7 ms·

The Australian boys who built a $1b company in the cloud

129 points by realize 14y ago

beilabs 14y ago
This is all part of a series relating to tech companies in Australia and the challenges they are currently facing. All the episodes are here: Episode 1 - http://media.smh.com.au/technology/digital-dreamers/digital-dreamers--episode-1-3302673.html http://media.smh.com.au/technology/digital-dreamers/digital-... Episode 2 - http://media.smh.com.au/technology/digital-dreamers/digital-dreamers--episode-2-3315654.html http://media.smh.com.au/technology/digital-dreamers/digital-... Episode 3 - http://media.smh.com.au/technology/digital-dreamers/digital-dreamers--episode-3-3347393.html http://media.smh.com.au/technology/digital-dreamers/digital-... Episode 4 - http://media.smh.com.au/technology/digital-dreamers/the-new-gold-rush-big-ideas-and-1b-dreams-3375254.html http://media.smh.com.au/technology/digital-dreamers/the-new-... Episode 5 - http://media.smh.com.au/technology/digital-dreamers/millionaires-in-thongs-digital-dreamers-episode-5-3408609.html http://media.smh.com.au/technology/digital-dreamers/milliona... It seems to me that Australia has a unique problem. There is a massive brain drain of engineers & tech entrepreneurs moving to the US to start their own business (E3 Visas). These are American, not Australian companies. * The current tax law is a nightmare for those AU startups wishing to dole out equity. * Lack of talent, the majority of students have steered clear of tech disciplines in university after the dot-com bust, the effect of this is being felt now as engineering talent is needed. * The government is not focused on the needs of startups preferring to invest heavily in pie in the sky ideas or just digging the dirt out of the ground. There is no decisive strategy from the opposition nor the current gov in power. * Lack of funding. There are just not enough investors in Australia looking to fund in Australian tech startups. The Australian startup scene is booming! Hopefully this series will highlight some of these issues so things can get even easier for new Australian companies.
- taligent 14y ago
  Bingo. And the fault lies with the incubators/VCs who are pushing and pushing these startups/entrepreneurs to go to the US so they can exit profitably. They are basically trading off the long term health of the industry for short term personal gain. They are a disgrace.
  - beilabs 14y ago
    Disgrace is too strong of a word. If I was being offered a multi-million dollar round of funding that I wasn't getting in Australia I would be a fool not to go. Many who have gone in the past have promised to come back and give back to the startup scene where they came from. Time will tell if they kept their promise...
    - taligent 14y ago
      How is it too strong of a word ? These incubators/VCs have the ability to bring more money to the table. They simply choose not to. And let's be honest here. The only reason they are pushing them to the US is so they can make money. They are sycophants. If they really cared about the industry they would be encouraging these people to stay in Australia, build something to benefit the local market and help them expand into Asia like every country dreams of and which we are uniquely positioned. And so far every successful Australian startup that I know of mad it in Australia BEFORE expanding to the US. Not when you have nothing more than an idea/prototype.
      - bmelton 14y ago
        You are aware that making money is kind of the point of venture capital, right?
        taligent 14y ago
        True. But I would hope that when many are taking TAXPAYER money that they would think about something more than short term money. After all it is in their best interest to have successful Australian startups.
        bmelton 14y ago
        Wait -- what VCs are funded with tax dollars? Either you guys do things very differently in Australia, or I'm missing your point altogether. Regardless, it isn't necessarily as black and white as you've stated. They aren't just looking for the 'short term' money, but to give the teams the best opportunities for success. Per beilabs' argument, it seems that their best chances for success aren't in Australia. You also seem to be missing the fact that it's a boon to the Australian economy for companies to succeed, even if they succeed elsewhere, unless they completely emigrate. Every Australian success story sparks another entrepreneur in Australia to get motivated. Yeah, it sucks that the deck is stacked against them at the moment, but that's not a problem the VCs can fix until the government gets cracking to foster startups. That's a long slow process... and as the existing government watches startups leave for those reasons, it should serve to motivate them to fix their laws and better retain local talent.
- wyclif 14y ago
  Why won't these Aussie companies hire American or Canadian devs? The scene down there seems so insular. Couldn't they mitigate the "brain drain" somewhat by recruiting in countries where English is already the default language and there is talent on the ground?
  - jacalata 14y ago
    US/Canadian devs are probably equally attracted to the US tech scene over Australia, no? Anecdotally, I'm an Australian who moved to the US fresh out of college, and the salaries here were waaay higher than what I was being offered in Australia - like 150% to 200%.
    - jacques_chester 14y ago
      Plus Australians don't have massive student debt -- we have income-contingent loans that don't count income earned overseas. So if you move to the USA ... you don't have to pay back the loan. Every time I see people on HN bitching about "low" wages and "high" costs in the valley, I laugh bitterly. American programmers really have no idea how good they have it.
    - wyclif 14y ago
      I've heard this explanation from others and it seems reasonable enough. I still wonder if they couldn't get "B" or "C" grade devs though. A lot of SV companies just won't settle for anything but "A" players, and if they can't get them (because of the incredibly competitive war for talent) many will just leave the job unfilled. That means that there are American and Canadian devs who might be willing to move to Australia to get some experience under their belt.
      - onetwothreefour 14y ago
        Why would an Australian company want to hire "B" and "C" grade devs, let alone import them? Wow, this thread is misinformed. There's plenty of world class "A" grade talent in Sydney. Some of those people leave, some of those people stay. You just have to know where to look. Funnily enough, not everyone wants to move to the US, because if you're not a founder of a tech company, there's very little reason to leave Sydney for SF.
- alecthomas 14y ago
  Regarding lack of funding, one of the founders of Shoes of Prey wrote an in depth blog post on raising a $3M series A round: http://www.22michaels.com/2012/06/how-we-raised-3m-round-of-funding-in.html http://www.22michaels.com/2012/06/how-we-raised-3m-round-of-... It's a good read, and to me it highlights just how difficult it is to get funding in Australia. To put it in perspective, they are a well established company with solid founders and a proven business model, and they still had a great deal of difficulty raising money.
