Tag: Sydney

Invite only collaboration

Can a council of wise men build a new Silicon Valley? TechSydney believes it can.

The success of Silicon Valley is partly based on the sharing of information. Can a closed group of business leaders replicate that success?

Currently I’m in the United States interviewing Australian startup founders who’ve moved to the Bay Area on why they’ve chosen to move their businesses in Silicon Valley.

Naturally there’s a whole range of reasons for relocating across the Pacific – for some most of their market was in the US, for others it was the accessibility of investors while for many the move was always part of their plan to go global.

A place you fall in love with

The almost unanimous comment though from the founders was one of the attractions of the Bay Area are the support networks, “It’s a place you fall in love with straight away – it’s the people and the attitude,” says Holly Cardew.  “People ask what can I help you with.”

Cardew, the founder of image management service PixC, sums up the consensus on the Bay Area business culture of ‘paying it forward’. Almost every entrepreneur who’d moved to San Francisco mentioned how the question “how can I help you?” was key to building a network and finding customers, staff and investors.

That openness to helping the ecosystem was greatly appreciated by Carl Hartmann, co-founder of logistics startup Temando. “I’m here today because people were kind enough to pay it forward,” he states.

Since then Harmann has become one of the ‘go-to guys’ for Australian entrepreneurs arriving in San Francisco and almost everyone we spoke to mentioned Carl as being a great help for them in obtaining initial introductions.

Building a community

Those introductions and helpful acts are essential in a community where the most valuable asset is the people, not just investors but the entire complex ecosystem of coders, lawyers, publicists, designers and various other disciplines essential for an industrial hub to thrive.

Which raises the question about yesterday’s announcement of the TechSydney initiative, a project claiming “to address the Sydney innovation ecosystem’s greatest challenge: collaboration.”

This is a good idea, and one this writer was involved in seven years ago with the failed Digital Sydney program in 2010 which aimed to bring together the disparate groups that make up Australia’s disparate tech and digital media sectors.

Government failures

Digital Sydney failed because the state government is poor executing at such initiatives so the fact TechSydney is being led by experienced startup founders, investors and advisors should give hope this attempt would be more successful.

However, TechSydney’s press release quickly dispels that hope with the opening line.

Australia’s most successful startups and global tech giants, including Atlassian, Airbnb and Airtree Ventures are backing a new not-for-profit aimed at turning Sydney into Australia’s Silicon Valley.

The “Australian Silicon Valley” line shows a focus on the current Bay Area tech startup model funded by venture capital and seed investors who are happy to forgoe profits in the hope of big capital gain when the business is acquired or goes public – the Silicon Valley Greater Fool model.

Silicon Valley itself is pivoting away from this model with businesses across the Bay Area now frantic to at least have the illusion of being profitable or on the path to making money. In narrowly promoting the tech startup model TechSydney seems to be trying to catch a wave that has already broken.

Slamming the door

The main worry from the TechSydney announcement though is that it seems to go against the open door policy that makes Silicon Valley so successful. Rather than encouraging questions and new entrants, TechSydney is slamming the door shut with only the successful and well connected invited.

The group will launch at an exclusive invitation-only Dinner on May 30 at the Powerhouse. Sydney’s top 200 technology companies will be in attendance. The first 100 have already been invited, and the group is now taking applications for the next 100 attendees at TechSydney.com.au, and is urging companies to register their interest today.

In some respects this is to be expected of the Sydney business community – the city’s industry is based upon the Rum Corps model of the colony’s early days where success is based upon connections and influence rather than being open and collaborative. This attitude underpins the ‘mates culture’ that is critical to acquiring power and wealth in New South Wales and across Australia.

With an attitude of having an ‘invite only’ group leading the push the hopes of creating an ‘Australian Silicon Valley’ are doomed. By locking out new entrants or dissenting thinkers, it’s impossible to create a vibrant hub.

Creating an open mindset

For Sydney, or any other Australian city, to succeed as a global hub in any industry that legacy of the Rum Corps, the mates network, needs to be suppressed and a more open, collaborative mindset put in place.

