Alan Noble discusses the contrast between Silicon Valley and Australia in the 2000’s
Alan Noble is the founder of AusOcean, a not-for-profit organisation with the mission of helping the world’s oceans through technology. Alan also worked for 11 years as the Engineering Director of Google Australia, during which time he oversaw the hiring of hundreds of engineers to Google Australia’s team and got to know many of the people working within Australia’s startup ecosystem. In his conversation with Adam, Alan discusses the contrast between Silicon Valley and Australia in the early 2000’s, and how the failure of Google’s service, Google Wave, played an important role in the growth of Australia’s startup ecosystem.
Alan’s Wikipedia page: https://en.wikipedia.org/wiki/Alan_Noble_(entrepreneur)
Alan on Twitter: https://twitter.com/scruzin
Adam Spencer: Hi, I’m Adam Spencer and welcome to Day One, the podcast that spotlights Australian startups, founders, and the organizations that empower Australian entrepreneurship. We go back to the beginning to tell a story of Australia’s most inspiring founders and how they built their companies. You’re listening to a special interview series as part of a documentary W2D1 is producing about the history of the Australian startup ecosystem. On the episode today we have:
Alan Noble: Hi, my name’s Alan Noble. I’m the founder of AusOcean. AusOcean is a not-for-profit environmental organization with a difference. We’re more like a tech startup in that we look at ways that we can apply or develop technology to solve ocean problems with a particular focus on technology for ocean monitoring. There’s a huge lack of information about our ocean ecosystems and technology is a fantastic way we can achieve a lot more scale and get more information for less. So that’s really what AusOcean is all about. We partner with other environmental nonprofits and try to help them solve their problems through leveraging technology. I’m also the former engineering director of Google Australia.
Adam Spencer: When would you say you first got involved in the Australian startup ecosystem?
Alan Noble: Yeah I first got involved in February 2002. A few months earlier I decided to return to Australia after spending 16 years living in Northern California and working in Silicon Valley that whole time. Came back to Australia on a scouting trip in February and it just so happened that the World Congress on Information Technology was being hosted in my home city Adelaide. I thought, well that’s a great opportunity to kind of scout out what’s happening in terms of tech startups. And I have to say I was really, really disappointed. There was so few tech startups on the ground and I thought, well, it’s probably just Adelaide. There probably aren’t many tech startups around… turns out it wasn’t just Adelaide. It was all of Australia, but-
Adam Spencer: Sorry what year was that?
Alan Noble: 2002.
Adam Spencer: 2002, right? Yep.
Alan Noble: So that’s the same year that Atlassian founded a little bit later on that year. There were very few tech startups in that early interesting growth phase. There were a few, I guess, scale ups from the previous era that were companies like Seek, but I was really interested in joining an early stage startup and I found a couple in Adelaide and the one I settled on was a company called Foursticks.
Adam Spencer: Can you comment on coming from Silicon Valley in 2002 into the Australian ecosystem, which wasn’t really… I suppose it didn’t really exist at all. Can you just kind of give us a bit of a comparison between the differences between the two ecosystems at that point in time?
Alan Noble: Sure. If you kind of go back to 2002, I’ll start with Silicon Valley. So Silicon Valley had just gone through the dotcom boom and bust, but Silicon Valley is remarkably resilient, even though it was still in that kind of bust phase. It was clear there were companies that were doing well and Google being one of them, which actually started during the downturn in Silicon Valley. In contrast Australia, there was very little startup activity and I struggled even to find a handful of interesting companies that I wanted to get involved in. I’d been in startups for, up until then… My first startup that I actually co-founded was back in 96. Before then I’d done some work for some other startups, a company called Pure Software. Coincidentally that was founded by Reed Hastings who went on to create Netflix a few years later.
Alan Noble: Back in Australia, it wasn’t just there was a lack of startups, the whole ecosystem was lacking. There weren’t many venture capitalists on the ground and the venture capitalists that were on the ground – and this is going to sound a little bit harsh – they weren’t very sophisticated by Silicon Valley standards. I mean, I’d been through several fundraising rounds in Silicon Valley. I kind of knew how it worked in Silicon Valley and I came back to Australia and I was shocked at how kind of hard it was to fundraise in Australia. And a lot of the terms were also honestly, back then quite onerous, a lot of the VCs back in 2002, they kind of functioned a bit more like vulture capitalists than venture capitalists. The terms they would kind of put before you were quite hideous. In fact, there was something that back in the heyday of Silicon valley, probably back in the nineties, was referred to as the capital cram where VCs would kind of try to cram as much capital into a setup as possible with the goal of actually gaining control.
