Billion dollar tech companies might sound like they belong in Silicon Valley but they are emerging right here, right now, at Sydney University. The stakes are high but the rewards are massive. Sydney is experiencing a significant boom in entrepreneurial activity and innovation. Sydney University students, predominantly computer science, engineering and design students, are using new technologies in an attempt to create game-changing companies. They’re taking on big risks, often with their own money, but the pay off, if successful, can be huge.
What is a startup?
Have you used Twitter? Did you check Facebook this morning? What about doing a Google search or watching a video on YouTube? All these companies began as startups and have redefined the way we interact. The power of these companies today shows the massive potential of startups. A startup is a new company founded by a small group of people – often based in software, online or in ‘high-growth’ technology. Startups will often launch their prototypes with no money and little sleep (think The Social Network), and get investment from an ‘angel’ investor or venture capitalist who wants a high return.
Software is King
Zynga launched its new game Cityville in 2011 and reached 61 million active users within its first 50 days. No other industry compares with the power of software.
So why is there so much hype with tech startups? If you look at the major industries of today, many have been transformed and are now dominated by companies that rely on the software platforms they have developed themselves. The largest book reseller today is Amazon. The largest music reseller is Apple. One of the largest communications service provider is Skype. The biggest difference with a tech startup, compared with your local coffee shop, is scalability. For less than $100, a software developer could build a simple product that could scale to millions of users within a day. Zynga, the social gaming giant that created Farmville, launched its new game Cityville in 2011 and reached 61 million active users within its first 50 days. No other industry compares with the power of software.
Tech culture before the wave
Until recently, it seems, Sydney University failed to teach students about entrepreneurism and innovation. Universities like Stanford are renowned for encouraging students – especially engineering students – to start their own companies. It was ingrained in their culture, something fundamentally different to Sydney University at that time. Studying I.T. at Sydney, the oldest and one of the most prestigious computer science schools in Australia, used to come with the pre-ordained idea of wearing a suit and working for an established company after graduation – a far cry from the innovation going on in Silicon Valley.
Matt Barrie, computer science alumnus, lecturer, and CEO of one of the most talked about Aussie startups, Freelancer, says: “There was no startup culture when I went through [uni]. Zero. The closest thing to an entrepreneurship subject was studying an ancient case study about the life cycle of the Amstrad computer.”
However, there remained a small group of like-minded ‘hackers’ (software engineering students who literally ‘hack’ away at building products). Ryan Junee, another computer science alumnus and famous Australian entrepreneur in Silicon Valley, recounts: “There was a small group of hard core geeks…it was mostly informal gatherings of people passionate about hacking.” He remarks on a certain stigma,“I also remember a group of friends living together in a ‘hacker’ house nearby, which I thought was kind of strange and cool at the time. Now that I live in (Silicon) Valley I see this everywhere!”
Startups, however, remained in the background. “The concept of a tech startup was not very widespread in Sydney back then…it wasn’t promoted widely as a career path,” Ryan says. “I actually worked for a startup right after I graduated, but I was one of the few. The concept of starting a company right after graduation was certainly foreign.”
Like-minded hackers did collaborate and Ryan ended up working for Matt Barrie’s first startup after he graduated from Sydney University. In the mid-1990s, Matt was one of the few actively encouraging tech entrepreneurism.
“There was no startup culture when I went through University. Zero. The closest thing to an entrepreneurship subject was studying an ancient case study about the life cycle of the Amstrad computer.” – Matt Barrie, CEO Freelancer.com
If you dont like it, change it
Kim Heras, Sydney law and commerce alumnus, is the founder of PushStart, a startup accelerator that gives ‘seed funding’ (amounts usually under $10,000) to local startups and connects them with industry mentors. He began his first startup during university. An avid Counter Strike player, Kim decided to create a tool to catch online cheats. “Our solution worked in a similar way to modern fraud systems at banks,” he says. “We took some funding, went to market, and I was a professional startup entrepreneur. I haven’t really looked back since.” “Uni meant that when I went to apply my knowledge to startups, I couldn’t. I was a pro at understanding how Coke competes with Pepsi but had no idea how to get a small startup off the ground. Don’t get me wrong – my university education was critical for understanding the fundamentals and building my critical thinking and analytical skills.” For Kim, it was a lack of community which prompted him to begin running startup community events.
Matt Barrie decided to enhance entrepreneurial teaching on campus and introduced a course in 2010 called Technology Venture Creation, based on a course from Stanford of the same name, which has since become highly successful. The course requires students to conceive a business idea and pitch it to real investors as the final exam. Some of these students were offered funding and went on to make their ideas a reality. “One of the teams this year just went through YCombinator, one of the premier incubators in Silicon Valley,” Matt says. “Most of the teams on pitch day last year would have cleaned up at any of the pitching contests I’ve sat on as a judge over the last few years.” He praised his recent batch of students, “The teams are more switched on, more enthusiastic, and more avidly following the tech industry.”
Entrepreneurism – booming on campus
The entrepreneurism and tech culture on campus today is one of the most vibrant in Australia and has significantly improved in the last five years. Ben Sand, currently building his educational startup, Brainworth, says: “Sydney University has a good tech culture and smart people. [Its] biggest advantage is its unparalleled student culture. Many people working on Brainworth came from Science Revue, SUITS (Sydney University IT Society) and NCSS” (National Computer Science Summer School).
In today’s context, any student can interact with software engineering students through societies and events. The 24-hour Hackathon last year, where students across multiple degrees collaborated to make an app in 24 hours, was a resounding success, and programs like NCSS help foster the next generation of talent. Ben Taylor, a computer science alumnus who started his own graphic design app, Halftone, says: “We’re seeing more students involved in startups. The biggest and best drives come from grassroots organisations. So if you want more tech culture, make more tech culture.”
“Sydney University has a good tech culture and smart people. [Its] biggest advantage is its unparalleled student culture.” – Ben Sand, Founder Brainworth.net
So you want to start your own company?
The best advice is to ‘just do it’. There literally has never been a better time. The cost involved in creating a company today is lower than ever before. If you don’t have the technical skills, recruit students who do. “Make things. Every month or so try building something new, launched in as short a timeframe as possible”, says Ben, who launched Halftone and other projects very quickly. “Keep doing this, keep researching, keep iterating until something sticks. You want to get up and running as fast as possible.” As is often said in startup communities, “fail fast”, work out what went wrong, and try and try again.
James Alexander is on Twitter: @shortino29