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Startup Australia

71 points by dtalic 14y ago

sideproject 14y ago
You tell 'em Barrie.
hoodoof 14y ago
Surely this guy doesn't think the answer is to vote in the liberals who will shut down the fibre to the home goal of the NBN? Is that really a good way to advance Australia's startups?
- dr1337 14y ago
  That's besides the point. FTTH is overkill and is absolutely not a requirement to build a technology industry. How is fibre going to a small town like Burnie in the middle of Tasmania going to encourage the creation of technology startups when its users are going to be technologically uneducated in the first place? What will most likely happen is all that bandwidth (paid by taxpayers) will most likely be used for Torrenting music, warez, movies and porn. As a pragmatist, the NBN rollout should have been targeted firstly for areas of high concentration of startup activity. That way, users most likely to benefit and create wealth from the increase of bandwidth will have first dibs that will eventually trickle down to the rest of the system. Unfortunately, for most short-sighted politicians, the main agenda of the NBN is to buy votes from rural and marginal electorates.
  - angusscown 14y ago
    I'd rather more of my potential customers get NBN. Startups hubs tend to already have the broadband required. 'wealth' will be created by capturing a larger user base for new broadband/low latency applications.
  - kerno 14y ago
    I think that people in Burnie in the middle of Tasmania would probably receive the greatest benefits from having fast and reliable internet access. With online education and MOOCs opening up education to those who want it, giving isolated and rural communities access increases the opportunities available to them at a far greater rate than giving the innner city the same benefit.
  - Volpe 14y ago
    Tasmania is used for a testcase because it is a great 'micro-version' of Australia. So potential issues that arise can be dealt with at a scale of 500,000 rather than 20,000,000. > Burnie in the middle of Tasmania going to encourage the creation of technology startups when its users are going to be technologically uneducated in the first place? What will most likely happen is all that bandwidth (paid by taxpayers) will most likely be used for Torrenting music, warez, movies and porn. I'll paraphrase your words: Poor/socio-economically disadvantaged people don't deserve nice things, because they are too poor to understand them. Politicians are short sighted for ignoring the rich middle class. You're view point is exactly WHY the NBN should be rolled out.
  - taligent 14y ago
    I don't say this lightly but you really are an idiot. The idea that innovation can only come from certain areas is completely baseless. The idea that people in countries towns like Burnie have no use for NBN other than music, warez, porn is offensive. And your concept of wealth "trickling down" has been shown time and time again to never happen. And the NBN is being rolled out everywhere so not sure where you get this ridiculous vote buying concept from.
- stephen_g 14y ago
  I really hope that sanity will prevail there when they get in (but by Abbot and Turnbul's comments, it may not be likely)... I mean, a big part of their plan is to not do anything in areas that have HFC currently, even though that cable is so over-subscribed that you don't get decent speeds in peak hour, and many apartment blocks just don't have access to it. So under the Coalition's plan, most people won't get even slightly better internet. How is that OK? Then, rolling out an inferior tech (compared to fibre) that is only marginally better to current ADSL to the rest which is going to run over an aging copper network that will require billions of dollars of maintenance over the years? All while maintaining the current telco monopoly... Really, their only selling point is the cost, but I haven't actually been able to find any evidence that the plan is actually costed - every reference to it being cheap is just based on rollouts in other countries with very different geography, population density and existing infrastructure. If they actually costed it, and then took running costs into account, I doubt it would actually be cheaper. And the current, superior NBN isn't even a cost to the taxpayer - it's an investment that will eventually pay itself back with a small profit. I think the biggest thing though is that even if it were double the price and didn't pay itself back, the economic benefits of having fibre generally available to businesses and homes, as well as having a network which provides open access to suppliers (instead of having to go through the Telstra monopoly) would make it worthwhile.
  - lubos 14y ago
    Could you please explain how NBN will pay for itself? Not to mention, NBN Corp. will not be any different monopoly from Telstra Wholesale. And regarding speeds, how is NBN going to solve that? Australia doesn't even have enough international throughput in the current network. NBN will make speeds even worst as the demand will only increase. The bottleneck here is not copper, it is international capacity. What's the point of replacing copper if the weakest link of the network remains.
    - coopdog 14y ago
      NBN Corp would become a monopoly like Telstra wholesale (and I hope they don't sell it, just outsource the operation), but at least it would split Telstra wholesale and retail. There was some seriously strange things going on there, like when the retail price goes below the wholesale price and the fine is nothing compared to the dollars lost by competitors. The copper situation is ok in inner city areas (except some buildings where the wiring is corroded, or the two wires split to different lines which increases noise/slows the connection), but ADSL speeds also depend on distance. Many areas can't even get into an exchange because they're full, and when you do if you're too far away from it your speeds will be quite horrible. Not to mention upload speeds, NBN would make it possible to send virtual images, giant movie files, HD video and other big chunks of data person to person, rather than this many to one subscriber download model we kind of have at the moment.
- ghiculescu 14y ago
  Barrie is arguing that the Gillard government is increasingly going to restrict an Australian startup's ability to hire the people it needs to succeed. When that happens, what good will faster internet in rural areas do?
  - Volpe 14y ago
    How is your statement related to your question?
- jfoster 14y ago
  The NBN will probably make little difference to startups. Not that the NBN isn't a good thing for Australia, but most Australian startups are likely targeting a global market, which Australia is only a tiny portion of.
D_Alex 14y ago
So very true... Australia desperately needs a startup scene for stuff other than the resources industry. Having said that - the LinkedIn article does not actually say much about what Startup Australia actually is. A google search brought me to this: http://www.startup-australia.org/ http://www.startup-australia.org/ . The first thing that hit my eyes was a large advert asking if I want to date mature women.... seriously, get some class! Do you really need to fund this with cringeworthy advertising? The rest of the site is underwhelming, maybe great startup some web design company could take a shot at making it look good.