- jacques_chester 14y ago
  I dislike politicians as much as the next person, but in actual fact the Commonwealth has showered a lot of money and attention on venture capital. They have an entire agency devoted to commercialisation and so forth -- Innovation Australia[1]. The problem is that despite the flowery language, it still moves, quacks and shits like a government department[2]. [1] http://www.innovation.gov.au/Pages/default.aspx http://www.innovation.gov.au/Pages/default.aspx [2] http://chester.id.au/2012/04/05/on-communicating-with-the-commonwealth/ http://chester.id.au/2012/04/05/on-communicating-with-the-co...
  - Tloewald 14y ago
    In general, the Australian government's attempts to foster innovation have simply been disasters, the main reason being that they take two approaches — creating funds (which simply lead to feeding frenzies by people who know how to get grants) and tax incentives (which simply encourage companies to create tax shelters). In general, the US VC scene thrive precisely because the government does virtually nothing in this space. Don't expect or even hope for the Australian government to help anything.
- nl 14y ago
  I know these are the default complaints about startups in Australia, but to address each point: The current tax law is a nightmare for those AU startups wishing to dole out equity. 100% true Lack of talent, the majority of students have steered clear of tech disciplines in university after the dot-com bust, the effect of this is being felt now as engineering talent is needed. There is talent around if you know where to look. The government is not focused on the needs of startups preferring to invest heavily in pie in the sky ideas or just digging the dirt out of the ground. There is no decisive strategy from the opposition nor the current gov in power. Mostly untrue. I've done work for two local startups in the last 18 months, and both received significant government help, to the point where my services were at least partially funded by gov programs. Yes, getting government help can be a slow process, but I doubt anyone would except anything else. The Shoes of Prey guys spoke specially about this recently at the Google startup event in Sydney. They praised the tax concessions and other gov funding available to startups. Lack of funding. There are just not enough investors in Australia looking to fund in Australian tech startups. Mostly untrue. There are plenty of YC-Style accelerator programs giving seed funding, and a decent number of individual investors interested. The VC funds don't seem to be playing the same game as Silicon Valley VCs though (but then - Boston VCs aren't playing that same game either). A local Australian startup I've done some work for raised a $2 million angle round recently[1] and didn't seem to have a lot of trouble with it. [1] http://delimiter.com.au/2012/02/23/australian-web-2-0-start-ups-raise-big-capital/ http://delimiter.com.au/2012/02/23/australian-web-2-0-start-...
- jacques_chester 14y ago
  > * The current tax law is a nightmare for those AU startups wishing to dole out equity. Could you elaborate?
  - djt 14y ago
    there are a lot of legal fees to set up the kind of employee equity plan that can cost a few thousand dollars in the US. we're talking 10-30 times as expensive.
  - deleted 14y ago
    [deleted]
    - jacques_chester 14y ago
      Ugh. That sounds all too much like the way we do taxation here.
  - asharp 14y ago
    Mmmm. Strange. Anyways, the major problem is that shares and options are taxed like income at the time of issue, with no easy way to defer the tax bill. This makes it essentially untenable to hand out equity to employees. This then makes it a lot harder to employ people as a bootstrapped startup.
  - toast76 14y ago
    It's less that it's a nightmare, and more that there aren't enough people that have done it to know the right way to go about it. We've been trying for 6months to get an ESOP off the ground, and have had a hard time finding an accountant/lawyer who knows their way through it, EVEN THOUGH we know what needs to be done.
- onan_barbarian 14y ago
  "massive brain drain of engineers & tech entrepreneurs" Bollocks. There is a massive amount of self-promotional noise coming from a medium-sized group of people going over to the US, not all of whom are that much or a loss to Australia. Certainly Australia has its problems. And moving to the Bay Area to start a startup is obviously a good idea from many parts of the world. That being said, having a bit of a whinge in the SMH about how lousy Australia is is a great way to get some free media coverage for your startup.
  - jacques_chester 14y ago
    Considering how easy it is for Australians in particular to live and work in the US, I don't think it's an idle complaint.
- dorian-graph 14y ago
  * Lack of talent, the majority of students have steered clear of tech disciplines in university after the dot-com bust, the effect of this is being felt now as engineering talent is needed. Very much so in QLD from experience. I'm studying [software] engineering at the University of Queensland and they give seemingly all their attention towards mining and civil majors.
  - jonpacker 14y ago
    I've heard really poor things about UQ's IT department though. I've heard that if you're doing IT related things, the reputation of the universities is backwards: Griffith is best, followed by QUT, and UQ is rather poor.
    - dorian-graph 14y ago
      That seems to be true. Unluckily enough, or at least a mistake on my behalf, I was at Griffith last year and had the choice out of all three uni's for engineering and went with UQ because of their record, amongst other things. Oh well.
    - TimJRobinson 14y ago
      QANTM and QUT are the 2 top In my opinion. I did programming at QANTM in 06-07 and it was fantastic as most of what I learnt was practical useful information and all the work we did was actually creating software rather than just studying theory / algorithms. Also got job offers at Halfbrick, Krome and Firemint upon graduating. Honestly I haven't met (or even heard of) any good coders from Griffith and UQ is as said good for most disciplines but not sure about IT.
astrofinch 14y ago
>"There's more lines of code in a Ford [car] than Facebook and Twitter combined," Cannon-Brookes said. If this is true, it's evidence that Ford can't hire software engineers.
- lwat 14y ago
  How would they even know how many lines of code is in Facebook?
  - angusgr 14y ago
    If you believe http://www.quora.com/How-large-is-Facebooks-codebase http://www.quora.com/How-large-is-Facebooks-codebase ... then 2011 numbers are a google search away. "Ford’s 2005 models contain between two and three million lines of code. Current 2007/2008 vehicles have an average of six million lines of code. The company is expecting about 10 million lines of code in its vehicles in 2010." http://www.plm.automation.siemens.com/en_sg/about_us/success/case_study.cfm?Component=63184&ComponentTemplate=1481 http://www.plm.automation.siemens.com/en_sg/about_us/success... Although it's an unfair comparison if you're counting all the dozens of subsystems in the car, mostly developed by third parties, but not counting the OS kernel, full MySQL source, libraries, etc. used by Facebook & Twitter.
