25 Reasons for the Australian Startup Scene to be Grateful
Over the past few months I have been surprised by the level of outrage and dissatisfaction in the startup ecosystem about the state of our industry and lack of support from various Governments.
While there is still a decade of work to be done to establish a significant technology industry, to be frank the startup ecosystem has never had it as good as it does now.
Two years ago I wrote a popular essay Let a 1000 Startups Bloom after realising that less than 6% of the BRW Rich List came from Tech Startup fortunes vs The USA Forbes Rich List which was~25% Tech Founders.
The original article is about 20 pages long and bemoans the lack of Government and community awareness or support for startups and innovation.
It follows the course of the Space Race and the Cold War and their massive effect on the growth Tech Companies in the US especially Silicon Valley, its worth a read if you want a trip down Memory Lane and a blueprint for how to launch a tech nation.
Over the last few weeks I have been having an ongoing discussion with a number of people about how we can improve the rate of new startup creation at University of Sydney and more broadly across the country.
As I thought about what still has to be done, it occurred to me that Australia has made huge progress in the last two years but there is still a long way to go.
24 Reasons For Australian Startups to be Grateful
In 2017 I believe the Australian Startup scene has a lot to be grateful for. The public narrative has changed significantly and I believe permanently.
3 years ago when I started writing there was barely a Federal or State MP that understood what a tech startup was (ironically Malcolm Turnbull was probably the most knowledgeable owing a large part of his fortune to a tech startup) almost all MPs lumped them in with fish and chip shops and suburban tradies and the policies and budget measures of both sides had reflected this forever.
3 years ago almost no one publicly supported the Australian Tech industry, it was Mining and Banking full steam ahead.
Technology Startups were at best an afterthought.
Fast forward to today and both sides of Politics and the general public are actively talking about startups and there is significant financial support for startups.
But it’s funny, almost everyday I see Facebook & Twitter rants from startup founders or commentators about the lack of Government Support or Investment Funds and while there is still a lot of work to do let me tell you we are a long way ahead of where we were 10 years ago.
25 reasons to be grateful.
- $50 billion to build over 30 Navy Ships (this is an excellent example of nation building, it might seem a bit old school but building ships is super high tech and you have to think this capability will have massive flow on effects like the US Space Race did for Silicon Valley),
- ~$900 million new VC Funds raised in 2015/16,
- $200m Innovation Fund to help commercialise CSIRO, University and Government funded research,
- $23 million Federal Incubator Support Program + Various State Incubator Programs,
- NSW Medical Devices Fund,
- Code Club hit 15000 kids learning to code (good one Annie & Team),
- NSW MVP $25k & Building Partnerships Grants $100k (these are probably the best starting point for Startups in the country),
- LaunchVic $60m for helping the Startup Ecosystem
- SA, QLD, WA and NT have a range of similar startup programs,
- $730 million DSTO Next Generation Technologies Fund,
- Atlassian IPO made everyone sit up and take entrepreneurship as a serious career option,
- Sydney School of Entrepreneurship (launches 2017 with $25 million in NSW funding),
- TechVouchers program $15,000 for SMEs to use high tech manufacturing facilities in the Australian Universities and Government Research bodies,
- $500 million Biomedical Translation Fund,
- CSIRO OnAccelerator Program to spin out startups now onto its 3rd group ($20 million in funding),
- $250 million Industry Growth Centres (like CRCs) for Advanced Manufacturing, Cybersecurity, Food/Agtech, Medtech & pharma, Mining tech and Oil/Gas resources,
- $25 million for Quantum Computing,
- Business Research and Innovation Initiative that offers $100k -$1 million in funding to solve specific problems,
- Austrade Landing Pads (you may not agree with the location for all of them but I have it on good authority the San Francisco one has been super helpful for one of the startup companies I advise),
- $30m for a new Cyber Security Growth Centre,
- Tax Incentives for Angel Investors (and a very active Angel scene),
- Accelerating Commercialisation Grants,
- R&D Tax Scheme,
- Diversity is finally getting the attention it deserves with great initiatives from accelerators and industry including SheStarts (Blue Chilli), Incubate and StartMate,
- Almost every University has an active startup accelerator with the majors getting serious funding and support including $1 million from The University of Sydney to Incubate.
In the last two years I reviewed about 400 applications for various accelerators including 2016 Muru-D, 3x batches of Incubate and the 1st batch of CSIRO OnAccelerator, while we saw a lot of awesome startups to be frank in my opinion the number of investable startups is still pretty small.
