By Alex Louey
When I say that tech startups in Australia are faced with numerous obstacles you can trust that I’m speaking from experience.
When I co-founded Appscore, I found out first hand exactly how difficult it was to propel a digital-based agency onto the global market. The Australian tech sector was, and still is, underdeveloped and lacking maturity.
Not only is there limited access to capital investment, but to talented professionals as well. This serves as a huge challenge to tech startups looking to thrive in their local backyard, without resorting to overseas markets.
Australia’s tech market is too small and comes with an inadequate market share.
Compared to markets in San Francisco for example, all of the collective experience in Australia is but a teardrop in comparison to this tech powerhouse. The US in general is a hotbed for innovative startups. If Australia ever hopes to compete at such a level then we need to begin building better relationships with professionals from these locations who are the best at what they do.
Australia’s tech sector remains overshadowed by the US
To give you an idea of where our tech sector currently stands, there are no solely software-based companies listed on the ASX.
In the US they are a dime a dozen.
To further drill this point home, Atlassian, an Aussie software tech company, has recently found huge success by listing on the US market as opposed to the ASX.
Atlassian had already seen fantastic success both in Australia and on the global scene but unfortunately they saw our local market as more of springboard to propel them into the global sphere.
What could have served as an inspirational flagship for Australia’s struggling start-up culture, quickly turned into another disappointing victory for US markets. Whilst Atlassian managed to improve their share price by 33% and this is fantastic news for the company’s owners and new investors, a promising opportunity has been missed for the Australian tech sector.
What we need is for a handful of companies such as Atlassian to tap into the Australian investor base and set a telling example to the global market.
Access and exposure to international players
One of the biggest struggles facing startups is a fundamental lack of experience and little to no support channels available.
While I managed to painstakingly establish Appscore as a global, mobile-first digital agency, I needed help along the way to get to where we are today. I co-founded Appscore with an established digital marketing agency with an existing global presence. This presented a valuable platform to access global markets and expand our services and client base.
Ultimately creating a successful startup is all about exposure and enticing interest amongs potential investors.
One such medium, which I have found very interesting, is a popular podcast created by US entrepreneur and angel investor, Jason Calacanis. His podcast, This Week in Startups (TWIST), has recently launched an Australian version and looks to expose promising Australian startups to American investors.
Enticing investors is the first step
I’m rather excited by what TWIST represents and think the podcasts will serve as an immensely valuable tool to help showcase what Australia’s startups have to offer. While we might not have a comparable level of experience to the US, the innovation we can offer shows real promise if given the right capital.
I think if American investors are made aware of this untapped gold mine down under, then they’ll be tripping over themselves in their eagerness to invest in Aussie startups.
The influx in investments in New York, Silicon Valley and San Francisco means that the cost to invest has been driven up, while Australia is experiencing the polar opposite. This means that investors stand to receive sizeable returns, with a much smaller upfront cost if they were to invest in Australia.
The Victorian government’s $60 million innovation fund is a good start.
Sixty million dollars might seem like a lot of funding to help support startups and facilitate further capital but compared to the resources and technology available to the US it pales in comparison.
We still have a long way to go to compete with foreign markets but we have made a positive start in the right direction. Many universities are now offering students a platform to showcase their startups to potential investors and get their ideas up and running from the earliest possible stage.
This is the kind of support we need to see more of to help Australia’s tech startup sector get off the bench.
Alex Louey is the co-founder and managing director of Appscore, an Australian based mobile-first digital agency.