Subtitle: Where are our Tech Billionaires?
I am quite lucky in some ways, in my day job I get to look at 1000s of inventions, select the ones I like and then spend the next 6-24 months building them with a team.
The inventions I really like typically have one thing in common, they solve a pressing global problem which affects the human race.
It’s taken me nearly a year to develop this essay, I unreservedly apologise in advance for its length.
I started writing it when looking at a few really big human problems and wondering why this focus on big problems was strangely absent from Australia’s political narrative.
Politicians of all persuasions were strangely quiet on developing the capability to tackle big global issues, preferring to make themselves as small a target as possible while launching time wasting attacks on their opposition using meaningless and mostly unimportant rage-porn subjects.
They all seem to be focused on point scoring against each other, rather than Australia’s point score against the world.
This is my plea to our leaders to change the narrative.
The BRW Rich List & Technologists
I haven’t looked at the BRW Rich List for years (I got sick of not being on it 🙂 but I had a quick browse recently and the same thing struck me as years gone by, the list is dominated by fortunes made by property development, mining, retailing and services.
Very few of the fortunes were created by technology companies and only a few of these are billionaires.
In the USA the Forbes Richest 400 is heavily tech weighted with at least 50 tech heavyweights making the grade, this is purely technology companies, it does not include the billionaires from media, communications, medtech, biotech, online retailing and other technology driven businesses and almost all of these are billionaires not millionaires, if we included all the others it would probably go closer to 100 of the 400 are technology related.
So depending on how you want to categorise the businesses, the US rich list is made up of between 12-25% technology related businesses.
It’s easy to get caught up being focused on relative inequality of one person or family having such massive wealth, however each rich lister at the top provides employment for thousands in some cases hundreds of thousands of people and is in many cases the lifeblood of their local communities (a fact overlooked by all the lefties who ignore how their jobs are made possible) and pay significant taxes with thousands of other businesses formed on the back of these giants.
More rich listers = more jobs.
In stark contrast the Australian BRW Rich List has very few tech related fortunes.
Tech Companies as defined by BRW
Congratulations to the newcomers Mike Cannon-Brookes and Scott Farquhar who have smashed it by being valued at more than a billion each, however I hasten to add this is a valuation from the last round of venture funding for a private company so hasn’t been validated in the public markets nor is it cash available for spending or further investment but its clear they are headed for some form of listing in the next few years so I expect it will be realised.
- Andrew & Paul Bassat Seek founders
- Matt Barrie again a new entrant, congratulations
- Craig Winkler – Old hand takes me back to the Dot Com days, Im sure MYOB shares got a lot of other people into day trading dotcom shares as well.
- George Koukis – Temenos – Banking software, most people in Australia have probably never heard of his company which is based in Geneva and services 1500 banks globally.
Of the 200 only 7 or less than 4% are technology related and two companies Atlassian and Seek produced 4 of the 7. I had to go back and read the list again several times because I could not believe that was all we had.
To be generous I looked at a bunch of others who had been categorised under other industries.
Companies who at a stretch are tech related companies
None of these guys below are pure technology companies but at a stretch you could consider them technology enabled businesses or got their start in technology. But none of them have created technology that has changed the world.
Ruslan Kogan – Retailer of OEM consumer electronics
David & Vicky Teoh TPG Communications
Len Ainsworth & family Gaming machines really is a tech business
Ralph Sarich made most of his money from property but got his start developing the Sarich Orbital Engine (which is an awesome case study for why you should avoid building your own factories for your new tech startup)
Silviu Itescu Biotech founded Mesoplast
Owen Kerr Pepperstone Forex Brokers which is fast becoming one of the dominate forex brokers and is driven by web based software and backend tech that would not have been possible a few years ago.
Even if we add these guys we are still at 6-7% technology related companies contributing to our top 200.
I might add that most of these people still have all of their wealth tied up in their businesses few have this cash released and ready to invest as most of it is still tied up in the original businesses.
Why does the USA have such a high % of Tech Billionaires?
To understand this you have to understand where the US tech billionaires came from and the conditions that led to an environment that drove their development.
