The valuable lessons Silicon Valley should learn from Australian startups

Australian startups are used to hearing about what they can do to be more like their cousins in Silicon Valley. Most often: Don't be afraid of failure and don't be afraid to ask. But as the Australian tech scene comes of age, it's time for local entrepreneurs to hand out the advice. 

On Feb. 17, a group of Australian startup founders flew to San Francisco, California to tour the offices of a number of tech heavyweights, including Google, Facebook and the Khan Academy. Chris Seymour, CEO of the car rental ecommerce platform, Carcloud, and Stuart Richardson, founder of venture fund Adventure Capital, were part of the contingent.

While Seymour and Richardson told Mashable Australia they were both impressed by the scale and innovation of the U.S. tech scene, they said Australians have insights worth sharing such as maintaining work-life balance and a global outlook, as well as building a sustainable business. 

"There's increasing interest in the way in which Australian business have been grown," Richardson said. "Amidst all of the noise that exists within Silicon Valley, investors are now starting to look outside the echo chamber to source high quality deals."

The work-life balance

Richardson has regularly travelled between Australia and California since the mid-2000s and has always found a marked difference between the work culture of the two tech scenes.

"There is a lot of cut and thrust, a lot big deals, big valuations, big pay packets, that exist in Silicon Valley, but with all of that activity comes a high level of expectation when it comes to ... the commitment of people that work within the business," he said. "The always-on culture is quite pervasive."

In comparison, Australia manages to maintain a relatively high quality of life. That doesn't mean you can't work efficiently and succeed, however. "I think there's a growing number of success stories which indicate you don't need to be in Silicon Valley to be successful," he said, citing the story of Sydney-based software startup Atlassian, which recently listed on the U.S. stock market, as an example.

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Building a business is a marathon not a sprint, Seymour agreed. "You have to have a team that's healthy and productive, that can support customers for years to come," he said.

Working insane hours also means you don't get out into the wider world. Silicon Valley, as the capital of "startup world," has an intense concentration of people with similar mindsets. While that can be powerful, it can ultimately breed homogeneity in thinking. 

"I don't think it's any secret of that being the Silicon Valley mindset, where people are designing for people who live there," Seymour explained. "You only get so much from a closed group."

A global view

Because of the small size of the Australian market, founders can't afford to just stay home -- they need to build an international platform from the beginning.

There are many American companies that Australians still can't use because their platforms are unable to accommodate issues like differences in pricing, Seymour pointed out. Xero, a New Zealand-founded accounting software platform, is a good example of a company that prepared itself for a global launch from the ground-up and not as an afterthought. "They're building it to scale internationally from day one," he said.

This international mentality is very Australian. "Just because you're based in Australia, doesn't mean you can't have particular functions of your business located in the U.S. or anywhere in the world," Richardson said. "Successful founders will go to where the most lucrative and attractive markets are."

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Keep it sustainable

In Silicon Valley, there seems to be plenty of venture funding still sloshing about, but in Australia, the small size of the market and lack of available private cash means local startups often have to be more economical in their approach -- and that's not a bad thing. 

Overnight successes are not only rare here, but potentially indicate an unsustainable approach. "In the U.S., some companies are able to fund and scale, similar to, say, an Uber, where it's about acquiring market share at whatever cost ... and without regard for the cost of doing business," Richardson said.

"Whether the San Francisco funding model is sustainable in the longterm or there's some sort of overvaluation, I can't speak to that," Seymour said, "but I don't think there's a lot of overvaluation in Australia."

In Richardson's opinion, growing steadily and within margins is usually the healthy approach, and it's the right approach for most Australian startups. "Here you've got 10-year overnight success stories," he explained, "which means these people have worked extraordinary hard for five to 10 years to create a business of value." 

That's a goal entrepreneurs on both sides of the Pacific could share.

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