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.
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.
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 :)
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.
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.
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.
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.
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.
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.
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.
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.