- yitchelle 14y ago
  I work in the Auto industry, and yep, the amount of code in a typical car is enormous. Just do a simple, back of a envelope style calculation. A typical car has about 25 electronic modules, ranging from simple seat beat controllers and complex controllers like engine management units and instrument clusters. Assuming that each modules have about 250K line of code, that would take it up to 6.25M line of code. That goes up if we start to consider high end cars like BMWs and Mercs. Let's not forget about the development infrastructure around the code development, that is another story..
  - raverbashing 14y ago
    Yes, in some ways make sense, if you add all of the code Also, embedded software doesn't / can't make use of existing libraries because of code size (but this is changing) And of course you can't really compare PHP+JS+what else in Facebook with C+Java+Assembly of car embedded systems But yeah, hardware companies don't know how to make software
cletus 14y ago
Firstly, congrats to the Atlassian boys. Whichever way you look at it, it's a great accomplishment. This thread has turned into a discussion about startups in Australia in general and let me add some perspective as an Australian who now lives in the US (NYC). Firstly, a disclaimer: I'm from Western Australia, specifically Perth. WA is different to most of the rest of the country (except maybe Queensland) in that it awash in the biggest resources boom probably ever. Iron ore and oil and gas primarily but others too (aluminium, nickel, etc). China is of course the largest buyer. In many ways Perth, the capital of WA and a city of some 1.5 million, is a boom town and really two cities: the haves and the have nots. The haves are in the resources game, directly or indirectly. The biggest indirect benefactor is construction. There is some $50B+ in infrastructure projects in the pipeline and prices paid for construction are just astronomical. This was worse in the housing boom (up to 2008) but is still bad. My brother-in-law who manages construction projects (apartment buildings and so forth) says that to build a two storey brick-and-tile house is about $2,000+/m2 (roughly $200/sq ft). Single storey is still probably $1500. Apartments in West Perth (close to the business district but not much else going on) sell for over $10,000/m2). The have nots are everyone else including software engineers. Post-housing bubble and because of the high cost of entry to the market (you will not find a house in Perth cheaper than $250,000 period and I'm including rundown houses built 50+ years ago) and tighter lending practices by the banks (anecdotally, the wholesale cost of lending pre-bubble bursting was 20 basis points about the RBA rate, now 100+) rents are going through the roof. A one bedroom apartment I rented in 2005 for $300/week is now $600+. There are far more extreme examples than this. On top of this the cost of living is ridiculous. Food, utilities, you name it. Basically if you aren't in the resources/construction game, you have experienced a drop in your real standard of living over the last 10 years. Commercial property is expensive. Everything is expensive. One big problem Australia has (IMHO) is stamp duty. Stamp duty as it applies to most people is a state government tax on the sale or transfer of property. In the US instead you pay property tax (typically 1-1.5% of assessed value AFAIK). In Australia you might pay as much as 5% of the sale value in tax. Now consider that a "normal" family home in Sydney or Perth might be $1 million. So if a family in Sydney wants to pick up and move to Perth they may be $80,000 in the hole (including agent fees and the like) before they even start... all for a job that might only pay $100-150k. This I believe really hurts labour market flexibility. Through a combination of taxing property and not the transaction and lower overall property values, this is not a problem the US has. I often joke to friends and family that it is cheaper for me to live in Manhattan than in Perth now. This has several negatives when it comes to tech: 1. There is a strong incentive go to the US, Real standard of living is higher, jobs are more plentiful and so on; 2. The high cost of living makes bootstrapping a startup in Perth expensive and not very attractive. More broadly to varying degrees I believe this applies to a large part of urban Australia; 3. Perth at least has never really had a tech scene per se. The norm is for any sufficiently large company to headquarter itself in Sydney or Melbourne. The only exception are resource companies (Rio Tinto, BHP, Woodside Petroleum and the like); and 4. Because there is so much "easy money" floating around in resources it's just to justify a tech startup comparatively. Plus there are usual reasons: Australia is far from everywhere (Europe, Australia, even Asia) and Perth is even further (it is I believe the most isolated capital city in the world and you need to go 3000 miles before you find another city above 100,000 people). Startups don't start in a vacuum. There is an ecosystem that makes them thrive. Angel funding, VC, etc. As far as regulation goes, I don't see any particular barrier here. Forming a company in Australia isn't cheap (~$1000 for a private company, more for a public). Financial regulation is much stricter such that operating in financial services is a difficult proposition because of regulatory burden. For example, I don't believe Mint.com could ever have started in Australia. I largely discount the "lack" of government involvement. Businesses will grow and thrive largely independently of the government and it's not something the government tends to be good at encouraging anyway (just look at the whole Curt Schilling thing). If I was going to do a startup today I'd go and hole up for 6-12 months somewhere cheap to get an MVP and then base myself somewhere with a decent tech scene, maybe NYC or Boston. From what I read the housing market is just nuts in SF now. Attracting and, more importantly, retaining staff I imagine is difficult in the Valley now. So much so that I think I would skip it entirely. Whatever the case, Australia would be pretty low down on my list.
deleted 14y ago
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205guy 14y ago
If they're that great, and have all that success, why does Confluence still suck? sorry, I thought this was quora.
- sherifmansour 14y ago
  What sucks about it? Interested to hear...
Zuz 14y ago
Atlassian as a company is awesome, their products quality varies and of course the best sellers (Jira and Confluence) are also the worse one code wise since they are the oldest. The point I'm starting to get mad about is this BS about not having sales. I've worked with an Atlassian partner and, well, Atlassian huge partner network is their sales force. And over the last year Atlassian itself has started hiring internal sales people too so please stop with this "no sales"

