Seven company founders discuss what they’d love to change about Australia’s startup landscape
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Australia’s tech and startup scene has made plenty of headway over the last 10 years.
There’s been some global success stories, a steadily increasing pool of venture capital and plenty of companies which made their way from early-growth phase to the ASX boards.
But as a relatively small economy with heavy exposure to global trade, it’s important for those within Australia’s startup ecosystem to always be asking — what’s next?
That’s both from the perspective of domestic initiatives, and also taking cues from other countries where the market infrastructure is more developed.
The question was front and centre in the latest edition of Stockhead’s survey series. We asked a group of successful entrepreneurs what they’d love to change about the startup landscape, and where they think Australia can still improve.
It prompted an interesting range of responses, from industry-specific changes to broader themes — the most common of which was the need to foster channels for attracting more personnel talent.
Here’s a summary of the feedback:
There are absolutely things that investors and government could be doing better to support the startup ecosystem.
For investors, there is a tendency now to stick to certain business models (such as Software as a Service) and shy away from any business models that are different. It would be very valuable for Australia to build a broader base of business models rather than simply be a place where SaaS business models flourish.
We should be encouraging innovation in hardware, and products as well where possible. For government, the most important thing is to make it easier for startups to attract the right talent from overseas. There is a dearth of technical talent in Australia and the current time and costs of hiring overseas talent for a startup is difficult.
Longer term, the government should be heavily investing in STEM education in secondary schools.
After capital, the most difficult challenge for Australian startups is access to skilled and experienced talent.
I think Australia should look to create a national system where both Australians abroad looking to return, and prospective skilled migrants applying to work in Australia, are algorithmically matched to any relevant opportunities no matter where they are located.
Increasingly in my travels I meet many people looking to either return or move to Australia who are simply unaware of the quality and number of opportunities in Australia. By using a data driven approach, both candidates and employers can get a realistic preview of the fit, and this could be easily used to validate foreign candidates vs. local talent.
We came up with this idea recently when we had to use our own product to help validate a necessary sponsored worker as there wasn’t anyone locally available that had the experience or skill set we were after. A combined public-private partnership could solve this, and this could have a material impact on the success of local startups and economic growth.
I think progressive technology focused countries and states have created great support mechanisms which are tailored to high growth businesses. This is the overarching reason why so many great scale-ups move to Silicon Valley.
Each time I ask why they are moving there, I get the response that it is for better government, investor and strategic partnership support during their high-growth phase.
When I started Devika, I was able to utilise the support of advisors who had already achieved amazing results themselves. They helped guide me on the business roadmap and navigate the incentive schemes offered by the government put in place to assist start-ups with the cost of outsourcing for software development.
We were also able to unlock early investment incentives for start-ups through ESIC. What would improve this support is continuous reinvestment into innovation by individuals and enterprises, as well as the government continuing their involvement.
This would enable startups to rapidly grow within our local market before looking overseas, rather than the other way around. Our earliest clients were from the USA and from that portfolio and testament we were able to onboard local startups and corporates to use our services to enable them on their technology roadmap.
Australia has made strides towards supporting Australian innovation, and any funding going towards supporting SMEs is positive. However, we’re still lagging in comparison to our global counterparts. SMEs are an essential factor in driving employment and economic growth. That’s why we’re so passionate about what we do at Lumi as we understand how important they are to the Australian economy.
One particular area where we would like to see more support is the liberalisation of the labour market. In areas where we struggle to recruit locally, it would make a considerable difference simplifying the process, so it’s easier to recruit globally.
We would also like to see a move away from nativism and populism. Australia is reliant on an inflow of talent for its continued prosperity.
Many startups also lack the experience and understanding of what’s required to become investor-ready. Being inexperienced with this results in reduced deal velocity for investors and the loss of valuable funding for startups to turn their ideas into viable businesses. I think it would be beneficial for both startups and investors if eco-system took steps to bridge that asymmetry in information.
For start-ups, both time and resources are at a premium, which is something that investors and regulators often don’t fully understand. In order to engage start-ups most effectively, potential investors and regulators need to be ready to assess, communicate with, and assist a start-up quickly.
Typical start-up engagement processes are arduous and time-consuming and are often beyond the scope and resources of a start-up. In addition, the requirements for protection and liability for investors and regulators can also be far too onerous for many small companies. Shorter, plain-English application processes and non-disclosure agreements could potentially reduce friction and frustration for both parties.
With regards to government start-up assistance, it is often very difficult for start-ups to access government funding. There appears to be a myriad of initiatives to encourage the government to mandate more start-ups, but there still seems to be an inherent reticence for government organisations to spend deliberately on start-ups.
In addition, the time and resources required to effectively pitch for start-up funding is typically beyond the scope of many smaller organisations.
A critical priority for the Australian government and our regulators must be to look at the ways in which we can foster stronger bilateral trade and regulatory links between Australia and Israel to allow startups in each ecosystem to scale more easily.
By strengthening those deeper cultural ties, we think it will only be a matter of time before more Israeli entrepreneurs scale to Australia – helping bolster the Australian economy, increase the volume of jobs and job creation within our technology and innovation industries, as well as lift competitiveness in the sector as a whole.
At Elsight, we have seen first-hand what a collaborative approach towards innovation has meant with a growing swathe of Israeli tech startups finding resonance for their exciting tech products and services here in Australia over the last few years.
This initiative should also be recognised as particularly significant within the context of cultivating a shared innovation ecosystem between the two countries with the potential to ameliorate Australia’s skills shortage.
As more Israeli entrepreneurs seek out opportunities to move to Australia, we can help overturn the traditional skills gap that Australia’s tech sector has faced.
Over the last few years we’ve gained lots of new insights about why it’s so hard to deploy tele-health in Australia. Our country has a huge need for technology-based healthcare deployments because of the vast distances our rural and remote citizens have to travel to get access to care, and because of the huge amount of time we spend travelling and waiting for doctors, even in urban areas.
There are two things that would completely unlock the telehealth market specifically and they both depend on regulatory changes.
The first is around the training of clinicians. Many are scared about delivering a video consultation and making a mistake or missing a symptom of their patient while on such a call. They feel challenged and out of their depth. After just a couple of trial calls on Coviu, however, they become confident with the medium and develop tactics on how to overcome the lack of being able to touch a patient.
This barrier to adoption can be addressed easily through training at universities and through PD training, where clinicians with experience share their tactics.Training on digital technology needs to become an inherent part of and a requirement for clinicians in the modern age!
Secondly, there is a duty for Medicare and private health insurers to embrace reimbursement for services delivered via digital technology. Right now, the reimbursement landscape for telehealth is a patchwork of complicated rules that nobody can understand. We need the regulator make reimbursements available more fairly across all healthcare services, and provide a simple model that all Australians can understand.