Aussie 'Gold Rush' in SV?

Aussies have been coming to the States for 30 years -- actually, longer if you think about Ugg and others, but for sure Peter Farel founding Resmed.

There's a misconception that if you come here, everything is solved and the streets are paved with gold. It's a little like the scientist I started out to be saying naively it's such great technology; build it and they will come.

I think the real story is Aussies who are building these companies back home; that's really new. I think Atlassian, Stayz, Bislr, Freelancer, Spreets, 99 designs, OzForex, and the prior generation Seek and Looksmart are the real heroes because they proved it could be done on shore in Oz [Editor's note: Australia]. Dave Skellern and Neil Weste went against all odds and proved you could build a big semi company in Oz with the first Wi-Fi chip company, despite the absence of any domestic chip market. Dave made a massive exit to Cisco.

What's also new is that the current generation got US private equity firms (not VCs, yet) to do later stage deals domestically. It would be great if local PE firms would get into these deals. I would much rather see Aussie funds supporting Aussie companies -- there is over a trillion dollars under management in Oz and it's a shame that most of the tech money goes into US tech.

Web deals are inexpensive to start and to fund -- so easy to bootstrap, and less constrained by geography. But they still need serious dollars if they start to get traction, because competition is so fierce they need to market like crazy and that costs big money. Sometimes they get lucky and go viral, but it's rare. With hardware deals, you need to have money to build the prototypes to get started; this is the area that Aussie entrepreneurs really need help with. It's also the area where the most sustainable and value-creating companies can be built. According to the World Economic Forum, Australian startups are strongest in the new to region category, not new to market or new to world -- this means we are good at copying successful ideas from overseas and exiting them in Oz. That's not sustainable. The same is true of many, many, other countries, and in general mercenaries make money far more easily than missionaries.

On the invention side Australia is disproportionately strong; there is massive government support of research -- we invented Wi-Fi, the photocopier, plastic money :) ...but we are weak on the rest of the innovation value chain. We are also more often visionary or missionary entrepreneurs when we do technology, rather than mercenary. Atlassian had a vision of collaboration rather than e-mail. Resmed proved the existence of a lethal disease no one ever knew existed but affected many, many people, then built a multibillion dollar company to cure it.

Another generational change: In the prior generations, there were few serial entrepreneurs in Oz; mostly they win once then go into something easier like property development. If they invest in tech, they tend to be pretty tough on terms like the older generation of family offices. Rather like toughened school boys, they do to the new kids what was done to them and it becomes self-perpetuating. The new generation are more accepting of risk, I think, because they tended to make money faster and easier through the evolution of the web. This is a really good thing for the country because they are willing to re-invest both in themselves (repeat entrepreneurs) and in each other. That's smart money and it's ecosystem creating; with that catalyst we could see a real tech investment ecosystem form Down Under….there certainly is enough beach for a silicon something. :)