129 points by realize 14y ago

This is all part of a series relating to tech companies in Australia and the challenges they are currently facing. All the episodes are here: Episode 1 - http://media.smh.com.au/technology/digital-dreamers/digital-dreamers--episode-1-3302673.html http://media.smh.com.au/technology/digital-dreamers/digital-... Episode 2 - http://media.smh.com.au/technology/digital-dreamers/digital-dreamers--episode-2-3315654.html http://media.smh.com.au/technology/digital-dreamers/digital-... Episode 3 - http://media.smh.com.au/technology/digital-dreamers/digital-dreamers--episode-3-3347393.html http://media.smh.com.au/technology/digital-dreamers/digital-... Episode 4 - http://media.smh.com.au/technology/digital-dreamers/the-new-gold-rush-big-ideas-and-1b-dreams-3375254.html http://media.smh.com.au/technology/digital-dreamers/the-new-... Episode 5 - http://media.smh.com.au/technology/digital-dreamers/millionaires-in-thongs-digital-dreamers-episode-5-3408609.html http://media.smh.com.au/technology/digital-dreamers/milliona... It seems to me that Australia has a unique problem. There is a massive brain drain of engineers & tech entrepreneurs moving to the US to start their own business (E3 Visas). These are American, not Australian companies. * The current tax law is a nightmare for those AU startups wishing to dole out equity. * Lack of talent, the majority of students have steered clear of tech disciplines in university after the dot-com bust, the effect of this is being felt now as engineering talent is needed. * The government is not focused on the needs of startups preferring to invest heavily in pie in the sky ideas or just digging the dirt out of the ground. There is no decisive strategy from the opposition nor the current gov in power. * Lack of funding. There are just not enough investors in Australia looking to fund in Australian tech startups. The Australian startup scene is booming! Hopefully this series will highlight some of these issues so things can get even easier for new Australian companies.