- mattbarrie 14y ago
  That's not the site. The industry action group was formed over the last two days at a design forum that consisted of entrepreneurs, startups, venture capitalists, educators and so forth.
- willix 14y ago
  Alex, I think startup-australia.org is completely different entity from what Matt is talking about
  - D_Alex 14y ago
    Oh. Thank goodness. But what is all this about then, is there anything available now beyond the Linkedin post?
    - edhooper 14y ago
      https://sites.google.com/site/siliconbeachproject/ https://sites.google.com/site/siliconbeachproject/ More is on the way
- edhooper 14y ago
  The temporary site for the group can be found here: https://sites.google.com/site/siliconbeachproject/ https://sites.google.com/site/siliconbeachproject/ It includes access to the data used during the workshop
kerno 14y ago
Coming back to Oz from London put into perspective how far behind we are. With HN London now attracting so many people they've had to start charging a fee to get in, and the community built around Silicon Roundabout, it is very sad to come back home and see the fragmented efforts to build a startup group in Australia. With Silicon Beach on and off, Startup Grind, lots of small meetups, and Fishburners in Sydney, there are certainly groups to build this community around but I still think we are years behind the critical mass of something like HN London. And that's just to talk about forums for people to gather in - it says nothing about our skills shortage. I agree with Matt's points regarding our reliance on the resources industry. So many people head off to the mines on a fly-in-fly-out basis, and make incredible coin - but it won't last long-term and then our skill base will be incompatible with value-adding services industries. However, I think we need successes before a great weight of people will shift towards STEM disciplines, in the same way that the dot-com frenzy saw Web Development course demand explode.
- jacques_chester 14y ago
  Nitpick: labour isn't a homogenous, fungible good. People who are good at trades are not 1-to-1 exchangeable with people who are good at STEM subjects.
  - kerno 14y ago
    No, probably not 1-to-1. However, before the industrial revolution we were all toiling in fields, so I think perhaps labour is more fungible that you give it credit.
    - jacques_chester 14y ago
      Well now we sail off into matters of comparative advantage, division of labour / gains from trade and so on. But the general point that labour and capital are highly heterogenous still stands. You can't pluck a boiler fitter out of the Pilbara, drop him at a desk in Perth, and expect to see anything useful for your web business any time soon. And vice versa.
StuieK 14y ago
There is some hope: http://blackbird.vc/ http://blackbird.vc/
Smerity 14y ago
To expand on one of the points in the article, let's expand venture capital raised per capita[1]... Israel: $170 per capita, USA: $75 per capita, Australia: $4.09 per capita. Austrlaia literally spend more on a single day of gambling (Melbourne Cup: $7.27 per capita) than we do in our entire venture capital industry. The government have also decided we're betraying the country by "abusing" a visa program to get more skilled programmers here. Of our 12,000 IT graduates, 8,000 of them are from overseas. 4,000 graduates doesn't go very far... Many of the 457 visas would also likely be programmers from international companies staying in Sydney: Atlassian and Google have numerous offices abroad and commonly allow programmers to travel around. The Australian government have no clue what's going on. Mike Cannon-Brookes, founder of Atlassian, just tweeted "How can you say IT is the future of the country, then complain when we import skilled labour to help us?!"[2] [1]: http://en.wikipedia.org/wiki/Venture_capital http://en.wikipedia.org/wiki/Venture_capital [2]: https://twitter.com/mcannonbrookes/status/312033343988449280 https://twitter.com/mcannonbrookes/status/312033343988449280
- wluu 14y ago
  I heard Mike on radio yesterday, here's his interview with Radio National Drive - http://www.abc.net.au/radionational/programs/drive/it-industry-outrage-over-pm27s-visa-rort-claims/4573766 http://www.abc.net.au/radionational/programs/drive/it-indust...
- mattbarrie 14y ago
  It would be 4,000 local IT graduates per year spread across our 1,500 startups, multinationals like Google and the corporate sector like banking & finance. It's not enough by any stretch. Also that's not saying that all those 4,000 are good graduates. A top tier institution like the University of Sydney might graduate 100 per year. If you look at Sydney city, there might be the same from UNSW, UTS, UWS, Macquarie etc. That leaves it pretty thin on the ground.
matthewsinclair 14y ago
At least part of the problem is AUS is that we really don't have VCs. We have companies masquerading as VCs, but they're more like mezzanine financiers than VCs. They want an established market, established customers, protected IP, massive sweat and real-equity from founders, and they want a controlling interest for their investment. They generally have no capacity for risk whatsoever, and unless you're digging stuff out of the ground and razing the environment, there's very little on offer from the Government, either. So I can see why a lot of tech startups kick-off here and then go offshore because the economic environment is just not conducive to startups (at least in general). Given how many people small business employs in this country (from memory, its the single largest employer, unlike mining, which only directly employes a low, single digit % of workers despite the mindshare it has) we should be doing everything we can to give people a leg up to start a business. For example, something like Jon Stewart's proposal for a 'softer cushion for failure' would be a great start. We could do a lot worse here in Australia that institute something like this: http://boss.blogs.nytimes.com/2012/10/18/jon-stewart-proposes-an-entrepreneurial-policy-dont-laugh/ http://boss.blogs.nytimes.com/2012/10/18/jon-stewart-propose...
- mattbarrie 14y ago
  There are only a few that have managed to get funds off the ground. The core problem is that VCs have trouble getting a second fund off the ground because they can't show a good return on the first.
feint 14y ago
This article is absolutely spot on. I often get asked why I chose to incorporate in the U.S and take investor money from U.S based investors and not from Australians. This is article explains why. There is a lot of talk in Australia but very little action - a lot of people calling themselves Angels, VC's, incubators etc. without actually funding any companies, or any decent companies.
- toast76 14y ago
  You need money in the system to fund quality startups. But you need quality startups to get money in the first place. The problem is that we lack a lot in both areas. Chicken/Egg.
  - feint 14y ago