Obviously their markets are significantly bigger than ours and often have global reach, this explains the massive difference in the size of the fortunes on their list but it doesn’t explain the fact that their list has more than double the number of tech companies as a percentage.
When you look back at the history of the USA, they were always trying to achieve something big.
Settling the wild west, joining the nation with Railroads, launching the mission to put a man on the moon, the development of production line machinery, factories, mechanised agriculture and their military complex was a massive driver in the development of their technology industry.
While the USA may not have invented all of these they spent significant resources doing them bigger and better than anyone else in the world.
While many people dislike their Gung ho attitude I would argue it is what made them an economic super power.
Over the years the USA have run numerous competitions known as X Prizes which are incentivised competitions to encourage private groups to do something very difficult to do.
Examples include Ansari X Prize to win the prize, famed aerospace designer Burt Rutan and financier Paul Allen led the first private team to build and launch a spacecraft capable of carrying three people to 100 kilometres above the earth’s surface, twice within two weeks making Space travel no longer the preserve of Governments.
Other examples include the Qualcomm Tricorder X Prize which envisions a device like the Tricorder on Star Trek a tool capable of capturing key health metrics and diagnosing a set of 15 diseases.
Metrics for health could include such elements as blood pressure, respiratory rate, and temperature.
Ultimately, this tool will collect large volumes of data from ongoing measurement of health states through a combination of wireless sensors, imaging technologies, and portable, non-invasive laboratory replacements.
The US Army and CIA have their own Venture Capital Funds, plus all of the arms of the Services actively fund research projects along with DARPA, NASA and a dozen other defence related groups.
DARPA has a $3 billion budget with a mandate to develop advanced technologies in areas like Robotics, UAVs, Big Data, Security, Self Driving Vehicles and dozens of other areas, these are mostly created using challenges which companies get to participate in.
I counted about 80 projects that they have sponsored and these are the ones we know about.
Once upon a time English Royalty and Admiralty used to sponsor various prizes (for example the Longitude Prize creation of a time piece which would enable mariners to tell the time at sea and therefore be able to calculate their position) or award privateers spoils of war for achieving various objectives in the name of the Crown.
I can’t really think of an area of industry or science where Australia’s leaders have set themselves the goal of solving a big problem and then mobilised the country to pursue that goal.
We are a nation of miners, shop keepers and service providers hardly scratching the surface on solving big world problems.
Space Race & The Cold War
The USA has a greater % of tech billionaires because the Space Race, cold war and various arms races and other developments led to demand for technical solutions which in turn launched companies that solved problems in successive waves of technology and in doing so resulted in the creation of massive creation of wealth.
The space race and cold war defence related needs in turn led to massive developments of embedded systems, micro-controllers and other computing systems where dozens of companies were born off the back of the invention of the transistor at Bell Labs such as Fairchild, Shockley and Intel, who then went on to develop the silicon microprocessor.
The First Trillion $ Startup
In a recently released research note Endeavour Research details the trickle down effect of one company Fairchild Semiconductors, who they claim is the first trillion $ startup based on the number and sheer volume of companies that came from their alumni (at the end of the 60s their revenue was around $100m).
The hundreds of companies their alumni launched are still a major force 50+ years later, some 92 Public companies trace their roots back to staff of Fairchild, their collective value?
Tech Waves – How Did The Billionaires Develop?
Successive technology waves or platforms have built foundations upon which the next wave was built.
Companies like Hewlett-Packard developed the test and measurement engineering equipment needed to develop sophisticated electronics.
This in turn laid the foundation for waves of mini computer companies in the 70s and 80s such as DEC, HP, Honeywell, Sun, Prime and other developments from companies such as Xerox, which off the back of defence and space funding created the Mouse, Ethernet, Hypertext tools, the laser printer, post script and the development of GUIs.
As these systems became more distributed this drove the need to connect them and networking companies such as 3Com, Cisco, Bay Networks emerged which then provided the foundation for the internet.
Further developments in lower cost microproccessors by Intel, Motorola & AMD and operating systems by Microsoft, DR Dos and others then made it possible for PC makers such as Apple and IBM to create a generation of low cost machines suitable for personal computing which were then cloned to drive the products into mainstream.