taligent 14y ago
Bingo. And the fault lies with the incubators/VCs who are pushing and pushing these startups/entrepreneurs to go to the US so they can exit profitably. They are basically trading off the long term health of the industry for short term personal gain. They are a disgrace.
- beilabs 14y ago
  Disgrace is too strong of a word. If I was being offered a multi-million dollar round of funding that I wasn't getting in Australia I would be a fool not to go. Many who have gone in the past have promised to come back and give back to the startup scene where they came from. Time will tell if they kept their promise...
  - taligent 14y ago
    How is it too strong of a word ? These incubators/VCs have the ability to bring more money to the table. They simply choose not to. And let's be honest here. The only reason they are pushing them to the US is so they can make money. They are sycophants. If they really cared about the industry they would be encouraging these people to stay in Australia, build something to benefit the local market and help them expand into Asia like every country dreams of and which we are uniquely positioned. And so far every successful Australian startup that I know of mad it in Australia BEFORE expanding to the US. Not when you have nothing more than an idea/prototype.
    - bmelton 14y ago
      You are aware that making money is kind of the point of venture capital, right?
      - taligent 14y ago
        True. But I would hope that when many are taking TAXPAYER money that they would think about something more than short term money. After all it is in their best interest to have successful Australian startups.
        bmelton 14y ago
        Wait -- what VCs are funded with tax dollars? Either you guys do things very differently in Australia, or I'm missing your point altogether. Regardless, it isn't necessarily as black and white as you've stated. They aren't just looking for the 'short term' money, but to give the teams the best opportunities for success. Per beilabs' argument, it seems that their best chances for success aren't in Australia. You also seem to be missing the fact that it's a boon to the Australian economy for companies to succeed, even if they succeed elsewhere, unless they completely emigrate. Every Australian success story sparks another entrepreneur in Australia to get motivated. Yeah, it sucks that the deck is stacked against them at the moment, but that's not a problem the VCs can fix until the government gets cracking to foster startups. That's a long slow process... and as the existing government watches startups leave for those reasons, it should serve to motivate them to fix their laws and better retain local talent.
wyclif 14y ago
Why won't these Aussie companies hire American or Canadian devs? The scene down there seems so insular. Couldn't they mitigate the "brain drain" somewhat by recruiting in countries where English is already the default language and there is talent on the ground?
- jacalata 14y ago
  US/Canadian devs are probably equally attracted to the US tech scene over Australia, no? Anecdotally, I'm an Australian who moved to the US fresh out of college, and the salaries here were waaay higher than what I was being offered in Australia - like 150% to 200%.
  - jacques_chester 14y ago
    Plus Australians don't have massive student debt -- we have income-contingent loans that don't count income earned overseas. So if you move to the USA ... you don't have to pay back the loan. Every time I see people on HN bitching about "low" wages and "high" costs in the valley, I laugh bitterly. American programmers really have no idea how good they have it.
  - wyclif 14y ago
    I've heard this explanation from others and it seems reasonable enough. I still wonder if they couldn't get "B" or "C" grade devs though. A lot of SV companies just won't settle for anything but "A" players, and if they can't get them (because of the incredibly competitive war for talent) many will just leave the job unfilled. That means that there are American and Canadian devs who might be willing to move to Australia to get some experience under their belt.
    - onetwothreefour 14y ago
      Why would an Australian company want to hire "B" and "C" grade devs, let alone import them? Wow, this thread is misinformed. There's plenty of world class "A" grade talent in Sydney. Some of those people leave, some of those people stay. You just have to know where to look. Funnily enough, not everyone wants to move to the US, because if you're not a founder of a tech company, there's very little reason to leave Sydney for SF.
alecthomas 14y ago
Regarding lack of funding, one of the founders of Shoes of Prey wrote an in depth blog post on raising a $3M series A round: http://www.22michaels.com/2012/06/how-we-raised-3m-round-of-funding-in.html http://www.22michaels.com/2012/06/how-we-raised-3m-round-of-... It's a good read, and to me it highlights just how difficult it is to get funding in Australia. To put it in perspective, they are a well established company with solid founders and a proven business model, and they still had a great deal of difficulty raising money.
jacques_chester 14y ago
I dislike politicians as much as the next person, but in actual fact the Commonwealth has showered a lot of money and attention on venture capital. They have an entire agency devoted to commercialisation and so forth -- Innovation Australia[1]. The problem is that despite the flowery language, it still moves, quacks and shits like a government department[2]. [1] http://www.innovation.gov.au/Pages/default.aspx http://www.innovation.gov.au/Pages/default.aspx [2] http://chester.id.au/2012/04/05/on-communicating-with-the-commonwealth/ http://chester.id.au/2012/04/05/on-communicating-with-the-co...
