Start-up outlook: A national disgrace

Start-up outlook: A national disgrace

Summary: The fact that Australia won't be represented at either of the globe's pre-eminent showcases for emerging tech companies should be considered a national disgrace.

TOPICS: Mobility

It's been a quiet month in Silicon Valley for Aussie tech start-ups.

No Australian companies were selected to be a part of this year's TechCrunch 50, and no Australian companies will be participating in the prestigious DemoFall 09 showcase this week.

The fact that Australia won't be represented at either of the globe's pre-eminent showcases for emerging tech companies should be considered a national disgrace. If this was the Olympics, politicians would be offering teary apologies and millions of dollars would be thrown at a new Institute or something.

Actually, millions of dollars have been thrown at a new institute, Senator Kim Carr's $196 million Commonwealth Commercialisation Institute, which was announced in 2009-10 budget. But we are yet to see any concrete plans of what it will offer, and no one seems to be in any rush to put something into play. I wouldn't count on an AIS-scale organisation here.

One of the Aussie DEMO alumni has made the grade, however, with the announcement of the sale of the DemoFall 2008 exhibitor Xumii to the European company Myriad Group.

The sale of Xumii, which makes web-based software for mobile phones, is likely to be typical of the fate of the majority of Australian tech companies for the foreseeable future. With venture capital sluggish and public markets closed to start-ups, trade sales to larger businesses will be the most common exit for weary investors looking for a return on their money.

Serial internet entrepreneur Domenic Carosa, the man behind Destra until the Opes Prime debacle saw it taken away from him, is building his new business around the idea of acquiring small technology start-ups and nurturing them to be sold to larger listed businesses.

If entrepreneurs still have stars in their eyes about one day leading listed businesses, most will need to reset their expectations pretty quickly.

Myriad is a French/Swiss company listed on the Swiss stock exchange, and is a roll-up of a series of different mobile technology companies, working with technologies such as Java, instant messaging, browsers and hash codes, with clients primarily in Europe and emerging markets. The company employs more than 800 people, including 700 engineers.

Xumii's technology uses a cloud-based service to aggregate multiple social media sites and instant messenger services on the handset, based around a hosted contact list. According to CEO Jennifer Zanich, the sale gives Xumii a much louder voice.

"To be part of a public company with such great customer relationships creates an enormous opportunity for Xumii," she says. "One of the challenges of being a start-up is getting large telcos and mobile handset makers to take you seriously. Now that we have the back of Myriad the question of longevity goes away and the focus is on the value of the Xumii Service to the customer."

Xumii has previously been funded by the Australian venture capitalists South Cross Venture Partners and CM Capital. Zanich says that a trade sale was not the only option available to the company, but selling to Myriad presented the best opportunity to get the technology into the market quickly given how rapidly the mobile social networking is moving.

Zanich will stay on to run the Xumii Services division of Myriad, with no changes to its 17 staff, including its Sydney-based engineering team.

Myriad's chief commercial officer Steve Langkamp and his company had been interested in acquiring a social networking technology for some time.

"Facebook recently reported 65 million mobile users," Langkamp says. "This is a massive wave, and the manufacturers and the network operators are eager to ride this wave.

"Our ultimate goal is to push the Xumii application deeper into the phone with our manufacturing partners, rather than just being a download, which enables it to do more," Langkamp says. "The ultimate goal is that we deliver a social phone book that is the core of the phone."

He declined to discuss the revenue that Myriad is likely to make from Xumii, but says the goal is to have the software embedded on phones by Christmas 2010. Commercial terms for the deal have not been disclosed.

"Today it's difficult to imagine a phone without SMS," Langkamp says. "In five years it will be difficult to imagine a phone without social networking, but it is going to take five years."

That Xumii was able to attract the attention of Myriad was no doubt assisted by its appearance at DEMO. Another Australian company which appeared at DemoFall 07, mig33, secured US$13.5 million in a funding round led by Valley investor DCM in January 2008.

No Australian company has made it into the TechCrunch 50, although Tangler, and PeopleBrowsr have exhibited in the so-called DemoPit.

