Digital Dreamers 1: Joining the StartUp bus
Asher Moses joins the StartUp bus in Las Vegas, where aspiring entrepreneurs pitch against each other for venture capital dollars.PT15M53S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-1yscx 620 349 May 17, 2012
"WE'VE created crack for women," says 20-year-old entrepreneur Nikki Durkin of her online fashion startup 99dresses. The trouble is, Australian financiers don't want to get the habit.
Ms Durkin's aim is clear: "I want to build a billion-dollar company." But she says Australia won't let her, so she's joining thousands of other Australians pursuing their dreams in the US.
Dressed for success ... Nikki Durkin's idea has been seized on by a US venture capital firm. Now she's about to move there. Photo: Hugh Hamilton
Over in Silicon Valley, failure is celebrated and seen as a chance to learn, but Ms Durkin, who grew up in Sydney, had the opposite experience in Australia when she had to shut down her site to tweak her idea.
"In Australia failure's seen as a bad thing . . . generally I think it's a bit of tall poppy syndrome happening," she says.
Ms Durkin has been an entrepreneur since she was 15, when she was pulling in $500 a week designing and selling t-shirts online. Now she's developing 99dresses – an "infinite wardrobe" allowing people to trade clothes with each other.
Ms Durkin has just spent three months in Silicon Valley being mentored at the number one startup accelerator in the world, YCombinator. Out of about 60 entrants, she was a favourite among the venture capitalists. She's about to close a round of funding and move to the US.
There are more than 65 technology startups in Silicon Valley that were created by Australians, and this number is growing rapidly. Many who feature in a major video series launching on smh.com.au on Monday are highly critical of both the government and the venture capital industry in Australia. They say Australia is asleep at the wheel and risks being left behind.
"They're moving to the US, they're getting a green card, and they're not coming back," says Matt Barrie, the Sydney-based CEO of global online outsourcing site Freelancer.com.
As Facebook prepares to go public tomorrow at a valuation of up to $US104 billion, the opposition communications spokesman, Malcolm Turnbull, says figuring out why Australia earns so little of its GDP from its own ideas is "the issue that keeps me up most at night".
"It keeps me up at night because I think we should do better. It keeps me up at night because I don't have any straightforward answers to it," he says.
The Communications Minister, Stephen Conroy, refused a request for an interview and did not respond to questions.
"They're just not listening to us, we're all just jumping ship and going overseas and putting offices there as opposed to trying to work within our own country," says Eddie Machalaani, 33, who with Mitch Harper, 29, created e-commerce platform BigCommerce.
Australia ignores its innovators at its peril. "Mitch and Eddie might be the next Bill Gates or Steve Jobs and that's something that the country can really celebrate," says Larry Bohn, the US venture capitalist who invested $15 million in BigCommerce.
According to the Aussie expat network Advance, about 15,000 Australians work in the San Francisco Bay Area alone – a large portion working for tech companies.
Mr Barrie has been an external lecturer at the University of Sydney for 10 years. "Pretty much all of the top guys from every year of my class . . . are actually in Silicon Valley right now doing companies."
Only $120 million – out of $1.8 trillion funds under management in Australia – was invested by Australian venture capital firms last year. US investors are picking up the slack.
"We've invested slightly over $100 million in Australia in three companies – Atlassian, Ozforex, 99Designs . . . and there is no upper limit," says Richard Wong, a partner with the large US venture capital firm Accel Partners.
Adrian Turner, an Australian entrepreneur who has lived in the Valley for the past 12 years, says if Australia doesn't invest in technology-based businesses in parallel to capitalising on the commodities boom, we're "going to be left behind globally in a way that's irreversible".
"There's a whole range of things that has to be done and part of them is incumbent on the private sector, part of it is incumbent on the government. Right now both parties are absolutely asleep at the wheel."