- Tloewald 14y ago
  In general, the Australian government's attempts to foster innovation have simply been disasters, the main reason being that they take two approaches — creating funds (which simply lead to feeding frenzies by people who know how to get grants) and tax incentives (which simply encourage companies to create tax shelters). In general, the US VC scene thrive precisely because the government does virtually nothing in this space. Don't expect or even hope for the Australian government to help anything.
nl 14y ago
I know these are the default complaints about startups in Australia, but to address each point: The current tax law is a nightmare for those AU startups wishing to dole out equity. 100% true Lack of talent, the majority of students have steered clear of tech disciplines in university after the dot-com bust, the effect of this is being felt now as engineering talent is needed. There is talent around if you know where to look. The government is not focused on the needs of startups preferring to invest heavily in pie in the sky ideas or just digging the dirt out of the ground. There is no decisive strategy from the opposition nor the current gov in power. Mostly untrue. I've done work for two local startups in the last 18 months, and both received significant government help, to the point where my services were at least partially funded by gov programs. Yes, getting government help can be a slow process, but I doubt anyone would except anything else. The Shoes of Prey guys spoke specially about this recently at the Google startup event in Sydney. They praised the tax concessions and other gov funding available to startups. Lack of funding. There are just not enough investors in Australia looking to fund in Australian tech startups. Mostly untrue. There are plenty of YC-Style accelerator programs giving seed funding, and a decent number of individual investors interested. The VC funds don't seem to be playing the same game as Silicon Valley VCs though (but then - Boston VCs aren't playing that same game either). A local Australian startup I've done some work for raised a $2 million angle round recently[1] and didn't seem to have a lot of trouble with it. [1] http://delimiter.com.au/2012/02/23/australian-web-2-0-start-ups-raise-big-capital/ http://delimiter.com.au/2012/02/23/australian-web-2-0-start-...
jacques_chester 14y ago
> * The current tax law is a nightmare for those AU startups wishing to dole out equity. Could you elaborate?
- djt 14y ago
  there are a lot of legal fees to set up the kind of employee equity plan that can cost a few thousand dollars in the US. we're talking 10-30 times as expensive.
- deleted 14y ago
  [deleted]
  - jacques_chester 14y ago
    Ugh. That sounds all too much like the way we do taxation here.
- asharp 14y ago
  Mmmm. Strange. Anyways, the major problem is that shares and options are taxed like income at the time of issue, with no easy way to defer the tax bill. This makes it essentially untenable to hand out equity to employees. This then makes it a lot harder to employ people as a bootstrapped startup.
- toast76 14y ago
  It's less that it's a nightmare, and more that there aren't enough people that have done it to know the right way to go about it. We've been trying for 6months to get an ESOP off the ground, and have had a hard time finding an accountant/lawyer who knows their way through it, EVEN THOUGH we know what needs to be done.
onan_barbarian 14y ago
"massive brain drain of engineers & tech entrepreneurs" Bollocks. There is a massive amount of self-promotional noise coming from a medium-sized group of people going over to the US, not all of whom are that much or a loss to Australia. Certainly Australia has its problems. And moving to the Bay Area to start a startup is obviously a good idea from many parts of the world. That being said, having a bit of a whinge in the SMH about how lousy Australia is is a great way to get some free media coverage for your startup.
- jacques_chester 14y ago
  Considering how easy it is for Australians in particular to live and work in the US, I don't think it's an idle complaint.
dorian-graph 14y ago
* Lack of talent, the majority of students have steered clear of tech disciplines in university after the dot-com bust, the effect of this is being felt now as engineering talent is needed. Very much so in QLD from experience. I'm studying [software] engineering at the University of Queensland and they give seemingly all their attention towards mining and civil majors.
- jonpacker 14y ago
  I've heard really poor things about UQ's IT department though. I've heard that if you're doing IT related things, the reputation of the universities is backwards: Griffith is best, followed by QUT, and UQ is rather poor.
  - dorian-graph 14y ago
    That seems to be true. Unluckily enough, or at least a mistake on my behalf, I was at Griffith last year and had the choice out of all three uni's for engineering and went with UQ because of their record, amongst other things. Oh well.
  - TimJRobinson 14y ago
    QANTM and QUT are the 2 top In my opinion. I did programming at QANTM in 06-07 and it was fantastic as most of what I learnt was practical useful information and all the work we did was actually creating software rather than just studying theory / algorithms. Also got job offers at Halfbrick, Krome and Firemint upon graduating. Honestly I haven't met (or even heard of) any good coders from Griffith and UQ is as said good for most disciplines but not sure about IT.