While Im excited about our new batch of Startups at Incubate.org.au Im mindful that this is the most advanced and largest cohort we have had in the 4 year history of the program but its a drop in the ocean and frankly Australia needs to be creating 100s of these deep tech startups every year.
In my opinion Australia’s biggest problem this year is not lack of Government Assistance or Venture Capital.
Our biggest problem in 2017 is growing entrepreneurial and STEM talent and creating investable startups.
This problem is going to take more than just money, its going to need active participation from the community in helping entrepreneurs launch and survive their first year of business.
So the question is, what are you doing about it?
Im spending a lot of my time helping new entrepreneurs get launch at Incubate.org.au as well as my two machine learning projects Visimagic (object detection for self driving cars) and Newscloud.io (Real Time API for News).
The startup ecosystem needs to actively help create the next generation of entrepreneurs, the Government can provide funds and programs but we need experienced entrepreneurs and specialists to help new entrepreneurs survive the first year of their startup life.
Incubate is always looking for experienced and talented founders and specialists to mentor our teams, if you are in Sydney please consider coming to one of our events and helping our startups https://incubate.org.au/contact/
Incubate Class 9 Startups include;
- SpaceOps a Cubesat Space Launch Business (yes it is Rocket Science, prototype being built, 1st test firing end of Feb),
- Hindtech which makes Masso Advanced Manufacturing Controllers for CNC Machines (has product and revenue)
- NICSLAB which makes Scientific Power Equipment for labs (has product and revenue),
- Winkd an exclusive Lesbian Dating App (prototype launching end Feb to a large wait list of users),
- BlogoTrip a Search Engine for Travel (prototype live now),
- EarthAI a Machine Learning Platform that finds Gold for Miners (prototype live, now has trial customers),
- Vouchify a Recommendation Network that helps Retail and Local businesses get more customers (~400 businesses using this),
- Gorep a Referral Sales Platform that helps ecommerce businesses generate new customers using teams of students and workers (prototype live, first customers trialling the system),
- iDissent a Complaints System that automatically generates legally correct complaints to help consumers resolve complaints with companies (prototype launching mid Feb),
- Haptec a Smart Surgical Assistant Device that attaches to a cauterisation tool and helps Cancer Surgeons detect Cancerous Tissue in Real Time (working prototype, investigating 1st target segment and planning clinical trials).
PS Im super keen to hear about your projects and initiatives, please add these into the comments
PPS Also feel free to add any interstate programs I missed into the comments.
My original Suggestions
Here are my suggestions from 2015 copied straight from Let a 1000 Startups Bloom and also from a letter to the then Assistant Minister for Science & Innovation.
- Pick 5 top National Nation Building Technical Priorities and offer aggressive incentives and funding to attack the problems (Great progress on Medical, Ship Building, security),
- Create effective crowdfunding laws that mirror the USA, virtually no restrictions on number of investments or size. (somewhat improved but less relevent due to extra VC and Angel funding),
- Extend Early Stage Venture Capital Tax Free Status to Angel Investments (Somewhat done),
- Allow formation of Angel Syndicates with Early Stage Tax Free Status (Somewhat done),
- Extend ASX No Liability Mining Company legislation to Startups (Mining Explorers were the startups of our last boom) with short form prospectus with appropriate risk warnings (nope),
- Non competitive grants for equipment, components, lab work and cloud computing time. (most State Govt have pretty good grants programs now and the cloud vendors such as Softlayer and AWS are helping with very generous grants),
- Startup Precincts created in every major city and regional centre co-located with University Campuses (mmm announcements but not much action),
- Free rent for startups working on the nominated problems for 1–2 years, based on business plan and evidence of execution (there is the Business Research and Innovation Initiative which pretty well fulfils this),
- Non competitive Founder Visas & 457 Exemptions (visas getting easier but still a lot of issues for early stage entrepreneurs, the requirement to raise capital is limiting otherwise good entrepreneurs),
- Anyone who gains a degree or postdoc gets Permanent Residency (no),
- Anyone with a post grad who wants to immigrate gets permanent residency (no),
- Startup Living (Ramen Noodles) Wage for 1 year (some progress with grants),
- Open access to advanced Fabrication and Lab facilities that already exist (somewhat easier),
- Join R&D and Commercialisation Activities Grants and Rebates together for one cohesive strategy. (mmm not really),