
Why Being an Australian Startup Sucks - kintamanimatt
http://blog.gleam.io/australia/
======
tjmc
This is the second article in a week where I've read the complaint that banks
don't loan money to Aussie startups. However I think you'll find banks don't
lend money to startups pretty much anywhere in the world. Banks aren't the
place to secure funding for high risk ventures - VCs, Angels and crowdsourcing
are.

I think the bigger issue in Australia is that the VCs here have a terrible
investment track record, so banks and other investors are less likely to given
_them_ funds to invest.

There are a couple of things that could change here to improve things. The
first is that it's currently easier to bet $15K on Melbourne FC to win the AFL
Grand Final than to invest the same amount of money in an Aussie startup.
That's completely crazy - it makes becoming an Angel in Australia a burden.

The second potential is Australia's vast pool of super funds (401Ks in US
terminology). They can't invest in either startups or VCs because it's "too
risky". However they should be allowed to invest a portion of the fund - say
10%. That would make a huge difference to the funding available to startups
here.

~~~
jbarham
Given that Australians have the highest per capita gambling losses _in the
world_
([http://www.economist.com/blogs/graphicdetail/2014/02/daily-c...](http://www.economist.com/blogs/graphicdetail/2014/02/daily-
chart-0)), I'm surprised that the regulations around funding startups are so
risk averse. Also ironic that angel investing from super funds is deemed "too
risky" but using your super to get an _interest only_ mortgage to buy an
"investment" property with negative cash flow is just fine. Clearly there are
powerful established interests at work...

EDIT: Given that Melbourne are currently 15th on the AFL ladder anyone would
be crazy to bet on them winning on the Grand Final. Port Adelaide, on the
other hand... ;)

------
zmmmmm
A huge benefit in Australia (at least, for now), is the healthcare and
education system. You can come out of university with no overheads and free
healthcare. All you need is rent, pizza and hosting costs and you can build a
startup. I honestly think a lot of the barriers in the article are overstated.
The biggest problem is the lack of economy of scale here, there is just not
much of a market to test your ideas in locally and a lot of regulation and
legal barriers (eg: asinine copyright laws, no fair use, etc.) that make it
much harder.

~~~
grecy
> _All you need is rent, pizza_

Not even that, you can go on the Dole [1] and get over $1k a month to spend
however you want.

[1] Australia has benefits if you don't have a job. They never expire.
[http://www.humanservices.gov.au/customer/services/centrelink...](http://www.humanservices.gov.au/customer/services/centrelink/newstart-
allowance)

And you get paid to go to University too.

~~~
TOMDM
Well, that's about to change with the new budget it seems.

~~~
grecy
If Abbott isn't kicked out soon, Australia is going to become a much, much
worse place. (for many reasons, not just the above) I had tears in my eyes
when my parents told me of his plans to charge University and healthcare fees.

I used to be proud to be Australian, I hope I can be in the future.

~~~
sien
The change of healthcare fees was a $7 co-payment on going to the doctor and
less of a tax benefit for higher income earners.

Australia still has universal health cover.

~~~
zmmmmm
Almost. There are in fact people in the world who do not have $7 and who once
could walk into a clinic but will have to essentially beg their doctor to give
them service for free. It's a tiny crack but if you want to apply the word
"universal" a tiny crack is as good as a chasm.

------
bbromhead
This won't be a popular comment amongst my fellow Australians, but some of
these points in the post don't ring true to me.

Being a startup in Australia is hard, but being a startup is hard anywhere. I
think there is a certain mentality amongst Australian startups that the US is
the land of milk and honey for startups and Australia sucks. There is a
certain element of truth in that, but its not as bad as some of the posts to
HN make it out to be.

First Tax Breaks: The R&D tax incentive is amazing
([http://www.ausindustry.gov.au/programs/innovation-rd/RD-
TaxI...](http://www.ausindustry.gov.au/programs/innovation-rd/RD-
TaxIncentive/Pages/default.aspx)). We have recovered around 40% of our seed
funding as a tax refund from the ATO. If you do something slightly innovative
and can prove that you do some testing, you qualify. This tax incentive has
directly allowed us to put on another developer.