astrofinch 14y ago

>"There's more lines of code in a Ford [car] than Facebook and Twitter combined," Cannon-Brookes said. If this is true, it's evidence that Ford can't hire software engineers.

lwat 14y ago
How would they even know how many lines of code is in Facebook?
- angusgr 14y ago
  If you believe http://www.quora.com/How-large-is-Facebooks-codebase http://www.quora.com/How-large-is-Facebooks-codebase ... then 2011 numbers are a google search away. "Ford’s 2005 models contain between two and three million lines of code. Current 2007/2008 vehicles have an average of six million lines of code. The company is expecting about 10 million lines of code in its vehicles in 2010." http://www.plm.automation.siemens.com/en_sg/about_us/success/case_study.cfm?Component=63184&ComponentTemplate=1481 http://www.plm.automation.siemens.com/en_sg/about_us/success... Although it's an unfair comparison if you're counting all the dozens of subsystems in the car, mostly developed by third parties, but not counting the OS kernel, full MySQL source, libraries, etc. used by Facebook & Twitter.
yitchelle 14y ago
I work in the Auto industry, and yep, the amount of code in a typical car is enormous. Just do a simple, back of a envelope style calculation. A typical car has about 25 electronic modules, ranging from simple seat beat controllers and complex controllers like engine management units and instrument clusters. Assuming that each modules have about 250K line of code, that would take it up to 6.25M line of code. That goes up if we start to consider high end cars like BMWs and Mercs. Let's not forget about the development infrastructure around the code development, that is another story..
- raverbashing 14y ago
  Yes, in some ways make sense, if you add all of the code Also, embedded software doesn't / can't make use of existing libraries because of code size (but this is changing) And of course you can't really compare PHP+JS+what else in Facebook with C+Java+Assembly of car embedded systems But yeah, hardware companies don't know how to make software

