As an entrepreneur, an offer of up to $100,000 in equity grant, access to free co-working space for six months, and a ready-made network of mentors and business advisors seems like a pretty good deal.
And in fact this is the pitch that the Queensland government has been using to convince international and interstate startups to relocate to the sunshine state for a minimum of six months under the Hot DesQ program launched as part of the $420 million Advance Queensland initiative.
There have been 53 recipients in two rounds of Hot Desq grants. Round two applications recently closed, and the call to register interest for round three – due to take place next year – is already underway.
Credit risk analysis and management platform provider CRiskCo, which also has offices in Tel Aviv and Silicon Valley, was one of the first 25 round one recipients of Hot DesQ.
CRiskCo CEO Erez Saf said up until meeting Queensland’s Innovation minister Leeanne Enoch, Australia had never been on the company’s radar.
“Literally, Australia was not on the map. We didn’t consider it as a relevant market for us at the start,” Mr Saf said.
“I wasn’t aware of the Queensland state in Australia. But what happened at the same time was that one of the big clients that we were working with – an international credit card company – mentioned they wanted to do a pilot in Sydney,” he said.
“So the combination of a customer in Sydney and the grant from the Queensland government was the reason why we made the move for six months.”
Fast forward six months and Mr Saf said the company is now working towards expanding its local presence in Australia.
Part of this will see CRiskCo use an additional $100,000 in grant money from the Queensland government – which it was given as part of the Ignite Ideas Fund – to commercialise and tailor its product for the Australian market.
“We have customers in Cairns and Brisbane, and are in discussions with local banks and organisations to work towards embedding our solution,” Mr Saf said.
“In all of this, we have also found good talented people here that can help use improve, develop and research the product.”
On the topic of talent, Mr Saf said its one key reason that sets the Australian market apart to Silicon Valley and Tel Aviv. He pointed out how there is an abundance of talent in Australia, in particularly data scientists.
“If you’re here [in Australia] you don’t understand how much harder it is outside. If go out there to find a data scientist in San Francisco, it’s almost impossible.”
The access to the network that exists between universities, government, and industry – from banks, insurance, and even mining – has also made the Australian market appealing, according to Mr Safe.
Another company that has found the Australian market attractive since participating in the Hot DesQ program has been Flowpay Australia. The company’s founder is Manfred Neustifter, who initially moved from Australia to Silicon Valley in 2014 because the “innovation boom hadn’t kicked off yet”.
But Mr Neustifter said he was motivated to return home not only because of Hot DesQ but because the Australian market was a looking “more and more attractive” as a launch market. The scene was “vastly different” today compared with when he left.
In fact, the company will be looking to officially launch in the next few months.
“Everybody understands the need for innovation. The innovation mantra is well and truly understood, and everybody – government and large organisations – are coming to grips with how fast they can do stuff…It’s a bit of a cultural shift that’s happening,” he said.
Mr Neustifter partly commends the Queensland government for its efforts in trying to develop an entrepreneurial ecosystem in the state through programs such as Hot DesQ.
“It’s pretty clever what they’ve done. It has immediate payoffs but the real proof in the pudding will be if they stop doing this in two years and seeing what it will look like then,” he said.
“The likelihood of anything dissipating is unlikely because the roots would have taken hold. We’ll start to see the real benefits in the longer term, and so what we’re doing now is building this grassroots up at every level.”
One other role Mr Neustifter believes the government can play is to lead the charge in changing the perception about the type of Australians who can and cannot invest in a startup.
“There’s a perception that anyone can invest in a home or investment property, whereas it seems as if it takes a special type of person to invest a startup. But if we can normalise that, it will create a healthier startup ecosystem and property market.”