TechSydney can do that if its leaders choose to do so. Hopefully at their invite only meeting at the end of the month the wise men of Sydney’s tech elite will decide that an open initiative that welcomes newcomers and tolerates new ideas is the best opportunity to make the city a global leader.

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Creating a retail community – A tour of Microsoft’s Sydney flagship store

Microsoft hopes to be able to build a community around its Sydney flagship retail store

Microsoft today opens the doors to its first flagship store outside of North America in Sydney, Australia. A look inside the project gives some insight into the company’s retail strategy.

Situated in Westfield’s Pitt Street Mall, the store promises “cutting-edge retail and experiential spaces that allow consumers to get hands on with products in an immersive way.” What’s immediately notable is the lack of obvious security with all the devices on display being available for customers to pick up and walk around the shop with.

Most of those devices showcase Microsoft’s various projects and alliances. Everything from XBoxes running Minecraft to Lumia phones are on display along with a range of laptops from partners such as Dell, Toshiba and Lenovo.

Looking across the shop floor
Looking across the shop floor

Notable among the devices is are the Surface Book and Surface Pro 4 along with the Microsoft Band 2 taking place of pride in the displays. As with everything else, customers can slip the wriststaps on and walk around with them. Microsoft’s representatives were coy on how they will prevent the less honest walking out the store with them.

Microsoft Band 2 wearables on display
Microsoft Band 2 wearables on display

Acting as a store greeter, the Answer Desk is the hub of store where representatives direct traffic whether it’s technical support – which like the Apple Genius Bar is provided free – sales, or directions to events in the upstairs community theatre.

Welcome to the Microsoft Store Answers Desk
Welcome to the Microsoft Store Answers Desk

Community is a big theme in the store and the company announced $4.8 million in software and technology grants to 11 not-for-profit Australian organisations to coincide with the shop’s opening.

That emphasis on ‘community’ is reflected in this quote from the company’s press release;

“Our new flagship store is here to showcase the very best of Microsoft to the local community and we are delighted Sydney has been chosen as its home,” said Pip Marlow, managing director, Microsoft Australia. “This is a key part of our commitment to delivering a truly interactive retail experience that gives customers, partners and community organisations the opportunity to see, experience and do great things, all made possible by Microsoft technology.”

Pip Marlow sees the upstairs community room as being an opportunity to engage with various school, business and technology groups. The space itself is a little cramped, however it can be isolated from the store’s general hubbub, unlike the Apple Store’s equivalent space.

The community theatre
The community theatre

Overall the store is modernistic but somewhat cramped and should the store be successful congestion is going to be a real problem, particularly around the Answer Desk and the narrow stairwell which, like its Apple competitor two blocks away, features a translucent stairwell.

A narrow translucent staircase
A narrow translucent staircase

In comparison to both the nearby Apple and Telstra stores, the Microsoft Showcase is surprisingly low tech with its retail experience. While the assistants will have mobile Point Of Sale terminals there’s little in the way of location technologies and contactless payments.

happy_holidays_microsoft_feature_store_sydney

Overall the Microsoft Store comes across as a touch crowded and, dare one say, a little old school retail. As a showcase for the company’s products, it’s probably no more impressive than those of the better retailers.

However if Pip Marlow’s aim of building a community around Microsoft’s products is successful, that could prove to be the long term winning strategy for the company.

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Riding the slowkansen

Taking the long route between Newcastle and Sydney via the Broken Bay ferry

Newcastle, a 160km north of Sydney is a drive easily done in less than two hours but for masochists and commuters there’s the three hour train trip affectionately known as the shitkansen by the locals.

The train trip itself has parts that are genuinely spectacular as it winds through the hills and rivers of the New South Wales’ Central Coast, albeit at speeds that are slower than in the 1933 timetables.

One of the reasons for the slow and spectacular trip is the Hawkesbury River and Broken Bay and that presents a natural barrier between Sydney, the Central Coast and Newcastle.

That natural barrier also presents an opportunity for a third, prettier route between the two cities using the private ferry service that runs between Central and Sydney’s northernmost suburb of Palm Beach.

