Emu Bob

The stateless micro-multinational

Last week's Economist had an article praising the stateless multinational. The article's perspective on the new breed of global company was worth noting.

The conventional wisdom is that a global business is a bad thing as it pursues a race to the bottom for lower taxes and costs. Clearly a rational business does this but the Economist points out the alternative is no better:

The real threat comes from overly chummy links between a state and its multinationals. Although politicians may have been more comfortable in a world where what was good for General Motors was good for America, that tended to lead to protectionism and antiquated working practices. Firms in which loyalty to the state goes beyond the economic value it offers usually expect something in return—soft contracts and subsidies, perhaps, or standards conveniently set in their interest. In fact the sorry story of GM itself highlights the dangers of being a national champion. Rather than fear the stateless corporation, people would be wise to do all they can to make them feel at home in their country.

At Ephox I perceive us as a small example of a "stateless multinational." We have our engineering team in Australia, our HQ in the US (including VP Sales & Marketing, COO) and now a growing operation in Europe (including CEO and CTO).

The challenges for a global company are clearly present. Communicating ever changing priorities takes work. Our US and European team have a sales-driven perspective and our Brisbane team tends to have a more engineering-driven perspective. Getting them on the same page is, well, not easy at times. Time zones and frequent long haul travel drives us crazy.

Despite all of this the opportunities for a global company are also evident. These opportunities are also one which our Australian heritage seem reasonably well equipped for.

Australians, on the whole, tend to be tolerant and welcoming of different cultures ("I am, you are, we are, Australian"). We work hard at not wasting time and energy on conflict as conflict is 'bullshit'. Empire building and being 'too big for ones boots' is frowned upon. Australian prime minister Bob Hawke probably summed up this spirit when, on a trip to Japan, he said that we weren't going to "play funny buggers" (apparently that didn't translate well.)

Embracing a global culture whilst retaining key elements of our heritage is an ongoing project at Ephox. I guess the ultimate is to take the best elements from all of our locations and people. As the Economist article says, a "globally integrated company needs a single culture, and that the best way to foster this is to make the highest ethics anywhere in the firm the norm for everyone, wherever they are working. Anything less tends to corrode the culture."

In my experience bringing out the best, and discouraging the worst, of our cultural tendencies has to be a cornerstone of any company with operations all over the world.

(For more reading The Economist has a whole series on the topic.)

Aussie Get Together in Palo Alto

The Aussie expat organisation, Advance, is hosting a shindig for Australians in Silicon Valley next Wednesday August 27th at Bistro 412 in Palo Alto.

Register and get the details on the Advance web site. It is about two blocks from home so I will be there!

Aussie Dollar Plummets

The Australian dollar is down more than 8% since the beginning of July.

This is excellent news for export-oriented companies such as Ephox who have a lot of expenses in Aussie dollars yet most earnings in US dollars. In fact, our worldwide price list is in US dollars so even when we sell in Australia we sell in US dollars. A weaker US dollar has made our software more affordable to a huge range of markets but on the balance I think it has hurt our business.

Before we all start celebrating and break open the champagne I am hoping that we can see the Aussie fall by significantly more ... even accounting for the recent drop the Aussie is up about 70% since the beginning of 2002. This seriously means that we would have 70% more staff in Australia than we do today if the currency had stayed where it was. We had our cost crisis long before it was popular for small business to be worrying about the cost of gasoline!

The other interesting thing to note from the graphs above is how closely the Aussie tracks the Euro. Most of the movement in the Aussie dollar has clearly been from US dollar weakness... not from any inherent attributes of the Australian economy despite what Australians might like to think ("We have mines! The Chinese love our coal!").

The relentless fall in the US dollar actually elicited some good laughs from a largely European audience at an SDForum event I spoke at during which I quipped "Thank you for traveling from Europe to evaluate Silicon Valley as a place to outsource your software development."

Homegrown US software companies are generally well funded, operate in a huge market and are thus often highly successful and difficult to compete with. The falling US dollar was the elephant in the room for any software companies with significant staff outside the US.

The US dollar's further rise is hardly guaranteed given how far it has come in just a week but I am certainly hoping it keeps 'going and going'!