    Agreed - but I know of many quality startups that have moved to the U.S from Australia (including mine). I think the bigger problem is lack of quality Angel investors, VC's and incubators. The largest angel network in Australia still has a ridiculous and immoral pay-to-pitch flow. They simply just don't get it. And the VC situation is even worse.
joonix 14y ago
Lack of enrollment in IT and entrepreneurship is a symptom of the culture, really. You've got tall poppy syndrome combined with protectionism that makes shooting for the easy low-risk stuff desirable... trades pay insanely well due to strong unions and tight immigration policy, for example.
- te_chris 14y ago
  Are you saying trades paying well is a bad thing? I'd argue that's a great thing for entrepreneurs who are willing to take risks because then you have strong, cash-rich people who can stimulate demand in the economy.
  - bwb 14y ago
    I think its gotten a bit overboard on pay. There is nothing wrong with that, but it will reduce innovation and risk taking. Especially with such a high minimum wage, people cost is so high that it's reducing innovation/entrepreneurship. I think this is their style but its gone too far in the last 5 years. The USA is a bit overboard on under paying. Minimum wage needs to go up + tied to cpi + fix health care to find a happier medium and build out a strong middle class. This might be our personal style though, but I think its gotten out of hand. I don't want to be Australia. I think Australia has gone a bit far and the USA not far enough. Somewhere in between is a sweet zone.
- josephagoss 14y ago
  IT is not a admirable career here at all, Medicine, Law and Engineering are the good careers that pay well and are generally respected, but IT is looked down upon big time over here. Its a shame really, but to most IT is tech support (I know many computer science grads who are on minimium wage tech support)
  - chucknthem 14y ago
    There's a huge difference between IT and software engineering, and using IT as the umbrella term is really doing us a disservice.
boyter 14y ago
Not so sure if I agree with the comment about not being able to hire developers. I think it could be better said "We are unable to hire developers for the price we want to pay". I am going to take up the offer to email and see how it goes... but I would be surprised if I get an offer which pays enough to actually live in Sydney. I recently went hunting for jobs and my experience was less then stellar. Many companies didn't even bother sending feedback to coding tests, and one expected me to pay for the Yahoo Boss API and violate Google's terms of service for a test. I will say I had an excellent experience with Hotels Combined though despite declining their offer for personal reasons. EDIT - Emailed then, and got a response within 1 minute. I will say this for Matt he's very responsive.
- josephagoss 14y ago
  Interesting, I know a basic php dev in Perth working for 75k a year, and many IT contractors are pulling in 200K. The thing is most of our grads end up in tech support on 40k. And that's why we are getting in many overseas IT people to actually code (The majority of my computer science class dislikes code)
  - boyter 14y ago
    75k isn't a great salary in Sydney (not sure about Perth) and I have seen more basic PHP dev jobs offering 55k then 75k. Contractors always pull in large amounts of cash, but that's usually not what these places are looking for. Agree that most grads seem to want to avoid coding. Out of my class I think only 1 or 2 actually ended up coding for a living. Not sure why that is in Australia but it seems fairly common.
    - scorpioxy 14y ago
      I also have a problem understanding why people bother with a CS degree but don't want to go into programming or don't even understand it. Why don't they major in something else?
  - mattbarrie 14y ago
    I have ads looking for great javascript developers for 100k+ and I am getting zero applicants. Zero.
jacques_chester 14y ago
If you're in Perth: http://www.morningstartup.com/ http://www.morningstartup.com/ I've only been able to get to one, but it's already given me useful feedback and I met some great people.
jacques_chester 14y ago
A lot of the VC funds that have launched in the past few years are actually seeded by government funds. Not a model that lends itself to genuine risk taking. Just imagine the headlines: TEN MILLION WASTED ON PHONE APPS I live in Perth. Fellow ex-UWA folks of my acquaintance have the same complaint as me, which is as follows: Perth has buckets and buckets of capital. This town is stupidly flush with cash. And Perth's taste for risk is much higher than the rest of country. You can raise tens of millions of dollars for high-risk, high-reward ventures in a relatively short time. But there's a catch: this only applies if your proposal is to take some geologists and a drilling crew for mineral exploration. The lifecycle for startups is ostensibly quite similar, but ... no dosh. The local investors don't really want to know about it. edit: That said, I wonder if Australia's intelligentsia will ever get over fetishising whatever industry and country which happens to be in the news a lot. I remember endless song and dance about Japanese cars. Now it's Silicon Valley. Eventually it will be, I dunno, rockets and jetpacks. From Montenegro. Meanwhile Australia is one of only 3 countries left with AAA rating and is the only country in the world that has had a growing economy for umpteen years. You can go a long way with sensible, basic policy settings.
- jfoster 14y ago
  Why should they? It's not what they know. People who have big wins in tech startups generally don't invest in mining ventures for the same reason.
  - jacques_chester 14y ago
    Because I have the primeval Australian political instinct: Somebody has lots of money, they bloody well ought give me some! :D
- jbarham 14y ago
  > You can go a long way with sensible, basic policy settings. A pity then that Australia's federal and state government policies (negative gearing, first home buyers grants, interest only mortgages for investors etc. etc.) have done so much to pump up the real estate market into such a huge speculative bubble than will do untold damage when it finally pops. It's insane what Australians are expected to pay for basic housing in one of the world's most lightly populated countries/continents. Here's an example picked at random: http://www.realestate.com.au/property-house-vic-north+melbourne-112981899 http://www.realestate.com.au/property-house-vic-north+melbou.... 3 bedroom terrace house (i.e., no windows in side walls) in North Melbourne, 1 bathroom, no parking, all yours for a mere $775k at 6.5% mortgage rates.
vtjendra 14y ago
AUS image = mining. USA image = tech innovation. Many Australians talented developer and computer engineers have been flocking to USA for mainly two reasons: 1. They are rewarded more in USA, both socially and financially. Who doesn't want to be in the middle of global innovation among other great people? 2. It is much more prestigious and hard to resist. Many US-based companies have been actively recruiting Australians, for example Amazon.com. This leave Australia with limited local talents and therefore comes up with need to employ overseas eng-IT professionals. Note that 457 are neither cheap nor simple to lodge and employ. We are currently at a phase where it is necessary to keep feeding our demand of technical professionals to keep the growth of Australia tech industry.
