9 ms·

Why being an Aussie startup sucks

72 points by aqrashik 15y ago

wisty 15y ago
Have you tried a non-local bank with Aussie branches, or just the Big Four? HSBC is pretty big, and has a fair few Aussie branches. Though maybe it's a subsidiary, not a branch. There's also Barclays Capital - I've heard of them so they must be big. If you go to http://en.wikipedia.org/wiki/List_of_banks_in_Australia http://en.wikipedia.org/wiki/List_of_banks_in_Australia, there's quite a few subsidiaries and branches of foreign banks.
- kokey 15y ago
  Banks like HSBC may seem and claim to help you between countries, but this is rarely the case. The problem is regulations, they really do operate in regional silos except perhaps on advice (and where the profits go). For example my HSBC account in the UK doesn't help me in opening an account in the US, even if I just moved to the US. It also doesn't speed things up when I want to transfer money to an HSBC account in Hong Kong.
  - jarek 15y ago
    HSBC has a somewhat-premium Advance service that specifically claims to help opening accounts when you move countries and move money and banking history. Was that what you were using in the UK? (That being said, apparently HSBC in the USA isn't all that great in general.) Perhaps their commercial/merchant banking can do similar things?
  - goatforce5 15y ago
    Citibank branches around the world really go out of their way to help you when you appear on their doorstep with a Citibank account from another country. My Citibank UK account absolutely helped in opening a Citibank US account. I also seem to recall it was quicker and/or cheaper to transfer money internationally between Citibank accounts.
alfiejohn_ 15y ago
Hey Alan :) What's the minimum requirements of setting up a shell Delaware LLC? Surely citizenship wouldn't be one of them.
- brianbreslin 15y ago
  He can find a us lawyer on elance to set him up and advise him on all this. Get a us tax record etc. He will want to talk to a us tax specialist too. I know both if he wants referrals
- ebaysucks 15y ago
  I looked into setting up a Delaware parent holding for my Startup Chile startup as I wanted to use Stripe. What stopped me was the need for an American social security number. To be clear: This is what the Stripe signup required, I can only assume they need it for all the merchant account magic they do.
  - BenSS 15y ago
    Buddy up with someone from HN? I'm now curious as to the logistics of having someone in the US setting up an LLC (only takes a couple weeks at most) for overseas operations.
    - furyg3 15y ago
      The person with the US SSN has to be listed as an owner of the company. So some (relatively large) degree of trust is involved...
      - ericabiz 15y ago
        Yes, and there is substantial risk for the American involved too. If listed as an owner, you're the one who gets served if the corporation gets sued in the US. So it's never as easy as "find an American and get paid", unfortunately.
  - blackiron 15y ago
joelhaasnoot 15y ago
Seeing as this article is from 2010, looks like Chargify now has "eWay" listed as a payment gateway. http://chargify.com/payment-gateways/ http://chargify.com/payment-gateways/ Being a European company, just looked at Chargify, and Quickpay is the gateway that looks like it supports all of EU. Going there, it looks like I need an acquirer for my gateway. So you're telling me that I need an acquirer to get the payments, a payment gateway for the credit cards, and Chargify to manage recurring billing? Kill me now, please. If anyone has an article on EU credit cards basics, please let me know.
- Luc 15y ago
  Outsource it? http://swreg.org/ http://swreg.org/ is what I use.
- thibaut_barrere 15y ago
  In case it helps, although it's not on Chargify: I'm going to launch a SAAS product (https://www.wisecashhq.com https://www.wisecashhq.com) and will use Recurly. They advised to join WireCard, which we did. Basically, WireCard does the acquisition, payment gateway and provide a merchant account as well, as part of a single pack; which means I "only" subscribe to Recurly + WireCard. I can acquire money in $ (we will only use $ first) despite being a french company, and my merchant account there will be in €. Be sure to check out the way Recurly handles VAT too: blog.recurly.com/2010/09/recurly-now-features-vat-support/ Hope this helps!
pitdesi 15y ago
Quick thoughts - Here's an ebook that might help folks understand the gateway/processor dynamic: http://feefighters.com/ebooks/what-is-credit-card-processing?force_download=true http://feefighters.com/ebooks/what-is-credit-card-processing... (written with US audience in mind, but most of it holds true worldwide) To get a US merchant account, you need a US Tax ID/Bank account (acquirable with Delaware company) AND a US Social Security number for someone who has ownership in the company. Unfortunately that is the minimum that underwriters will accept... AFAIK you need the same stuff with Stripe, Samurai, and Braintree. One thing to realize is that for us startups serving startups, we would love to do the rest of the world but there are a bunch of complications that come with doing so (timezones, currencies, partners, taxes). We (http://samurai.feefighters.com http://samurai.feefighters.com) hope to be in Australia in the near future. If interested in Samurai for Europe or Australia, give us your email address here: https://docs.google.com/a/transfs.com/spreadsheet/embeddedform?formkey=dDZrMVI1YVVGT0NhSmpQbl80Q0o5Z2c6MQ&ndplr=1 https://docs.google.com/a/transfs.com/spreadsheet/embeddedfo... If interested in Canada, use this form: https://docs.google.com/a/transfs.com/spreadsheet/embeddedform?formkey=dGh0bHdEMlZ1cVZsbE50djhVbjlHN2c6MQ https://docs.google.com/a/transfs.com/spreadsheet/embeddedfo... As for the beaches, I hope to find out soon :)
