Australian Government doesn't understand startups, gov responds

Australian Government doesn't understand startups, gov responds(blog.mijura.com)

30 points by abrimo 14 years ago | 17 comments

angusgr 14 years ago |

I know it's at a different scale, but I'd be interested to know what Australian HNers think of the New Enterprise Incentive Scheme: http://www.deewr.gov.au/Employment/JSA/EmploymentServices/Pa...

(In short: program runs via Centrelink to give 13 weeks small business training then 52 weeks of income support allowance while you start a business. Available to anyone who would otherwise be eligible for an unemployment allowance.)

I'm told the business training is very simplistic, but from what I understand they will accept people looking to start any business.

Getting just enough to scrape by for 12 months while focusing on your business seems like a good opportunity to me.

Joakal 14 years ago | |

I tried to get into it. They have wanted solid metrics, customers willing to buy, etc. And I haven't even started my project because I was in middle of university. I later decided to bootstrap, gut a lot of stuff and continue doing university.

Although they'll pay and train you once you get in, there's no assistance if you wanted to bootstrap. The person was very nice but said while it's a pretty novel project and nationally beneficial, that's how the program is at the moment.

It seems like they only wanted to fund small competing businesses, not innovative businesses.

You would be more better off with this scheme:

http://www.commercialisationaustralia.gov.au/

abrimo 14 years ago | |

I remember someone on Silicon Beach said they went through it. It sounded good so I had a look and called up about it however you aren't allowed to launch your business until you complete the program. It also seems geared towards small local businesses (e.g. businesses must be 'not competing directly with existing businesses').

However I like the idea behind it. I was even thinking of some program similar to the way university is funded (HECS scheme) that provides interest free capital (maybe right after you finish uni) to explore starting a business. After spending 4 years at uni, an extra year to learn and explore business ideas would be very rewarding even if you end up working after that.

scheff 14 years ago | |

A mate did it and said that you need to have a winning business plan that shows evidence that you would become self-sufficient almost immediately. That's not to say that it wouldn't work in the case of tech startup, it's just less likely.

scheff 14 years ago |

Good work,

I came to the same conclusion after 4 years of trying to get traction with my startup in Australia. The Australian government has futile support for tech innovation, which is a major failing considering our talent and adoption of technology is world-leading in some cases.

We need to be innovating as heavily as we can if we plan to have an economy post-mining boom. Currently our talent disappears overseas where they are respected and appreciated, whereas they could be doing miraculous things in Oz instead. You look at the buzz of energy and productivity in Silicon Valley and realise that just a couple of skilled people can create jobs for hundreds and boost the economy.

My own experience - I wrote to the then Tourism Minister, Fran Bailey, explaining that Australia needed to innovate its tourism marketing or perish, and that I had an innovative solution ready to go. The response was "Sorry, we can't help you." And today, after one failed marketing campaign after another, Tourism Australia has come around to the idea I put forward - get tourists to spread the word themselves (see http://www.nothinglikeaustralia.com.au)

Therein lies the value of innovation - several failed multi-million dollar marketing campaigns VS a lean startup reaching the same conclusion and offering the same solution.

I injected all of my time and money into the venture, but didn't have the necessary support to make it a genuine business operation.

I have lost patience with this government, but I haven't given up with startup ventures, I just won't depend on our govt to achieve success.

cbs 14 years ago | |

>Therein lies the value of innovation - several failed multi-million dollar marketing campaigns VS a lean startup reaching the same conclusion and offering the same solution.

Hindsight is awesome, isn't it? They had now way to know that your startup wasn't destine to fail, but now that your idea has been successfully executed by someone else you feel vindicated. Great, but that doesn't retroactively make you less of a risk back then nor does it prove that you would have executed on your idea as well as the people they went with.

scheff 14 years ago | | |

I knew with foresight that it was the correct premise because I saw it working already in other formats. The only question remaining was "what is the best format/execution to make it work?" and that is the uncertainty of which you speak. Innovation allows us to rapidly fail and learn so as to come up with the correct solution. Tourism Australia's answer was to keep creating multi-million dollar marketing campaigns, which teaches us little and wastes millions of dollars, and takes months of retrospective analysis to learn anything. All that we've learnt from the marketing campaigns is "People aren't as interested in Australia as they were 20 years ago." With a tech startup solution we would have learnt a number of things through observation of how the target demographic interact with each other and with tourism operators, plus what they best respond to, and therefore how best to promote Australian tourism products to them.

abrimo 14 years ago | |

Thanks, great job on trying to change Tourism Australia - some of the campaigns I've seen from them are just embarrassing. It really does feel that those startups which have been successful have done so in spite of being in Australia, not because of it. I, like you, am determined to try and do it on my own.

scheff 14 years ago | | |

The only other successful startup I have spoken to in Australia was Zendesk. The founder I spoke with went 2 years without a salary and the startup was self-funded.

duncan_bayne 14 years ago |

Agreed that Govt. here is clueless, but I'd appreciate you not lobbying for them to take more of my money to give to your startup.

abrimo 14 years ago | |

Yea I was hoping they would reallocate the money they are currently spending. For example, they give over 60m a year to private VC firms which 'manage' the money by making very few investments. They've also committed almost as much to Commercialisation Australia which doesn't seem to go anywhere.

The current government programs are costly and not yielding many results. I'm hoping they could take a fraction of that for programs such as the ones in Singapore or Chile and get far better results.

nl 14 years ago | | |

The "correct" government policy to encourage high-tech startups isn't as obvious as you seem to think.

Steve Blank recently recommended that the Finnish government "might want to consider putting themselves out of the public funding business by using public capital to kick-start private venture capital firms, incubators and accelerators" [1]

That's quite a similar model to what the Australian government does already.

I've been involved in a few companies that had some funding from the old COMET program[2] as well as the new Commercialisation Australia[3] programs, and they aren't as useless as you seem to think.

As you note many of the current set of Australian startups have been funded by overseas (ie, Silicon Valley) venture funds. Given that Australian venture funds don't see the opportunity it isn't at all clear why the government would think differently.

In my experience there is a lot more awareness and support at lower levels of government (state and local level), where startups are seen as supporting local employment. For example, NSW recently announced $3M in funding for "creative digital content" and there are a range of different programs in other states.

The Silicon Beach group is very involved in thinking about this. They operate mostly out of Sydney, but have an online presence too[5].

[1] http://steveblank.com/2011/10/07/the-helsinki-spring/

[2] http://www.ausindustry.gov.au/InnovationandRandD/Commerciali...

[3] http://www.commercialisationaustralia.gov.au/WhatWeOffer/Pag...

[4] http://www.startupsmart.com.au/finance/new-$3m-fund-for-nsw-...

[5] http://siliconbeachaustralia.org/

cbs 14 years ago |

>However the government, culture and venture capital industry in Australia are still far behind. Few grant programs exist

Are you really suggesting the reason they don't "get it" is that the government tit isn't big enough to help you bootstrap your for-profit enterprise? If I was an Australian, I'd be offended.

apedley 14 years ago |

The current Australian government doesn't understand economics either. A mentality of take from businesses and give to the poor. They might realize one day that if they provided more for small businesses, there would be more jobs and hence less poor.