Do US start-ups have an edge on Australian ones?
This is a question I’m frequently asked and my answer is always that, on face value, there is no edge.
Start-ups from across the globe are all pretty much on equal footing. It’s true that US start-ups are closer to the larger pots of investment cash and so this gives them an automatic advantage which Australian competitors need to work incredibly hard to overcome.
But in order to access the investment they still need to be able to demonstrate that they’ve got a good idea, a great product and proven revenue streams.
This is where I believe Australian start-ups that go global via US venture capital funding most definitely have the edge over those from other countries. My reasoning for this is two-fold.
Firstly, I believe that Australia has great talent. The business brains and creativity amongst the entrepreneur community over here is second to none.
Australians like to win, you see it in the sportsmanship and you also see it in the business world. They are brave, which means they are more open to new ideas, approaches and technologies.
Plus Australians are a smart bunch (there’s a reason why the economy here is in pretty good shape), they know how to make business work and how to keep it working.
That’s not to say that counterparts in the US don’t have any of the above but I think that when you put the two nations side by side, Australia is just that little bit hungrier and that is what differentiates its business people.
As well as being a hotbed of talent, the Australian business community is also a calm, supportive environment within which to develop and nurture an ‘idea’.
By the time the ‘idea’ has been considered, tested, developed and it has reached fruition it’s usually a pretty amazing idea. Challenges are often ripped up and replaced by opportunities and that’s what drives the success of the start-up community here in Australia.
When you take great talent, a burning desire to succeed, amazing ideas, and a culture that believes in itself, and add to it the funding and associated business processes, marketing and sales streams that often only come from the US venture capital community, the result is hyper growth. You can’t have the latter without the former and it’s the former that is in abundance here in Australia.
That’s why I believe Australian start-ups have the edge on their US counterparts when it comes to fighting to attract the kind of investment that will make them one of the notable winners in Silicon Valley.
To win this investment, they need to make sure they are prepared to move out of Australia to prove their worth. Not necessarily indefinitely, but certainly long enough to build the kinds of trustworthy relationships that will persuade US investors to help them to realise their dream.
This is perhaps the biggest challenge for home grown entrepreneurs – leaving Australia in order to become an Australian success story.