- nirvana 15y ago
  How is a foreign corporation, setting up a US corporation, going to have a social security number for an owner of the corporation, if none of the owners are US citizens? Is this really a requirement of the underwriters, or the IRS? I remember looking at an EIN form once and seeing that it required a SSN in order to get an EIN. But of course, someone whose never lived in the USA would not have an SSN. This would seem to imply that the USA is only open for business to US Citizens. You need an EIN to do anything that might be taxable in america, but you can't get one unless you have an SSN.
  - rprasad 15y ago
    You would get a TIN (taxpayer identification number), which is essentially an SSN or EIN for foreign taxpayers.
gpambrozio 15y ago
Try being in Brazil then... All of these hurdles, plus the craziest tax laws in the world. It's almost like a Kafka story trying to run a business here.
cubicle67 15y ago
ha! this is exactly where we are now we're in the process of getting a merchant account going but it's a long drawn out pain. We're using eWay for the gateway as I've used them in the past and they've been fantastic. The bank, however, is having a hell of a job getting it's head around the idea that we want to sell a service over the internet (we're building a saas product). last call from the bank was yesterday when they decided they wanted full login and usage rights to our app (so they could verify it?) - kind of hard when it's not built yet. We seem to be in a bit of a chicken/egg situation where we have to actually launch before they'll let us receive payments... Prior to that they wanted revenue history for the last few years! agh! Luckily we anticipated this taking so long which is why we started the ball rolling months ago. tl;dr: use eWay
josephcooney 15y ago
Why being an aussie start-up doesn't suck - two words - health insurance. The public health system provides for much, and as a private citizen for a few hundred dollars a month I can get coverage for elective things. I'm not faced with a decision like 'shit, if I quit my job at bigco and go and do this startup thing and then get sick will I be putting my life at risk?'
- Shivetya 15y ago
  Yet many young people in no way require the amount of health coverage older people do. Why should they be forced to buy into something they don't need? Each year we go through our health care presentations we have numerous people asking to opt out but they aren't allowed. Yes it weighs on the minds of many, but not all. I am all the more willing to pay as you go on my health care but I would prefer to see reasonable coverage for catastrophic care which is what really becomes expensive.
  - run4yourlives 15y ago
    The whole point of health insurance - nay, insurance in general - is the idea that the well fund the sick in part, because being sick costs so much money. If all the young healthy people opted out, you'd have pools full of old sick people, and rates would be so bad, there wound't be much of a point. With insurance, you need a large element of people that are essentially paying into the service for no benefit in order to insure the risk. That's the whole idea.
    - anamax 15y ago
      > The whole point of health insurance - nay, insurance in general - is the idea that the well fund the sick in part, because being sick costs so much money. Actually, no. The idea of insurance is that you pay a slight premium over your expected costs in order to avoid getting hit by variance. (The slight premium is to pay transaction costs.) Healthy people paying for sick people is subsidy, even if you hide the subsidy behind the label "insurance". Being "older", I'm all for today's young people subsidizing older people. I wonder if the next group of young people will feel like subsidizing the current group when the current group gets old, but that's not my problem.
damncabbage 15y ago
<Redacted> is Westpac[1], I'm guessing. [1] http://www.westpac.com.au/business-banking/international-trade/cashflow/foreign-currency-account/ http://www.westpac.com.au/business-banking/international-tra...
- daemin 15y ago
  I was going to say NAB, since they offer a multi-currency account that is quite expensive and onerous to acquire.
lukejduncan 15y ago
How is it possible that a bank can request you remove a blog post?
- morgo 15y ago
  There are very few banks. The poster is clearly upset with his, but if they refuse to do business, he will have even fewer options.
inkaudio 15y ago
Perhaps Envato my can help, that's the company behind themeforest, audiojungle and the whole tuts network of sites. They may be able to provide suggestions, there are an Aussie based startup who are profitable, have experience (been in business for 5 years) and they only sell digital based products and subscriptions.
justinj 15y ago
they may be ahead with startups, but jesus, the banking system. they're still using checks [sic] over here. Can you believe that? it's 2011.
- kuhn 15y ago
  My co-founder and I were just bitching about that this morning. It's unreasonably difficult to send money to people in the land of capitalism... Even worse is most of the 'innovation' in the banking sector seems to be pointed at making old systems less painful (e.g. cashing checks via MMS etc.). Why not just eliminate them altogether? Major opportunity for disruption if you can overcome some pretty deep and wide moats.
