When the smiling faces and names of Scott Farquhar, Mike Cannon-Brookes, and Mike Cannon appeared on the annual Business Review Weekly list of young rich people, some eyebrows were raised.
They did not just overtake mining magnate Nathan Tinkler, but also signaled the sudden emergence of a new Australian economy that does not involve fracking. It was a vindication of their commitment to the “ramen” economy: long nights, instant noodle soup, and low financial income for a product which might never be seen in the light.
Many Australian tech entrepreneurs were envious of Atlassian’s founders, who had “bootstrapped their way” to global competitiveness, without much outside investment or venture capital.
The Valley also eased the feeling of being far away from Silicon Valley and San Francisco. The Valley appeals to many Australians because they feel like it is a place where people understand their business. This is very different from the Gold Coast, where investors, bank managers and relatives are more likely to fund Gold Coast property than risk investing in digital technology startups.
It took Atlassian founders 10 long years to build their company up to its current prominence. This is not uncommon for enterprise software. This stamina is largely responsible for the respect that people have for the founders. There are still questions about how to best create more Atlassian here in Australia. It is hard for the government to tailor policies to the wide variety of products, markets, and sectors that make up the digital economy, aside from subsidizing ramen. Commercialisation Australia is generally seen as making the right decisions for certain sectors. However, local investors are at a disadvantage because they cannot see what the next big online store, app, or website could be.
In Australia, it is common to worry about the lack of firms on the same scale as Google or Facebook. It ignores the large number of small and mid-sized digital businesses that, in aggregate, will yield enormous returns to the Australian economy both in terms of tax revenue and employment. Google Australia is so interested in generating tech SMEs that it commissioned a PWC Report, Startup Economy. The report suggested that this sector could add up to 540,000 jobs and 4% of GDP by 2033. This is no small issue, given that many of Australia’s largest tech companies pay minimal corporate taxes.
Digital innovators with the ability to reach a market in Asia that is low-to-medium-income will have a huge opportunity. Imaged sourced from www.shutterstock.com.au
The myth of startup culture is that the best place to launch a tech company is Silicon Valley. This is because the region is renowned for its clustering, where companies trade and share information that is too specialised to write down. Silicon Valley’s appeal is due to the virtuous circle of venture capitalists, Stanford University and other x-factors. It’s no surprise that accelerator programs in the region, such as Y Combinator and Founder Institute, are attractive to Australian startups.
Is there an alternative to the current system? Singapore’s Block 71 is a warehouse-style building for startups located near the National University of Singapore. Many of these startups are able to benefit from the government’s efforts to harness the creative energy of app designers, ecommerce software developers, and finance software writers and lead Southeast Asia in these fields. Hanoi, Kuala Lumpur, and Jakarta have similar startup cultures that can tap into markets much larger than Australia. Indonesia has 240 million people, second only to the US. This will be sorted into digital needs of all kinds.
Startups in Australia could be captivated by the future. The long-term prospects for innovators are enormous despite the inevitable digital downturn, which will reduce the supply of new products and firms. The cross-party support of a renewed commitment by the government to Asian cultural and linguistic literacy may be critical in training Australians to understand and create products that are suitable for these markets.
It’s difficult for Valley companies to keep up with the changing nature of technology in Asia’s many-faceted societies. It could be a couple of Chinese students who are currently studying in Melbourne or an Australian-born Vietnamese, Indian, or Australian entrepreneur who can leverage family connections to build a fast-growing company. It is more important to encourage these new digital geographies than the California dreams that dominate the startup headlines. This could be one of the most effective ways for Australia to join the Asian Century.