Startup copycats won't win Silicon Valley 'pissing contest': Scoble

The unique forces that shaped Silicon Valley — easy access to three universities and a history of government investment throughout the Cold War — set up the region to be the globe's startup poster child many years ago.

While other parts of the world may look to the region and try to emulate it, Rackspace startup liaison officer Robert Scoble says that it is impossible to compete with the Valley ecosystem.

"My advice, if I was sitting down with government people, is don't try to get into a competition with Silicon Valley, you're going to lose that one," Scoble said.

"You're going to lose the startup pissing contest right away."

While Scoble said that while Australian startups are able to stand up to Silicon Valley startups, the regulatory environment in Australia, especially concerning stock options, is holding the ecosystem back.

"We were just talking to the guys that do Shoes of Prey, and they have to play lots of games to get their employees stock options," he said.

"We don't do that in Silicon Valley; everybody has stock options in Silicon Valley, it's an accepted part of how you compensate people, and it's how you convince people to join your startup.

"There is an ecosystem problem here that the government needs to fix."

Looking back at the dotcom bubble, Scoble said that the economic danger is when quick exits start to be looked at as standard practice.

"If your expectations are that you spend five years, and build a business, and you know that there is still a risk that it won't work, then I think that's healthy.

"It's the expectations that get out of whack — that's when the problems start, because it just makes it so hard to build a business that has any value in that kind of climate."

With amendments to Australia's 457 visa laws changing the way that companies in Australia hire foreign workers, Scoble says bringing foreigners into a region is important for its ecosystem.

"We have an attitude that immigrants are stealing jobs, and it's not really true. It's a bad attitude to have as an American, and it's hard to convince people of that."