GST: Yup GST is a pain but at least its uniformly applied to the whole
country. The US you have to apply it on a state by state basis (depending on
where you are located etc and the nature of the good/service you provide).
Other countries have a consumption tax. Seriously meeting your tax obligations
is a requirement of doing business anywhere, its not that hard to do:
if(countryCode == "AU") {//apply GST... }.

Venture Capital: Nothing can compare to Silicon Valley in terms of money
available for the tech space, but at the same time Australian VCs are often
happy with a 10x exit as opposed to pushing you to be either a $1 billion
company or go bust. The choice of where you raise will be a personal choice
more likely influenced about who you know. Remember the higher the valuation
you get, the bigger the exit you need to make.

Australia being expensive: Sure you pay a little bit more for your mac book
pro, but the guy using it will be seriously cheaper than someone in the
valley. You think Australia is competitive for developers who could get a
cushy contracting rate. Try competing with facebook, google etc for the top
talent.

Internet: Ok the current government hates in the NBN, it sucks, I love fast
broadband as much as the next person, but unless your startup is about
delivering high bandwidth content to Australians who cares? Your servers are
going to be sitting on AWS in US_EAST anyway.

Mind you having said that I do agree with some points. Employee Share Schemes
are a pain in the arse and getting a good payment provider is tough. Seriously
spend the cash to get a Delaware C-Corp and open a US bank account... this
will make your life so much easier. Even Braintree Australia is a shadow of
using Braintree from the US.

~~~
grecy
I'm an Australian that left 8 years ago, and have been living and working in
the US and Canada ever since.

I agree with you 100%.

Australia being expensive: Anyone that says that needs to wake up to how lucky
they are to live in "the lucky country". After living a few years in America
(and to a lesser extent Canada) I'm more than happy to pay extra for "stuff",
given life is so, so much better. Heath Care, Education, decent
infrastructure, paid vacation, sick and maternity leave, just to name a few.
Also consider someone working minimum wage in the US ($7.25/hr) has to work
~206 hours to get that $1500USD MacBookPro. In Australia, someone on minimum
wage ($16.37/hr) has to work ~113 hours for the same $1849AUD MacBookPro.
Obviously minimum wage earners are not buying MacBookPros, but given that
wages scale similarly, you see living/working Australia is actually better
than living/working in the US.

Timezones: Wait, it's a complaint that the world has timezones now? Give me a
break!

Foreign Investors want a global vision: The OP of the article is upset that
_foreign_ investors want to get a boat-load of money back on their money by
reaching as many customers as possible? Does this person not understand how
investors think?

In short, cry me a river. I challenge any Australian who disagrees with me to
go and live in the US for a few years, then see what you have to complain
about.

~~~
vacri
The timezone issue is significant if you need to offer realtime support as
part of your product, and the majority of your clients aren't near where you
are.

~~~
semerda
West and East coast in the US are 3 hours apart (timezone - ta-da!). Same
issue with timezones applies even in the USA. Realtime support is hard to do
anywhere in the world. What happens when the operator is overloaded with too
many requests. There are many ways to make this scale and work even across
timezones and languages.

~~~
vacri
Come on guys, give me some credit. We're having problems with internal
processes right now because our offices are split between Melbourne and San
Francisco, and there's only 2 hours in the regular working day of overlap.
Being a couple of hours out is nothing compared to being almost the entire
working day out.

The more your support has to do shift work, the harder it is to get and vet
support, train them properly, and the more expensive they are to pay. The more
they're awake during normal sleeping hours, the lower the quality of support -
and I say this having spent two years doing support for in-timezone sleep
medicine equipment. The article also states other problems with response lag
and low efficiency, which is what happens if you can't adjust your work day
(and if you do, then you're out of sync with local services).

The kind of condescending 'get over it' comment from grecy is _utterly_ beside
the point - regardless of whether you deal with it well or not, out-of-
timezone sync support _is_ more difficult to do, and that is something worth
mentioning in a list of hurdles an Australian startup might face.

~~~
grecy
> _The kind of condescending 'get over it' comment from grecy is utterly
> beside the point - regardless of whether you deal with it well or not, out-
> of-timezone sync support is more difficult to do, and that is something
> worth mentioning in a list of hurdles an Australian startup might face._

You know, Australians are _very_ well known internationally being being
complaining so-and-sos.

I can't believe a thinking person would actually complain that Australia is in
vastly different time zone. Next you'll be complaining it's too hot, then that
it's to sparsely populated (oh, you already are). It never ends with you, does
it?