This in turn led to a massive explosion of PC hardware and software companies, further developments of HTTP and web server software and applications driving the next wave of web based businesses.
Cheap PC based server hardware led to the wide availability of Managed Service Providers and Web Hosting Companies which in turn led to the further development of open source web server software software such as APACHE, PHP, MYSQL and Linux as well as development tools to help code applications on these platforms.
Whilst I have glossed over the history and only mentioned a few of the 1000s of companies involved, with each successive wave new fortunes were created that are now represented on the Forbes Rich 400.
What helped create the original waves?
A shared Nationalistic quest, vision or goal to put a man on the moon and to defend the country.
Where are our missing Tech Billionaires? What is wrong with Australia?
What’s missing here? Why don’t we have a Rich List full of tech millionaires & billionaires? Why doesn’t Australia truly dominate any technical, medical or scientific fields?
Why do politicians roll out the same tired old examples of Australian Innovation, The Hills Hoist, Wifi, Resmed and Cochlear, the youngest being 25+ years old.
Because the cupboard is bare, there are only a few major global hits in recent memory.
If you look at the preconditions for the development of Silicon Valley, I would argue it’s not all about the Venture Capital, though most people in the local Startup scene would have you believe that lack of VC is Australia’s biggest issue, I just don’t agree.
Yes access to capital is a problem but it’s not our most pressing problem.
If you spoke to the dozen or so active VCs in this country they would tell you the biggest issue is finding quality deal flow, people and technology that have the ability to become world class businesses.
• Last year Blackbird VC looked at 450 deals and only invested in 9 (which is actually a lot). I would argue that our VCs could raise more money if they had sufficiently good deal flow.
• Sydney Seed Fund looked at 200 deals and only invested in 3.
Believe it or not finding quality deal flow is every investors biggest problem and the less established you are the tougher this is, most entrepreneurs wont believe me when I say that there are Venture Capital Funds in the US who simply will not make money because they cannot get a look in to the top deals and arguably this includes any investor who is not in the top 20% of VCs or Angels.
They won’t make money because they can’t get a piece of the hot companies, which means they probably will get into the losers but didn’t get the 1-2 big winners they needed to make the whole portfolio return a profit.
If you take some time to listen to some top VCs in the US you will find these guys are incredibly aggressive and compete very hard to get into the top deals, stories of partners hoping on a plane on a moments notice to travel across the country for an afternoon meeting to close a deal with a hot company are not unusual and at least from my perspective its not what I expected.
If you look in the US you will find most successful VCs will have numerous funds some managing $billions, they are raising new funds regularly and are able to do this as they have demonstrated that they have a pipeline of quality deals and are putting the money they have raised to work and can find good homes for more money.
So I feel pretty confident we can put the VC problem out of the way for now, money is flowing to this country from US and Asian investors when there are hot companies that deserve it.
Our problem is far more fundamental, we need more
Quality people solving quality problems with a commercial objective.
I have said it before and I will say it again, most of the startups I see in the various business competitions are focused on low quality problems.
Mostly 1st World Hipster problems that are not creating a body of knowledge or ground breaking techniques in scientific, technical or medical fields.
In the last two years I have been involved 6-7 business plan competitions and incubation programs across our a number of our top local Universities plus a number of pitch competitions outside of the University, all up I have probably seen 200+ pitches both live and via my tech blog Startup88.com as well as reviewing ~500 inventions in my day job.
Arguably these pitch sessions should be the breeding grounds of billionaires, however I saw few ideas which were ground breaking, that truly could claim to be trying to change the world.
In fact I had a sense of Deja vu, as I attended the second year of these competitions that there were a number of near duplicate startups.
I saw Parking Apps, at least 5 fast food delivery apps, an app for sports teams, online apps for glasses, lead generation for car dealers, a robot for kids, a dog bowl with a webcam, a new age bike helmet, socks for charity, numerous image editing and uploading apps, an events app, a babysitting app, an auction platform for livestock, a number of skin creams, a social makeup platform for girls, a neighbourhood social network, a number of job sites filling questionable niches.
