A whole new culture is emerging based on providing support for a new breed of innovative entrepreneur through business structures and financial processes that include- incubators and accelerators, mentoring and training services and access to investment capital.

Startup enterprises now number in the tens and possibly hundreds of thousands, embracing virtually every significant commercial, industrial and social process. This nascent culture is rapidly evolving into a global force-gaining structure by coalescing around  numbers of Hubs, Networks, Ecosystems and Application Sectors.

Major Hubs are currently based in most of the world's largest and most dynamic cities - London, Berlin, Istanbul, Helsinki, Tel Aviv, Stockholm, Auckland, Singapore, Beijing, Bangalore, Sydney, Paris, Sao Paulo, Moscow, Reykjavik, Tallinn, Chicago, Manilla, New York and Barcelona, as well as the major iconic Silicon Valley nexus. At the same time a number of emergent hubs are gathering momentum in many urban regions of the developing world, preparing to disrupt and rejuvenate the economies of Africa, the Middle East, Asia and South and Central America.

But rather than just copy the hype of Silicon Valley, each Hub is beginning to reflect its own national cultural identity.

And Sydney is no different.

The Culture

Sydney is a dynamic and compellingly exciting city that has been the focus of many travelogue reviews and write-ups for many years. But there is  another dimension beyond its exotic beauty showcasing its centrepiece- the iconic Opera House, jutting out into one of the most stunning harbours in the world. Forty years ago the Opera House too was seen as a disruptive upstart by the architectural and political establishment of the day. And like many current startups had its share of both detractors and supporters.
But its founder, the Danish architect Jorn Utzon, winner of the original design competition, open to the major architectural firms of the world, stuck to his vision and eventually overcame the massive political and technological hurdles that threatened its survival.

And today that deeper current of innovation and rebelliousness is resurfacing in the guise of a vibrant entrepreneurial culture.

Sydney’s Central Business District stretches from the Opera House to that other icon of Sydney’s startup cityscape - the Sydney Harbour Bridge, flanked by  Circular Quay where the ferries and liners berth, extending round to the port wharves and warehouses of Walsh Bay, long since converted into upmarket apartments and performance spaces.

It then winds through the heart and soul of the city, past its Art Gallery embedded in the Royal Botanic Gardens and on past the green swathes of the Domain and Hyde Park. Then on to Sydney’s historic Town Hall down to Cockle Bay and Darling harbour. Then a short walk to the nearby historic suburb of Pyrmont, past the Haymarket and ChinaTown  with its mix of Asian cultures to Central Railway Station, which meets Broadway and the start of historic Parramatta Rd; surrounded by the original working class suburbs of the inner city including- Ultimo, Redfern, Surry Hills, Glebe,  Newtown, Camperdown and Leichhardt.
These were the traditional working class suburbs of Sydney town, offering cheap rents to families and students attending the historic sandstone Sydney University and more utilitarian Technical College  and University of Technology.

These inner city suburbs went upmarket long ago, but they still retain an edgy identity with their share of converted warehouses and hole in the wall coffee bars, featuring some of the best coffee brands and baristas in the world- now switching from the traditional Italian brands to roasting local blends like Campos, Danes and Toby’s Estate.

Good coffee and creativity have always gone well together and these inner city suburbs are now where the Startup revolution has taken root in Sydney.

The Support

There’s a buzz around all Startup hubs and Sydney is no different. The entrepreneurs involved come from a mix of backgrounds reflecting Australia’s multicultural society, primarily in the 25-35 age group but also with a growing number of more mature participants choosing to opt out of their mid-life careers to chase their passions and dreams.

Some observers have adversely compared the more laid back Sydney and Australian entrepreneurial scene with Silicon Valley’s frenetic, high adrenaline, take no prisoner ethos. But wiser heads have realised that each culture should choose its own road to recognition, adapting the most relevant features of other ecosystems to its own innovation template. The Australian startup scene is realising it is better off mining its own rich cultural seam, just like the local film industry before it, rather than trying to emulate a US or European model.

And so it has emerged. Startups in Sydney, Melbourne, Brisbane, Adelaide and Perth, have now gained the confidence to follow their own instincts and challenge the world on their own terms. And the proof is in their success stories.  But it’s now a seller’s market, with Startups increasingly selective about the quality of the investment fund they accept money from.

A PwC report commissioned by Google Australia in 2012 predicted that Australian tech startups could generate $110 billion or 4% of GDP by the early thirties, creating over half a million jobs. It identified 1500 current startup businesses with more than 60 % in Sydney. But as the industry hurtles towards 2014 this number now looks very conservative,
The Sydney Startup culture now encompasses numerous popular workspaces, incubators and accelerators as well as support services and regular events- forums, hackathons, meetups and conventions, showcasing outstanding innovations and skills. These have blossomed, often from deep co-working and mentoring roots such as offered by Fishburners and Blue Chilli.

