Here Are 5 Ways One CEO Thinks Australia's Startup Scene Is Changing

Australian startup Atmail’s CEO Zach Johnson is based on Queensland’s Sunshine coast and says being an Aussie startup is now an asset. Image: Supplied.

Australia’s startup scene is still relatively small but over the past ten years it has done a lot of growing up.

Living in Australia between 2005 and 2011 and again since 2013 after a two year stint back in Los Angeles, Atmail CEO Zach Johnson has seen the transformation of the country’s startup scene first hand.

He says one of the biggest factors which has transformed the Australian startup space over that time is the growth of Atlassian in the US, a company which has proven Australian tech company’s can make it big overseas.

Johnson has worked in New York, Boston, San Francisco, Los Angeles, Sydney and now on Queensland’s Sunshine Coast.

“Since I’ve moved back, I lived back in LA between 2011 and 2013, moving back and talking to some of the players in the Australian startup scene now they’re telling me the same things that I’m seeing myself, that there is quite an emergence of support and better infrastructure and capital that is permeating the startup landscape now, it’s a really good time, there are still a lot of impediments but by and large it’s a really good time to be starting a business,” he said.

1. Early runs on the board are turning into wins

Back between 2005 and 2011 Johnson said today’s successful Australian startups were just tallying a few early runs on the board.

“Those successes were only just germinating,” he said.

Fast forward to now, after the success of Atlassian there has been much more opportunity in the investment community for Australian startups overseas, Johnson said. “That established success gives much more hope to other startups and raises eyebrows on investors.”

He said even though only a handful of Australian startups have made it big and venture capitalists in the US are starting to take notice of what’s happening Down Under. “There’s much more opportunity, investment opportunity,” he said.

2. Australia’s laid back lifestyle is seeping into startup culture

The work/life balance Australia is known for is permeating into its newest enterprises, creating different startups with different cultures to those in the US.

Johnson said Australia’s more relaxed lifestyle is already working to the nation’s startup scene’s advantage.

Recognising that work/life balance in Australia is “probably at the extreme end in favour of the employees,” he said it’s going to be a good thing in the long run because it will create healthier, more sustainable businesses.

“It’s much more healthy than in the United States and I think it builds a much more sustainable organisations which will create value for shareholders,” Johnson said.

He also said a smaller startup scene here is better for Australia’s startup execs because you don’t see employees jumping around from company to company like what is happening in the US.

“In the US you have more chances to hop from one company to the next,” Johnson said.

While that can prove great for the individual it isn’t always good for the company as it “comes at the expense”, he said.

3. Seed capital is easier to source

It’s becoming easier for startups to attract capital in Australia.

“From what I’ve seen it’s much easier to attract earlier stage capital,” Johnson said.

Compared to his first stint in Australia, he said “it’s a lot easer to get that seed capital now”.

But luring in mid-to-late stage capital “is still definitely a challenge,” he said.

Johnson explained there is still a “resistance from overseas institutional investors”, when it comes to pouring money into company’s with headquarters in Australia.

He said while he doesn’t fully understand why there is a hold up there, Johnson said Australia is more than capable of funding it’s more developed startups through superannuation.

Opening up superannuation funds would allow more investors to invest in incubators or do equity exchanges with Australian startups.

“That would be a game changer for us,” he said.

4. Australian made counts for something

Johnson said the brand value of being an Australian startup is burgeoning, being viewed as irreverent, forthright and quirky by many who matter in the US.

Having an Australian name tag is currently somewhat of an asset, Johnson said especially since Atlassian broke down a few barriers when it expanded into the US in search of capital, skills and growth.

“Even though companies like Atlassian chose to move their headquarters overseas they still retained their Australian culture,” he said.

“There’s a bit of cache being an Australian company.”

Johnson said branding as an Australian startup can give a company a competitive edge which is something Atmail has experienced.

“We’ve been selected by American companies because we’re not American,” he said.

5. The knowledge economy is finally here and its starting to grow

Johnson said back in 2005 the focus on Australia’s knowledge economy was lacking and while there is an abundance of skilled tradespeople there remains a challenge of reapplying skill sets.

Atmail is at the far end of the startup spectrum, it has been around for a few years and is located in regional Queensland on the Sunshine Coast – something that adds a whole other dimension to its operation when it comes to recruitment and infrastructure.

“Really for us the most important thing is access to world class talent,” Johnson said.

“We’re not in Silicon Valley, we’re not in a capital city and because of that we don’t have a pool of qualified candidates knocking on our door.”

As a result Atmail relies on its beachside location and company culture to lure talent from around the country and the world.

But he said Atmail still has access to all the tools it requires to operate a global startup with fibre optic internet, good restaurants and an airport 15 minutes down the road.

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