Atlassian’s Scott Farquhar warns you’re “either becoming a software company, or being disrupted by one” – StartupSmart

Every company is a software company, or is becoming one, according to Atlassian co-founder Scott Farquhar.


Giving the 2014 JJC Bradfield Lecture in Sydney on Monday night, Farquhar compared software to the invention of electricity in terms of the impact it is having on society.

“It’s software that powers computers, powers robots; software is the ultimate lever for human performance,” he says.


“As such, like electricity, it can augment us, enable us, even replace us in many areas. Archimedes said, ‘Give me a lever long enough… and I’ll move the world.’ Software gives humanity that lever.


“Companies now only fit into two buckets: either becoming a software company, or being disrupted by one.”


Software has liberated Australia from the tyranny of distance, which Farquhar suggests provides both an opportunity and a threat for Australia.


“We ‘made it’ from suburban Sydney. That’s the good news. The bad news is that any other ‘Mike and Scott’ from any suburb in Seattle or Shanghai, Lucknow or London or Hanoi or Helsinki can make it too,” he says.


Given this, Farquhar says it’s important for the government to implement policy that helps foster innovation in the sector. Like employee share option reform (which the government announced today) and encouraging superannuation funds to invest more into local venture capital in order to bridge a gap in the Australian venture capital market.


“Although the activity level of angel investors and VCs has ramped up – there is still a significant gap in the market in Australia,” Farquhar says.


“Particularly once you move beyond an early stage, it is too difficult for a company to raise finance locally.”


He also praised government tax incentives like the R&D Tax Incentive Program and the Export Market Development Grants Scheme.


The parliamentary secretary to the Minister for Communications, Paul Fletcher MP, says he had a number of takeaways from Farquhar’s lecture, including the need for the nation to produce workers with the right skills.


“He had some very important points about employee share ownership schemes and venture capital, but the point I want to focus on is the need for the right skills in the workforce,” he says.


“Clearly when it comes to having enough skilled people to support a software industry, two critical policy levers sit squarely with government: education and immigration.


“Clearly this is a timely point to be raising when the Review of the Australian Curriculum was released (Sunday) and Education Minister Christopher Pyne has stated there will now be discussions with states and territories and other key stakeholders about how to strengthen and regime the curriculum.”


That review was criticised by those in the IT industry for not doing enough to promote ICT skills.


As for immigration, Fletcher says the Abbott government is setting policy “with an eye towards meeting the skills needs of the economy”.


“In my view, Scott has had some serious and important things to say,” Fletcher says.


“It is critical to sensible policy development in this area that government is in no doubt what the sector is saying.”


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