Both Fishburners and BlueChilli have nurtured the Startup scene in Sydney for a number of years, establishing spacious workspaces in converted warehouses in the inner city. BlueChilli has traditionally offered an early stage incubator program including website and app development as well as seed capital and marketing support. But indicative of the new competitive pressures from overseas venture capital firms the company is now- partnering with groups such as The Lean Startup Machine and Deloittes, launching a $10m VC  investment fund for entrepreneurs.

Fishburners is the largest tech co-working space in Australia, having hosted hundreds of entrepreneurs and founders over the last ten years representing more than 115 startup businesses. At any one time most of its space in Ultimo close to full capacity, typically hosting small teams developing apps on behalf of large corporations keen to get an edge over the competition to one man bands such as James Foster developing a Chinese language tutorial app to capitalise on the future boom in tourism and business.

But the Sydney startup ecosystem has now exploded, with a number of additional cooperative groups emerging to share the spoils, such as Incubate, with its base embedded in the Sydney University Student Union. Incubate has made a recent splash, expanding from Sydney University to include students and alumni across all Australian Universities. It receives additional support from Google and ATP Innovations – another incubator and accelerator, sharing its spacious Australian Technology Park Innovation Centre HQ at the old converted Redfern Railway Yards.

ATP Innovations is a veteran force in the Australian Innovation scene having raised almost $80m venture capital and employing 300 people in 50 technology businesses, with over 70 new products and services launched each year.Many more investor groups are now in the mix- both local and US franchises generating an ongoing stream of marketing and mentoring support and financial incentives.

These include the Founders Institute- the world’s largest entrepreneurial training and startup accelerator, with over a 1000 graduate companies from chapters in 55 cities across 30 countries including a branch in Sydney- offering a 14 week launch program which steps founders through the process of project management, marketing, business model development- mentored by exposure to the knowledge of industry veterans.

And the Institute and other countless incubators and accelerators around the world are not just attracting the typical demographic of twenty to thirty something coders with computer science backgrounds, but entrepreneurs, engineers and domain experts of all age groups - middle aged executives, trade and factory workers and housewives- even retirees still chasing their lifetime dreams; all with the vision and wisdom of hindsight that only serious life experience can provide.

This is the new world where age and experience is not a barrier but an advantage and where creative content and innovation is king.

No wonder established technology giants such as Google, Microsoft, Apple, Sony, Cisco, Samsung, Yahoo and Amazon as well as big business and Government are desperate to cash in on this potential bonanza; not necessarily to make an immediate killing but to gain a foothold in this new, ultra-competitive survival game.

Most have either spun off their own internal Startup divisions like IBM or created new independent vehicles and are partnering with established incubators such as Fishburners and BlueChilli- experimenting with the new economy.

Projects include ANZ’s Innovyz Start, Telstra’s Muru-D and Optus Innov8 incubators- where startups receive seed funding of up to $40,000 in return for minimal equity. Google is ubiquitous in this culture, keeping its finger on the pulse and its options open by having an each way bet- supporting a variety of hubs, with the possibility of taking a stake in those with the most potential at a later stage- linked to its Ventures arm.

Corporates are also being encouraged to join the bandwagon. Telstra has invited CBA, Coca-Cola, Amatil and Foxtel to partner with its Muru-D program. For such established enterprises, this is all about getting a defensive stake in the new driver of capitalism- avoiding the risk of their portals being breached by unknown upstarts.
And now there are some serious Australian successes on the board to justify the current investor optimism such as-

BigCommerce—providing ecommerce software and a shopping cart solution for online businesses – has received $40 million funding from American  venture capital funds.

AussieCommerce- success story topping the list of the country’s fastest growing companies through its flash sales website Cudo- promoting Internet package deals at discount prices.

Selz- a digital payment and retail platform for content producers, allowing Internet traders to build an online audience and sell directly to them at a fraction of the price by US providers such as Paypal- The platform allows traders to sell products directly from blogs or social media websites.

Atlassian- now a global company founded by two former Uni of NSW graduates- software development and collaboration tools sold to millions of users to improve software development- project management

DesignCrowd and  99 Designs- graphic design crowdsourcing websites- establishing sales and service offices in the US- 

Freelancer- a job outsourcing market startup- competes with major rivals oDesk and Elance for small project freelance graphic designers, programmers and writers- recently listed on the Australian Stock Exchange- valued at $700m with IPO oversubscribed-

Ennova – Envision- a popular construction management softw as a service startup- now widely used globally

Tiger Pistol- crowd intelligence for small medium business- with the use of Facebook as a promotions platform

Catapult Sports- with more than 300 sports association clients in the US and Europe- providing GPS wearable tracking equipment for sports player analytics.

