable welfare systems for those who are disadvantaged, a properly regulated banking sector, strong consumer laws, and lots of other things that make for living here actually pretty awesome. Heck, we're stable because we got so many things right over the past few decades.
4. Technology obsessed populace with cash to spare
5. Highly connected populace no longer concerned about technology (risk averse my arse)
We do things differently here. That makes us different, not impossible to do business with.
You have out an awful lot of words into my mouth. Of course it is possible to build a technology company here, it is just a lot harder than it could be.
I quoted you almost word for word!
It's harder to build a company anywhere than it could be. I know, I've tried. Hats off to every startup and business person with reasonable morals everywhere.
It's harder to build a company anywhere than it could be. I know, I've tried. Hats off to every startup and business person with reasonable morals everywhere.
Once 'angel' with quite a big reputation 'brainraped' us a few weeks ago.
The environment isn't very conducive to success.
The environment isn't very conducive to success.
I am sorry to hear this. Keep trying and don't let the bastards get you down.
You mentioned in the other comment predatory angels. Did you have an experience too?
Of running into predatory "angels" then yes, but I managed to avoid getting done over by them (more by luck than skill).
The local market is very small, and still spread out. The population is half that of Spain, or the same as southern England, so if you are selling to a domestic market you need to cover the whole country. If you are selling to the rest of the world, the timezone is not great, and getting to see clients is slow and expensive. Internet access is not good and expensive.
Despite that there are success stories.
Despite that there are success stories.
The small local market is a common misconception. Australia does have 22 million inhabitants, but Australian GDP is around 1.56 trillion USD (2013, World Bank) vs 2.1 trillion for the whole of South East Asia. Which has over 600 million inhabitants. Not to mention that Australia being considerably more egalitarian than any member of ASEAN (thanks to minimum wage, non-concentration of wealth in the ruling elite, etc.), you have many more actual potential customers.
I obviously cannot give precise numbers but average basket for the e-commerce companies I worked for roughly did scale according to GDP per capita.
At the peak of the boom, RRP was 50% higher in Australia than anywhere else in the world (causing massive cross-border e-commerce, of course) and margins were and are still very good, in part due to lack of competition.
The other points brought up on the thread (such as lack of funding) are valid but globally true.
I obviously cannot give precise numbers but average basket for the e-commerce companies I worked for roughly did scale according to GDP per capita.
At the peak of the boom, RRP was 50% higher in Australia than anywhere else in the world (causing massive cross-border e-commerce, of course) and margins were and are still very good, in part due to lack of competition.
The other points brought up on the thread (such as lack of funding) are valid but globally true.
Share schemes and tax is probably a big one:
http://www.afr.com/technology/tech-startups-back-overdue-emp...
Share schemes are about to change I believe.
It's not even "when you will come to the US". It's when will you come to Silicon Valley. The rest of the US is considered inferior in S.V. from the community here. We live in a global economy. You can build your company where it suits you best. There are many quality investors all over the world. Good Luck.
I have to admit that I ended up skimming over the rest of the article after the false choice of "unicorn or nothing" that the author characterized about SV. Even limited to YC companies, what percentage are unicorns? And is every company expected to be a unicorn? The vast majority of YC companies are moderate successes or moderate failures.
The whole "there's no Australian Secret or Pets.com" really sounded like sour grapes to me. Do Texans (people from a region of similar population size and GDP to Australia) boast about their lack of spectacular technology company failures?
Why not just say, "Australia is bloody awesome, it's home, and we've decided to stay for that reason. We're living proof you can flourish as a startup in Victoria. It turns out that we decided that we didn't want to move to the Bay Area."? I'd really be interested in the details of how they actually got it to work (marketing, customer relationships, developers).
That being said, I'm very grateful that they posted a blog about it. I've found Australian companies to be fairly tight-lipped in comparison. The more exposure there is to Australian technology companies, the more opportunities for customers and investors will materialize.
The whole "there's no Australian Secret or Pets.com" really sounded like sour grapes to me. Do Texans (people from a region of similar population size and GDP to Australia) boast about their lack of spectacular technology company failures?
Why not just say, "Australia is bloody awesome, it's home, and we've decided to stay for that reason. We're living proof you can flourish as a startup in Victoria. It turns out that we decided that we didn't want to move to the Bay Area."? I'd really be interested in the details of how they actually got it to work (marketing, customer relationships, developers).
That being said, I'm very grateful that they posted a blog about it. I've found Australian companies to be fairly tight-lipped in comparison. The more exposure there is to Australian technology companies, the more opportunities for customers and investors will materialize.
One area where I hope things might be different is biotech. The markets are always global, and there is a lot of scientific talent here. The disadvantages compared to other countries is less I think just due to the nature of biotech. There are going to be big opportunities as healthcare in Asia is transformed by increasing personal wealth in China and South East Asia.
My business is technically in the biotech area and if anything biotech is worse. The problem is biotech takes long term susustained funding to succeed which Australia lacks the will to provide. We have great scientists who are incredibly inventive, but turning this opportunity into viable businesses seems beyond us. We would rather as a nation speculate in residential real estate than use our very competitive science skills.