  - daemin 15y ago
    Isn't that what PayPal set out to do, where you could send anyone money just over email? Conversely I was thinking that Australia needs some sort of integrated Merchant Account/Payment Gateway system company, much like Stripe.
cletus 15y ago
I'm an Australian but I currently work in New York. From my perspective, a startup in Australia has many hurdles: 1. The cost of living. Seriously, Australia is an incredibly expensive place to live now. I'm from Perth and I'd say that overall it's cheaper for me to live in _Manhattan_ than Perth now. MANHATTAN. Actually, same for same rent-wise, Perth is still cheaper but Manhattan has options Perth doesn't (like saving money by living in a walk-up); 2. Virtually no VC and startup community; and 3. Depending on your industry, you will find very consumer-friendly legislation that is actually a problem for small companies to comply with, particularly in the finance space (and within that space, particularly dispensing anything that could be construed as "financial advice"). The US has gotten worse about this in the last decade with SOX and other reactionary legislation but it's still better. Put it this way: I don't think something like Mint could ever be done in Australia. Now Australia's fortunes rise and fall with China's so the boom industries are mining and construction. If you can think of something to sell to these industries, you could make a lot of money. But why do it in Australia? The strong Australian dollar makes it more attractive to do it elsewhere. Sure health insurance is an issue but you can buy that in the US and even if it's hundreds of dollars a month (IMHO) you're better off overall.
- lancewiggs 15y ago
  Perth is not Australia - it's not the East Coast. Perth and WA is comparatively moribund for start-ups, and years behind when it comes to adoption. They still have thick sections of classified advertisements there in the newspapers, and the dominant marketplace is a weekly classifieds newspaper - Quokka. Meanwhile, as you say, the economy market is overheated with the mining boom. But there is some great stuff happening in Sydney and Melbourne, and some awesome things happening across in New Zealand. Auckland and Wellington are closer to Sydney than Perth - and a lot more advanced.
  - rdouble 15y ago
    I was in Melbourne for 3 months this year and enjoyed it, but it was shockingly expensive. Groceries are 2x the cost of NYC, clothing is 3x. If you drive, fuel is 6x. Housing is about the same. From what I know, Sydney is even more expensive. If this list is to be believed, all major cities in Australia are more expensive than NYC, which is about the most expensive place in the USA. http://www.citymayors.com/features/cost_survey.html http://www.citymayors.com/features/cost_survey.html As to your first point, I traveled extensively in Australia. To an outsider, Perth is more culturally similar to the rest of the country than Sydney is. :P
mgkimsal 15y ago
This may seem a bit naive, but given how many people complain about banking services in non-US countries, specifically as it related to merchant accounts and SaaS offerings, isn't there a business to be made solving that problem for those people? Couple issues I can see: 1. Maybe it's that the market is too small, but if you made it easier, I'd bet you'd have more customers. 2. Working within the legal/financial systems in those countries may be too difficult???
- dasil003 15y ago
  It could be an interesting venture, but I think very capital intensive, and extremely risky. Not only do you have widely varying government bureaucracies to navigate in each country, but you also have the credit card companies and banks trying to kill you at every turn. You could build a very promising business and then by killed by legislation at the stroke of a pen because you were out-lobbied by the powers that be. That's not to say it couldn't be done, but I think you'd want to start with deep connections in at least one country and build a viable business there first before attempting to move to multiple countries.
  - mgkimsal 15y ago
    I was, perhaps, a bit unclear. I was meaning specifically different ventures to operate specifically in one country and offer deep expertise and service in that one country only. The OP was about Australia. I suspect there's some legislation which makes is hard for viable competition to get established, but I can't imagine it's totally impossible. Once a more customer-oriented cc gateway/merchant vendor was operable, it would provide some competition to the established players.
katiepatrick 15y ago
Australia has low self esteem and a 'you'll never make it' attitude which is pervasive. There is little consciousness within employees of the concept of 'equity' which can often be replied with 'I don't work for 'free'' - or even for for 'less'. It took us 3 months to set our our facility using chargify which was fuct - whatever. But now it works and it is awesome. I moved to the bay area from Australia for the knowledge hub and to find hackers who are also environmentalists (who seem to be as rare as hens teeth). The amount I have learned technically in a short period of time has been profound. I can never go back to Australia. It feels like a ball chain has been removed now I am in an environment that cultivates, even reveres nerdy freaks and dreamers.
saturn 15y ago
