Australia’s start-up culture is progressing, but critical needs remain, reports Nigel Bowen.
Not before time, Australia is starting to get serious about start-ups: the 500 Startups program is set to launch in Melbourne; the Advance Queensland initiative is generating activity in that state; the Lighthouse precinct in Sydney’s Barangaroo is launching, in addition to that city’s existing initiatives such as Stone & Chalk.
The big kick-start came in December 2015, when, in the first months of his prime ministership, Malcolm Turnbull introduced the $1.1 billion National Innovation and Science Agenda – one of his first major initiatives.
This was a great first move for the nation, say StartupAUS director Topaz Conway and former muru-D co-founder, now Lighthouse Sydney chief, Annie Parker.
Arriving from Britain to co-found the Telstra-backed start-up accelerator, muru-D, Parker keenly points out all Australia has going for it.
“The biggest thing I’ve noticed since moving here is the amount of talent. I’d thought, given there’s a smaller population here than the UK, that might not be the case but Australia absolutely punches above its weight. There are so many amazing ideas, whether it’s innovations in technology, business models or social entrepreneurship. On top of that, you’ve got ready access to south-east Asia and the Chinese market. People in other parts of the world can only dream of having that on their doorstep.”
Agreeing with Parker that “there are a lot of innovative people in Australia and a whole lot of good ideas running around”, Conway points out Australia’s ultimate competitive advantage and drawcard for international talent: lifestyle. “Look at the quality of life,” she says. “I mean, who wouldn’t want to live here?”
What Australia needs
Unfortunately, local talent and sunshine aren’t nearly enough. Parker argues that for Australia’s start-up scene to flourish it’s going to take politicians offering special treatment. And voters being far-sighted enough to back them for doing so.
“It helps if entrepreneurship is on the national agenda,” Parker says. “That happened [following Malcolm Turnbull’s ascension] almost overnight. Suddenly, it seemed legitimate for people to quit their day jobs and become entrepreneurs.”
Nonetheless, talking up entrepreneurship is just the start, despite Australia’s talent, we need more.
“The first thing the government can do is bring great talent into the country, so that Australia can have the best founders. The best talent will go to those countries where the conditions for start-ups are favourable and the conditions for investors to invest are favourable.”
But tax breaks to early-stage investors get a nod. Parker hopes such a move might avoid the need for cash-hungry Aussie entrepreneurs to decamp overseas. Securing major funding is another matter.
“It’s become easier in Australia to secure early-stage funding – that first $50,000, $150,000 or $250,000,” she notes. “The issue comes when local start-ups need a couple of million in Series A funding [a company’s first significant round of venture-capital financing]. At that point, many end up on a plane to Silicon Valley where it’s easier to get.”
In a similar vein, Conway says a greater generosity of spirit towards the nation innovators is needed. “This is one of the wealthiest nations, per capita, in the world,” she says. “It has the fourth-largest pool of managed funds in the world – an amount of money bigger than most economies. There’s lots of wealth but it’s going into property, big boats and God knows what. Very little of it goes into supporting innovation. That to me is a real problem.”
A further issue, in some ways tied to funding, is what we’re doing to encourage female innovators and entrepreneurs launch start-ups. Both Conway and Parker say particular support is needed there.
“If you’re a great founder solving a real-word problem and your solution is excellent you will find funding,” Parker says. “I don’t think it makes a huge difference whether you’re male or female going into the room [to pitch investors]. Where the issue lies is that a lot of women count themselves out of the race before they even tried. That means we need to support female entrepreneurs to give them the confidence to get in the room in the first place.”
Conway, who is also chair of Springboard Enterprises, a network dedicated to building female-led tech companies, takes a less rosy view, arguing “the standards women are judged on as entrepreneurs are different to those men are judged on”. While supporting moves to change investors’ mindsets she also points out women need to change their own mindsets.
“Men don’t question using other people’s money – and potentially wasting it – to try to build a big company. Women are prone to not asking for enough money and being under-funded. Under-funded companies end up failing. People like me are trying to change both sides of the [mindset] equation.”