Ah, now I know where you are coming from. Yeah, we have amazing potential around biotechnology, but the current government cut funding to the CSIRO by $111 million and scrapped the Science Ministry when they won government, then recreated it last year and put as its head Ian MacFarlane who said of Scientists who weren't happy about a lack of a dedicated Science Minister:
"But I hear it constantly from some of the precious petals, can I say, some of the precious petals in the science fraternity, and if you can’t guess, I won’t accept it.”
So I'm not surprised you don't think startup culture is great in Australia!
"But I hear it constantly from some of the precious petals, can I say, some of the precious petals in the science fraternity, and if you can’t guess, I won’t accept it.”
So I'm not surprised you don't think startup culture is great in Australia!
It is even worse than this - we have almost all the conditions (both culturally and economic) to develop one of the best startup cultures in the world, yet we let ourselves down time and time again for totally stupid reasons.
Serious question: what would we need to change to allow for startup culture to flourish in Australia? I'm genuinely interested - from your ASIN patent I can see you are developing a way of ameliorating issues in sequencing genomes. I have virtually no understanding of DNA, but from reading the first few paragraphs of your patent, it looks like you are one of Australia's innovators!
P.S. You need to fix the patent page on your website. It seems to have been lopped into two columns, and is impossible to read. Just a heads up.
P.S. You need to fix the patent page on your website. It seems to have been lopped into two columns, and is impossible to read. Just a heads up.
I actually think we don’t need to change that much as we have nearly all the things in place for creating a great startup environment. Since it is a bit long for just a post here I think will make it a blog post on personal website.
I had forgotten that the ASIN patent was even on the Nucleics website. It was being used for an old SEO experiment. I have fixed it up so at least you can read it now :)
I had forgotten that the ASIN patent was even on the Nucleics website. It was being used for an old SEO experiment. I have fixed it up so at least you can read it now :)
Ah yes, the Sydney real estate situation is horrible. It seems that the Australian government is desperate to attract investors to buy Australian property. I even started getting telemarketing calls from random people asking me to invest in their property funds. It definitely looks like a housing bubble.
I'm seriously hoping that it bursts soon, rent is just getting ridiculous.
I'm seriously hoping that it bursts soon, rent is just getting ridiculous.
As someone exposed to the Sydney real estate market it is definitely insane right now. When this bubble bursts it is going to very nasty for everyone.
As an Australian who has lived in Silicon Valley for 20+ years it’s good to hear the perspective from home. I co-founded, bootstrapped and sold my first startup to a public company. There is room to not “pursue” the unicorn model in Silicon Valley – but you need confidence in your approach. Needless to say, I am on my third startup now – and having done it “my way” I intend to continue doing it my way. Good on you and good luck — I think you’ll enjoy your life alot more doing it the way that feels right to you.
Uh, wait, does the US have a "startup visa" now?
The former conservative Prime Minister of Australia provided soldiers to invade Iraq, and in return got AUSFTA a free trade agreement which, amongst other things, created the E-3 visa just for Australians to enter the US. US Congress was told a trade deal with Australia would "strengthen the foundation of our security alliance” [Sydney Morning Herald 15/11/02]
Edit: source https://www.unisa.edu.au/Global/business/centres/cags/docs/a...
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Edit: source https://www.unisa.edu.au/Global/business/centres/cags/docs/a...
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There's the E-3 specifically for Australians, I've been told it's fairly easy to get but I am not sure how it applies to founders.
https://en.wikipedia.org/wiki/E-3_visa
https://en.wikipedia.org/wiki/E-3_visa
It does not apply to founders. I could move to the USA and take someone's job there, but it is impossible to bring my business to the USA and employee Americans and pay masses of taxes to the U.S. Government. Visas are one area where Australia leads the USA.
The E3 requires employer sponsorship and doesn't offer a ready path to a green card, so it isn't friendly to starting a company in the US. It is fairly easy to get because it has its own special quota just for Australians so they do not need to compete with immigrants from other countries as for an H1.
I know many people that have converted an E3 to a green card, the main thing I found with US immigration is that you want a good lawyer.
There's the E2 visa (http://www.quora.com/How-can-the-E2-visa-help-US-aliens-to-w...), or if you have an established company outside the US you could use the L1 visa (intra-company transfer/opening a new office).
One thing that really stands out about Australia is that tech startups here last a long time (they don't seem to ever 'run out of money'). Investors are patient and they invest cautiously; in fact, if they like your idea, they will 'keep tabs' on you and they won't invest a single dollar until you have some meaningful numbers to show them - And by numbers that means either decent revenue (yes, REVENUE) or exceptional user growth (coupled with a clear monetization plan).
That's both good and bad. It means it's very difficult for early starters to get funding in Australia, but it means that once you do get that funding, you can expect the investor to stick around. I have worked for 2 startups which had been operating on a modest loss for 5+ years - One of them had almost no growth and little potential (in my opinion), the other had modest growth but high potential. These startups don't seem to have problems raising further rounds of capital year after year.
I found that Australian startups are lean and have a low marketing budget - They tend to spend everything on the product and generally don't like hiring sales people or paying for advertising unless it gives them an immediate, measurable return - They don't spend money just to create hype.
Australian founders tend to dismiss the importance of advertising - They believe that if they put all the focus on product development, that eventually, the product will become so good that it will just blow away the competition (who have wasted all of their funding on advertising).
US startups generate a massive amount of noise in the market - Spending on advertising at the moment would just create more white-noise - You won't get a return on that. At least that's the general belief.