Nice article, I guess, but overly complex; it really is a very simple set of reasons. Here goes: 1. There is a large startup community in the US 2. Many people interested in startups already went to the US because of (1) 3. The barrier to moving to the US because of (1) is far lower than trying to recreate the environment locally 4. This is a strongly self-reinforcing phenomenon Wash, rinse, repeat. You can say the exact same thing for films and music. Spoken as an Australian who is likely moving to NYC in the coming months. The startup environment just does not exist in AU. I have the petri dish, I have the bacteria, what I need now is agar, and there is precious little to be found down under.
podperson 15y ago
I'm also an Aussie living in the US and agree wholeheartedly with the title. The article focuses on "tyranny of distance" issues which I agree are a serious pain. Another problem in Australia is that the entire investment community is focused on sucking on the government teat* and tax minimization. I was involved in meetings with Australian "VCs" that were far more concerned with how they'd write off the loss from their investment than actually delivering a successful product. * The Australian government has a terrible habit of trying to "pick winners" and invest in projects directly. A classic example of this was a huge fund created in the early 90s to fund "multimedia" development. This probably did more to kill the Australian "multimedia" industry than any other single act. Also in the mid-80s the government at the time came up with a well-intentioned but retarded idea of encouraging research by offering >100% tax write-offs for R&D expenditure. This is a classic example of paying peanuts and getting monkeys -- most companies simply figured out tricks to reclassify stuff they already did, like photocopying, as R&D.
kuhn 15y ago
Suggest all Aussie startups check out http://www.startmate.com.au/ http://www.startmate.com.au/ they're doing heaps to build the startup community back in Oz as well as forming strong ties to the US. They've just opened their 2011 intake. Startmate was a massive help to us at Chorus (http://www.getchorus.com http://www.getchorus.com). With their help we launched our product and successfully flipped our company up to the US. Today we're operating out of Mountain View, CA.
Trindaz 15y ago
In Australia we build companies so that we don't have to work for someone else, and we scoff at big ideas. In the US we build companies to change the world, and we scoff at small ideas. (from an Aussie who recently made the move to Silicon Valley)
jacoblyles 15y ago
Recently I discovered that there is a US work visa specifically for Australians (the E-3). Unlike the H1-B, the E-3 cap of 10,000 per year has never run out. Also, E-3 applications go under less scrutiny and are more likely to be approved and are generally approved quicker. It's worth thinking about if you are an Australian programmer interested in working for a US startup.
- benkant 15y ago
  Thanks for pointing that out. I figured there was some sort of visa concession as a result of the FTA but didn't know what it was. You made my day.
acangiano 15y ago
Generally you can replace "Aussie" with "Non-US based".
kim-pushstart 15y ago
- The lack of payment gateway options in Australia sucks - CORRECT - There is no startup community in Australia - INCORRECT ------ There is a massive amount of community activity for those who care to look for it. Here are just a few examples - PushStart - http://www.pushstart.com.au http://www.pushstart.com.au - StartMate - http://www.startmate.com.au http://www.startmate.com.au (NB: Alan, the OP, is cofounder of http://www.bugherd.com http://www.bugherd.com which went through StartMate's first Sydney program and is doing incredibly well) - Fishburners - http://www.fishburners.org/ http://www.fishburners.org/ - AngelCube - http://www.angelcube.com http://www.angelcube.com - Startup Weekends (here's the next Melbourne one) - http://melbourne.startupweekend.org/ http://melbourne.startupweekend.org/ - Silicon Beach Google Group - http://groups.google.com/group/silicon-beach-australia/ http://groups.google.com/group/silicon-beach-australia/ - Sydney Tech Startup Meetup (Open Coffee) - http://www.meetup.com/open-coffee-sydney/ http://www.meetup.com/open-coffee-sydney/ ...or just sign up to The Fetch (http://thefetch.org/ http://thefetch.org/) or Sydney Startup Digest (http://startupdigest.com/2011/05/24/sydney-startup-events-2/ http://startupdigest.com/2011/05/24/sydney-startup-events-2/) From a funding point of view you have more and more angel / super-angel sized investment $$$ coming online all the time. There's also an ever increasing amount of large scale investment into top Aussie startups from leading Valley firms. This has led to a good number of successful startups and more that continue to be started everyday. I could keep going on but I won't... :) The point is, let's not get confused. The post is about a specific issue with being a non-US based startup not about the Aussie startup community as a whole.
- justinj 15y ago
  Kim - he's clearly a jaded west-coaster.
  - toast76 15y ago
    I'm from Melbourne :P
- chrisrickard 15y ago
  Yup - totally agree kim. plus it seems like the startup culture in Melbourne alone on the rise
teflonhook 15y ago
1) You can do subscriptions with Paypal 2) Moneybookers is an alternative which is easier to set up and cheaper When you get big you can use someone like GlobalCollect or Cybersource.
teflonhook 15y ago
Being an Australian startup early on is great because there's a number of programs to get easy cash, including AusIndustry CommercialReady which can get you a CPI-indexed loan for $1-2m.

