By Michael Stevens-Jones, Executive Partner, Global Entrepreneur Program and SmartCamp, IBM Australia / New Zealand

The entrepreneurial culture in Australia and New Zealand (A/NZ) is thriving – you only need to look at recent Aussie exports like 99Designs and Atlassian to see some of the early influence these innovative startups are wielding globally. However, success for these companies is reliant on access to not only funding but technical expertise, business mentorship and access to other knowledge resources. In many cases, the startups which need the most support – due to their visionary scope or the complexity inherent to their industries – are those least likely to feature in the public eye.

The entrepreneurial landscape in A/NZ is a tightly interconnected ecosystem of small companies, seed and angel investors, government agencies (providing funding, market development and research), incubators / accelerators and universities. The region prides itself on having an entrepreneurial spirit. Influencing factors include:

• Both economies are dominated by small to medium enterprises – 99 percent of business in Australia are SMEs[1], compared to 97 percent in New Zealand[2]

• The physical distance from big manufacturing countries in Europe and USA forces companies in A/NZ to innovate to make up for a lack of alternatives

• Today, low levels of regulation and red tape means starting a company is relatively easy

• More recently, new businesses have taken advantage of improved digital distribution opportunities via the Internet to tap into overseas markets. This will only improve with the NBN rollout over the next decade.

Encouragement for entrepreneurialism is provided through media, government agencies and high profile successful entrepreneurs like Peter Kazacos and Mark Bouris in Australia. Corporates and multinationals like IBM, Microsoft, Optus and others are increasingly adding support through competitions and sponsorships.

Smarter start-ups, smarter planet

The arrival of IBM’s Global Entrepreneur Program (GEP) and its flagship initiative SmartCamp in A/NZ is significant for several reasons. It marks a first step by IBM to ensure the viability of local startups, particularly as A/NZ entrepreneurs continue to head overseas where resources and talent are seen as more abundant. It places an emphasis on fast-growing industries in the region – such as healthcare, infrastructure, natural resources and telecommunications – which have particularly high entry-level barriers but also the potential to yield positive outcomes on a global scale. Finally, it presents software startups across A/NZ with a unique environment in which to rigorously test both their ideas and commercial value propositions to improve their chances at real-world success.

Resisting the brain drain

The latest crop of high-profile Australian startups has tended to eschew setting up locally in favour of seeking overseas funding, talent and visibility. The success of any startup depends not only on its core idea, but how effectively it can be commercialized into a viable product or service. And the success of that commercialization process is often, if not always, contingent on the number of opportunities available to entrepreneurs: these include everything from accessible venture capital, to how open target markets are to new solutions. While this region has already produced several notable software entrepreneurs and businesses, the majority of these have had to move overseas to fully realize their expansionary plans.

By bringing SmartCamp to Australia and New Zealand, IBM hopes to provide the necessary opportunities for entrepreneurs to commercialize their ideas locally. SmartCamp acts as a conduit through which innovative software startups can access IBM’s global networks of partners, clients and technical resources, all without having to leave home. Given that many of these entrepreneurs’ solutions have global applicability, they can also benefit from the international visibility which the broader SmartCamp program offers competitors. CropLogic, the inaugural winner of the IBM SmartCamp in Sydney, develops cloud-based decision support software tools that help farmers maximize their yield through analyzing crop data. Global appeal was one of the contributing factors for CropLogic’s success in this year’s SmartCamp – interest in its software from US buyers highlighted international potential. This was also the case for Quintessence Labs, the Australian wildcard entry that was joint winner of the regional SmartCamp finals. Quintessence Labs also has a strong presence in the US, which was no doubt a factor in their recent success.

Reducing barriers to entry

Moreover, the SmartCamp program focuses on areas of software innovation which encounter particularly high barriers to entry. Developing platforms in areas like urban networking, healthcare and utilities requires enormous amounts of data and capital for startups to even make it to the prototyping stage. These startups require not only expertise in software development and design, to improve. E-health developers must understand the challenges of patient diagnostics and decision support; software for smarter utilities has to take into account the physical infrastructure and governance of existing networks. The challenge for entrepreneurs in these areas is to focus on developing their product while simultaneously engaging with numerous stakeholders and issues within their target industry.

These areas all have relevance to IBM’s broader vision of a “smarter planet,” one in which data and technologies are harnessed to improve the quality of life for communities around the world. IBM has the critical mass to enable, test and deploy many of these solutions, a process which also generates increasing expertise in a virtuous cycle of learning and development. Such opportunities are not readily available to startups without the existence of programs like SmartCamp, through which entrepreneurs can leverage IBM’s existing expertise to better inform their own solutions. SmartCamp represents IBM’s investment in future market-leaders; partnerships developed by the GEP have the potential to both kick-start entrepreneurial projects and sustain IBM’s place at the forefront of “smarter planet” innovation.

A testing ecosystem

The test of a startup’s success is how it ultimately performs in the real world. Software entrepreneurs face particularly intense global competition and demand for immediate results; an opportunity to test business hypotheses prior to launch can be invaluable to actual deployment. Like similar startup “camps,” SmartCamp provides entrepreneurs with opportunities on two fronts: mentoring and advice from industry experts; and a mentoring workshop whereby start-ups are provided with real-time advice on their pitching process, in which to build up practical business communication skills. The A/NZ pitching process placed CropLogic and other finalists in contact with leading IT and business experts, resulting in numerous insights for all participants.

Software development often gets overlooked when discussing how entrepreneurs have changed our society. Yet it’s important to remember that many of today’s biggest businesses – including IBM – were once startups with limited resources and opportunities. Initiatives like SmartCamp are necessary if we want the benefits of software and data to extend to the next generation.