Catching the slow train

slow-train-newcastle-sydney-shitkansen

Starting from the original Newcastle Railway Station, the trains run twice an hour during the day with one ‘fast’ service taking two-and-a-half hours and slow trips taking three.

interior-of-newcastle-sydney-slow-train

Inside the trains things are relatively comfortable although quite grubby. The purple colour scheme are the refurbished older carriages, the original 1970s ones being in a fairly awful green. The news trains feature a modern vandal proof colour scheme although the seats are more uncomfortable for a three hour journey.

Another weakness with the train service is the spartan facilities, apart from graffiti covered toilets there are absolutely no passenger amenities so bringing your own food and drink is essential along with fully charged electronics as there are no power outlets available.

closing-newcastle-sydney-railway-line

Amazingly, rather than improving the railway service to the state’s second biggest city the government plans to abandon the last five kilometers and replace the trains with buses. If there was one example of the 1960s thinking that dominates Australian politics, this venal and ill-thought out proposal is a wonderful example.

The Central Coast

While the parts of the ride between Sydney and Newcastle are spectacular, the stretch south to the Central Coast are the boring parts featuring little more than housing estates and low grade scrub until arriving at Gosford where the train runs alongside Brisbane Water until Woy Woy.

woy-woy-shopping-centre

On alighting the train at Woy Woy, the immediate impression is a town that won’t win any heritage awards with its neglected main street and an anonymous shopping mall. All of which is a pity as its location between the hills and waterways is sensational.

Sadly there’s little reason to hang around so getting a bus to Ettalong is the best thing to do.

bus-woy-woy-to-ettalong

From Woy’s Woy’s dismal transport interchange – a fate that waits Newcastle’s truncated railway service – buses leave every few minutes for the 15 minute journey to Ettalong. If you have a Sydney transport travelpass then your ticket is valid on the private bus service.

Ettalong

If you’re stopping for lunch or a break during the journey, Ettalong isn’t a bad choice with a lot more coffee bars, restaurants and bakeries than the rather depressing choices at Woy Woy.

Since this writer’s last visit to the town three years ago when its centre was struggling with many empty shops; its fortunes have improved dramatically and it’s gone back to being a good destination for a day trip in itself.

Catching the ferry

ettalong-palm-beach-ferry

The ferry itself is a twenty minute trip including a brief stop at the village of Wagstaffe. Its route winds through the sandbanks of Brisbane Water before getting to the open water of Broken Bay.

lion-island-hawkesbury-ettalong-to-palm-beach-ferry

Midway across the bay, the ferry passes Lion Island and the mouth of the Hawkesbury River before entering Pittwater and the Northern Suburbs of Sydney.

Palm Beach

arrival-at-palm-beach-ferry-wharf

The wharf at Palm Beach is a classic wooden structure in a lovely location. Across the carpark and road is a general store, the Barranjoey House restaurant and a fish and chip shop.

For a takeaway meal, the fish and chip shop is nicer than the general store but you can enjoy either at the park alongside the ferry wharf.

For a sit down meal, Barrenjoey House has an expensive restaurant along with a bar with an outdoor seating area if you’re looking for a cold drink while waiting for a bus to Sydney.

The bus to Sydney

l90-bus-from-sydney-to-palm-beach

The bus back to Sydney takes about 90 minutes. It isn’t the most comfortable journey however the views of the city’s gorgeous Northern Beaches are worthwhile if you’re sittiing on the left side when heading south.

Once past Long Reef, the journey is mainly suburbia except when crossing the Spit and Harbour Bridges. A more interesting option that will add another hour to the journey is to switch buses at Warringah Mall and travel to the city via the Manly Ferry.

Taking the Slowkansen from Newcastle to Sydney isn’t the trip for anyone in a hurry with it adding up to two hours to an already slow three train hour journey but it’s a lot more interesting than the regular way to travel between the two cities.

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Finding the smart money

Can events like Sydney’s AngelEd and London’s City Meets Tech help those cities become global startup centres?