~~~
vacri
?

You're doing some pretty massive projection there. I said that the timezone
increases support costs if you're not where your market is, and it's worth
putting on a list of hurdles for startups. I didn't _complain_ about the
timezone, just mentioned that it's not the trivial issue you painted it as.
It's also winter here in Melbourne, where it gets cold enough that I've heard
both Scots and Canadians bitch about how stupidly cold it is here (because we
don't insulate our buildings properly), and when summer rolls around, I love
the heat and 40+ degree days. And when it comes to 'sparsely populated', I've
argued several times here on HN that Australia is one of the most urbanised
large countries in the world - despite the outback image we promote, far more
of us live in the cities and we have a very centralised population.

So not only are your complaints wrong about me, they're the diametric opposite
of who I am and what I say. It's fine if you don't like the country and want
to live somewhere else, but don't just make shit up about your former fellow
citizens in order to justify your movement to yourself.

------
shimms
Not dismissing the rest of the article at all, but with specific regard to
accepting online payments, why no mention of Pin [0]? Stripe/Braintree aren't
the only options for Australian businesses to accept credit cards online
easily, in-fact we have our own, home-grown alternative kicking arse in that
arena.

Pin has been out of beta for over a year, accepts payments in multiple
currencies [1], is Australian owned and operated, and works very similarly to
Stripe with regard to integration and client libraries [2].

I get frustrated that an Aussie company solving the very issue lots of people
complain about (easily accepting card payments online) doesn't get a mention,
and is always playing second fiddle to Stripe.

[0]: [https://pin.net.au](https://pin.net.au) [1]:
[https://pin.net.au/docs/currency-support](https://pin.net.au/docs/currency-
support) [2]: [https://pin.net.au/docs/api](https://pin.net.au/docs/api)

------
underwater
I'm an Australian working at a US software company. I've always planned to
return home at some point. But the state of the industry in Australia makes
this seem like a very poor move. I could move to Sydney, take a 50% pay cut
for an uninspiring position, and still end up with a higher cost of living
(yes, including house prices!) than here in the Bay Area.

~~~
zizee
You mention that you'd have to take a big paycut to work in Aus, yet the
author of the article complains that it is expensive in Australia because of
high wages.

Which is correct?

~~~
jlawer
I am pretty sure you can hire most Aussies cheaper then you can compared to
Silicon Valley or New York, but I consider both of those places the exception
to the rule, and someone on a good wage there will tend to take a pay cut to
go anywhere.

Look at www.seek.com.au which is pretty much the premiere jobs site for
Australia for prices

Senior Dev Roles in Sydney and Melbourne will get ~ $120k AUD per year with
Brisbane and other state capitals generally dropping from there. Mid Level in
Brisbane (3rd largest city) is generally $65k AUD. Orgs tend to be smaller
here, so there are less managers / director / CTO roles then I have seen in
the US. As such you can find it more difficult to climb the ladder.

On top of salary though there are a few extra expenses. Employer super is ~ 9%
(going up to 12% in the future) on top of salary. States may (or may not) have
payroll tax, and you likely also have to pay for things like WorkCover (which
is an insurance scheme for injuries sustained at work). On the other hand most
companies don't offer health insurance, etc as perks.

~~~
jbarham
> On the other hand most companies don't offer health insurance, etc as perks

IMHO as someone who's worked in the US and now lives in Australia, that's a
good thing! I'd argue that one of the major causes of the current health
insurance fiasco in the US is the history behind health insurance being
offered as a perk for good jobs. My health insurance (medicare & private) in
Australia is completely separate from my employer and my employment status,
and I very much like it that way.

~~~
semerda
Exactly. That is one thing I hate in the US. You leave a company and they cut
all your health benefits. Left on the street. And when you do find coverage
you end up paying nearly 1K per month for mediocre coverage. In comparison in
Australia I remember paying $100 per month (5 years ago) for private coverage
on top of medicare (free).

In the US at my previous gig, I remember hearing older folks with health
issues afraid to get made redundant because they would loose their health
coverage. None of those fears exist in Australia.

------
bobbles
The Australian Government has a petrifying fear of anything that operates
online. They see no value in country wide internet and present short sighted
ideas whenever the concept is brought up.