72 points by aqrashik 15y ago

wisty 15y ago

Have you tried a non-local bank with Aussie branches, or just the Big Four? HSBC is pretty big, and has a fair few Aussie branches. Though maybe it's a subsidiary, not a branch. There's also Barclays Capital - I've heard of them so they must be big. If you go to http://en.wikipedia.org/wiki/List_of_banks_in_Australia http://en.wikipedia.org/wiki/List_of_banks_in_Australia, there's quite a few subsidiaries and branches of foreign banks.

kokey 15y ago
Banks like HSBC may seem and claim to help you between countries, but this is rarely the case. The problem is regulations, they really do operate in regional silos except perhaps on advice (and where the profits go). For example my HSBC account in the UK doesn't help me in opening an account in the US, even if I just moved to the US. It also doesn't speed things up when I want to transfer money to an HSBC account in Hong Kong.
- jarek 15y ago
  HSBC has a somewhat-premium Advance service that specifically claims to help opening accounts when you move countries and move money and banking history. Was that what you were using in the UK? (That being said, apparently HSBC in the USA isn't all that great in general.) Perhaps their commercial/merchant banking can do similar things?
- goatforce5 15y ago
  Citibank branches around the world really go out of their way to help you when you appear on their doorstep with a Citibank account from another country. My Citibank UK account absolutely helped in opening a Citibank US account. I also seem to recall it was quicker and/or cheaper to transfer money internationally between Citibank accounts.

alfiejohn_ 15y ago

Hey Alan :) What's the minimum requirements of setting up a shell Delaware LLC? Surely citizenship wouldn't be one of them.

brianbreslin 15y ago
He can find a us lawyer on elance to set him up and advise him on all this. Get a us tax record etc. He will want to talk to a us tax specialist too. I know both if he wants referrals
ebaysucks 15y ago
I looked into setting up a Delaware parent holding for my Startup Chile startup as I wanted to use Stripe. What stopped me was the need for an American social security number. To be clear: This is what the Stripe signup required, I can only assume they need it for all the merchant account magic they do.
- BenSS 15y ago
  Buddy up with someone from HN? I'm now curious as to the logistics of having someone in the US setting up an LLC (only takes a couple weeks at most) for overseas operations.
  - furyg3 15y ago
    The person with the US SSN has to be listed as an owner of the company. So some (relatively large) degree of trust is involved...
    - ericabiz 15y ago
      Yes, and there is substantial risk for the American involved too. If listed as an owner, you're the one who gets served if the corporation gets sued in the US. So it's never as easy as "find an American and get paid", unfortunately.
- blackiron 15y ago

joelhaasnoot 15y ago

Seeing as this article is from 2010, looks like Chargify now has "eWay" listed as a payment gateway. http://chargify.com/payment-gateways/ http://chargify.com/payment-gateways/ Being a European company, just looked at Chargify, and Quickpay is the gateway that looks like it supports all of EU. Going there, it looks like I need an acquirer for my gateway. So you're telling me that I need an acquirer to get the payments, a payment gateway for the credit cards, and Chargify to manage recurring billing? Kill me now, please. If anyone has an article on EU credit cards basics, please let me know.

Luc 15y ago
Outsource it? http://swreg.org/ http://swreg.org/ is what I use.
thibaut_barrere 15y ago
In case it helps, although it's not on Chargify: I'm going to launch a SAAS product (https://www.wisecashhq.com https://www.wisecashhq.com) and will use Recurly. They advised to join WireCard, which we did. Basically, WireCard does the acquisition, payment gateway and provide a merchant account as well, as part of a single pack; which means I "only" subscribe to Recurly + WireCard. I can acquire money in $ (we will only use $ first) despite being a french company, and my merchant account there will be in €. Be sure to check out the way Recurly handles VAT too: blog.recurly.com/2010/09/recurly-now-features-vat-support/ Hope this helps!

pitdesi 15y ago

Quick thoughts - Here's an ebook that might help folks understand the gateway/processor dynamic: http://feefighters.com/ebooks/what-is-credit-card-processing?force_download=true http://feefighters.com/ebooks/what-is-credit-card-processing... (written with US audience in mind, but most of it holds true worldwide) To get a US merchant account, you need a US Tax ID/Bank account (acquirable with Delaware company) AND a US Social Security number for someone who has ownership in the company. Unfortunately that is the minimum that underwriters will accept... AFAIK you need the same stuff with Stripe, Samurai, and Braintree. One thing to realize is that for us startups serving startups, we would love to do the rest of the world but there are a bunch of complications that come with doing so (timezones, currencies, partners, taxes). We (http://samurai.feefighters.com http://samurai.feefighters.com) hope to be in Australia in the near future. If interested in Samurai for Europe or Australia, give us your email address here: https://docs.google.com/a/transfs.com/spreadsheet/embeddedform?formkey=dDZrMVI1YVVGT0NhSmpQbl80Q0o5Z2c6MQ&ndplr=1 https://docs.google.com/a/transfs.com/spreadsheet/embeddedfo... If interested in Canada, use this form: https://docs.google.com/a/transfs.com/spreadsheet/embeddedform?formkey=dGh0bHdEMlZ1cVZsbE50djhVbjlHN2c6MQ https://docs.google.com/a/transfs.com/spreadsheet/embeddedfo... As for the beaches, I hope to find out soon :)

