In mid-May some of the biggest names in Australia’s tech sector announced a new partnership, TechSydney, aimed at highlighting the credentials of Australia’s biggest city as a hub for high-growth companies, and lifting it into the top 10 global cities for startups.
This week TechSydney staged a dinner at Sydney’s Powerhouse Museum attended by around 200 founders and investors at which the organisation’s CEO Dean McEvoy explained what it would be seeking from members.
Two million dollars.
That’s a lot of money – much more than a lot of funding rounds that you see in the Sydney tech scene. And it’s a big ask when a lot of the members are cash-strapped startups who themselves are looking for backing.
But then, when it comes to putting Sydney on the map as a hub for tech-based companies, there are some enormous challenges, not least that it needs to compete with the likes of San Francisco, Singapore, Berlin, Boston and London in attracting talent. Not only is it physically a long way from other parts of the world, but the technology industry is somewhat fragmented simply because it is still relatively young, and company founders are finding talent prospects see moving to Sydney as a bigger risk than with other cities.
TechSydney has the support of big local names like Atlassian and Canva but also some of the global companies like Airbnb and Uber, as well as venture capital outfits including Reinventure, Blackbird Ventures, and Airtree VC.
McEvoy has been a well-known figure in the Australian technology community since he founded group buying platform Spreets in 2010 and selling it a year later to Yahoo for $40 million. He explained TechSydney’s goals on Monday night the audience was later asked to participate in a survey gauging their interest in what had been outlined.
McEvoy told Business Insider that having reviewed feedback from attendees, he was “quietly confident” TechSydney would be able to reach its ambitious funding goal.
Of the respondents to the survey, McEvoy said 96% said they were planning to support the project or put themselves down as a “maybe” pending further information or approvals.
“I was not expecting that result,” McEvoy said. “It is a big target and the tiers were, and membership levels were expensive. We intentionally wanted to test the water and see where people were at. But I was pretty impressed that that was the result.”
“The rule of thumb is for crowdfunding that if you can close 30 to 35% of the funds you need in advance, then I’m confident we’ll get to that level.”
The global war for talent
TechSydney’s key pitch to members is the benefits of its Founder Forums, where company leaders can meet with peers to network, and discuss challenges in their businesses. The issues raised at the forums will then serve to direct TechSydney’s lobbying efforts.
One of the biggest problems identified more recently by senior tech sector leaders, including Atlassian co-founder Mike Cannon-Brookes, is that when explaining the benefits of Sydney to potential recruits on, it can be tricky to provide reassurance that the city offers suitable employment opportunities beyond their own company – an important consideration because the reality is that sometimes a move to a job in another country simply sometimes doesn’t work out.
TechSydney is hoping to address that by building a stronger network of visibly connected companies.
“Atlassian’s done a great job going out and marketing what it’s like to work in Sydney, but that still doesn’t solve the Plan B option, because they can only go out and talk about Atlassian,” McEvoy said. “Likewise, Canva: they do these great recruitment videos about what it’s like, the culture, but again it doesn’t solve that Plan B issue.
“We’ve got all these great companies – instead of walking into a restaurant and having one thing on the menu, you walk in and you have 10 great things on the menu and that makes you more likely to buy something.
“Just by doing that one thing for those companies overseas, we can solve that problem in a way that they can’t solve it themselves,” McEvoy said.
Here are the jobs McEvoy says the funding would support:
- Government relations;
- Community manager / PR;
- Event manager;
- A designer and developer, and
- Founder forum managers.
McEvoy is aiming to show “value from day one” and has a withering assessment of the activity of some industry lobby groups.
“If you’re just an industry association, what do you normally do? You send around a survey once a quarter… and get few issues that might be top of mind for members, and then you go and write a list of things you’re going to do and people in government you’re going to talk to, and then you report back next quarter, before you send out the next survey,” he said. “And for the members, it’s this sort of vague value proposition.”
McEvoy says that while startups might find it hard to part with the membership fees, his pitch is that they should recoup it by saving on costs in other areas, especially the hated recruiters’ fees.
“I think the way to put it in perspective is that all of these companies are hiring great people, at an enormous rate of knots. Part of what makes them high-growth is that they’re bringing on lots of people. That’s the biggest problem facing the industry. If we can incrementally improve that process, our fees are no more than hiring one or two people through a recruiter.”
Like many in the Sydney technology industry McEvoy believes the city – and Australia with it – is in danger of being left behind as competing locations steam ahead.
“If you look at it objectively through the eyes of the economy and business, 22% of our GDP is about to be disrupted by these high-growth technology companies. Our thriving industries that we have at the moment – in banking particularly – are about to be disrupted, and we can either be the people in 10 years’ time that are whingeing on the sidelines and going, God, we’ve got no jobs, or we can be the team that’s on the victory side, saying look at what we’ve achieved. I think that’s really the proposition we have for this country. Do we step up and take advantage of this maybe once-in-a-lifetime opportunity, or do we sit on the sidelines and in 10 years wonder why no-one is buying coal?”