It's kinda depressing

~~~
shard972
I'm sorry but just because the LNP isn't on board with the Monolithic NBN
project while still committing billions to infrastructure doesn't equate to
"They see no value in country wide internet".

Can we not just slander because they don't agree with you?

~~~
stephen_g
It's not that they are not on board - it's that they are spending just as much
on a version that is objectively worse in almost every way...

They have said that there's no value in homes having faster than 25Mbps, but
are still putting in the same amount ($29bn Government equity investment vs
$30bn before) of money to deliver that as what the fibre network that would
have been able to provide 1Gbps to 93% of the population would have cost
(pricing permitting, of course. But that would have dropped fast as demand
went up and 1Gb/s would have been as affordable as the 100Mb/s plans available
today on the NBN are).

And decent options for small business are nowhere to be found. Have you tried
getting decent internet outside a CBD? We would kill for the NBN - other
providers wanted between $2000 and $4000 a month for 20/20Mbps fibre, and this
is in the inner suburbs of a capital city!

~~~
tomcorrigan
I don't want to get too political here but the previous government massively
understated the cost of FTTP broadband. The money saved is much more
substantial than $1bn. Whether it's a more effective long term investment is
another question altogether.

Also, prices were not scheduled to drop for the broadband service. The Labor
governments $30bn costing was predicated on NBN users paying _more_ than they
currently pay for ADSL services, and for those charges to increase annually.

~~~
quink
Wrong. In fact, I posted about this just an hour ago over on reddit:

[http://www.reddit.com/r/australia/comments/290n9b/is_the_nbn...](http://www.reddit.com/r/australia/comments/290n9b/is_the_nbn_strategic_reviews_terminal_value/cigel11)

Furthermore, you're calling it a saving of money in one sentence and then
imply that it's in investment right in the next. So what is it, a pure
expenditure or an investment?

And in fact, with the NBN plan I'd likely switch to were it available in my
area I would pay $10 less than my current connection, have 4 times the
download speed, 40 times the upload speed and unlimited data. Or I'd stay with
the same provider and pay $5 more and the same as above but not unlimited
data. Either of the two are with a phone line included.

So I guess if that's what you meant by paying more than with ADSL, then that's
one way of looking at it. Another way is this (mind you, with 40 Mbps upload
vs. a maximum 2 with ADSL):
[http://i.imgur.com/VKovuSO.png](http://i.imgur.com/VKovuSO.png)

Which blows this:

> The Labor governments $30bn costing was predicated on NBN users paying more
> than they currently pay for ADSL services, and for those charges to increase
> annually.

Pretty much right of the water, doesn't it? In fact, I'm curious. Where did
you hear it and believe it to such an extent you were willing to parrot it
without any further fact checking?

------
foxylad
It could suck more... try being a Kiwi startup!

Seriously, interesting article. I can relate to many of the points (online
payments, for instance). I'd put premature taxing of stock options at the head
of the list - it's something the government could change at the drop of a hat,
and it would change the whole landscape.

~~~
te_chris
It's not THAT bad here. I'm starting a new company and tossing up where to
incorporate (Oz v. NZ) as one of the other partners is Australian and most of
our sales will be in Australia. What's super annoying is how frustrating doing
business between the two countries is, especially considering CER. Oh, and the
payment thing straight sucks.

------
hawkice
For the ambitious youngsters: do not wait until there's a Hacker News story
about how easy startups are in <Scenario X>.

------
paulsutter
As a founder of several Silicon Valley startups, now living in Tokyo and
exploring the "startup scene" in Asia, allow me to comment.

TOP 5 REASONS STARTUPS IN COUNTRY ___ ARE SO DIFFICULT

1-4. Exits, exits, exits and exits. Exits are scarce in country ___ and
valuation multiples are low [because strategic acquirers are far away].

5\. VC money. VC money is scarce in country ___ and on shitty terms, because
EXITS ARE SCARCE AND ON SHITTY TERMS, and for no other reason.

Beyond that, this article reflects mostly bad decisions and wishful thinking.

> The Government Does Not Support Online Businesses

Neither does the US Government.

> Nor Does it Support Venture Capital

Nor does the US government. Also, see "VC Money" above.

> Foreign Investors Want You to Have a Global Vision

No they want you to sell into a big market. Australia has billionaires, ergo
there are large markets in Australia. Go find one. Or go to a place that has a
market you like better.

> start-up employees are liable for the tax charge on shares when they vest
> (not when sold), even though the value can’t be realised properly yet.

The one interesting point in the article! Thank you! Now you have one specific
point that you can address. Set aside your blanket criticism of Australia, and
people will be able to hear your one good point.

> Very Few Tax Breaks or Grants

What Silicon Valley successes can be attributed to tax breaks or grants?
Actually it's just the opposite. Government programs that support startups are
most common in countries where there are structural reasons that startups are
hard.

> Australia is Getting Really Expensive

Neutral point, it affects your pricing and costs equally.

> We’re both in our early 30′s, with a family & mortgages.

So you want to be a startup founder, AND own a house, AND have a family? How
is this Australia's problem? Founding a startup requires tremendous focus.
Seems like poor judgement with a touch of entitlement.

> Timezones Make Communication Hard

Locating yourself far away from your target market is foolish, not unfair (see
"foreign investors" above).

> we’ve got more incubators than ever before, we got lots of amazing co-
> working spaces & everyone is really just trying to find their product market
> fit in the big bad world.

I recommend looking a little more intently at the /results/ side of the
equation, and a little less on the /effort/ side of the equation.

