Startup city

I am reading ‘Startup Nation‘, which tells the story of Israel’s tech startup community – 3,500 or more companies. An incredible number considering a population of 7 million. On this measure Perth should have about 1,000 or so. Maybe it does. A report published last September put it at 200, but this might only be a fraction of the total. I did a rough preliminary count and got to 150 quite quickly. I am sure I know only a small minority.

It depends how you define ‘startup’ of course. I tend to define it as a new company, less than three years old, probably (though not necessarily) in tech, that has a scalable business idea. Something that could go to $10 million or $100 million in revenues in a few years from inception. Most won’t of course, but that is the game. It’s not simply a new small business that provides a few jobs to its founders and team. It’s something that could enjoy explosive growth. Hence the attraction to seed and business angel investors, who get the golden opportunity to get in at the ground level.

There are grey edges around the definition of a startup, and how many are actually ‘going’, as opposed to many that might be ideas, hobbies, dormant and/or unfunded. But let’s assume the business is going, has clients, revenues and either founder, family, friends, angels or even venture capital money.

The number (150? 200? 1,000?) is inconsequential. It’s the scene, the vibe, and there are marked similarities between the state of Israel and the city of Perth that makes for interesting comparisons…

1. Isolation
2. Displaced population
3. Pioneering spirit (frontier mentality)
4. Mix of nationalities
5. Large major industry requiring innovation
6. Healthy disregard for authority
7. Relatively small population
8. Strong universities with innovation flavour

All these factors mean both places have a mix of ‘can do’ people, with an urge to do something. In Israel they call the attitude chutzpah. They are not ‘from here’ and have to forge their own future. There is a sense that much can still be done, there is still plenty of opportunity. People arrive with their talents (800-1000 people arrive in Perth every week) bringing their worldly experience and ‘get up an go’ with them- for they have literally ‘got up and gone’ to get here.

In the way Singapore used its people (the only asset it had) and an open economy to create incredible growth for its first 50 years, so Israel and Perth are gaining from the skills within its human resources. Israel has 63 companies listed on the NASDAQ, more than any other country outside the US. How many could we get there?

Startup Nation by Dan Senor and Saul Singer was published in 2009 and was fifth in NY Times business best seller list in 2010. http://en.m.wikipedia.org/wiki/Start-up_Nation