nikcub 14y ago
There are two distinct points here that are being a bit muddled. The first is the 457 visa issue. For those that don't know, it is a skilled immigration visa, similar to the H1B in the United States. Australia is coming up to an election in September where the sitting center-left Prime Minister is very likely to lose her Prime Ministership to the center-right party. To sure up her base on the left yesterday she came out and attacked the 457 visa and said that they needed to be more tightly regulated, since they are being exploited by some and are taking jobs away from Australians. Prominent Australian entrepreneurs came out in support of the visa, and argued that you can't grow a new information economy without the importation of skilled labour to make up for the shortfall in local skills. This was the biggest national news item yesterday. As an analogy, imagine if Obama came out in support of lowering H1B visa's or restricting their use, and the shit that would cause. The second issue here, which Matt also takes on by attaching it to the first, is what a lot of people in the startup world feel is a disadvantage that the Australian startup ecosystem has over its US, Israeli etc. counterparts. This argument has been playing out for years now, to not a lot of effect. I think there is a contradiction in this argument, when you combine the two together. On the one hand you are asking the government to leave you alone and let you import labour, but on the other hand you are asking them to do something about the lack of venture investment, the lack of skills, university places, etc. I think the later argument of asking the government to do something to assist startups stems from a misunderstanding of how silicon valley works and why it became successful. This misidentification leads to a feeling that with one or two changes you could 'clone' what has made silicon valley a success, which is not true. The attitude in Silicon Valley has always been to be left alone by the government. The tech industry in the USA is grossly underrepresented in Washington lobby groups (only recently have Google, Apple and Microsoft invested more in lobbying as their businesses broaden and intersect areas where government has more control, such as spectrum). Further to that, Australia ranks well in most global indicies for business startup, running a business and open markets. We actually outrank the USA in ability to start a company, and we rank about even in other business friendliness metrics[0]. I think Australia's major problem is cultural. We have a fear of failure, a lack of entrepreneurial spirit, and a severe tall poppy syndrome (all of which I have experienced first hand - ironically from some of the very people who are most vocal about wanting to make Australia more like Silicon Valley). These should be a clear indication that the "problem" with the Australian startup scene (if there is one, I don't think there is) is not the cause or fault of the government. I think Matt would have been better served here to focus his argument on the 457 issue, using the same arguments he has (such as Australia won't always have things to dig out of the ground), but leaving the other issues alone for now. [0] http://www.gfmag.com/tools/global-database/economic-data/11862-best-countries-for-doing-business.html#axzz2NZyqAC00 http://www.gfmag.com/tools/global-database/economic-data/118...
quadhome 14y ago
The biggest "barrier," if you can call it that, to solving the IT skills gap is the E-3 visa program: https://en.wikipedia.org/wiki/E-3_visa https://en.wikipedia.org/wiki/E-3_visa It's a reciprocal visa program between Australia and the United States. Australia offers Americans the friendly 457 visa and the US offers Australians the friendly E-3 visa. It's an independent and generous quota compared to the H-1B visa. It's surreal to me reading people weighing in so heavily about the difficulty in hiring Australians and ignoring the elephant in the room. If you are a decently skilled Australian in IT, you get up and move to Silicon Valley. Why? * More money. * More respect. * In the center of your industry. * Paid travel! This is the same complaint New Zealand has had about Australia for years too. Kiwis move to Australia for the similar reasons. Background: I've been on a 457 for two and a half years. Everyone I know from the US or Europe on a 457 is in Australia for the "lifestyle." The rest are people who came to Australia to study or work from place like India/China/Philippines[1], converted to a 457, and are working their way to permanent residence and finally citizenship. And you'd be unsurprised how many move to work in the US or Europe after earning their Australian citizenship. [1] http://www.immi.gov.au/media/statistics/pdf/457-state-territory-summay-report-jan13.pdf http://www.immi.gov.au/media/statistics/pdf/457-state-territ...
jcampbell1 14y ago
The author is indirectly describing what is known as "Dutch disease". When a country is rich in natural resources, smart and enterprising people specialize in learning to extract natural resources. This damages the technology sector because talent gravitates todward money in market economies. Also, the first paragraph of wikipedia's article on dutch disease is flawed. Dutch disease is used by economists to describe when a domestic comparative advantage crowds out another industry. It has nothing to do with manufacturing. The first paragraph incorrectly implies that it has something to do with the manufacturing sector.
- jacques_chester 14y ago
  > The first paragraph incorrectly implies that it has something to do with the manufacturing sector. Because historically it's been the manufacturing and trades sectors that get crowded out; they are the industries most directly competing with mining for skills and equipment inputs.
jedmeyers 14y ago
I am originally from Eastern Europe. I have got an Australian permanent residence visa but decided not to move there at least for now. I feel much better in Silicon Valley on a work visa, where my salary is higher, my work is more meaningful, prices are MUCH lower and my wife found a job in a reasonable time, also in software engineering. I was shocked that you cannot find half-sized shoes in Sydney's stores, and this is considering that their price was 2.5 times higher than the price on Zappos. Australia has to wake up and deal with their protectionist policies regarding local businesses. By giving them protection from external markets they might survive for a while, but this definitely won't last long. No competition means no innovation and high prices for consumers.
- joonix 14y ago
  Protectionist is exactly right. But things are quickly changing, at least when it comes to local retail. The incumbent bloated chains like Meyer are being disrupted rapidly by overseas online retailers as well as shrewd foreign retailers like Zara setting up in Australia. It's a good thing, too, because the duopolies in Australian retail deserve to be disrupted. They have coasted for far too long providing mediocre value to the customer.