~~~
pjc50
_So you want to be a startup founder, AND own a house, AND have a family? ...
Seems like poor judgement with a touch of entitlement._

Well, that makes me feel a whole lot better about being a salaried employee.

------
salem
Missing from this article is that most places outside California don't have
laws in place to prevent employers claiming all the IP you generate on the
side while being a salaried employee.

Ditto for non-competes. This can make it even harder to raise money, because
of the risk of litigation.

The tax burden of receiving stock options is also pretty terrible, it
effectively reduces the spread of equity in the Australian startup scene. So
there is no broad base of benefactors from this list of successful exits to
seed the next round of founders.

------
redguava
If you want to play the VC/Funding game, don't do it from Australia. I'm okay
with that.

That doesn't mean being a Australian startup sucks, my experience is that it's
awesome. I wouldn't have it anywhere else.

Just do that crazy thing of getting customers to pay you money and earn more
than you spend.

------
trhway
>Foreign Investors Want You to Have a Global Vision

a reasonable expectation given that it is a part of big space speaking the
same language and close [relatively, like closer than Russia for example]
culturally.

>In a nutshell start-up employees are liable for the tax charge on shares when
they vest (not when sold)

the same for the shares - RSU - here, in the US. Or may be the author meant
"options"? It is really 2 different things...

> I’ve witnessed a huge explosion of enthusiasm in Australia, we’ve got more
> incubators than ever before, we got lots of amazing co-working spaces &
> everyone is really just trying to find their product market fit in the big
> bad world.

sounds like a gold rush, or at least sounds very similar to the one happening
right now here in SV.

Anyway, startup is a tool, not the goal...

------
prawn
The write-up misses postage as an issue for any startup moving a physical
product or trading anything physical between customers. Postage prices within
Australia are rough and even worse if you're trying to ship out of the
country. People buy from Book Depository (free shipping, at least in the past,
from the UK) and Deal Extreme (free shipping from Asia) often getting products
more cheaply than they could even ship them here.

------
crdb
I'm a French citizen living in Singapore after Sydney (in one of the companies
you quote). I think you get a lot of things right there, and they apply to
other countries as well.

Where I disagree:

\- Australia is a much bigger market than it looks because Australians are
connected to the internet and have high disposable income. For example, only
10% of South East Asia's 618 million inhabitants are connected (and many, only
on smartphones), and their basket value is as much as 5x lower for similar
products, so you could almost argue that Australia is a bigger market than the
whole of South East Asia! 70-90% of e-commerce depending on the products was
coming from abroad in 2011 according to CBA crunching 1 million of their
customers' accounts - that's heaps of local opportunities.

\- the government does not need to "support" young businesses, it just needs
to get out of the way of entrepreneurs and investors. To be fair, compared to
most of Europe, it does. Australia is a capitalist Anglo-Saxon country and if
you are a citizen, it's pretty easy to start up. Singapore recently made it
much harder to get government money, for example SPRING funding is only
available to companies with investments from an approved list of VCs, and they
have to be Singapore-based, but it still wins because it's the easiest country
with the rule of law anywhere in the world to start a company in, especially
when it comes to things like visas being granted in a few hours or days.