Presenting at DEMO is no guarantee of success, with another DemoFall 07 presenter, kannuu, apparently flaming out about a year ago. But standing on the podium or accepting an Oscar is considered a big enough payout for the money and effort that goes into the Australian Institute of Sport and the performing arts community.

Even a little recognition of the achievements of our entrepreneurs would be nice — especially when the trade sale will generate more money for the Australian economy than a bronze medal in the 100 metres backstroke.

Topic: Mobility

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  • It is a national disgrace

    Australia is still a very inventive country. A lot of the world's innovations, both simple and complex, have come from Australia and it is nowhere limited to the clothsline and rotary lawn mower. Cement trucks, xerography (the method photo copiers use to duplicate documents), the black box flight recorder and the orbital combustion engine were all invented here. As were catermerans, refrigerators and postage stamps.

    Sadly the patents for most Australian inventions are now owned by off-shore companies. It is also a shame that we don't manufacture most of the things we invent.

    Both these can be attributed to our national government (both sides of politics) who kowtow to the United Nations and their tyrranical policies on world trade that is biased towards countries that compete on the grounds that slave labour in dangerous work environments is an acceptable arrangement.

    We can't forget to add our major retailers here either. Coles, Woolworths, Bunnings, Harvey Norman and others are hell bent on making a fast buck at any cost, including at the cost of jobs. With this in mind it goes without saying that they'll keep the difference between the cost of an Australian-made item and that imported at a lower cost.

    Because of our heavy reliance on imported goods we find ourselves in a situation where it is surprising that there are any entities left to worry about attending conferences and exhibitions.
  • typical

    All Australians care about is sport and the thick people who participate in these activities. It's this bogan culture that thrives in this country that stops start ups from being able to generate any interest or investors.

    People in this country are to busy buying Holdens, watching football and beating up their wives to care about achievements in IT.
  • Russell you are an idiot

    not much more to say on that one really.
  • well...

    You wouldn't agree? All you ever seem to see on the streets these days are boisterous stinking, ugly, inarticulate 'tradesman' with their mole girlfriends doing burnouts in their old commodore utes and giving people evil looks and saying "whatcha lookin at caaarnt?" If you so much as look at them. How is an IT industry supposed to thrive in a country that is populated predominately by these kind of people? The answer is: you can't. Boy, I'll be glad when I move back to London.

    Have I touched a nerve Brett? No doubt you are like I described above. Actually no, I'll give you some credit, as you are posting on this website. You probably drive a Holden Clubsport or Senator and work in middle management for some Telco company, letting your frustrations out on your co-workings and ignoring your wife while you watch The Footy Show while you laugh at Sam Newman because he is such 'a lark'.

    This country is such a joke. And you wonder why we didn't get anywhere in TechCrunch
  • co-workings

    Whoops, I made a typo. Sue me
  • Hi Sue

    So you real name is not Russell its Sue.

    Are you actually a hermaphroditem pompous pommy, caaarnt?
  • wow

    someone is having a bad day!
  • haha

    Go away you sill bogan
  • Hehe or she she

    Yeah, we can go to the foowtball and watch Chewlsee, have a few pints and bash soom coont ay Sue?
  • sill not sue

    her, hermy russ' name is sill, not sue.
  • typical 2

    As expected, mention 'going back to London' and you're considered a 'Pom'. Also as expected, make a minor spelling mistake and some moron who does not have the capacity to do anything else but correct spelling mistakes makes some smart alec remark. Give yourself a clap for being so clever in picking that up, anonymous.

    Born in Australia, poster above the other idiot. Doesn't mean I can't bash this country that celebrates brawn and how well someone can drive over science/technology, education and other far more important merits. What a worthless country this is. A country that has no work ethic and peoples idea of having fun on the weekend is heading out to their local pub and knocking someones teeth down their throats. And even though this is a website for people involved in IT, I'm sure this is how you all spend most of your time. Sickening,
  • Yes sickening

    Doesn't mean we can't bash you either for being a mouthy, ingrate, pommy would be.

    Give yourself a slap for being too stupid to spell correctly, probably not as good as the bogan in the commodore, you put shit on.