HeyLets- a social media app- launching in Australia and looking to raise $2m from local and US venture capitalists.

Other previously established Australian Internet success stories include- Realestate.com, Carsales, Expedia- a one-stop online travel booking site- and Seek- a profitable recruitment site with $12 billion in market capitalisation.

And these winners are just the tip of the iceberg as the tsunami of Australian innovation gathers momentum- covering the spectrum of applications, at the same time establishing Sydney’s reputation as a world class entrepreneurial hub -

Bluechilli alone is currently sponsoring over 30 startups,with the aim of reaching 100 in the next few years including-
Vivdways – connecting to what’s important  
Giggedin- providing tickets to live music
Eyecrowd-  consumer opinions on design Stylerocks-  customisable jewelry and fashion.
Renterfixer- solving rental property problems
Lime- applying lime to lawns
StrictlyService- book a car service online  
Brand honee – establish online video brands
Digital sorbet – a business toolbox managing the virtual working woman’s business clients.

The Incubate university Student group, founded in 2012 has recently launched 16 initial startup ventures, with support from Google and ATP Innovations – now expanding into universities across Australia. In the program, startups receive $5000 seed funding plus co-working space and mentoring. From this A list, eight startups were selected to pitch to VCs and Angels including-

JobGPS- career navigation for graduates
Makeupsocial – a social network for beauty
Skytree- growing food at home  
Drivelist- test drive delivery
Neighbourhood networks- connecting neighbourhoods and services
Rocketshift- matching workers with jobs
WhoGives- facebook for charities
Speakeasy- encrypted messaging
Neighbourhood Networks- an online social  network to connect with others in the neighbourhood

An endless stream of major showcase events are promoting this instant creative  economy and investors of all shapes and sizes are flooding in to gauge the local talent, eager to capitalise on the blossoming of Australian/Sydney innovation.

These include-

Tech 23- showcasing a selection of the most successful local startups- many already expanding into the global arena - a sign of Sydney’s increasing maturity and confidence- covering application sectors from robotics to rent a room, maths coaching to data management, video services, respiratory physio,  payment services, livestock  management and sustainable food.  

#StartupAUS / Startup Spring  with 68 events, sponsored by the Australian arm of Google, providing the usual package of Google goodies-  cloud resources,  mentoring backup and uber connections. Events include – Sydney opera House Hackathon, Gamification for Customer Engagement, Monetisation principles, Silicon Beach Drinks, Friday Pitching competitions.

Amplify Festival-  an AMP sponsored initiative for exploring leading edge thinking, disruptive technologies and emerging trends- held every two years and featuring 43 global thought leaders.

AngelEd 2013-  bringing together experienced and successful tech investors to share their views on Angel investment and understand the risks and benefits around this form of funding in Australia.

Startmate 2014-  seeking Australia’s most likely startup founders, capable of creating globally competitive internet startups. Each Startmate class is divided into teams guided by alumni companies, gaining 5 months practical experience in Sydney and Silicon Valley. Startmate invests $50k for 7.5% equity in a business- as well as providing free office space and assistance to launch the successful companies.
AngelHack: APPHack- a mobile app competition funded by Google, running in 30 cities around the world including Sydney. The competition focusses on teaching Android and iOS development skills- building mobile apps. This Hackcelerator program is hosted by the Innovation community with judges from firms such as - SydVC,  Right Click capital, Tank Stream Ventures, Psse, Vimily, Freelancer and BlueChilli.

Microsoft Bizspark- in conjunction with Microsoft Ventures is a free global program for startup mentoring and connecting, supporting and development of software startup apps.

66 Meetups- supported by the City of Sydney and ATP Innovationsa regular networking and educational event to help creative talent understand the business side of the startup culture;

Plus a host of other incubators, co-working environments and casual meetup opportunities are also available in informal city spaces-

Silicon Beach Drinks Sydney- informal group that holds regular weekly meetups in a relaxed bar atmosphere for tech entrepreneurs to discuss ideas and solutions–
Sydney Datapreneurs- for Sydney startups building businesses based on data analytics
StartNest- another coworking space for Sydney tech entrepreneurers and freelancers
Sydney Tech- hosts startup meetups at Fishburners-
Think Act Change – organising monthly meetups for innovators and thinkers
Sydney Data Miners- informal meetups using data mining to generate ideas
Big Ideas Australia- brainstorming, pitching and inventing ideas
Lifehacker Australia –providing app development and workplace productivity tips
Pushstart – a mentoring and funding community for Australian tech startups
Pollenizer- a startup incubator sharing learning experiences and testing business ideas to build successful startups –involved in Telstra’s startup incubator Muru-D
Anchor- manages hosting services for business critical websites -
NICTA Australia’s ICT Research Centre  GroupX-aiming to increase the number of tertiary ICT students and professionals.
iAccelerate- an innovation ecosystem servicing the Illawarra area including Wollongong University.
UNSW CIE- Centre for Innovation and Entrepreneurship for University of NSW alumni as well as the general public- providing targeted learning and interaction.