\- you forgot to talk about immigration law. It's better than the US' yearly
H1-B lottery, but still pretty hard to import technical talent, which is
scarce locally. Some of us get in for a year under the WHV scheme, which is a
nice way to test foreign talent before you apply for sponsorship. From memory,
of the 120 developers who applied to our last job posting, around 20% were
from the US, 5% from Australia, 50% from Europe and the rest from countries
where visas will be painful. If this is representative, Australian and US
immigration policies hurt businesses. Australia's entrepreneur visa requires 1
million AUD capitalization, which is ridiculous - in Singapore you can
theoretically capitalize your company with 50k SGD, and then apply for an
Employment Pass for yourself; all you will need is someone else on an
Employment Pass or better to act as director for the company in the meantime.
Guess where all the Asian startups incorporate!

But you are correct that there is a hell of a lot of places (such as tax law,
with equity as you state or even with income, capital gains and corporate tax)
where the government could make Australia considerably more competitive, and
the funding environment is really bad (although I've found Australian
investors much smarter in aggregate than elsewhere in the region).

------
nikatwork
Lack of mentoring is also a huge problem. I know of an Australian B2C SMS
startup which had a killer value proposition and secured over a year's worth
of runway funding.

Unfortunately they chose the wrong tech stack to deliver - Enterprise Java
instead of something nimble - and didn't have the correct focus on building
traction.

With a bit of mentoring and tough truth they could easily have hit a home run.

~~~
threeseed
You can be very nimble with Enterprise Java. Plus you get the benefit of the
biggest library bar none. The issue isn't the technology it's the mindset.

Look at technologies like Dropwizard or Vert.x.

~~~
nikatwork
Sure you can, especially with eg Groovy and Grails, but I wouldn't say it's
Java's "sweet spot". Plus you tend to attract a lot of corporate enterprise
Java devs who on average have a different mindset to quick-moving product
devs.

I moved into a Perl shop straight after and the difference in productivity
using off-the-shelf language features was staggering. Ironically I'm very
interested in Clojure right now, I get the feeling it could deliver impressive
productivity while leveraging underlying Java technologies.

------
dyno12345
I would _much_ rather live in Melbourne than SF but I couldn't find _any_
positions that looked at all interesting there...

------
wiradikusuma
not directly related, but the article mentions Singapore many times: can any
non-Singaporean with experience in running (ramen) startup in Singapore give
some information? maybe in a blog post like this?

EDIT: to clarify, esp. if you're not there (e.g. you're an Australian in
Australia thinking of starting up in Singapore).

~~~
crdb
The gist of it is: if you have residency, it's a no brainer. Incredibly cheap
and easy, the only issue (as anywhere not the Valley) is funding, which is
still not at Valley levels or with Valley culture. This is changing as more
entrepreneurs exit and become angels.

A lot of people have written long posts about it on Quora, so try a quick
search there. The regulatory environment is changing somewhat this year,
particularly regarding visas (apparently the EntrePass was abused by people
buying themselves residency on the cheap and the government is cracking down).

~~~
sheepmullet
In my experience the talent pool is quite small in Singapore compared to
Australia. That being said there isn't a lot of good opportunities available
to the top talent so you can probably employ a significant chunk of it.