I attended a pitch session only a few months ago and I kid you not, it was near identical to the years before.
Update: I recently attended Startmate 2015 & Incubate 2015 and these were significantly better than any group I have seen in the last few years which is encouraging.
What did Silicon Valley have that made it successful?
A University Community (Stanford) with its own Startup Park with the vision to support it’s emerging startups and quality graduates.
I would argue with recent developments we have 3-4 great Universities in Sydney working to encourage Entrepreneurs and at least one in Victoria, its not clear about the other capital cities, it feels like our Universities are really starting to encourage their students to launch businesses but it’s still early days.
Australian Technology Park goes some of the way but for many years it was in my opinion a real estate play.
I think they are doing a great job on incubating startups now, however I object to Government funded institutions requiring startup companies to give up equity to access tax payer funded facilities. It is also by all accounts not an easy thing to get into and space is very limited.
A quest and reason for Startups to exist.
Simply the US Government of the 40s, 50s and 60s engaged in a nation building exercise around space and defence that literally ensured that there was demand for new technology and stimulated technological invention and innovation.
A Entrepreneurial Founder Culture.
The US has a founder culture, a willingness to leave academia and launch companies.
This is where Australia differs.
What is Australia missing?
Lack of Entrepreneurial Aspirations from the people most likely to create ground breaking new technology
This is where I fear I will offend many people in Universities both Students and Staff however lets press on.
My experience of attending University of Technology Sydney in the 80s-90s and spending the last few years working with students and academics at five of the best Universities in Australia leads me to believe that while some of them are working on important scientific work, few of them are willing to risk the life of an entrepreneur and there is no evidence to suggest the Australian Academic structure encourages or rewards entrepreneurial aspirations.
As I understand it in Australian Academic performance management is focused on research and publishing journal articles and doing fee for service work for Corporations.
More journal articles = better academic performance = funding & promotion.
I am fairly certain there is nothing in their reward structure around more startups, more spinouts, more tech transfer or more patents.
Definitely get industry money in, but don’t turn the learning into a new enterprise and don’t let IP ownership escape.
While publishing and basic research is absolutely important, there isn’t a great correlation to creating new enterprises.
In defence of the Tech Transfer offices, they are leading a fantastic resurgence of entrepreneurial activity among students and many of them are doing their best to get research out of the lab and into companies, however the basic KPIs do not reward academics for doing so, nor does the University IP and Spinout processes for staff make this easy to do.
Lack of basic startup infrastructure located close to key Universities and transport
While I have a lot of admiration for many of the incubators and accelerators around the country and the teams that run them they are mostly for-profit enterprises, in some cases real estate plays that need startups to pay commercial rates + offer equity in order to sustain themselves.
Nothing wrong with this but if a Government wanted to create a petrie dish of startup activity then you need to create a precinct that will give every potential entrepreneur a desk and access to a workshop for free for a year and then subsidised for 2-4 years after that.
If the Government really wanted to do something about encouraging startups they would create large startup parks in unused Government buildings and industrial sites close to the Universities and transport in both capital cities and regional center’s.
But sadly there is little solid action or evidence to suggest that either side of Government sees launching new startups as a priority.
Lack of a suitable assistance package for entrepreneurs to help Startups get started
I absolutely believe in a welfare safety net for those who can’t provide for themselves, I believe its essential to a healthy society, but I find it amazing that there is absolutely no such support for a new entrepreneur.
This country has a comprehensive welfare system, if you don’t have a job, undertaking full time studying or have are injured or disabled there are Government welfare programs which will give you in some cases an indefinite payment benefit so you can eat and get by.
If you have chosen to launch a startup you are on your own.
Even the guys who sit at home and watch TV on the dole get paid a weekly payment to keep food on the table and the Government will do it indefinitely, but you don’t get this sort of support if you are trying to kickstart a business.
Frankly its a bad joke.
If we want a million startups to bloom I believe we should be offering startup entrepreneurs the same benefit as a dole bludger for a year so they can get started.
The reality is most entrepreneurs wouldn’t want it and would stop the payment as soon as they could, however it would allow them to buy ramen noodles while they get started.