Greencard Lottery - It is Worth Applying

I won the Greencard Lottery (aka the Diversity Visa Lottery) in 2004. So did my wife.... twice!!  My cousin won one. A lady I met when getting my greencard in Sydney had her best friend win won the same year she did.

How the hell did that happen? Are we all just lucky???

Not particularly... the US allocates the numbers for the Diversity Visa Lottery to regions. The "Oceania" region has an unusually low number of applicants generally so you stand a much better chance of winning than you might suspect.

The Advance web site has some information about how to apply. So if you are Australian (or from any other country in Oceania) go do it.... applications close on December 2. Winning a green card makes immigration to the US very very easy when it is usually challenging. And you don't have to take up the offer if you win... you can always say no if your significant other can't stand the thought of leaving the land downunder.

Aussies in Content Management

Gartner has recently  released their Magic Quadrant for Enterprise Content Management featuring 17 companies including the usual suspects of IBM, Oracle, EMC and Open Text as well as some smaller niche players.

One thing that struck me is that of the 17 vendors, 2 of them are Australian - Objective and Tower Software. This led me to think about how large the presence of Australians in the content management market is. It is really quite astonishing.

Here are some highlights and some other "content management related" companies that have an Australian connection that I am aware of:

• Ephox - $2M+ in sales. Makes EditLive!, leading authoring software for web content management. Founded in Brisbane in 1998. (I helped found Ephox and still work for Ephox.)
   
• Objective - $35M in sales made Gartner Magic Quadrant. Founded by Tony Walls in 1987.
   
• IBM/Presence Online - IBM's web content management product from acquisition of Presence Online. Presence Online was founded in Sydney in the late 1990s. Development is still largely done from Sydney and many former Presence Online team members still work for IBM's Lotus/WCM area.
     
• Atlassian - $25M+ in sales. Makes Confluence, leading enterprise wiki software. Founded in Sydney in 2002.
     
• Tower Software - $10M+ in ECM revenue, made Gartner Magic Quadrant. Founded in Canberra in 1985.
     
• Vignette - the Vignette Collaboration product came from acquisition of Australian company Tower Technology (no relation to Tower Software) and the development team is based in Sydney.
     
• Mambo Communities Pty Ltd - leading open source web content management that has also spawned Joomla. Founded in Melbourne.
   
• Centric Minds - successful Java- and .NET-based web content management. Founded in Adelaide by Tod Peddler in 1997.

I am sure there are many more that I am missing too? James Robertson of StepTwo Designs has a list of over 50 vendors based in Australia.

What is it about Australians and content management?

Immigrants & Entrepreneurship in Silicon Valley

One question I have heard come up a few times by Australian entrepreneurs coming to the United States is "Americans love Australians right, that will help won't it?"

I think the question is only ever half serious, and so is my answer: I am yet to meet an American in Silicon Valley so get over it! Here are the stats to prove it:

More than half of the Silicon Valley companies founded in the past decade were led by at least one immigrant.

Accents amongst entrepreneurs just are not that unusual in Silicon Valley. Dharmesh Shah has some insights into why.

If you are selling something to middle America you might get a bit of "an Ossssiiee!! I loooove Ossies!" but my tip would be you had better be bringing something to the table other than just your Steve Irwin impression.

Immigrant entrepreneurs are part of American fabric. Americans embrace them and certainly don't penalise them. But don't expect any tilting of the playing field in your favour just because you are an Aussie.

If anything, the value in being Australian overseas can be in networking with the expat community. Hooking into groups like Advance, ANZA Technet and the San Francisco Australian American Chamber of Commerce (aka SFAussies) is a good start.

 

Photo of Sergey Brin from James Duncan Davidson/O'Reilly Media, Inc. and MediaLive International

Technorati tags: australia, immigration, silicon valley, entrpreneurship, startups, entrepreneur

The State of Australian Venture Capital

  From Brad Howarth in Red Herring:

The cumulative annual internal rate of return (IRR) of Australian VC funds formed between 1987 and 2005 was an embarrassing -0.9 percent.

Good one!? No wonder they are struggling to raise more funds for later rounds.

