Australians just dig stuff and grow stuff, and don't do tech. Here's a suggestion from the Future Party

Let's mandate farm-to-consumer tracking. 

That is, as consumers of food we would like to know -- as would approximately 1 billion Chinese -- that the food we're eating has come from a healthy, responsible, sustainable farm. We would like to see a QR code on any packaging that links through to the ingredients, and where they were sourced from, and so on. For non-packaged (e.g. fruit and vegetables) there could be some other kind of sign up to give that information.

That will mean that:

• Australia will lead the world in trustworthy food supplies, which will be a very, very big deal in the future.
• Provide plenty of fodder for startups to provide the technology to make it happen.
• Make Australian food just a little less competitive in the world market, easing the pressure on the dollar which will be buoyed up in the near future heavily by Chinese food purchases.
• Encourage farmers to be more proactive in automation technology.

Fighting against the tide of "Australia just digs and grows stuff" is too hard: so we should aim to dig and grow stuff better than anyone else. There are fully-automated (robots only) farms that are servicing Woolworths, Coles and Aldi today. There's no reason Australia can't lead the world in FoodTech startups.

Thanks to Markus Pfister.

How to launch without venture capital

• 99.8% of all startups never raise any external capital
• Whether you raise capital or not makes absolutely no difference as to whether the startup is successful or not.

(Both facts from the QUT CAUSEE study).

It was pointed out to me recently that after 16 years of running businesses and having launched quite a few start-up technology products in that time -- without ever raising capital -- that I should try to package up my approach for other people to use.

So if you want a 2 hour Skype or Google Hangouts session with me (for AUD300+GST), just get in contact (gregb@ifost.org.au or greg_baker on Skype) and we can arrange a time. What I promise to give you is at least two or three good ideas that might get you going without having to spend stupendous sums of money.

Ideas to kick start innovative thinking

A school friend asked me last night about how to build a unicorn-scale business from a relatively small amount of capital. Essentially it's a question of innovation -- given the worst problem in your industry, or the area that most begs for disruption, how do you kick start your brain to think of better solutions? 

So far, I've come up with six thought triggers.

• The etherealisation of devices. For example, 20 years ago, medical devices consisted of very expensive sensors with a bit of dumb logic to give a result. Today, it's a race to the bottom on dumb sensors with more and more sophisticated logic. What's the cheapest thing you could use to take a measurement?


• The availability of motion and position sensors. How would it help if you knew exactly where data was entered? Or if you knew how your physical product moved in real-time?


• Explore some of the demonstrations on http://www.alchemyapi.com/products/demo (now part of IBM Watson). In particular, look at their ability to do sentiment analysis -- to give you a summary of how people are feeling about topics. What could you do with a summary of everything your customers say about you?

• Most people don't realise how good speech recognition has become as their only experience is Siri (which is very, very good) and they don't realise how general it can be. Try out a demo of Dragon Dictate, or use "Ok, Google" on an Android phone. What would you do differently if you could run your business on spoken information?

• Get a feel for how conversational bots are working. Look at this demo of an agent that schedules meetings: https://meekan.com/hipchat/  . There have some competitors, such as Amy from http://x.ai/ . Do the interactions you have with your customers follow some formulaic approach? How would you do things differently if the initial engagement with your customers was handled by a bot?

• There are generational differences in the way we run businesses (here's a blog post about a very interesting company that I did some work for: http://blog.ifost.org.au/2015/04/gen-y-businesses.html). What are the assumptions you make because you expect to interact via email?

Greg Baker (gregb@ifost.org.au) has worked with numerous startups -- http://www.ifost.org.au/startups/ for a short list -- as a developer, manager and consultant. He also runs mentoring sessions helping entrepreneurs wanting to bootstrap their businesses without venture capital or angel investments.

@16z Outside of the USA, are we also seeing the same 16 themes in the way software eats the world? Here are my Oz impressions

I was perusing Marc Andresson's website. Marc is one of the better known venture capitalists and famously wrote that software is eating the world.