71 points by dtalic 14y ago

You tell 'em Barrie.

Surely this guy doesn't think the answer is to vote in the liberals who will shut down the fibre to the home goal of the NBN? Is that really a good way to advance Australia's startups?

dr1337 14y ago
That's besides the point. FTTH is overkill and is absolutely not a requirement to build a technology industry. How is fibre going to a small town like Burnie in the middle of Tasmania going to encourage the creation of technology startups when its users are going to be technologically uneducated in the first place? What will most likely happen is all that bandwidth (paid by taxpayers) will most likely be used for Torrenting music, warez, movies and porn. As a pragmatist, the NBN rollout should have been targeted firstly for areas of high concentration of startup activity. That way, users most likely to benefit and create wealth from the increase of bandwidth will have first dibs that will eventually trickle down to the rest of the system. Unfortunately, for most short-sighted politicians, the main agenda of the NBN is to buy votes from rural and marginal electorates.
- angusscown 14y ago
  I'd rather more of my potential customers get NBN. Startups hubs tend to already have the broadband required. 'wealth' will be created by capturing a larger user base for new broadband/low latency applications.
- kerno 14y ago
  I think that people in Burnie in the middle of Tasmania would probably receive the greatest benefits from having fast and reliable internet access. With online education and MOOCs opening up education to those who want it, giving isolated and rural communities access increases the opportunities available to them at a far greater rate than giving the innner city the same benefit.
- Volpe 14y ago
  Tasmania is used for a testcase because it is a great 'micro-version' of Australia. So potential issues that arise can be dealt with at a scale of 500,000 rather than 20,000,000. > Burnie in the middle of Tasmania going to encourage the creation of technology startups when its users are going to be technologically uneducated in the first place? What will most likely happen is all that bandwidth (paid by taxpayers) will most likely be used for Torrenting music, warez, movies and porn. I'll paraphrase your words: Poor/socio-economically disadvantaged people don't deserve nice things, because they are too poor to understand them. Politicians are short sighted for ignoring the rich middle class. You're view point is exactly WHY the NBN should be rolled out.
- taligent 14y ago
  I don't say this lightly but you really are an idiot. The idea that innovation can only come from certain areas is completely baseless. The idea that people in countries towns like Burnie have no use for NBN other than music, warez, porn is offensive. And your concept of wealth "trickling down" has been shown time and time again to never happen. And the NBN is being rolled out everywhere so not sure where you get this ridiculous vote buying concept from.
stephen_g 14y ago
I really hope that sanity will prevail there when they get in (but by Abbot and Turnbul's comments, it may not be likely)... I mean, a big part of their plan is to not do anything in areas that have HFC currently, even though that cable is so over-subscribed that you don't get decent speeds in peak hour, and many apartment blocks just don't have access to it. So under the Coalition's plan, most people won't get even slightly better internet. How is that OK? Then, rolling out an inferior tech (compared to fibre) that is only marginally better to current ADSL to the rest which is going to run over an aging copper network that will require billions of dollars of maintenance over the years? All while maintaining the current telco monopoly... Really, their only selling point is the cost, but I haven't actually been able to find any evidence that the plan is actually costed - every reference to it being cheap is just based on rollouts in other countries with very different geography, population density and existing infrastructure. If they actually costed it, and then took running costs into account, I doubt it would actually be cheaper. And the current, superior NBN isn't even a cost to the taxpayer - it's an investment that will eventually pay itself back with a small profit. I think the biggest thing though is that even if it were double the price and didn't pay itself back, the economic benefits of having fibre generally available to businesses and homes, as well as having a network which provides open access to suppliers (instead of having to go through the Telstra monopoly) would make it worthwhile.
- lubos 14y ago
  Could you please explain how NBN will pay for itself? Not to mention, NBN Corp. will not be any different monopoly from Telstra Wholesale. And regarding speeds, how is NBN going to solve that? Australia doesn't even have enough international throughput in the current network. NBN will make speeds even worst as the demand will only increase. The bottleneck here is not copper, it is international capacity. What's the point of replacing copper if the weakest link of the network remains.
  - coopdog 14y ago
    NBN Corp would become a monopoly like Telstra wholesale (and I hope they don't sell it, just outsource the operation), but at least it would split Telstra wholesale and retail. There was some seriously strange things going on there, like when the retail price goes below the wholesale price and the fine is nothing compared to the dollars lost by competitors. The copper situation is ok in inner city areas (except some buildings where the wiring is corroded, or the two wires split to different lines which increases noise/slows the connection), but ADSL speeds also depend on distance. Many areas can't even get into an exchange because they're full, and when you do if you're too far away from it your speeds will be quite horrible. Not to mention upload speeds, NBN would make it possible to send virtual images, giant movie files, HD video and other big chunks of data person to person, rather than this many to one subscriber download model we kind of have at the moment.
ghiculescu 14y ago
Barrie is arguing that the Gillard government is increasingly going to restrict an Australian startup's ability to hire the people it needs to succeed. When that happens, what good will faster internet in rural areas do?
- Volpe 14y ago
  How is your statement related to your question?
jfoster 14y ago
The NBN will probably make little difference to startups. Not that the NBN isn't a good thing for Australia, but most Australian startups are likely targeting a global market, which Australia is only a tiny portion of.