Commercial Ready (Or whatever it is called this year)
I have observed these programs through 4-5 changes of Government now and each time there is massive disruption to the programs with months or even years without a functioning program while the deck chairs are shuffled around and similar programs produced, in the interim startup life is severely disrupted.
I recently spent an interesting 20 minutes talking to a senior manager at AusIndustry, while I support the Commercialisation teams and their efforts, it became obvious to me this re-birthed program was really aimed at established businesses but would probably never fulfil the hope of launching new startups.
The Problem? Same as its always been, the requirement for 1:1 matching funds.
Given the small total value of venture capital available to early stage companies in this country, it seems unlikely that matching funds will be found from external funding sources which really restricts this to companies that have revenue to fund the matching $ themselves.
Some years ago I sat in a presentation for the Green Car Innovation Fund, I asked the question that no one wanted to answer, essentially how the program could be successful with the small companies it was trying to encourage when the matching funds needed was 4x the amount of VC funds available.
No one wanted to touch the question and they quickly moved on.
A few years later a Government report detailed exactly what I had said would happen.
It was obvious there would never be enough funding to support the matching $ requirements, if the companies didn’t have matching revenue, there wasn’t sufficient VC funds raised to support it, the money was never going to be available so the majority of funds could never be deployed.
I wonder if it was merely lack of recognition of the problem or if they never intended to spend the grant $ and in fact were merely propping up a doomed local car manufacturing cartel which would ultimately pull out anyway.
Its fair to probably characterise the Federal Commercialisation programs as the Government Equivalent of A/B round of VC funding.
You won’t receive it unless you have sufficient traction to raise other funding. In my opinion this program will do very little to help a broader startup surge.
Unfortunately everything has all sorts of limitations, as an example the otherwise commendable Minimal Viable Product grant in NSW of $15,000 has a rule that you can’t have started work on the MVP at all.
Seriously? No prototype or proof of concept. A blank sheet of paper. Its great they started thinking about the problem and are proactively addressing it, but a grant for a startup that has done absolutely no work on the product doesn’t make a lot of sense to me.
Many startups are put off by the red tape, restrictions and delays around these programs and avoid them like the plague.
Nation Building (or not)
By far and away Australia’s biggest problem is the lack of Statesmen like Politicians who have the balls and the foresight to embark on a nation building exercise.
And before you mention the National Broadband Network as a Nation Building exercise, let me knock that on the head.
Pre-emptively I stress this is not a problem of the current Governments making in my opinion they are mitigating this as best they can.
As one of the countries largest spending commitments on record this has done very little to build our communications and tech industry.
We have lots of trench diggers, fibre splicers and service providers but very little long term Intellectual Property, Product or technology creation.
As far as Im aware no major new networking products have been created by Australian companies to build the NBN.
The Government of the day was presented a plan and the opportunity to create a Broadband Co-operative Research Centre by one of the leading guys in the space Ross Halgren prior to commencement of the NBN to develop broadband products for the NBN but the plan was met with silence.
As a vote buying exercise they wanted to get Youtube to the masses as soon as possible so insisted on products off the shelf effectively ensuring Australian businesses received little or none of the product revenue and no technological development.
Can you imagine China, Korea or the USA walking away from the opportunity to develop a new technology business in what is still a major growth market? Can you imagine them just handing that business over to another country?
No, neither can I.
Whilst the NBN will have a benefit for business and an educational and communication improvement for residential users it seems unlikely it will launch a million startups.
What it will do is provide great Youtube and Netflix speeds and sadly that’s what gets you elected.
I can’t think of a time in recent memory when politicians on either side have expressed a burning desire to push Australia to the forefront of solving a major scientific or technical problem.
If politicians of the day had said that this was an opportunity to create a new communications industry to become leaders in the development of broadband, wireless and satellite equipment the NBN would have my full support.
But sadly as a nation building exercise it fell well short of it’s potential and is an exercise in pork barreling and electoral bribery.
If you don’t believe me look at the rollout map for the foreseeable future and work out what colour the electorates are, they overwhelmingly red.