In classic Aussie-speak, Mike Zimmerman of TVP defends early stage tech ventures in Australia and points out:

There’s a lot of bloody interesting stuff happening down here.

I agree with him, but I hope that this bloody interesting stuff that they have invested in over the past five years starts translating into returns for their LPs otherwise the nascent venture capital industry will never get going.

Why invest in an 'assett class' returning -0.9 percent when private equity, property and the share market have done so well during the same period?

And - also interesting - the two success stories of Seek and Wotif that Brad quotes were actually built without venture investment. As they would say in Australia: bugger!

[From Techcraunch]

Technorati tags: venture capital, australia

Wikis in the Enterprise

Congrats to Mike and Scott, co-founders of enterprise wiki vendor Atlassian, who have just been crowned Entrepeneurs of the Year in Australia. Zoli Erdos has a nice summary, as does Mike himself.

With 1800+ customers, their enterprise wiki software is really taking off. It is a crowded market place in which they have been able to really stand out.

Content management consultant Alan Pelz-Sharpe doesn't think much of enterprise wikis though: "Wiki's are I think smoke and mirrors, KM software and WCM software pretending that they are something new and hip." Bah humbug I say, wikis have their place in the WCM, KM marketplace.

Technorati tags: wiki, atlassian, australia

STIRR Sydney

Two weeks ago I ventured out to the STIRR 8 mixer for start-ups in Palo Alto and I ran into fellow Aussie Martin Wells of Tangler. STIRR is an interesting event that has sprung up this year with a big Web 2.0 focus.

It was a great night, full of entrepeneurial energy of those wanting to create the next YouTube and semiconductor-come-consumer-internet investors wanting the next 100 bagger. All good Bubble 2.0 fun of course.  Anyways, towards the end of the night Martin and I were chatting with some of the founders of STIRR (Sanford Barr, Sean Ness and Dan Arkind) about how great it was and that it would be great to have something like this in Australia.

Well, hats off to Martin who announced, less than 2 weeks later, that STIRR Sydney is to be held on December 6th... less than one month from the original idea. You can sign up here. Hopefully they are able to keep the mix of entrepeneurs and investors high and "service providers" low. That is one of the best features of the Silicon Valley version.

Technorati tags: stirr, sydney, tangler, web 2.0

USA TODAY Goes Downunder

Via Dateline Media's e-newsletter, Kevin Maney at USAToday says judging by their start-ups, those Aussies are quite a crafty bunch (and also on his blog).

Despite the artictle title, Kevin doesn't exactly seem impressed with the crop he sees and offers a few somewhat snarky remarks on a variety of Aussie start-ups and research projects he visited whilst downunder.

In his discussion of 5th Finger he seems more concerned with their name than what they do

His company is called 5th Finger, which I find disturbing in a post-nuclear-accident way. Like calling a company 3rd Ear. Maybe he needs to rethink.

He also pays no favors to Steve Bleistein, Karl Cox and June Verner's "requirements engineering for strategic alignment" at the National ICT Australia's incubator:

These folks don't really know how to explain their company — which is charming, other than the fact that I'm lost.

Ansgar Fehnkers gets a mention for his Goanna project but Kevin doesn't want to talk about it at cocktail parties (is that really a requirement?)

GreenPea is next up and gets a slightly nicer comment ("the demo is pretty slick") but Kevin seems to wonder why Raymond hasn't tapped his Stanford school ties at Google.

Locata are on his Tuesday stop and he says "Locata could be onto something, because location-based services are going to become an integral part of life over the next decade" ....but alas the postiveness is shortlived as "it seems like Locata could take years and lots of money to get to a take-off point".

His last two stops are Animal Logic (digital effects) and Perpetual Water (grey water treatment).

It sounds like Kevin never got over his jet lag. Hopefully he writes something a little more interesting in the next few weeks as it is a long way to go to write just a 1,000 words.

Having said all of that, Kevin is probably right when he says that Australia has "smart people who need marketers the way gin needs tonic". And besides, any airplay in USA Today is probably good airplay.

Update: my bad, looks like Kevin has been writing a few more things about his trip downunder. Such as why Finland is not the right model for Australia (I agree) and National ICT Australia's entrepreneur-in-residence Ralph Petroff.