D_Alex 14y ago

So very true... Australia desperately needs a startup scene for stuff other than the resources industry. Having said that - the LinkedIn article does not actually say much about what Startup Australia actually is. A google search brought me to this: http://www.startup-australia.org/ http://www.startup-australia.org/ . The first thing that hit my eyes was a large advert asking if I want to date mature women.... seriously, get some class! Do you really need to fund this with cringeworthy advertising? The rest of the site is underwhelming, maybe great startup some web design company could take a shot at making it look good.

mattbarrie 14y ago
That's not the site. The industry action group was formed over the last two days at a design forum that consisted of entrepreneurs, startups, venture capitalists, educators and so forth.
willix 14y ago
Alex, I think startup-australia.org is completely different entity from what Matt is talking about
- D_Alex 14y ago
  Oh. Thank goodness. But what is all this about then, is there anything available now beyond the Linkedin post?
  - edhooper 14y ago
    https://sites.google.com/site/siliconbeachproject/ https://sites.google.com/site/siliconbeachproject/ More is on the way
edhooper 14y ago
The temporary site for the group can be found here: https://sites.google.com/site/siliconbeachproject/ https://sites.google.com/site/siliconbeachproject/ It includes access to the data used during the workshop

kerno 14y ago

Coming back to Oz from London put into perspective how far behind we are. With HN London now attracting so many people they've had to start charging a fee to get in, and the community built around Silicon Roundabout, it is very sad to come back home and see the fragmented efforts to build a startup group in Australia. With Silicon Beach on and off, Startup Grind, lots of small meetups, and Fishburners in Sydney, there are certainly groups to build this community around but I still think we are years behind the critical mass of something like HN London. And that's just to talk about forums for people to gather in - it says nothing about our skills shortage. I agree with Matt's points regarding our reliance on the resources industry. So many people head off to the mines on a fly-in-fly-out basis, and make incredible coin - but it won't last long-term and then our skill base will be incompatible with value-adding services industries. However, I think we need successes before a great weight of people will shift towards STEM disciplines, in the same way that the dot-com frenzy saw Web Development course demand explode.

jacques_chester 14y ago
Nitpick: labour isn't a homogenous, fungible good. People who are good at trades are not 1-to-1 exchangeable with people who are good at STEM subjects.
- kerno 14y ago
  No, probably not 1-to-1. However, before the industrial revolution we were all toiling in fields, so I think perhaps labour is more fungible that you give it credit.
  - jacques_chester 14y ago
    Well now we sail off into matters of comparative advantage, division of labour / gains from trade and so on. But the general point that labour and capital are highly heterogenous still stands. You can't pluck a boiler fitter out of the Pilbara, drop him at a desk in Perth, and expect to see anything useful for your web business any time soon. And vice versa.

StuieK 14y ago

There is some hope: http://blackbird.vc/ http://blackbird.vc/

Smerity 14y ago

To expand on one of the points in the article, let's expand venture capital raised per capita[1]... Israel: $170 per capita, USA: $75 per capita, Australia: $4.09 per capita. Austrlaia literally spend more on a single day of gambling (Melbourne Cup: $7.27 per capita) than we do in our entire venture capital industry. The government have also decided we're betraying the country by "abusing" a visa program to get more skilled programmers here. Of our 12,000 IT graduates, 8,000 of them are from overseas. 4,000 graduates doesn't go very far... Many of the 457 visas would also likely be programmers from international companies staying in Sydney: Atlassian and Google have numerous offices abroad and commonly allow programmers to travel around. The Australian government have no clue what's going on. Mike Cannon-Brookes, founder of Atlassian, just tweeted "How can you say IT is the future of the country, then complain when we import skilled labour to help us?!"[2] [1]: http://en.wikipedia.org/wiki/Venture_capital http://en.wikipedia.org/wiki/Venture_capital [2]: https://twitter.com/mcannonbrookes/status/312033343988449280 https://twitter.com/mcannonbrookes/status/312033343988449280

wluu 14y ago
I heard Mike on radio yesterday, here's his interview with Radio National Drive - http://www.abc.net.au/radionational/programs/drive/it-industry-outrage-over-pm27s-visa-rort-claims/4573766 http://www.abc.net.au/radionational/programs/drive/it-indust...
mattbarrie 14y ago
It would be 4,000 local IT graduates per year spread across our 1,500 startups, multinationals like Google and the corporate sector like banking & finance. It's not enough by any stretch. Also that's not saying that all those 4,000 are good graduates. A top tier institution like the University of Sydney might graduate 100 per year. If you look at Sydney city, there might be the same from UNSW, UTS, UWS, Macquarie etc. That leaves it pretty thin on the ground.

matthewsinclair 14y ago

At least part of the problem is AUS is that we really don't have VCs. We have companies masquerading as VCs, but they're more like mezzanine financiers than VCs. They want an established market, established customers, protected IP, massive sweat and real-equity from founders, and they want a controlling interest for their investment. They generally have no capacity for risk whatsoever, and unless you're digging stuff out of the ground and razing the environment, there's very little on offer from the Government, either. So I can see why a lot of tech startups kick-off here and then go offshore because the economic environment is just not conducive to startups (at least in general). Given how many people small business employs in this country (from memory, its the single largest employer, unlike mining, which only directly employes a low, single digit % of workers despite the mindshare it has) we should be doing everything we can to give people a leg up to start a business. For example, something like Jon Stewart's proposal for a 'softer cushion for failure' would be a great start. We could do a lot worse here in Australia that institute something like this: http://boss.blogs.nytimes.com/2012/10/18/jon-stewart-proposes-an-entrepreneurial-policy-dont-laugh/ http://boss.blogs.nytimes.com/2012/10/18/jon-stewart-propose...

mattbarrie 14y ago
There are only a few that have managed to get funds off the ground. The core problem is that VCs have trouble getting a second fund off the ground because they can't show a good return on the first.

feint 14y ago

This article is absolutely spot on. I often get asked why I chose to incorporate in the U.S and take investor money from U.S based investors and not from Australians. This is article explains why. There is a lot of talk in Australia but very little action - a lot of people calling themselves Angels, VC's, incubators etc. without actually funding any companies, or any decent companies.

toast76 14y ago
You need money in the system to fund quality startups. But you need quality startups to get money in the first place. The problem is that we lack a lot in both areas. Chicken/Egg.
- feint 14y ago
  Agreed - but I know of many quality startups that have moved to the U.S from Australia (including mine). I think the bigger problem is lack of quality Angel investors, VC's and incubators. The largest angel network in Australia still has a ridiculous and immoral pay-to-pitch flow. They simply just don't get it. And the VC situation is even worse.