nirvana 15y ago
How is a foreign corporation, setting up a US corporation, going to have a social security number for an owner of the corporation, if none of the owners are US citizens? Is this really a requirement of the underwriters, or the IRS? I remember looking at an EIN form once and seeing that it required a SSN in order to get an EIN. But of course, someone whose never lived in the USA would not have an SSN. This would seem to imply that the USA is only open for business to US Citizens. You need an EIN to do anything that might be taxable in america, but you can't get one unless you have an SSN.
- rprasad 15y ago
  You would get a TIN (taxpayer identification number), which is essentially an SSN or EIN for foreign taxpayers.

gpambrozio 15y ago

Try being in Brazil then... All of these hurdles, plus the craziest tax laws in the world. It's almost like a Kafka story trying to run a business here.

cubicle67 15y ago

ha! this is exactly where we are now we're in the process of getting a merchant account going but it's a long drawn out pain. We're using eWay for the gateway as I've used them in the past and they've been fantastic. The bank, however, is having a hell of a job getting it's head around the idea that we want to sell a service over the internet (we're building a saas product). last call from the bank was yesterday when they decided they wanted full login and usage rights to our app (so they could verify it?) - kind of hard when it's not built yet. We seem to be in a bit of a chicken/egg situation where we have to actually launch before they'll let us receive payments... Prior to that they wanted revenue history for the last few years! agh! Luckily we anticipated this taking so long which is why we started the ball rolling months ago. tl;dr: use eWay

josephcooney 15y ago

Why being an aussie start-up doesn't suck - two words - health insurance. The public health system provides for much, and as a private citizen for a few hundred dollars a month I can get coverage for elective things. I'm not faced with a decision like 'shit, if I quit my job at bigco and go and do this startup thing and then get sick will I be putting my life at risk?'

Shivetya 15y ago
Yet many young people in no way require the amount of health coverage older people do. Why should they be forced to buy into something they don't need? Each year we go through our health care presentations we have numerous people asking to opt out but they aren't allowed. Yes it weighs on the minds of many, but not all. I am all the more willing to pay as you go on my health care but I would prefer to see reasonable coverage for catastrophic care which is what really becomes expensive.
- run4yourlives 15y ago
  The whole point of health insurance - nay, insurance in general - is the idea that the well fund the sick in part, because being sick costs so much money. If all the young healthy people opted out, you'd have pools full of old sick people, and rates would be so bad, there wound't be much of a point. With insurance, you need a large element of people that are essentially paying into the service for no benefit in order to insure the risk. That's the whole idea.
  - anamax 15y ago
    > The whole point of health insurance - nay, insurance in general - is the idea that the well fund the sick in part, because being sick costs so much money. Actually, no. The idea of insurance is that you pay a slight premium over your expected costs in order to avoid getting hit by variance. (The slight premium is to pay transaction costs.) Healthy people paying for sick people is subsidy, even if you hide the subsidy behind the label "insurance". Being "older", I'm all for today's young people subsidizing older people. I wonder if the next group of young people will feel like subsidizing the current group when the current group gets old, but that's not my problem.

damncabbage 15y ago

<Redacted> is Westpac[1], I'm guessing. [1] http://www.westpac.com.au/business-banking/international-trade/cashflow/foreign-currency-account/ http://www.westpac.com.au/business-banking/international-tra...

daemin 15y ago
I was going to say NAB, since they offer a multi-currency account that is quite expensive and onerous to acquire.

lukejduncan 15y ago

How is it possible that a bank can request you remove a blog post?

morgo 15y ago
There are very few banks. The poster is clearly upset with his, but if they refuse to do business, he will have even fewer options.

inkaudio 15y ago

Perhaps Envato my can help, that's the company behind themeforest, audiojungle and the whole tuts network of sites. They may be able to provide suggestions, there are an Aussie based startup who are profitable, have experience (been in business for 5 years) and they only sell digital based products and subscriptions.

justinj 15y ago

they may be ahead with startups, but jesus, the banking system. they're still using checks [sic] over here. Can you believe that? it's 2011.