Almost every complaint I hear about the NBN is related to not being able to download Netflix fast enough, not many people complaining about running telemedicine or Video conferencing or cloud computing or any of the startup related technologies.
Not much nation building going on there.
The last example of Nation Building I can think of before that was the Insulation Scheme. I actually thought this made sense economically to get people into work at the time, however Nation Building it was not.
Lacking Global Ambition – Our Biggest Problem
Thanks if you are still reading.
It’s is apparent to me that we haven’t had leaders with global ambitions for our country for 20 or more years.
Our politicians are too busy infighting and presenting as small a target as possible while still getting elected.
No single leader has painted a grand audacious vision for what our country could achieve.
No one has stepped up and said we as a nation are going to solve Diabetes, or Water or Solar or any one of the 100s of real problems the human race faces.
So I call on the few Statesmen like like Politicians in our Government to step up and take a stand.
Set a goal for your remaining term.
Find a series of big problems that Australian Entrepreneurs can rally behind to solve.
Create schemes that give as many diverse startups as possible the opportunity to solve that problems.
To do so you need to solve a few problems.
Unlock the tools – Break down the barriers
There is a story of about one of the founders of HP, Bill Hewlett who came in to work on the weekend and found the tool cabinets locked.
He promptly cut them open with bolt cutters and left a note to the manager not to lock the tools on the weekend as they trusted their employees.
I make the observation that Australia’s tool store is mostly locked to most Australians.
If you are not a member of a University faculty (its not enough to be a student) or a CSIRO or similar institute you have almost zero chance of making meaningful progress in any field of scientific or technical endeavour due to the difficulty of accessing the appropriate tools and resources.
Try finding a place to make PCBs in Sydney, or a CNC mill to fabricate a prototype or a lab to run biological or chemistry experiments.
Unless you are a member of University staff or a Phd it is very difficult to access these resources.
And yet our country is full of qualified immigrants being forced to drive taxis as they don’t have a University position.
I know an inventor who was a Dean in his native country when he came he was outside our traditional academic system and it took some years to get back in, he is now an adjunct but what of the 100,000s of post grads immigrants who could do meaningful work but lack access.
In many cases successful people with a track record in their own country are either unable to get a University or Institutional position or unable to access tools and labs they need to continue their work in this country.
Literally hundreds of thousands of capable immigrants are driving taxis and doing menial work compared to what they are qualified or capable of.
And what of the hundreds of thousands of potential immigrants with degrees or post grads who are forced to leave the country after finishing their degree?
Seriously you have locally trained immigrants with post grad qualifications and you are kicking them out?
What a Waste.
Their degrees should have permanent residency certificates stapled to them
Recently I lost one of the best Engineers I have ever had the pleasure to work with due to an expiring student visa. He had a 5 year Mechatronics Degree and a 2 year Masters of Business and could literally build anything electrical, computing or mechanical and was an expert in Drones, Robots, process control and electronics.
The barriers that the 457 Visa process created made it both cost and time prohibitive to get him residency and his talent and many of his friends is now lost to this country.
Aspiring Students who are keen to experiment and learn their craft are also mostly unable to until they start their PhD.
I remind the reader that the inventions and discoveries that most of us regard as the most significant contributions to mankind mostly did not come from a University Lab and only a few were funded by Government most of them were created by the tinkers, makers and experimenters of their day.
But todays tools are more complex and expensive and few people have them in the shed.
I quote the headings from this very good article The 50 Greatest Breakthroughs Since the Wheel with some of my own
- Printing Press
- DNA & DNA Sequencing
- Optical lenses,
- Paper, second century
- The internal combustion engine, late 19th century
- Vaccination, 1796
- The Internet, 1960s
- The steam engine, 1712 essentially invented by a coal miners barrow boy
- Nitrogen fixation, 1918 (new class of fertilizers)
- Sanitation systems, mid-19th century
- Refrigeration, 1850s
- Gunpowder, 10th century
- The airplane, 1903 two guys in a bike shop transformed travel, warfare, and our view of the world
- The personal computer, 1970s
- The compass, 12th century
- The automobile, late 19th century
- Industrial steelmaking, 1850s Mass-produced steel,
- The pill, 1960 Launched a social revolution
- Nuclear fission, 1939
- Synthetic fertilizers and scientific plant breeding Norman Borlaug, the agricultural economist who devised this approach, has been credited with saving more than 1 billion people from starvation.
