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Helping start-ups go global

Monday, 10 January 2011 | By Oliver Milman

ANZA Technology Network helps Australian start-ups crack the US and Chinese markets through a series of workshops, webinars and paid-for programs.


StartupSmart speaks to Viki Forrest, CEO of the San Francisco-based network, to find out if Aussie enterprises are making their mark on Silicon Valley.


Can you explain a bit about ANZA’s background?

ANZA was established 10 years ago by Australians who were sent to California on business. There was good access to other Australian entrepreneurs for drinking beer, but not business. The lack of a proper network was a huge barrier to their growth.


We’ve morphed in many ways to challenge that barrier but the mission remains the same – by using our connections we can help start-ups succeed here.


What kind of businesses do you help?

We source clients in Australia that are very serious about doing business in the US. Many of them find it hard to get traction in the US.


What industries do you operate in?

Technology, but I use that term very broadly. We work with companies ranging from medical technology to Facebook app builders. The network is very broad – we wouldn’t have a business if it only focused on one niche.


We recently signed a contract with the Victorian Government to help businesses that are looking at the US and China. That will focus on medical and sustainable technology companies.


It’ll be interesting to see how that goes. We are talking to the South Australian Government too and we are keen to hear what the other states are doing – all have their reasons for investing or not investing in this kind of thing.


What programs do you run?

The first program is called Gateway, which is open to all-comers. Companies take part in a three-day summit in the US or China to find out about these markets.


The outcome of this is that companies shift from their Australian-based thinking to really understand what it takes to make it in these markets.


The second program is the Fast Track scheme which is for start-ups who have the research, the resources and the funding to do business overseas. We work with them in the first 12 months to mentor them, help them with networking in the market, help form their entry strategy, acquire customers and partners. We explain how transactions work here and help them get that first crucial sale.


We take them through the critical steps in how to do business in the US and China, such as visas and contracts – the bread and butter stuff that is very easy for us.


We discuss the needs of each company to see where they need help. In terms of cost, the Victorian Government program, for example, is subsidised and costs $30,000.


That seems like a significant sum for a start-up.

We’ve seen other companies spend tens of thousands of dollars setting up here. In terms of a market entry plan, we’ve yet to see an Australian company come close to getting it right by themselves – that’s the harsh reality of operating in a small market.


We can get them connect to partners and investors – not just an email introduction either. That can help move you into business within three months.


Which recent Australian start-ups have done well in the US?

Software companies have done well recently – 10% of those on the Fast Track program have raised investment here, which is very high. Usually, it’s one in 1,000.


In terms of successful businesses, Aruspex have done well here, so has Iatia and The Broth, which is a WA company that makes Facebook applications. We are very selective about who we work with.


What’s the main motivation for start-ups to expand to the US?

There are two main reasons. In the case of a business like The Broth, there is no market for what they do - Facebook applications - in Australia. It wants millions of customers and no one really gets it in Australia.


They understood that fact. They said ‘we can’t do this in Perth’, sold the house and came here. They got all the tech guys they needed in San Francisco and yet no one knows what they look like in Australia.


Then there’s a business like Aruspex that signed a big deal with a US company and was dragged over here to service that piece of business.


There is a third reason that sometimes comes up – companies that run out of market in Australia. They are in the top three in the country and have nowhere else to go. They are used to being successful and they come here thinking they can do it all over again. They can get a nasty shock when they do that and their cashflow in Australia can suffer as a result.


Are you seeing a lot of innovation coming out of Australia?

There is plenty of innovation in Australia but we don’t see any of it because there isn’t the money to get it out of the door.


There is an enormous focus on web 2.0, and we are really seeing businesses in this area take off. There are 20 to 30-year-olds in Australia that have grown up with the internet and can run it from their bedrooms.


There are some millionaires who help them and the likes of Pollenizer or Startmate help them get angel investment, but the stuff that changes the world still needs significant amounts of time and cash. There just isn’t the appetite for that investment in Australia.


It’s a shame. I’m not sure if there will ever be that investment, but there are certainly good tech businesses coming out of Australia. The barrier is that only the best idea gets the money.


Working hard in the US gives you 10 times the return than it does in Australia.


There’s nowhere else in the world like Silicon Valley – you can’t compare anywhere else in the world to it in terms of entrepreneurship and innovation. When Australian entrepreneurs come out here, their eyes pop out of their heads.