kuhn 15y ago
My co-founder and I were just bitching about that this morning. It's unreasonably difficult to send money to people in the land of capitalism... Even worse is most of the 'innovation' in the banking sector seems to be pointed at making old systems less painful (e.g. cashing checks via MMS etc.). Why not just eliminate them altogether? Major opportunity for disruption if you can overcome some pretty deep and wide moats.
- daemin 15y ago
  Isn't that what PayPal set out to do, where you could send anyone money just over email? Conversely I was thinking that Australia needs some sort of integrated Merchant Account/Payment Gateway system company, much like Stripe.

cletus 15y ago

I'm an Australian but I currently work in New York. From my perspective, a startup in Australia has many hurdles: 1. The cost of living. Seriously, Australia is an incredibly expensive place to live now. I'm from Perth and I'd say that overall it's cheaper for me to live in _Manhattan_ than Perth now. MANHATTAN. Actually, same for same rent-wise, Perth is still cheaper but Manhattan has options Perth doesn't (like saving money by living in a walk-up); 2. Virtually no VC and startup community; and 3. Depending on your industry, you will find very consumer-friendly legislation that is actually a problem for small companies to comply with, particularly in the finance space (and within that space, particularly dispensing anything that could be construed as "financial advice"). The US has gotten worse about this in the last decade with SOX and other reactionary legislation but it's still better. Put it this way: I don't think something like Mint could ever be done in Australia. Now Australia's fortunes rise and fall with China's so the boom industries are mining and construction. If you can think of something to sell to these industries, you could make a lot of money. But why do it in Australia? The strong Australian dollar makes it more attractive to do it elsewhere. Sure health insurance is an issue but you can buy that in the US and even if it's hundreds of dollars a month (IMHO) you're better off overall.

lancewiggs 15y ago
Perth is not Australia - it's not the East Coast. Perth and WA is comparatively moribund for start-ups, and years behind when it comes to adoption. They still have thick sections of classified advertisements there in the newspapers, and the dominant marketplace is a weekly classifieds newspaper - Quokka. Meanwhile, as you say, the economy market is overheated with the mining boom. But there is some great stuff happening in Sydney and Melbourne, and some awesome things happening across in New Zealand. Auckland and Wellington are closer to Sydney than Perth - and a lot more advanced.
- rdouble 15y ago
  I was in Melbourne for 3 months this year and enjoyed it, but it was shockingly expensive. Groceries are 2x the cost of NYC, clothing is 3x. If you drive, fuel is 6x. Housing is about the same. From what I know, Sydney is even more expensive. If this list is to be believed, all major cities in Australia are more expensive than NYC, which is about the most expensive place in the USA. http://www.citymayors.com/features/cost_survey.html http://www.citymayors.com/features/cost_survey.html As to your first point, I traveled extensively in Australia. To an outsider, Perth is more culturally similar to the rest of the country than Sydney is. :P

mgkimsal 15y ago

This may seem a bit naive, but given how many people complain about banking services in non-US countries, specifically as it related to merchant accounts and SaaS offerings, isn't there a business to be made solving that problem for those people? Couple issues I can see: 1. Maybe it's that the market is too small, but if you made it easier, I'd bet you'd have more customers. 2. Working within the legal/financial systems in those countries may be too difficult???

dasil003 15y ago
It could be an interesting venture, but I think very capital intensive, and extremely risky. Not only do you have widely varying government bureaucracies to navigate in each country, but you also have the credit card companies and banks trying to kill you at every turn. You could build a very promising business and then by killed by legislation at the stroke of a pen because you were out-lobbied by the powers that be. That's not to say it couldn't be done, but I think you'd want to start with deep connections in at least one country and build a viable business there first before attempting to move to multiple countries.
- mgkimsal 15y ago
  I was, perhaps, a bit unclear. I was meaning specifically different ventures to operate specifically in one country and offer deep expertise and service in that one country only. The OP was about Australia. I suspect there's some legislation which makes is hard for viable competition to get established, but I can't imagine it's totally impossible. Once a more customer-oriented cc gateway/merchant vendor was operable, it would provide some competition to the established players.

katiepatrick 15y ago

Australia has low self esteem and a 'you'll never make it' attitude which is pervasive. There is little consciousness within employees of the concept of 'equity' which can often be replied with 'I don't work for 'free'' - or even for for 'less'. It took us 3 months to set our our facility using chargify which was fuct - whatever. But now it works and it is awesome. I moved to the bay area from Australia for the knowledge hub and to find hackers who are also environmentalists (who seem to be as rare as hens teeth). The amount I have learned technically in a short period of time has been profound. I can never go back to Australia. It feels like a ball chain has been removed now I am in an environment that cultivates, even reveres nerdy freaks and dreamers.

