Last week I read the story about Sydney startup Symbiot Technology, the co-founder of which said:
“I would say it’s 100 times easier [pitching for investment] in the States than in Australia,”
“It’s a cultural thing; what we’ve learnt is that in Australia … while the startup space is getting better, it [the ecosystem] is still hugely conservative and hugely skeptical,”
“We don’t get the same response in the US — culturally it’s a lot different. It’s a shame, to be honest.”
Perhaps 100 times is a bit of an exaggeration. Although, I will concede that Australian founders raising locally will struggle with achieving valuations comparable to that of their American contemporaries.
As many people who read my writing, I have been on a bit of a rant about Adelaide. I was also recently interviewed by a local Adelaide magazine about my position on Adelaide. After sharing that article on Facebook, I was barraged by supportive comments and messages, including from Vinomofo co-founder Andre Eikmeier, who quite simply said:
“Take it from someone who flies from Adelaide to Melbourne every week – stay!”
This week I had the good fortune of sitting next to Blue Sky Alternative Investments chairman, John Kain. He’s an Adelaide boy and sympathetic to my relentless pro-Adelaide position.
Honestly he was the first person I didn’t have to defend my position to. I shouldn’t be so surprised given he is the chairman of a fund manager with $3.25 billion in assets under management, and unapologetically Adelaide.
During our meeting he dropped one of the most valuable lessons I’ve had this month and I thought it would be also be invaluable to my fellow startup founders that are also debating the heartbreaking question:
John explained there’s five reasons to keep your business where it is:
1. It’s close to your market: There’s a saying that says: go where your customers are. At Accodex, our early customers were in Adelaide, but now the bulk of our new business is coming from USA.
2. It’s close to expertise or other key inputs: In Adelaide, we’re at no distinct advantage with respect to talent.
3. It’s close to your capital: The capital environment is better on the east coast, and more so in US.
4. It’s cheaper to do business: Thankfully the relative cost of doing business in Adelaide smashes the east coast and US.
5. The founder happens to be there: I am here, and life’s good in Adelaide.
So from this, I have two out of five. Not enough for making a rational argument for keeping my company in Adelaide. But the last reason I would add to break the tie is:
6. You are committed to contributing to your local startup ecosystem: If you actually care about your friends and family in your local community, you’re going to want to do everything in your power to keep the jobs and prosperity locally.
I hope this helps my fellow founders in finding some clarity.
Chris Hooper is an accounting futurist and chief executive of accounting startup Accodex.