On his website there are 16 themes that he is seeing. Obviously, he invests big money in big startups, where I tend to be advising smaller and less splashy groups with little or no up-front cash. And north-western Sydney isn't Palo Alto. But there is quite a lot in common:

• Sensorification of the enterprise. Yes, the insurer-broking-customer system I've been developing with the best and brightest in the industry is doing that, and that's one of the big takeaways. We haven't even begun to tap what can be done with mobile sensors. This one is universal.
• Machine learning and big data. Obviously, I spend a lot of time helping customers with big data storage (as that's the other three-quarters of my work). Backup and recovery of big data is an issue that no-one knows how to do properly (myself included). But on the machine learning side, yes, I'm seeing this everywhere. There was the project where I was extracting keywords out from emails ( http://blog.ifost.org.au/2014/05/keywords-from-emails-on-google-app.html ) and displaying a colour summary of what the author of the email thinks about those topics. The data we got from the big data analysis I did of COI group's staff attitudinal surveys was extraordinary -- did you know that there are 5 distinct different ways to be a successful organisation, and another 14 to be unsuccessful? In another we found that a flower shop should stay open an hour later.
• Containerisation is not a trend I'm seeing yet in customers with existing infrastructure. What I am seeing is customers simply not having their own data centre presence -- not even maintaining a server rack or a local server. So the containerisation I'm seeing is more around self-contained applications managed by different companies.
• Digital health. From the dental camera system that I've been developing, to the start-up I was talking to last week, software is eating up the entire medical device industry. The medtech industry (which is big in Sydney -- bigger than most people realise) is turning into a developer of sophisticated software for small cheap sensors.
• I'm not seeing the efficient online marketplaces trend as clearly. Perhaps because I'm based in Australia with a smaller less efficient market (in general) but specialty and uniqueness is still common, and I don't see any Australian companies racing to the bottom on price and staying in business.
• Bitcoin and blockchain. The retailers I'm speaking to don't see bitcoin as a priority, but they don't really have a problem with it. So it will come, and the volatility will reduce. On the other hand, if I put insurance contract binding information into the blockchain, I'm pretty sure my insurance customers would freak out and run hiding. So this trend will come from the retail side.
• Funnily enough, whether to do cloud-client computing is a pressing question that I'm researching at the moment. That is, for two projects I'm doing at the moment I know I have a lot of in-mobile image and sound analysis computation to do. Bandwidth from the mobile is a problem, but so is CPU time on the mobile. Where to do it? It's not obvious which is better.
• I'm not doing any work for Controlability any more (that stopped when I went to google), but we were well ahead of the curve on that. What we were building in Darwin and Brisbane (hardly centres of technology) are what a whole bunch of "Internet of things" startups are trying to do now. It was secure, it was sensible, it was cost-effective and it made the residential development companies money. So I'm a bit biased on this: I think the rest of the world is playing catch-up.
• I can't say much about online video, but it seems to me that the money previously being spent on face-to-face training and e-learning is there for the taking as these move to video. I still don't have any video content to sell for anything I'm doing (I'm still writing books) but I can see the market is ready for it. Australia was well ahead of this curve, as the business of doing face-to-face training went undead several years ago; from what I've seen India and China are well behind on this curve.
• The changes sweeping the insurance industry: yes: real-time data extraction from company systems to give a day-by-day risk premium. We're working on it.
• DevOps: the week before last I was talking to a very famous software company about their SaaS offering. They have a long, long way to go to get from "sysadmins of a box that runs an application" to "site reliability engineering". Maybe, just maybe, some of the other Australian SaaS players are doing it better, but I doubt it. So few companies here have enough scale that they can do any statistically meaningful analysis of their outages or incidents. So while lots of people will talk about it, it's going to be a long time before DevOps is going to make a measurable difference here, sadly.
• Failure and the culture of fail fast. I see no evidence of this anywhere here. The vast majority of start-ups are self-funded, boot-strapping and grabbed an opportunity that arose. The QUT CAUSEE study showed no correlation between the success of a start-up and the number of failed startups the principals had been involved in. The closest QUT found was a kind of bonus for pivoting: if you changed direction as a result of customer feedback directing the company to a new product or solution in that industry then that was a very good predictor of success.
• I don't have enough experience to comment on full-stack startup, virtual reality and crowdfunding
• While I used to be able to say with confidence that I was a security guru, I don't think I can comment on Andresson's theme; I'm probably losing it.

What I found interesting is what didn't appear, but are really clear themes that I'm seeing:

• Image analysis is everywhere. Every company has dozens of problems which can be solved by moderately simple image analysis techniques. There simply aren't enough knowledgeable gurus out there to do the work.
• Interfacing with the low-tech. I think there's a Silicon Valley bubble which assumes that everyone wants to be on-line with a smart-phone all the time. But there are many workers and customers that simply can't or won't do this. In the last few weeks: a startup the severely disabled on-line with assistive technology; the retail conversations were around simplifying warehousing procedures so that the tech un-savvy can cope; the edutech project getting tech-averse sport coaches to be able to put wet weather into their school's twitter, facebook and skoolbag systems.

Resources for start-ups in Sydney

This was my answer to a Quora question about a USA-based entrepreneur setting up a local presence in Australia.

