Paul Graham’s VC blog has a provocative story on why startups should move to Silicon Valley to improve their chances of success. This raises the question should Australian startups follow his advice.
My view is a firm “yes”. Not only are Australian investors inexperienced in finding and nuturing startups but they are notoriously reluctant about putting money into anything remotely innovative or “outside the box”.
So it’s probably even more important Australian innovators to go the US than it is for their British, Irish or Indian counterparts.
What’s always amazed me with Australian investors is how they will keep backing known dogs. The best example was One.Tel where the founders repeated the mistakes they’d made in previous ventures but we’re able to keep the investor’s cash coming in because they were the right people who’d gone to the right schools.
For an unknown kid without connections and with a truly original idea (and One.Tel was certainly not an original idea) it’s difficult to see how they’d have any reason not to be on the first plane to San Francisco.
Interestingly, Paul Graham’s follow up blog post on the future of startups says “you don’t beat the incumbents; you redefine the problem to make them irrelevant”.
It’s going to be interesting to see how the incumbent Australian investors are going to deal with the new economy. Will they just sit on their behinds and enjoy the blessings of the current commodities boom and wait for the next housing boom? Or will they learn new tricks?
Or will a new generation come along and redefine the problem?