saturn 15y ago

Nice article, I guess, but overly complex; it really is a very simple set of reasons. Here goes: 1. There is a large startup community in the US 2. Many people interested in startups already went to the US because of (1) 3. The barrier to moving to the US because of (1) is far lower than trying to recreate the environment locally 4. This is a strongly self-reinforcing phenomenon Wash, rinse, repeat. You can say the exact same thing for films and music. Spoken as an Australian who is likely moving to NYC in the coming months. The startup environment just does not exist in AU. I have the petri dish, I have the bacteria, what I need now is agar, and there is precious little to be found down under.

podperson 15y ago

I'm also an Aussie living in the US and agree wholeheartedly with the title. The article focuses on "tyranny of distance" issues which I agree are a serious pain. Another problem in Australia is that the entire investment community is focused on sucking on the government teat* and tax minimization. I was involved in meetings with Australian "VCs" that were far more concerned with how they'd write off the loss from their investment than actually delivering a successful product. * The Australian government has a terrible habit of trying to "pick winners" and invest in projects directly. A classic example of this was a huge fund created in the early 90s to fund "multimedia" development. This probably did more to kill the Australian "multimedia" industry than any other single act. Also in the mid-80s the government at the time came up with a well-intentioned but retarded idea of encouraging research by offering >100% tax write-offs for R&D expenditure. This is a classic example of paying peanuts and getting monkeys -- most companies simply figured out tricks to reclassify stuff they already did, like photocopying, as R&D.

kuhn 15y ago

Suggest all Aussie startups check out http://www.startmate.com.au/ http://www.startmate.com.au/ they're doing heaps to build the startup community back in Oz as well as forming strong ties to the US. They've just opened their 2011 intake. Startmate was a massive help to us at Chorus (http://www.getchorus.com http://www.getchorus.com). With their help we launched our product and successfully flipped our company up to the US. Today we're operating out of Mountain View, CA.

Trindaz 15y ago

In Australia we build companies so that we don't have to work for someone else, and we scoff at big ideas. In the US we build companies to change the world, and we scoff at small ideas. (from an Aussie who recently made the move to Silicon Valley)

jacoblyles 15y ago

Recently I discovered that there is a US work visa specifically for Australians (the E-3). Unlike the H1-B, the E-3 cap of 10,000 per year has never run out. Also, E-3 applications go under less scrutiny and are more likely to be approved and are generally approved quicker. It's worth thinking about if you are an Australian programmer interested in working for a US startup.

benkant 15y ago
Thanks for pointing that out. I figured there was some sort of visa concession as a result of the FTA but didn't know what it was. You made my day.

acangiano 15y ago

Generally you can replace "Aussie" with "Non-US based".

kim-pushstart 15y ago

- The lack of payment gateway options in Australia sucks - CORRECT - There is no startup community in Australia - INCORRECT ------ There is a massive amount of community activity for those who care to look for it. Here are just a few examples - PushStart - http://www.pushstart.com.au http://www.pushstart.com.au - StartMate - http://www.startmate.com.au http://www.startmate.com.au (NB: Alan, the OP, is cofounder of http://www.bugherd.com http://www.bugherd.com which went through StartMate's first Sydney program and is doing incredibly well) - Fishburners - http://www.fishburners.org/ http://www.fishburners.org/ - AngelCube - http://www.angelcube.com http://www.angelcube.com - Startup Weekends (here's the next Melbourne one) - http://melbourne.startupweekend.org/ http://melbourne.startupweekend.org/ - Silicon Beach Google Group - http://groups.google.com/group/silicon-beach-australia/ http://groups.google.com/group/silicon-beach-australia/ - Sydney Tech Startup Meetup (Open Coffee) - http://www.meetup.com/open-coffee-sydney/ http://www.meetup.com/open-coffee-sydney/ ...or just sign up to The Fetch (http://thefetch.org/ http://thefetch.org/) or Sydney Startup Digest (http://startupdigest.com/2011/05/24/sydney-startup-events-2/ http://startupdigest.com/2011/05/24/sydney-startup-events-2/) From a funding point of view you have more and more angel / super-angel sized investment $$$ coming online all the time. There's also an ever increasing amount of large scale investment into top Aussie startups from leading Valley firms. This has led to a good number of successful startups and more that continue to be started everyday. I could keep going on but I won't... :) The point is, let's not get confused. The post is about a specific issue with being a non-US based startup not about the Aussie startup community as a whole.

justinj 15y ago
Kim - he's clearly a jaded west-coaster.
- toast76 15y ago
  I'm from Melbourne :P
chrisrickard 15y ago
Yup - totally agree kim. plus it seems like the startup culture in Melbourne alone on the rise

teflonhook 15y ago

1) You can do subscriptions with Paypal 2) Moneybookers is an alternative which is easier to set up and cheaper When you get big you can use someone like GlobalCollect or Cybersource.

teflonhook 15y ago

Being an Australian startup early on is great because there's a number of programs to get easy cash, including AusIndustry CommercialReady which can get you a CPI-indexed loan for $1-2m.