The Sydney-Melbourne rivalry could stunt Australia’s startup growth, says StartupAus chief Alex McCauley

If Australia is going to become an internationally-recognised startup hub, Sydney and Melbourne will have to set aside their sibling rivalry and agree to share the spoils, according to Alex McCauley, chief executive of StartupAus.

Speaking to StartupSmart, McCauley says there has been an increasing focus on internationalising Australia’s startup space.

He says Australia has a few “super-international startups”, typically offering Software-as-a-Service solutions, which only generate around 10% of their revenue in Australia, and which have had an international focus from a very early stage.

“But there’s a whole bunch of other businesses — more than we would like to see I think — that don’t have any customers in another market,” he says.

“I love the focus on helping Australian startups to look internationally, and also helping internationals look at Australia and see what we have to offer.”

While initiatives such as the new accelerator funding from LaunchVic are focused on getting Australia-grown startups onto the international stage, McCauley says Australia’s startup ecosystem should be “two-way internationally porous”, with founders, investors and companies coming in, as well as Australian companies selling overseas.

“Tech companies want to do R&D in Australia and they’re not right now,” McCauley says.

With the exception of the government’s much decried, “terrible” entrepreneur visa, McCauley says, so far, the focus has been on helping Australian startup founders to attract global talent.

“Next on the list will be how to attract great foreign founders, and how to make this entrepreneur visa actually work,” he says.

But a big part of making Australia a globally-recognised startup-friendly nation will be creating more consistency in the message it is sending, and creating a “geographic solidification of areas of strength”, says McCauley.

Basically, he says, the bickering between the startup hubs of Sydney and Melbourne may well be driving business away.

“One thing we need to do more of is having all of Australia’s state and city governments pushing in the same direction when it comes to focusing on international investors in startups,” McCauley says.

“There’s a lot of federalised competition here that really is unhelpful.”

McCauley puts forward a scenario in which an international tech company may be considering setting up an R&D location overseas, and is considering Sydney, Melbourne and Singapore as its leading options.

“If Melbourne says Sydney’s crap, and Sydney says Melbourne’s crap, they just go to Singapore,” he says.

“Why would you go to a place that other people are telling you is crap?”

If the two ecosystems could come to an understanding by which Melbourne, for example, is lauded for its creative technology startup scene, while Sydney boasts the best business-to-business software startups, that would benefit the Australian space as a whole, says McCauley.

It’s a goal to have, but ultimately one that requires both good intentions and a little more maturity, he says.

“Some of those things naturally solidify, and hopefully there will be a decision so we can support each other’s strong suits – and as a country we have some pretty clear strong suits,” he says.

“But, that just comes with maturity and organic growth.”

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