    Only one thing worse than a bogan. A narcissistic, pretend aristocratic halfwit.

    Grow up wanker, there's good one for ya, then off to London with you now! I hope when you get there they treat you like the bogan you really are, moron.

    Sickening, yes you are.
  • Well

    I'm waiting for more predictable pearls of wisdom from you Russ, you dic****d.
  • Russell

    Well this was so unexpected. A stupid bogan Australian who, when he gets upset, starts calling people names and having to swear and carry on. I'm sure if we were having this conversation in real life you'd get in my face, threaten to knock my teeth in and smash a king brown bottle over my head.

    How about you stop frothing at the mouth in front of your computer screen you anonymous cretin and realise that there is more to life in the IT world besides bashing Telstra and getting riled up about someones point of view that differs from your own.

    Pig disgusting bogan, that is you.
  • haha, waiting

    "I'm waiting for more predictable pearls of wisdom from you Russ, you dic****d."

    Wow. I can just picture you, constantly hitting F5 while you sit glued to your seat, not even getting up to go to the toilet in fear that I might type something that you might miss.

    I'm so so sorry that I could not respond straight away so I could continue to be insulted by such a marvellous chap as yourself. Maybe you should try doing some work. Or, are you unemployed? And is your wife, who probably goes by the name of "Sheila" getting you another tinny?

    Please keep this up, this is turning out to be quite a humorous afternoon.
  • Wuss, Sue, Sill, Herm

    Ha, Mr Predictable, fancy you not being able to control yourself for more than a few minutes, speaking of frothing wildly. I didn't have to wait long.

    Little boy, born in the under privileged backstreets of Melbourne, flukes a job in London because he knew someone, forgets the hardship of his childhood and now thinks he's above us all. Wonder what your mum would think . Bet you disgust her. Go Chewlsee.

    I love having fun with the mentally challenged, like you hey Wuss. But do you know why you, mentally challenged number 1, because I am a Pom, who emigrated here. I have been here for nearly six years and wouldn't go back.

    You know nought fool. So all your ridiculous bogan generalisations mean nothing to me, you are an embarrassment to both Australia and England, hey moron and jet setting man of mystery.

    Disgusting specimens like you should be sent to Afghanistan for target practice for both sides.

    Don't forget to lick the plane windows on the way to London. Ta ta Basil!
  • Haha

    I'm glad I stuck around just to read that reply!

    Nice try trying to make out you're not upset about my above comments and trying to pretend you're a pom. It's obvious you are a stereotypical disgusting australian yobbo. So don't try and make out you're not.

    Ta ta yourself, Mr Crocodile Dundee. Don't forget your VB on the way out!
  • Gawd, not another one...

    Not another one... Why is it that people can't have a lively debate without resorting to outright personal abuse.

    Russell, you clearly have a problem with the Australian way of life so as the other users have mentioned already, if you don't like it then either do something positive to change what you believe to be wrong or get on a boat and go home. I can't be more succinct.

    Yes, sport and watching sport is more or less the backbone of the Australian psyche. I'd blame that on our she'll be right and laid back lifestyle. I don't believe, however, that Australia has produced more wifebashers than the mother country either on a per capita basis or in real terms. Your comment on wife bashing is stupid and ignorant.

    As the owner of several Holdens over the years I don't think I have been hard done by as a motorist. There's nothing better than getting behind the wheel of an Aussie V6 or V8 and cruising up the freeway, on an outback gravel road or across the desert from East to West and back. Sure beats the heck out of a tinny Vauxhall that's no longer made in its homeland ay. ;-)
  • Hello bogan, Wuss

    Really do you think.

    Not switched on enough to check my name from the very first post. Pom Git. No, doesn't twig, 2+2, no?

    Bit of a giveaway to anyone with intelligence but not you hey Bruce?

    Next time we meet Wuss, bogan, you may bow before me, again, ok, bogan!
  • wow

    I really got to you, didn't I?

    Nice work anyway, 'champ' (using some of your lingo there, I'm sure). You kept me entertained during a slow afternoon anyway.

    Until we meet again my arch nemesis! Hoorah!