Running a startup can be challenging at the best of times, but what is it like trying to establish business credentials when operating out of one of the world’s most isolated cities?
Writing at Medium, Appbot co-founder and chief executive Stuart Hall has shared his experiences and lessons learnt in running the technology startup out of Perth.
“At Appbot we are proudly Australian,” Hall writes. “When people think of Australia, they generally think of Sydney or Melbourne on the east coast. We are in Perth, Western Australia, one of the most isolated cities in the world. Western Australia is huge, four times the size of Texas.”
As Hall observes, Perth is a long way from hubs such as San Francisco and New York, with almost 20-hour-or-more flights representing “a lot of movies and airplane food”.
Hall acknowledges that time zones can be challenging, with Appbot’s customers located throughout the world and less than 3% located in Australia.
Time differences may present a challenge when dealing with customers in America, however Hall also points to a favourable time difference with countries such as China, Japan and Indonesia, which he says represents “a pretty amazing advantage and opportunity”.
“Support is probably the thing you need to consider most,” he writes. “Worst case we reply to customers within six hours, and they tell us they are more than happy with that. Some businesses may need people to work nights or overseas in opposite time zones to get 24-hour coverage. But it does mean some early mornings and late nights for us.”
Customers expect to be able to pay in US dollars, and Hall observes that there are a number of payment systems that provide for charging in US dollars outside the US, handling exchange rates (which should also be a consideration) and depositing funds into an Australian dollar account.
“One big issue with this still is the banks,” he writes. “To them we still look like an Australian company. Charges of US credit cards from outside the US send off all their alarms. Even when a customer phones up the bank and approves the transaction it can often trigger the same alarms the following month.”
Hall recommends being completely up to speed with accounting and reporting requirements before registering a business in the US, observing that it is possible to “start simple and use an Australian bank account with Pin Payments or Stripe and deal with the card problem further down the track”, as Appbot did.
Hall observes that a lot of developers have historically been drawn interstate and overseas to cities such as Melbourne and San Francisco.
“Hopefully this is starting to change with more great companies starting up here,” he writes. “But on the flip side there’s also less competition for the great hires.”
Meanwhile, following the downturn in the mining boom a lot of free office space has opened up in Perth, with businesses now able to secure “nice spaces for less than 40% of what they were going for five years ago”.
“We started out in a co-working space, but once you get to your first employee it actually works out a lot cheaper to get your own space,” Hall writes.
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Martin Kovacs is a journalist with experience covering the IT, consumer electronics, retail, finance and energy sectors.
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