16/07/2008 - 22:00

Silicon Valley lures dot com players

16/07/2008 - 22:00


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As much as the resources boom may be drawing in talent from around the globe, Western Australia's brain drain continues in industries like technology where Silicon Valley remains the drawcard.

Silicon Valley lures dot com players
MOVING UP: thebroth.com founder Markus Weichselbaum (left) and Strattica Group\'s Michael Kyriacou are both relocating to California\'s Silicon Valley

As much as the resources boom may be drawing in talent from around the globe, Western Australia's brain drain continues in industries like technology where Silicon Valley remains the drawcard.

Three well-known Perth entrepreneurs are proving that point with plans to move to the US to establish operations in the west coast technology hub, attracted to market access, venture capital and like-minded people.

Stephen Goh has already located his Mig33 mobile phone application venture there, while Leederville-based social media application producer thebroth.com founder Markus Weichselbaum is simply waiting for his visa.

Strattica Group's Michael Kyriacou is attending a nine-month program in California with longer term plans to open an office there.

Another company, West Perth-founded Interzone Games last year established its headquarters in the US city of Chicago because of the market dynamics.

It's not all one-way traffic, though.

Former Silicon Valley-based banker Larry Lopez, who lives in Perth, is chairman of the organising committee of the state government's Brilliant West Week project to encourage the development and promotion of innovation and creativity in WA.

Mr Lopez was previously president of Silicon Valley Bank and chairman of Perth-based consultancy Atrico.

He founded Red Dog Capital Partners as his latest venture.

Part of Brilliant West Week is to highlight that WA has more to offer than just resources. Some of the speakers at the conference will be Apple co-founder Steve Wozniak and Mr Goh.

As part of the technology exodus Mr Kyriacou acknowledges that Mr Lopez's efforts may well have a profound effect on WA in terms of opportunities in the technology field, but right now the US offers more tangible benefits.

"I think Larry, in conjunction with all of the programs that are happening right now, is going to have an extraordinary effect in WA," Mr Kyriacou said.

"I think that if you multiply those changes [that are taking place] by a few more decades, you'll have a very exciting place. We seem to be doing similar sorts of things to Queensland, and if you look at Queensland compared to where they were 20 years ago, that's been a step change of difference.

"I think an advantage of California is there are lots of educated people who are early adopters of technology.

"Here [in Perth], we haven't got quite enough people, possibly, to achieve critical mass for a lot of companies. It's not a criticism; it's just a different strategic landscape."

The electrical engineer is one of a select group of 25 entrepreneurs travelling to Silicon Valley for a nine month program of networking with some of the world's leading technology companies and venture capitalists.

Participants will attend lectures and seminars at California's Santa Clara University, and undertake internships with local companies.

Mr Kyriacou said that while he planned to learn more about venture financing and product development, a longer-term goal was to set up an office for Strattica in Silicon Valley.

He also hopes to attract funding for several products developed by Strattica during the program, which commences in mid-September.

"By that time, I hope to have two deals of my own ready to go. They possibly could get funded here, but it's more likely [in Silicon Valley], so it would be nice to be investment ready," Mr Kyriacou said.

The first of the products being put forward is described as a black box that gathers high-value statistical information online, for use in the advertising industry.

A pilot of the product, developed in conjunction with engineers from Edith Cowan University, achieved proof of competency in October last year.

In addition, Mr Kyriacou is hoping to get backing for a board game that teaches principles of entrepreneurship, which may eventually be converted back to an online game.

The headquarters of mig33 was relocated to Burlingame in California last year from where it produces internet applications for mobile phone users as well as services such as VoIP.

Mr Goh launched his product in the US in September and recently reported that it had 13.7 million registered users and clocks 4 million sessions per day.

Mr Goh is possibly the best known of Perth's technology entrepreneurs, having established Sanford Securities, a pioneer in online stockbroking and web-based trading platforms.

He later emerged with a company called Project Goth which is the vehicle behind the mig33 mobile phone venture that he lauched about two years ago.

One of the ironies of the internet is that while it may superficially bring people around the globe closer together, web-based business is still better done face to face. At least that is the view of Markus Weichselbaum, founder of Leederville-based social media application producer thebroth.com.

Mr Weichselbaum and his partner Sue Zann Toh are planning to move their headquarters to San Francisco to get closer to the Silicon Valley businesses they deal with on a regular basis.

"It is really so much more convenient to be located over there," he said.

"There is not much of a scene here really.

"To do business you have to be there face to face.

"Almost exclusively all our strategic alliances and partnerships are only there because I have been there in person."

Mr Weichselbaum does not specifically blame Perth, believing even Sydney and Melbourne are too isolated when you come to this industry.

"Perth is a great place to live it is not a great place to run a successful online business unless you cater for local business."

"It is really Silicon Valley and that is it."

"We have felt the downside of not being there for years but, in the past, we did not have the early competitive position that we do now."

"I would not say it (the move) is temporary or permanent. The iron is hot, I just have to be there at the moment."

But all is not lost for Western Australia in this move. Most of thebroth.com's workforce of 10 will remain in Perth, from where they already produce web applications such as giant collaborative art projects which have 14 million users globally.

"Our team is here. The strength of the company clearly depends on the strength of the creative team.

"Not everyone would be delighted to pack up their family and move country. I did suggest that to my employees."


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