Around the world startup communities are working to connect with local investors, in Sydney and London two groups are showing how it is done.

“We’re looking at turning idle money into start money,” is the aim of Sydney AngelEd says one of its founders, Ian Gardner.

Fitting startup companies’ capital needs into the established criteria of investment managers is an ongoing problem that AngelEd’s founders want to resolve. “We see startups becoming an asset class,” says Gardiner.

AngelEd, to be held on November 7, aims to educate high wealth investors and asset managers on understand the risk, benefits and hype around angel investment, particularly in tech companies.

The global search for funds

Startups around the world are struggling to engage with investors – in London, the local tech community has set up City Meets Tech to introduce British investors to high growth companies.

London should have an advantage in this field given its leading role in the global finance industry, however the challenge for the tech community is to find financiers who are prepared to accept higher levels of risk than mainstream investments.

“The City is generally risk adverse and doesn’t understand tech and tech start-ups,” says the City Meets Tech website, “though really it’s about understanding the business and managing risk though unfortunately innovation requires at least some risk.”

Australia’s trillion dollar superannuation system should similarly give Sydney an opportunity that to become a global centre however it suffers from a similar, if not worse, conservative investment culture to London’s.

Turning Sydney into a global finance centre has been an objective successive state and Federal governments for twenty years but the sleepy, comfortable and risk averse culture of Australian fund managers offers little to attract foreign investors or companies.

Much of Australia’s is problem is the insular nature of local fund managers with all but a tiny part of the nation’s retirement savings being put into the top local stocks, listed property funds or domestic infrastructure projects that are notable for their lousy returns and extortionate management fees.

Breaking that mentality is going to be the key to both AngelEd and the Sydney’s success as a financial centre.’

Competing with the world

While London and Sydney are struggling with the challenges of encouraging investors into the high growth sectors, cities like Singapore and New York are developing investor communities that are attracting entrepreneurs to their cities.

Many governments dream of being the next Silicon Valley and while it isn’t likely anyone can recreate the circumstances that led to Northern California becoming the computer industry’s world centre , a vibrant and accessible capital market will be necessary for any place hoping to be a global cnetre.

For Sydney and London, the success of initiatives like AngelEd and City Meets Tech may be critical for both centres’ future in the global digital economy.

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New York celebrates its entrepreneurs with Made in NY

New York City shows how cities and nations have to promote their economic strengths

Part of a thriving industrial hub is having the business and skills that support the sector. If you’ve got them, you need to tell the world you’re open for business.

Somebody who is doing this well is New York City’s Office of Media and Entertainment which runs the Made In NY program.

While much of the focus of the program is on attracting film production, Made in NY recently branched out into promoting the city’s tech community boasting successful businesses like video sharing site Vimeo, tutor matching service Tutorspree and stock photography supplier Shutterstock.

Towards the end of the Shutterstock clip one of the staff mentions ‘drop bears’ – a little bit of Sydney argot creeps into the story.

It’s the Sydney connection that makes the Made In NY campaign so bittersweet, I was involved in setting up the Digital Sydney project for the New South Wales government.

While Sydney doesn’t have the size of New York’s or London’s tech industries it does share the advantage of being one of the most diverse cities in the world. The work of organisations like ICE in Parramatta is important in realising some of that potential.

That potential is huge – having sizeable communities of East and South Asian language speakers gives Sydney a real opportunity in the Asian Century.

Unfortunately most of those communities live in Sydney’s West and while lip service is given to the needs of that region most economic development work focuses on corporate welfare for established interests and supporting inner city stuff that white folks like.

When I started at what was then the Department of State and Regional Development in 2009 I was told that many in the agency believed NSW stood for “North Sydney to Wooloomoolloo”, something that largely turned out to be true. The west of Sydney, like most of the state, took second place behind the wants of big business.

This is what’s encouraging about the Made In New York campaign, it promotes smaller business – although they all seem based in lower Manhattan staffed largely by a middle class monoculture, which seems to be a problem when you buy into hipster chic.

Hipster chic is one of New York’s strengths and that’s what every city and country needs to be doing in a global connected economy.