joonix 14y ago

Lack of enrollment in IT and entrepreneurship is a symptom of the culture, really. You've got tall poppy syndrome combined with protectionism that makes shooting for the easy low-risk stuff desirable... trades pay insanely well due to strong unions and tight immigration policy, for example.

te_chris 14y ago
Are you saying trades paying well is a bad thing? I'd argue that's a great thing for entrepreneurs who are willing to take risks because then you have strong, cash-rich people who can stimulate demand in the economy.
- bwb 14y ago
  I think its gotten a bit overboard on pay. There is nothing wrong with that, but it will reduce innovation and risk taking. Especially with such a high minimum wage, people cost is so high that it's reducing innovation/entrepreneurship. I think this is their style but its gone too far in the last 5 years. The USA is a bit overboard on under paying. Minimum wage needs to go up + tied to cpi + fix health care to find a happier medium and build out a strong middle class. This might be our personal style though, but I think its gotten out of hand. I don't want to be Australia. I think Australia has gone a bit far and the USA not far enough. Somewhere in between is a sweet zone.
josephagoss 14y ago
IT is not a admirable career here at all, Medicine, Law and Engineering are the good careers that pay well and are generally respected, but IT is looked down upon big time over here. Its a shame really, but to most IT is tech support (I know many computer science grads who are on minimium wage tech support)
- chucknthem 14y ago
  There's a huge difference between IT and software engineering, and using IT as the umbrella term is really doing us a disservice.

boyter 14y ago

Not so sure if I agree with the comment about not being able to hire developers. I think it could be better said "We are unable to hire developers for the price we want to pay". I am going to take up the offer to email and see how it goes... but I would be surprised if I get an offer which pays enough to actually live in Sydney. I recently went hunting for jobs and my experience was less then stellar. Many companies didn't even bother sending feedback to coding tests, and one expected me to pay for the Yahoo Boss API and violate Google's terms of service for a test. I will say I had an excellent experience with Hotels Combined though despite declining their offer for personal reasons. EDIT - Emailed then, and got a response within 1 minute. I will say this for Matt he's very responsive.

josephagoss 14y ago
Interesting, I know a basic php dev in Perth working for 75k a year, and many IT contractors are pulling in 200K. The thing is most of our grads end up in tech support on 40k. And that's why we are getting in many overseas IT people to actually code (The majority of my computer science class dislikes code)
- boyter 14y ago
  75k isn't a great salary in Sydney (not sure about Perth) and I have seen more basic PHP dev jobs offering 55k then 75k. Contractors always pull in large amounts of cash, but that's usually not what these places are looking for. Agree that most grads seem to want to avoid coding. Out of my class I think only 1 or 2 actually ended up coding for a living. Not sure why that is in Australia but it seems fairly common.
  - scorpioxy 14y ago
    I also have a problem understanding why people bother with a CS degree but don't want to go into programming or don't even understand it. Why don't they major in something else?
- mattbarrie 14y ago
  I have ads looking for great javascript developers for 100k+ and I am getting zero applicants. Zero.

jacques_chester 14y ago

If you're in Perth: http://www.morningstartup.com/ http://www.morningstartup.com/ I've only been able to get to one, but it's already given me useful feedback and I met some great people.

jacques_chester 14y ago

A lot of the VC funds that have launched in the past few years are actually seeded by government funds. Not a model that lends itself to genuine risk taking. Just imagine the headlines: TEN MILLION WASTED ON PHONE APPS I live in Perth. Fellow ex-UWA folks of my acquaintance have the same complaint as me, which is as follows: Perth has buckets and buckets of capital. This town is stupidly flush with cash. And Perth's taste for risk is much higher than the rest of country. You can raise tens of millions of dollars for high-risk, high-reward ventures in a relatively short time. But there's a catch: this only applies if your proposal is to take some geologists and a drilling crew for mineral exploration. The lifecycle for startups is ostensibly quite similar, but ... no dosh. The local investors don't really want to know about it. edit: That said, I wonder if Australia's intelligentsia will ever get over fetishising whatever industry and country which happens to be in the news a lot. I remember endless song and dance about Japanese cars. Now it's Silicon Valley. Eventually it will be, I dunno, rockets and jetpacks. From Montenegro. Meanwhile Australia is one of only 3 countries left with AAA rating and is the only country in the world that has had a growing economy for umpteen years. You can go a long way with sensible, basic policy settings.

jfoster 14y ago
Why should they? It's not what they know. People who have big wins in tech startups generally don't invest in mining ventures for the same reason.
- jacques_chester 14y ago
  Because I have the primeval Australian political instinct: Somebody has lots of money, they bloody well ought give me some! :D
jbarham 14y ago
> You can go a long way with sensible, basic policy settings. A pity then that Australia's federal and state government policies (negative gearing, first home buyers grants, interest only mortgages for investors etc. etc.) have done so much to pump up the real estate market into such a huge speculative bubble than will do untold damage when it finally pops. It's insane what Australians are expected to pay for basic housing in one of the world's most lightly populated countries/continents. Here's an example picked at random: http://www.realestate.com.au/property-house-vic-north+melbourne-112981899 http://www.realestate.com.au/property-house-vic-north+melbou.... 3 bedroom terrace house (i.e., no windows in side walls) in North Melbourne, 1 bathroom, no parking, all yours for a mere $775k at 6.5% mortgage rates.

vtjendra 14y ago

AUS image = mining. USA image = tech innovation. Many Australians talented developer and computer engineers have been flocking to USA for mainly two reasons: 1. They are rewarded more in USA, both socially and financially. Who doesn't want to be in the middle of global innovation among other great people? 2. It is much more prestigious and hard to resist. Many US-based companies have been actively recruiting Australians, for example Amazon.com. This leave Australia with limited local talents and therefore comes up with need to employ overseas eng-IT professionals. Note that 457 are neither cheap nor simple to lodge and employ. We are currently at a phase where it is necessary to keep feeding our demand of technical professionals to keep the growth of Australia tech industry.