The Investors

Funding  support is also ramping up, provided by an increasing number of Angel, Seed, Venture Capital and Private Equity Funds, as well as traditional banking and investment groups.
But the venture capitalists are not the only game in town in the 21st century investment environment. Suddenly they’re being outflanked by smaller more nimble competitors- forced to compete with the new breed of aggressive Angel networks, crowdfunding platforms and private equity specialists.

So the mystique of VCs and past easy deals are wearing thin. Leveraging Intellectual capital and innovation through mobile apps is suddenly the new game of thrones, where billions can be won or lost in the blink of an eye in the new knowledge economy. In the future high risk roller coaster world there is no such thing as certainty- a world tailor made for the more nimble networks of Crowdfunders and syndicates of wealthy Angel investors happy to take a gamble; offering both seed capital for visionary ideas and serious follow up investment for possible winners, gaining the advantage of an inside rails run to grab the glittering payoff prize.

Current venture capital, equity Investment partners and platforms supporting the Sydney/Australian startup scene include-

Rampersand- added the first of up to a dozen tech startups to its portfolio- looking at risky but potentially lucrative early stage companies-  /
Pozible- a crowdfunding platform and community building tool for creative projects and ideas.
First investment – a digital marketing platform–Blackbird Ventures-$20 million early stage investment fund.
Starfish ventures- US based- has raised $400 million for early stage investment- currently investing $185 million- focussing on IT, life sciences and clean technology.
Square Peg Capital -is a heavy hitting team of seven industry veterans willing to invest large dollops of money  in businesses across a variety of growth stages, particularly in higher stage rounds with $500,000 to $10m. But also for startups in the growth stage requiring $20-40 million- competing against US firms already with investment in over a dozen companies such as travel website Wego and design software developer-Canva.
Startmate – a startup accelerator-offering mentoring and seed financing  
Innovation Bay- an NFP networking group- passionate about innovation and technology  
Heads over Heels- angel investor in high potential womans startup business networking group  
Future Capital- pooled development fund to assist development of emerging companies.
Tank Stream Ventures – seed fund seeking to raise $20m / Disruptive Capital- investing $4m in Catapult Sports GPS tracking systems /
Accel Partners-  equity firm-  investing $35 million in design website 99designs, $60 million in Atlassian, foreign exchange website OzForex and $40 million in Big Commerce  
Adventure Capital- early stage venture capital firm
MH Carnegie / Vivant ventures- $80 million VC fund- $40 million from Vivant ventures will provide seed funding up to $500,000. And much larger cash injections to slingshot companies to the next round.

In addition a number of the more adventurous Australian based investment fund managers are dipping their toes into the technology pool of startups, particularly in e-Commerce and telecommunication stocks.

No nation is born with its culture in its DNA. It has to be nurtured. At the start of this revolution, the strengths of the Australian brand of innovation, creativity and tenacity are already evident. But it is especially important in this new industrial revolution, that the startup phenomenon is all-inclusive, welcoming a spectrum of entrepreneurs across age groups and cultural backgrounds; ensuring that the deep and proven historical characteristics of the nation are preserved and passed on to future generations.

The Startup phenomenon is just the latest in a rolling wave of technology driving changes and reshaping our relationship with the planet, triggering a whole new way of survival. And most significantly it is achieving this by releasing the full global potential of human creativity. It can be likened to the first industrial revolution in the 18th and 19th centuries that radically transformed all aspects of world society by improving living standards and providing new ways to release the creative potential of new generations.

And so the Australian and Sydney startup hubs are on a roll, competing but also cooperating with other innovation centres around the world; at the same time meshing with other revolutions in the sciences, arts, culture, knowledge and education.  
This holistic approach is what Sydney and Australia excel at.

So visitors and travellers who make the voyage at the beginning of the 21st century to this vibrant centre of the Australian startup culture, are in for a surprise. They will be excited by a society combining the dynanism and beauty of one the great cities of the world with the innovative potential that Australia has always been famous for- now transforming it into a creative powerhouse - a technological portal to Asia and the world..

Contact the author

David Tow
dhtow01@gmail.com