cletus 14y ago

Firstly, congrats to the Atlassian boys. Whichever way you look at it, it's a great accomplishment. This thread has turned into a discussion about startups in Australia in general and let me add some perspective as an Australian who now lives in the US (NYC). Firstly, a disclaimer: I'm from Western Australia, specifically Perth. WA is different to most of the rest of the country (except maybe Queensland) in that it awash in the biggest resources boom probably ever. Iron ore and oil and gas primarily but others too (aluminium, nickel, etc). China is of course the largest buyer. In many ways Perth, the capital of WA and a city of some 1.5 million, is a boom town and really two cities: the haves and the have nots. The haves are in the resources game, directly or indirectly. The biggest indirect benefactor is construction. There is some $50B+ in infrastructure projects in the pipeline and prices paid for construction are just astronomical. This was worse in the housing boom (up to 2008) but is still bad. My brother-in-law who manages construction projects (apartment buildings and so forth) says that to build a two storey brick-and-tile house is about $2,000+/m2 (roughly $200/sq ft). Single storey is still probably $1500. Apartments in West Perth (close to the business district but not much else going on) sell for over $10,000/m2). The have nots are everyone else including software engineers. Post-housing bubble and because of the high cost of entry to the market (you will not find a house in Perth cheaper than $250,000 period and I'm including rundown houses built 50+ years ago) and tighter lending practices by the banks (anecdotally, the wholesale cost of lending pre-bubble bursting was 20 basis points about the RBA rate, now 100+) rents are going through the roof. A one bedroom apartment I rented in 2005 for $300/week is now $600+. There are far more extreme examples than this. On top of this the cost of living is ridiculous. Food, utilities, you name it. Basically if you aren't in the resources/construction game, you have experienced a drop in your real standard of living over the last 10 years. Commercial property is expensive. Everything is expensive. One big problem Australia has (IMHO) is stamp duty. Stamp duty as it applies to most people is a state government tax on the sale or transfer of property. In the US instead you pay property tax (typically 1-1.5% of assessed value AFAIK). In Australia you might pay as much as 5% of the sale value in tax. Now consider that a "normal" family home in Sydney or Perth might be $1 million. So if a family in Sydney wants to pick up and move to Perth they may be $80,000 in the hole (including agent fees and the like) before they even start... all for a job that might only pay $100-150k. This I believe really hurts labour market flexibility. Through a combination of taxing property and not the transaction and lower overall property values, this is not a problem the US has. I often joke to friends and family that it is cheaper for me to live in Manhattan than in Perth now. This has several negatives when it comes to tech: 1. There is a strong incentive go to the US, Real standard of living is higher, jobs are more plentiful and so on; 2. The high cost of living makes bootstrapping a startup in Perth expensive and not very attractive. More broadly to varying degrees I believe this applies to a large part of urban Australia; 3. Perth at least has never really had a tech scene per se. The norm is for any sufficiently large company to headquarter itself in Sydney or Melbourne. The only exception are resource companies (Rio Tinto, BHP, Woodside Petroleum and the like); and 4. Because there is so much "easy money" floating around in resources it's just to justify a tech startup comparatively. Plus there are usual reasons: Australia is far from everywhere (Europe, Australia, even Asia) and Perth is even further (it is I believe the most isolated capital city in the world and you need to go 3000 miles before you find another city above 100,000 people). Startups don't start in a vacuum. There is an ecosystem that makes them thrive. Angel funding, VC, etc. As far as regulation goes, I don't see any particular barrier here. Forming a company in Australia isn't cheap (~$1000 for a private company, more for a public). Financial regulation is much stricter such that operating in financial services is a difficult proposition because of regulatory burden. For example, I don't believe Mint.com could ever have started in Australia. I largely discount the "lack" of government involvement. Businesses will grow and thrive largely independently of the government and it's not something the government tends to be good at encouraging anyway (just look at the whole Curt Schilling thing). If I was going to do a startup today I'd go and hole up for 6-12 months somewhere cheap to get an MVP and then base myself somewhere with a decent tech scene, maybe NYC or Boston. From what I read the housing market is just nuts in SF now. Attracting and, more importantly, retaining staff I imagine is difficult in the Valley now. So much so that I think I would skip it entirely. Whatever the case, Australia would be pretty low down on my list.

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205guy 14y ago

If they're that great, and have all that success, why does Confluence still suck? sorry, I thought this was quora.

sherifmansour 14y ago
What sucks about it? Interested to hear...

Zuz 14y ago

Atlassian as a company is awesome, their products quality varies and of course the best sellers (Jira and Confluence) are also the worse one code wise since they are the oldest. The point I'm starting to get mad about is this BS about not having sales. I've worked with an Atlassian partner and, well, Atlassian huge partner network is their sales force. And over the last year Atlassian itself has started hiring internal sales people too so please stop with this "no sales"