- The sextant, 1757 It made maps out of stars.
- The telephone, 1876
- Alphabetization, first millennium b.c.
- The telegraph, 1837
- The mechanized clock, 15th century
- Radio, 1906
- Photography, early 19th century
- The moldboard plow, 18th century
- Stumpjump Plough
- Archimedes’ screw, third century b.c. transformed irrigation and remains in use today at many sewage-treatment plants.
- The cotton gin, 1793 Institutionalised the cotton industry
- Pasteurization, 1863
- The Gregorian calendar, 1582
- Oil refining, mid-19th century Without it, oil drilling would be pointless.
- The steam turbine, 1884 generates 80% of the worlds power
- Cement, first millennium b.c. The foundation of civilization. Literally.
- Scientific plant breeding, 1920s
- Oil drilling, 1859
- The sailboat, fourth millennium b.c.
- Rocketry, 1926
- Paper money, 11th century
- The abacus, third millennium b.c.
- Air-conditioning, 1902
- Television, early 20th century
- Anesthesia, 1846
- The nail, second millennium b.c.
- The lever, third millennium b.c.
- The assembly line, 1913
- The combine harvester, 1930s
- The 3 Point Linkage & Power Take Off for Tractors
Only a few of these inventions come from Academics, why would the future be any different?
So if we accept that much of future tech businesses could in fact be started by two guys or girls in a garage why is so much of our funding and Tools locked up in institutions your average inventor or maker cannot access?
We need Maker, Hacker and Bio Labs open to the public in every major city and regional hub.
Australia needs a Quest
A proactive Government would do well to direct their R&D $ towards creating momentum in areas of critical importance for the country.
If I had to nominate Quests where I think it makes sense for Australia to compete this would be my selection of ideas.
Agriculture will be our next mining boom, we will become the worlds food bowl. Wars will be fought over food security. The question is whether we will own it or China. But at the very least we should be the leaders in high tech agriculture. Tools, systems, methods, robotics, drones, water, fertiliser, fuel efficiency, pest control, environmental sensing, factory farms, land management.
Solve Diabetes, Obesity and Heart Disease or provide better management/prevention solutions. These are a pandemic which already affects Australians and will become a major health cost and quality of life issue in the next 15 years.
Wearable or personal health any devices or systems which can proactively keep people out of hospitals has to be a great thing for people and for the country
This is a critical Issue for most Countries in the world. Filtration, efficiency, delivery, reclamation.
Specifically Solar. We all know we should go small efficient Nuclear Power Stations but its just not going to happen especially since the Japanese earthquake, so the best alternative is Solar. We should be throwing money hand over fist to create new solar engineers and inventions.
Bugger spending money on propping up an ageing Car industry, put a Billion into Solar developments and see what happens.
I am a very strong believer that we should be putting roof top solar everywhere we can with local battery storage.
In most parts of Australia we have power generation and transmission grids that have been sold off and the operators incentives are not in line with the peoples.
Most of them are guaranteed a return on capital employed so have little efficiency incentive, in the current situation they are the most efficient method of delivering power to the masses but they continue to raise prices above cost of living and the Government should be encouraging people to run their own power generation only using the Grid as a backup.
To effectively do this requires new or significantly cheaper battery technology and cheaper solar panel technology.
Areas of interest are power management, power extraction, new solar cell types, new battery types, new integrated control units for managing the power and charging batteries.
Update: Elon Musk must have been reading my essays again and has just announced the new Telsa Battery Pack for the homes, however its not legal in many parts of Australia.
Car Power Systems
Fuel is an economic and security problem, pollution problems aside our reliance on foreign fuel and petrol in general is a long term economic security issue for the country, yet we never hear our leaders taking a leadership position about reducing fuel reliance.
