Starting a Business in Adelaide: How Adelaide Ranks as a Start-up Location
Not just a city of churches
By Oliver Milman
Population: 1.2 million
Start-up survival rate: 75.7% (2007 to 2009)
Adelaide’s reputation as a rather slow-paced city notable only for its churches is increasingly at odds with a start-up scene that is beginning to gather pace.
Known for its impressive standing in the worlds of education and biotech, the South Australian capital is becoming an unlikely hub for a number of promising web-based ventures.
Last month, an Adelaide firm, SME Growth Capital, was chosen by the TechStars Network to take on the model of the prestigious US-based start-up incubator.
The arrival of the TechStars model in Australia was greeted warmly by the start-up community, but it is also notable that the location of such ventures is no longer an issue for Adelaide.
The hub, which will provide $18,000 in funding to 10 start-ups next year, will join a small but talented group of new businesses that call Adelaide home.
Adelaide’s higher education establishments have provided some of the impetus, boosting app developer MyTime, which won the University of Adelaide’s $10,000 ZEN eChallenge.
Rival Flinders University has got in the act too, providing the IP for ThereItIs, a new tech business with seemingly global potential that offers an innovative new way of displaying information for retail websites and content management systems.
Then there is South Australian entrepreneur Melanie Seears, who won the Newmont Young Entrepreneur of the Year award, as well as the Innovation Award at the South Australian Young Entrepreneur Scheme’s annual prize-giving ceremony last week.
Seears’ start-up, On the Gro, creates and sells baby-focused products. It is set for expansion to New Zealand and the UK.
Another Adelaide entrepreneur making international waves is Gerard Ramsay-Matthews who, while bed-ridden with Chronic Fatigue Syndrome, invented a new hand-eye co-ordination aid, Speed Striker. The product has since been stocked in US supermarket giant Wal-Mart.
Scratch beneath the surface and you’ll find plenty of start-up help too, such as the Tomorrow Start and Tomorrow IP programs for the creative industries, Innovation SA’s investment attraction course and MEGA, an entrepreneurship “master class” for digital start-ups.
While it lacks the presence of a premier incubator, at least until the TechStars model arrives, Adelaide does at least have the ThIncLab, a University of Adelaide hub and the BioSA Incubator, aimed at the biotech industry.
Budding entrepreneurs needn’t be lonely, either, with regular meet-ups at Mobile Monday and the Startup Club.
Problems do exist, however. Adelaide’s location means that fast-growth businesses have to make good contacts outside of the city if they are to expand.
Government support is a little lacking, too. The state government has slashed funding for many start-up initiatives, with SA’s eight Business Enterprise Centres in danger of closing when the tap is turned off in June and industry body Business SA having to switch to alternative income streams.
Funding, like elsewhere in Australia, is a problem, not aided by the decision of leading Adelaide venture capital firm Playford Capital to pull the plug on future investments after having its public funding cut.
“I’ve found Adelaide to be very supportive – I managed to get my seed and angel investment from here,” says Guy Sewell, founder of ThereItIs, who relocated from Sydney prior to starting the business.
“It’s easy to find developers as it’s not a huge market. I haven’t spent $1 on recruitment. The city is about the quarter of the size of Melbourne, so obviously the sheer numbers are a problem. We are trying to get other start-ups together to share war stories and build some kind of fledgling ecosystem.”
“What Adelaide really needs is a strong incubator with good industry links. There’s a lot of talent here but not many opportunities to fulfil it.”
Craig Yeung, partner at Piper Alderman's Adelaide office and prominent start-up scene player, adds: "One of the great pros of being in Adelaide is the close networks that we have in a smaller city."
"I think it works like a massive incubator because of the great flow of ideas and collaborations that start-ups and entrepreneurs have here with each other."
"There are great start-up functions here and everyone seems to know everyone else and what they do, and so there is a real positive vibe and atmosphere."
"On the other hand, because of Adelaide's size we simply do not have the large investors/funding sources that may be available in other cities and do not have the extensive network of investors."
"This means that start-ups here in Adelaide have to work much harder and smarter to get their ideas to work or to the next stage."
"So although we all seem to help each other here in Adelaide, to survive is in my view harder than if the start-up was in another city."
Adelaide’s Silicon Valley
Thebarton is Adelaide’s main start-up nerve centre, housing a number of web and biotech businesses, as well as a University of Adelaide campus.
Solid research credentials, especially in biotech, and a thriving health care industry. Electronics is another area of strength, employing more than 14,000 people. An emerging group of start-up networks, competitions and incubators.
Still overlooked by many Sydney and Melbourne-centric investors. No central hub to connect the disparate branches of support for start-ups. Government cuts are a worry.
On the Gro
Inscriptus – a data storage start-up that recently raised $750,000 in an attempt to crack the US market.
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