The Terrible State of Australian VC and Structural Issues

• Laziness. Australia, like America is a very lazy country. Essentially, when you peek inside of corporate structures, especially white-collar ones, you see that by design 10% of people are doing the work. Everyone else is on UBI. Bullshit jobs is the reason for this. Where we would have 20% unemployment if the world was fully automated/optimised and so it's easier to preserve the wellbeing of the country. However, this creates a precedent that moderately intelligent people with IQs of 115+ (one deviation from the mean) can earn $200k+ with very little effort. In this case, what is the incentive to try for them? Especially ones with low-agency. They can buy a $2-3M home live in some area adjacent to nice parts of the city and go from there. Therefore, there isn't a culture of innovation. The US is much the same barring places like SF, NYC & Boston. 94% of the country is the same, living on the fruits of those main states. This is seen in productivity growth which hovers ~0.8%...
• Capital Flow. There is less capital here. You cannot raise a $800M fund 1 like Schwarzman did after Lehman brothers. There are only 3 VC funds that are even worth speaking to: Square Peg, Blackbird & Airtree. They are riding off Canva, Atlassian, Immutable, Safety Culture, Dovetail, Wisetech & the few other Australian tech successes. They don't really invest pre-revenue unless the founder has already sold a company for hundreds of million like Sam Kronnenberg w/Cuttable.
• University Funding. Take larger % of any company that incubates from it's own premises. Less incentives for VCs to invest.
• Talent. If you are a talented employee with high agency, you go to America. In Sydney, a great SWE gets paid $200-300k straight off bat. In the US, they can get paid $1M at well funded startups. Capital = Talent. Otherwise, you have to convince talent to join based on mission of company or ambition/learning from the founder. Primarily though, most talent wants good compensation.
• Structural causes of laziness. 70% of exports are mining. Huge coal and gas reserves in QLD, NSW, SA & WA = good money for mining. I'm not sure exactly but this money definitely flows through to the rest of the economy. One link could be mining taxes → public sector jobs created. Otherwise, property is huge wealth gainer here as well. Triguboff's and Lowys of the world are obvious. But, there's also the average PWC/McKinsey dude who reinvested the $200k salary into a house 15 years ago and now owns 2 properties worth $6-8M and can live in good areas. "Every Australian wants to grow up to be a landlord."
  • Mining contributes 6% of government revenue.
  • Dutch Disease. Mining strengthens $AUD = other sectors more competitor because less $USD can pay for $AUD
• Immigration. The immigrants work hard.
• Mimetic Culture. This is probably downstream of laziness. People generally don't accept difference. Meaning that you should fit into norms & follow the road outlined for you.
• Lack of Manufacturing. Got rid of it in 1980s. Outsourced everything to China. Made sense in terms of comparative advantages & specialisation of labour. However, this means Aus Businesses are a service-a-thon with limited capacity to build product.
• Potential: Agriculture should be higher % of revenue, energy should be utilised more & solar should play bigger role (can we build data-centers?), terraform the middle of Australia for resources.
  • Data Centers & Solar. Nuclear & Defense investment. More agriculture & water innovation.
  • Superannuation toward more interesting, venture-backed, deeptech bets & investments e.g. Defense, Biotech, AI etc. Flood $100BN into next-gen investments. Government project like Misha suggested.
  • Visa 2.0. Founders & Engineers allowed to live here for free.
  • Build NVIDIA data-centers in rich homes. Texas of AI Inference: clusters, GPU compute etc
  • $1BN in national entrepreneurship programs for people under 30
  • Negative Gearing perversity. People are incentivised to lose money on paper because you can deduct that from your taxable income. Also people are taxed more for working than they are for owning assets, incentivises people to own assets & not contribute to the economy, rather than contribute through income.