Frequently fluctuating petrol prices change disposable income and in many cases act similarly to monetary policy but completely outside the control of the Reserve Bank.
As a country we should be thinking about how to make our country less dependent on petrol and rely on power which is locally generated. It will take a long time but someone has to start doing something about it.
Suggestions: Hybrid vehicle development kits, Hydrogen, low boost turbos for existing cars.
Drones & Robots
We have fantastic skills in these areas, excellent University schools and reasonably loose laws, yet aside from the a handful of individuals and companies we lack any meaningful industry around Drones or Robots.
Suggestion: Border Patrol, Search and Rescue, Agtech, Security, Smart Manufacturing, hazardous jobs.
We can’t afford to manufacture electronics locally, however the actual fabrication is not where the value is, the IP, software and design is the key value in the process in some cases up to 70% of the street price is margin or Intellectual Property.
We could become leaders in Electronics design and development…. if we had access to better prototyping tools.
What do we need? A Quest & a Plan – When do we need it? Now
If the leaders of our nation are really concerned about writing a new story for our country, a story that has technological leadership and domination of important industries, then they need to signal the countries academics and potential entrepreneurs to take action.
Many people will complain about these incentives, however I would argue that what we have right now is not working and to quote Henry Ford
“If you always do what you’ve always done, you’ll always get what you’ve always got.”
Here are my suggestions
- Pick 5 top National Nation Building Technical Priorities and offer aggressive incentives and funding to attack the problems
- Create effective crowdfunding laws that mirror the USA, virtually no restrictions on number of investments or size.
- Extend Early Stage Venture Capital Tax Free Status to Angel Investments
- Allow formation of Angel Syndicates with Early Stage Tax Free Status
- Extend ASX No Liability Mining Company legislation to Startups (Mining Explorers were the startups of our last boom) with short form prospectus with appropriate risk warnings
- Non competitive grants for equipment, components, lab work and cloud computing time.
- Startup Precincts created in every major city and regional centre co-located with University Campuses
- Free rent for startups working on the nominated problems for 1-2 years (based on business plan and evidence of execution)
- Centralised Accounting functions as a precondition for grants and free rent
- Non competitive Founder Visas & 457 Exemptions
- Anyone who gains a degree or postdoc gets Permanent Residency
- Anyone with a post grad who wants to immigrate gets permanent residency
- Startup Living (Ramen Noodles) Wage for 1 year
- Open access to advanced Fabrication and Lab facilities that already exist
- Join R&D and Commercialisation Activities Grants and Rebates together for one cohesive strategy.
Conclusion & A Call To Arms
It has become apparent in the last few months that both sides of Politics are attempting to woo the Startup Community.
This is great news it means they are starting listen and to look past the mining boom to create opportunities that will build the country into the next few decades, it would be great to see them proactively push changes rather than the Startup community having to drag them kicking and screaming to get even the smallest of changes enacted.
The next time you go to the polls ask yourself, has my candidate or party got a clue about technology, startups, science, research & development and commercialisation? Do they have a Nation Building Strategy?
If they don’t then it’s time to switch sides or back a minority candidate that has a clue (Independent NSW Member Alex Greenwich comes to mind as a good example).
Demand more from your representative or donkey vote, do something to send a message that it’s not good enough.
Australia can and should develop world class technologies and products, Australia can and should have it’s share of Technology Billionaires and high incomes from world class technology companies.
But be warned, unless our Nations Leaders take a proactive leadership position and start thinking like Nation Builders, we are doomed to be a nation of miners with no work, shop keepers with other countries products and manual labourers with no fields to sow or products to build.
Thanks for reading, Startups and Technology are my life.
In my day job I work for the Startup team at Intellectual Ventures based in Sydney developing paper inventions into technologies, products and spinouts.
Current projects include a personal medical device that can sense Human Hydration/Dehydration and a low cost $100 Computer Vision Powered Field Microscope for Detecting Malaria and other blood diseases.
In my spare time I mentor startups in Sydney and publish Startup88.com.
If this essay resonates with you please feel free to connect to me via Linkedin and please take the time to follow me on Twitter/Mikenicholls88
Note all opinions are my own.