If you can’t define and articulate what it is you add to the economy, then you’re locked into the low value, small margin commodity end of the marketplace and that is a tough place to be.

The question for all of us, on a personal and a national basis, is do we want to be price taking commodity producers or do we want to develop the high value, growth business of the 21st Century.

New York City has made its choice, we have to make ours.

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Uber’s New Year’s test

New Years Eve 2012 is going to be a tough test for the Uber hire car booking service as prices surge.

Update: It appears Uber passed the New Year’s Eve test without problems. There were almost no complaints at all.

New Years Eve 2011 was a tough night for customers of the Uber hire car booking service in New York City when fares surged as partygoers headed home.

This year, Uber hopes to overcome problems by making sure customers are aware with big warnings of prices and even a sobriety test so users can confirm they know what they are doing when they agree to catch a cab.

Uber’s dynamic pricing matches supply with demand, which means a more reliable service but also opens the company to allegations of price gouging during busy periods.

Those allegations are exactly what happened in New York last year and in 2012 Uber’s risks of bad publicity are far higher as the service is now international with operations in cities like London, Paris and Sydney.

Sydney will be the first city to encounter the effects of surge pricing and big risks lie in the Harbour City as Sydneysiders are used to fixed cab fares and enjoy a good whinge when things don’t work in their favour.

Over a million people are expected on the shores of Sydney Harbour to watch the New Year’s Eve fireworks which means cabs and hire cars are at a premium.

If Sydney has the triple fares expected in New York then Uber’s fare from Circular Quay to Bondi Beach will be around $150. This compares to the standard cab fare of around $30.

Those markups will be exploited by the incumbent taxi companies and booking networks. We can expect a wave of stories over the next few days from tame journalists regurgitating the incumbents’ media releases.

How Uber’s Australian management deals with this will be worth watching. One hopes they are prepared a tough week and don’t enjoy the festivities too far past midnight.

Another problem for Uber is going to be Sydney’s mobile data networks which are horribly unreliable during peak periods. It may well be that Uber’s customers and drivers never get a fare anyway.

Last year I was near the Habour Bridge and didn’t have a Vodafone signal from 8pm onwards. I’ll be comparing the performance of all three Aussie networks from the same place tonight.

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Desperate Ken and market realities

Adam Smith’s invisible hand of the market is giving some people a nasty slap over the head.

Ken Slamet has a problem, his in-laws are trying to sell the family house and no-one will give them the price they want.

The house at 228 Warrimoo Ave has been on the market through an agent for more than 100 days, pulling in ridiculously low offers, Mr Slamet said.

Depending on the deposit, Mr Slamet is seeking between $1.5 million and $1.6 million for the house his wife grew up in.

One would argue that those “ridiculously low offers” are actually Mr Market giving Ken and his in-laws a slap of reality. They are simply asking for too much money.

St Ives, a suburb on Sydney’s Upper North Shore, is going through demographic change. In 1960s and 70s St Ives was the suburb for successful stock brokers and bankers, however in the 1980s and 90s that demographic decided they wanted to live closer to the city and Harbour and suburbs like Mosman and Clontarf became their areas of choice.

For Ken’s in-laws and their neighbours, this is bad news as few other people can afford 1970s mansions on large blocks within 30km of Sydney. Those who do manage to sell often find the buyers are developers who sub-divide to build townhouses or apartment blocks, madness in a congested, car-dependent suburb with poor public transport links.

Adam Smith’s invisible hand of the market is giving those holding properties that were attractive to stockbrokers in 1972 a nasty slap over the head in 2012.

Ken though has a solution for his problem – he’s offering a rent to buy scheme at a mere snip of $2297 per week. An amount 70% higher than the average Sydneysider’s gross income and a whopping four and half times the city’s average rent of $500.

Good luck with that.

The real problem is that Ken’s in-laws are stuck with expectations higher than the market reality. Like many of us in the Western world, they believe their assets are worth more than they really are.

As the global economy deleverages there will be many more people like Ken’s family. For many the transition to a less wealthy lifestyle is going to be tough.

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