Definitely not going to be a tech hub anytime soon though.

~~~
crdb
It is (out of 120+ applicants, we had 1 PR and 1 EP holder, rest foreign) but
it's also incredibly easy to import talent. Pay them enough for an EP, and you
get the EP approved in hours if not days.

In one case, the guy was in Colombia when we made him an offer and sent him
his flights, his EP was rejected when he was transferring in New York (because
he didn't have a degree, so the government thought we were "overpaying" and
asked us to explain), his appeal was approved just before he landed in Hong
Kong, where he downloaded the Letter and showed it to border control in
Singapore. Total time from offer to walking into the office: 36 hours. Good
luck doing that in the US.

------
semerda
Half of the comparisons in the article are irrelevant, nit picking on stuff
that isn't important. However I do agree that Australia doesn't have enough
post seed money.. but Blackbird Ventures (and others) are changing that.

So I am an Aussie living in Silicon Valley for the past 5 years. Done 2 tech
startups in AU and now in USA. Here is my take on the article based on my
experience in both markets.

You don't need an exit strategy. Stop focusing on exits overseas. Just build
something people want!

It isn't difficult to scale products worldwide from Australia. Infrastructure
wise you now have AWS in Sydney, the best worldwide infrastructure platform
(see Gartner’s Service Magic Quadrant). On the business front you only ever
want to do an international strategy once you proved your product has a
scalable business model. Same applies for US companies before they go global
after Seed. While in the "Seed" phase use the local market to learn & iterate
before scaling out.

5 years ago iTunes App store / Google Play did not exist. That sort of
distribution is a door to the world! Not to mention the internet itself. Learn
ASO, SEO and if you don't have a mobile product.. then build one asap. The
future is mobile. Humans are mobile creatures and we engage now more via that
computer (mobile phone) in our pocket.

Look at WhatsApp. Based in Silicon Valley built an empire out of sight. They
focused on an international market. By the time local competition noticed what
a monster of a business it became, Facebook snapped them up for $19B.

I often hear business people that run tech companies complain more than
software engineers about how hard it is to build companies without funding. As
Chris Dixon pointed out at Startup School 2013, "Business people vote with
their dollars. Engineers vote with their time". Maybe it's time to learn to
code? If you can code you can build product now, iterate now etc.. without
sitting around day dreaming ideas while waiting for "funding" so you can pay
someone else to code it for you.. and potentially mess up the foundations.

Tax Breaks or Grants don't matter. I have not heard any startup even consider
those in the USA.

Australia is Expensive - have you seen the rentals in SF/bay area? Food and
clothing - yeah dirt cheap in the USA compared to AU.

Timezones - West & East coast in the USA are 3 hours apart. If you need 24
hour support outsource it via oDesk.

Have you considered Health care? in the USA it is insanely expensive. If you
don't have a job you will pay around $1.7K for good coverage per month for
your family (you, spouse & kid). If you don't, you have no coverage. In
Australia.. oh yeah it's free. And not tied to your job. Now say you have
employees. You should consider this a massive expense because if you don't
cover them, there are plenty of other companies that will with better
benefits. You won't have these issues/expenses or competition for talent in
Australia.

When I left Australia few years ago there was no Fishburners (Sydney coworking
space) or Startmate (YC like mentorship and seed financing) or a swarm of
similar entities now all over Australia supporting local startups & talent.
Yet people still built business. When I did my 1st tech startup straight out
of University there wasn't even enough free online content to tell me how to
do stuff, no support networks and infrastructure cost an arm and a leg. If you
ask me, I think it is far easier today to build a tech business in Australia
then it was few years ago.

------
paulhauggis
"Basically, for startups it’s super expensive to do business in Australia
compared to other big cities—wages, compliance, tax and even software costs
are high, and to make it even more tough, there’s typically less funding
available to meet these costs."

This is what happens when government gets too big and the labor unions are
mandated by law.

~~~
threeseed
What type of nonsense is this ? It's super expensive to do business in
Australia because it's super expensive to do anything in Australia. It has a
high cost of living, high salaries, high property prices, small population and
it located far from everyone.

We've seen over the last few months what a smaller government looks like.
Moving to a "user pays for everything" model means less take home wages with a
flow on effect of less money for startups.

Labor unions are not mandated by law and for all intents and purposes
irrelevant for 99.9% of startups. They do serve an incredibly valuable part of
society being the only counterweight to large corporations who are easily able
to buy their way into politics.

~~~
programmarchy
> We've seen over the last few months what a smaller government looks like.
> Moving to a "user pays for everything" model means less take home wages with
> a flow on effect of less money for startups.

I don't know much about Australian government, but how is a "user pays for
everything" model different from taxation? In your state, doesn't a user still
pay for a service through taxation, whether an income tax (less take home
wages), sales tax (less money for startups) or some other tax?

~~~
Jam0864
Taxes didn't get reduced, they just got reallocated to fighter jets.

~~~
prawn
Reductions in public services/welfare supposedly matched by temporary levies
on high earners. Those levies will be gone soon enough and the high earners
will make back any shortfall through super changes anyway.