Sydney is definitely the right city if your company is a medtech or financial tech startup.  Melbourne does biotech better, but even then there are successful biotech companies in Sydney. Canberra would only be appropriate for a startup doing government or military technology. 

I'm not an immigration lawyer and it's not legal for anyone without approval from the department of immigration to give immigration advice. The right person to talk to is an immigration lawyer.

• There is a 457 visa: https://www.immi.gov.au/media/fa.... I've employed people on 457 visas in my own company and it was all pretty straightforward. I've worked with people who used the 457 visa to come to Australia to run a business that they were setting up.
• There is an alternative, which are the 132, 188 and 888 visas, here:https://www.immi.gov.au/media/fa...  I don't know anyone personally who has used these. There also 160-class visas: http://www.immi.gov.au/Visas/Pag...

The equivalent of a USA LLC is a "Pty Ltd" company. These are registered with the Australian Securities and Investment Commission (ASIC) using form 201:http://www.asic.gov.au/asic/asic... or you get your accountant or lawyer to do it for you. There are also companies that process shelf companies and assign it to you; this is the quickest and least painful, but the most expensive (usually a couple of hundred dollars).

Your company needs to have at least one director appointed who is a resident. This can cause a chicken-and-egg problem for an entrepreneur coming to Australia as the first and only employee, because they won't be able to start the company to nominate them as an employee. The solution is to get someone already resident in Australia to be a director initially, and then once here and set-up to fill in the form with ASIC to replace your local contact director with yourself.

Australian businesses need to register for an Australian Business Number with the taxation office. https://abr.gov.au/for-business,... Most startups will be lodging a monthly report to the tax office to say how much was paid to employees that month, a quarterly report to the tax office on how much GST (goods and services tax) the company collected and paid, and an annual report to the tax office on the company profits. The tax office are not as onerous as the IRS and the people they employ generally nicer. They try to help startups to some extent. For example you get a window of time after the company starts where they won't penalise late tax paperwork. Also, if there is a some genuine reason for not being able to lodge your tax on time (e.g. a family emergency) you can request an extension. I haven't had to do it very often, but I've never had an extension request denied yet in 15 years.

I recommend using  http://www.saasu.com/ for managing the Australian entity's accounts as this does everything right for Australian business automatically. It has a report that tells you exactly what to put in what field for your monthly and quarterly reports. 

It is important to get proper tax advice on the company structure before doing anything in Australia that might give the company a value. For example, it's very tax-inefficient for the USA-based company to own the Australian entity. It might work out better if the USA-entity's owners can own the Australian entity directly.

There are government programs for helping start ups as well. The one that is really worthwhile is the R&D Tax Incentive which can give a better-than-100% tax deduction on research and development. http://www.business.gov.au/grant...

It is compulsory to have workers' compensation insurance if a company employs anyone (even the owner). It's not very expensive, and it's not hard to set up. I use an insurance company called QBE, but there are plenty of others: http://www.qbe.com.au/Workers-Co...

For other insurances I've generally directed budding entrepreneurs to a broker (for the last three generations my family have used these folks: http://www.jmdross.com.au/). 

All of the above is true for starting up a company of any kind in Australia. There are a couple of resources worth mentioning for start-ups:

• http://sydstart.com is the main start-up event for startups in Sydney. Normally it happens twice a year, but in 2014 there was just one big event.
• http://fishburners.org  is the largest tech co-working space in Australia. If you need a community to be among, this is probably a good place to start.
• http://atp-innovations.com.au/ is one of Australia's (and one of the world's) leading incubators.

There are some down-sides to setting up a start-up in Australia:

• There are problems with venture capital and angel investment in Australia. 99.8% of all start-ups never get any external investment. (That's even though 30+% of all start-ups describe themselves as high-tech startups).
• It's very difficult to offer share schemes to employees as they get hit by the "geek tax" (people are trying to get it fixed).

That said, Sydney is one of the best places in the world to run a business. 


Here's a quote from the Atlantic:  http://www.theatlantic.com/business/archive/2011/05/the-worlds-26-best-cities-for-business-life-and-innovation/238436/#slide22

Sydney is the only city in the survey to finish in the top five in ease of doing business, livability, health and safety. More than sun and surf, it's consistently called the best place to start a business by international surveys. 

The only bad thing that they could come up with was the cost of public transport. (Which is true. You'll need to get an Opal cardhttp://www.opal.com.au/ and even then many people end up paying >$100 per month to get around.)

There are no problem getting hold of brilliant developers in Sydney. Ads are generally on Seek (http://www.seek.com.au/) . There is a reason that the world's major companies do large amounts of development here: Google Maps, Canon Research Labs, Cochlear, Atlassian, and many others. Start hiring: you'll quickly discover why.