nikcub 14y ago

There are two distinct points here that are being a bit muddled. The first is the 457 visa issue. For those that don't know, it is a skilled immigration visa, similar to the H1B in the United States. Australia is coming up to an election in September where the sitting center-left Prime Minister is very likely to lose her Prime Ministership to the center-right party. To sure up her base on the left yesterday she came out and attacked the 457 visa and said that they needed to be more tightly regulated, since they are being exploited by some and are taking jobs away from Australians. Prominent Australian entrepreneurs came out in support of the visa, and argued that you can't grow a new information economy without the importation of skilled labour to make up for the shortfall in local skills. This was the biggest national news item yesterday. As an analogy, imagine if Obama came out in support of lowering H1B visa's or restricting their use, and the shit that would cause. The second issue here, which Matt also takes on by attaching it to the first, is what a lot of people in the startup world feel is a disadvantage that the Australian startup ecosystem has over its US, Israeli etc. counterparts. This argument has been playing out for years now, to not a lot of effect. I think there is a contradiction in this argument, when you combine the two together. On the one hand you are asking the government to leave you alone and let you import labour, but on the other hand you are asking them to do something about the lack of venture investment, the lack of skills, university places, etc. I think the later argument of asking the government to do something to assist startups stems from a misunderstanding of how silicon valley works and why it became successful. This misidentification leads to a feeling that with one or two changes you could 'clone' what has made silicon valley a success, which is not true. The attitude in Silicon Valley has always been to be left alone by the government. The tech industry in the USA is grossly underrepresented in Washington lobby groups (only recently have Google, Apple and Microsoft invested more in lobbying as their businesses broaden and intersect areas where government has more control, such as spectrum). Further to that, Australia ranks well in most global indicies for business startup, running a business and open markets. We actually outrank the USA in ability to start a company, and we rank about even in other business friendliness metrics[0]. I think Australia's major problem is cultural. We have a fear of failure, a lack of entrepreneurial spirit, and a severe tall poppy syndrome (all of which I have experienced first hand - ironically from some of the very people who are most vocal about wanting to make Australia more like Silicon Valley). These should be a clear indication that the "problem" with the Australian startup scene (if there is one, I don't think there is) is not the cause or fault of the government. I think Matt would have been better served here to focus his argument on the 457 issue, using the same arguments he has (such as Australia won't always have things to dig out of the ground), but leaving the other issues alone for now. [0] http://www.gfmag.com/tools/global-database/economic-data/11862-best-countries-for-doing-business.html#axzz2NZyqAC00 http://www.gfmag.com/tools/global-database/economic-data/118...

quadhome 14y ago

The biggest "barrier," if you can call it that, to solving the IT skills gap is the E-3 visa program: https://en.wikipedia.org/wiki/E-3_visa https://en.wikipedia.org/wiki/E-3_visa It's a reciprocal visa program between Australia and the United States. Australia offers Americans the friendly 457 visa and the US offers Australians the friendly E-3 visa. It's an independent and generous quota compared to the H-1B visa. It's surreal to me reading people weighing in so heavily about the difficulty in hiring Australians and ignoring the elephant in the room. If you are a decently skilled Australian in IT, you get up and move to Silicon Valley. Why? * More money. * More respect. * In the center of your industry. * Paid travel! This is the same complaint New Zealand has had about Australia for years too. Kiwis move to Australia for the similar reasons. Background: I've been on a 457 for two and a half years. Everyone I know from the US or Europe on a 457 is in Australia for the "lifestyle." The rest are people who came to Australia to study or work from place like India/China/Philippines[1], converted to a 457, and are working their way to permanent residence and finally citizenship. And you'd be unsurprised how many move to work in the US or Europe after earning their Australian citizenship. [1] http://www.immi.gov.au/media/statistics/pdf/457-state-territory-summay-report-jan13.pdf http://www.immi.gov.au/media/statistics/pdf/457-state-territ...

jcampbell1 14y ago

The author is indirectly describing what is known as "Dutch disease". When a country is rich in natural resources, smart and enterprising people specialize in learning to extract natural resources. This damages the technology sector because talent gravitates todward money in market economies. Also, the first paragraph of wikipedia's article on dutch disease is flawed. Dutch disease is used by economists to describe when a domestic comparative advantage crowds out another industry. It has nothing to do with manufacturing. The first paragraph incorrectly implies that it has something to do with the manufacturing sector.

jacques_chester 14y ago
> The first paragraph incorrectly implies that it has something to do with the manufacturing sector. Because historically it's been the manufacturing and trades sectors that get crowded out; they are the industries most directly competing with mining for skills and equipment inputs.

jedmeyers 14y ago

I am originally from Eastern Europe. I have got an Australian permanent residence visa but decided not to move there at least for now. I feel much better in Silicon Valley on a work visa, where my salary is higher, my work is more meaningful, prices are MUCH lower and my wife found a job in a reasonable time, also in software engineering. I was shocked that you cannot find half-sized shoes in Sydney's stores, and this is considering that their price was 2.5 times higher than the price on Zappos. Australia has to wake up and deal with their protectionist policies regarding local businesses. By giving them protection from external markets they might survive for a while, but this definitely won't last long. No competition means no innovation and high prices for consumers.

joonix 14y ago
Protectionist is exactly right. But things are quickly changing, at least when it comes to local retail. The incumbent bloated chains like Meyer are being disrupted rapidly by overseas online retailers as well as shrewd foreign retailers like Zara setting up in Australia. It's a good thing, too, because the duopolies in Australian retail deserve to be disrupted. They have coasted for far too long providing mediocre value to the customer.