Five things the Australian startup ecosystem takes for granted
Wednesday, October 12, 2016/
It’s said that perspective is the way we see things when we look at them from a certain distance – it allows us to properly appreciate their value.
That’s exactly what happened to me over the last couple of weeks.
After traveling from Australia to Israel to attend the DLD Tel-Aviv Innovation Festival and then over to Vietnam to speak at the Hatch!Fair startup conference, it was clear that what’s obvious for entrepreneurs sitting in their Israeli offices is not necessarily as obvious for Sydney-based entrepreneurs, and certainly not for founders sitting just a few hours flight from there.
The more mature the ecosystem is, the easier it gets to take things for granted.
To grow a successful startup you need to have the right mindset. You need to think big, believe in yourself and never quit. You also have to have a supportive environment.
Sounds pretty obvious right? Well, not really.
Israel is a prime example of a country which is very good in “producing” this entrepreneurial mindset – it’s culturally imprinted in the citizens’ mind. Like in Hollywood, where every waiter is actually an actor waiting to be discovered, Israeli waiters are all startup founders, dreaming on a multi-million dollar exit.
But let’s take a look at Vietnam. Vietnam has indeed started to embrace the startup concept with tremendous fervor that one would expect from this vibrant country. However, the term “startup” is still catching on as a definition of the entrepreneurial spirit that produces international phenomes at great speed.
Previously, a startup business might have been a sidewalk food cart selling delicious street food. The shift in mindset is now in full development, although Vietnamese entrepreneurs have a long way to go in establishing the right frame of mind for global success. Most of the startups are “me too” solutions and usually target the local market. The few that are thinking about global expansion are mostly run by foreigners.
It’s fair to say that Australia is sitting in a good place in the middle – more and more young adults are aspiring to be startup founders and the entrepreneurial spirit is starting to take off.
Equipped with a very supportive ecosystem and big dreams, Australia is definitely on the right path.
Think raising funds in Australia is hard? Try doing it in Vietnam.
In a country where you need to get a license to be an investor – not to mention the fact that it takes around six months of paperwork – it’s no wonder there are a scarce amount of angel investors or VC funds around.
When attempting to raise a $100,000 seed round is an almost impossible task, agility and running lean become your two best friends.
Talent is the pain point of almost every ecosystem.
Finding good talent is hard all over the world, but the foundation of the problems is completely different.
In the US and Israel, the problem is not about finding talent, rather acquiring it. While talented individuals are usually very expensive, already taken or working on their own start-ups, they do in fact exist. To sign them in, you just need to be far more aggressive and persuasive.
On the other hand, in Australia, it’s difficult to recruit superstars as the pool is still not big enough. Nevertheless, the Aussie lifestyle, coupled with having English as the native language, makes it easier to import talent (that will eventually help grow the local pool of talent).
In both cases, money, and determination, can usually solve the problem. But what if you live in a place where English is still a barrier, the local talent is limited and inexperienced and money doesn’t come easily? Welcome to Vietnam.
The Silicon Valley was smart enough to understand that collaborating and sharing ideas is what helps founders get the right feedback, focus and grow in a more efficient manner.
This concept is slowly making its way into other ecosystems across the globe.
NDAs are starting to be a thing of the past, while co-working spaces are on the rise and encouraging group discussions and activities, and founders are realising it’s better to share and get the right feedback than protecting their idea and get it all wrong.
I felt this change during my visit to Israel and I know Australia is catching up as well, but surprisingly enough, Vietnam has been left behind. All of the Vietnamese expats I spoke to shared the same first impression – the locals come to work and don’t even hold a single conversation with one another, not to mention speaking about their idea or looking for any feedback.
One of the challenges presented by the culture for startups has been the roots in Confucian beliefs, which can promote total acceptance of the tried and true, and never to question one’s senior. This can make the open sharing of ideas more of a challenge, and it means that founders are rarely questioned by subordinates, even if those individuals have excellent ideas.
Even though it seems as if the foreigners are helping with changing this work culture, there’s still a long way to go.
The bread and butter of every startup founder is his or her network. The better it is, the greater their chances are to succeed.
There are some things money can’t buy and one of them is human connections. It’s usually either something you come armed with when you first start, acquire along the way by attending events, joining accelerators, incubators or simply by hustling.
Israel and Australia have a relatively small entrepreneur community which is fairly easy to plug into. Once you’re in, you can get anywhere if you are smart enough about it. The local networks also easily extend abroad to other territories including the desirable Silicon Valley.
The government and many private organisations are very supportive of bridging networking initiatives and do their best to help grow the existing network.
Vietnam, on the other hand, still has a long way to go before establishing a local, supportive community.
There’s definitely a will and desire to build such a network, Hatch!Fair being an example by bringing in an array of global experts for the two days conference.
As positive as these first steps are, it will take many more events, delegations and activities before a sound network of investors and mentors will be available to all entrepreneurs. The language barrier would have to be addressed as well.
Reading this article you might think it is impossible to be a startup founder in Vietnam.
Well, it’s no easy task, but it’s doable, especially for those who focus on the local market at the moment (after all, it is a 95 million person market, so the reward is big enough if you are willing to take the risk).
The good news is that the entire ecosystem is making huge steps quite rapidly. Cultural norms are changing to welcome new enterprises, and the government is slowly easing the way to finding financing. As a strength, the Vietnamese people successfully adapt and succeed when facing seemingly insurmountable odds.
Universities, policymakers, and other types of institutions now view idea-stage enterprises as a crucial plank in the foundation of future economic growth.
The bottom line is that this gives us Aussies a bit of perspective on our own ecosystem and on what we’ve managed to achieve over the last few years. We need to appreciate our accomplishes and endeavor to make it even better.
So what if we are not as mature as other places? We have our own strengths and we need to use them to our own advantage.