Alan Noble: And they were still doing that back in 2002 and probably even well into the 2010s in Australia, but that practice was long gone. Because it’s a very, very entrepreneur unfriendly policy to kind of attempt to take control of a company. So basically the whole ecosystem was, in a nutshell, embryonic, dare I say, lacked maturity. It was really only with the evolution of startups like Blackbird VC, like decades later that we started to see entrepreneur friendly VCs, but it wasn’t just the VCs. It was the whole ecosystem trying to get people, not just trying to find the technical talents that you needed. You could typically find engineers, you could hire software engineers and comp sci graduates. You couldn’t hire a UX designer to save yourself. You’d really struggle to hire a product manager. So a lot of the other functions that we now take for granted that are essential to building a tech startup were really lacking. Even finding people to kind of provide guidance and sit on your boards was… People that had real contributions they could make was quite challenging. So it was a very immature ecosystem only 19 years ago.
Adam Spencer: I want to ask you in a second what in your opinion changed between 2002 and 2011/12, that decade there? What changed to really kick things into gear, but the 2002, when you were talking about the – I love the vulture capitalists phrase – why was that flying? Like why was that the kind of practice at that time?
Alan Noble: Yeah, I think the charitable explanation would be that the VCs at the time didn’t yet appreciate that their purpose was to enable the entrepreneurs to be successful. First and foremost it wasn’t about controlling companies. And I think it literally took a new breed of venture capitalists to kind of say, hey we’re going to get much better outcomes if we’re there kind of backing the entrepreneurs. It might mean we’re taking a slightly smaller cut up front, but guess what? We’re going to make that pie big. So even though we have a smaller slice there’s… The thing is entrepreneurs have to have skin in the game and if they end up with so little equity that their stake in the business becomes unexciting to them, well that they’ll do other things.
Alan Noble: So there was probably just a gradual awareness that practices need to change and it took a few years for that circuit. I think there probably were more people returning from overseas that were kind of starting to bring in some of that overseas experience through osmosis. There’s a few structural things that might have happened along the way. I like to talk about, so after that foray into Foursticks, which lasted a couple of years, unfortunately they didn’t survive, but that was a classic… For me it was a learning experience. I kind of did a bit of a post mortem and I realized why. And part of it was that the support that entrepreneurs needed was lacking. It wasn’t entirely the fault of the company. Although there were business decisions that were in retrospect poor. So Foursticks did make some poor business decisions, but the big takeaway message for me was less about the individual choices, the companies, founders, and board made, but what was missing in the Australian tech startup ecosystem at the time.
Alan Noble: A few years later, when I joined Google, I had the opportunity to convene a round table of 50 or so stakeholders in the startup ecosystem, mostly entrepreneurs, but also some policy makers as well, and some service providers. And we asked ourselves the question, what do we think was the most pressing need for startups in Australia? And we reached the conclusion that it was really a lack of awareness first and foremost, that led to the decision to found a nonprofit called StartupAUS.
Adam Spencer: The StartupAUS. Yeah, can you tell me more about that? Because I know that recently it has kind of morphed, is that the right term into the Tech Council of Australia? But StartupAUS has done a lot in the advocacy space, like what was the main mission of that and what did it look like in the beginning of getting that up and running?
Alan Noble: Yes. Well, StartupAUS, we realized that there were a few key or pressing issues that we needed to tackle fairly urgently. First, we needed to dramatically improve policy makers awareness of tech startups, and the value that tech startups could bring to the Australian economy. If you spoke with bureaucrats back then they really had precious few ideas about what a tech startup was. So we needed to change that and make sure that treasury and other departments were on board and supporting tech startups with good policies. We also needed to make sure that we got the settings right for talent and making sure… And that also related to policy of course too. So initially we focused on working with policy makers to firstly get the settings right to make it easy for startups to attract talent and bring entrepreneurial talent into Australia and also get the settings right for incentive stock options or compensation, which at the time was quite onerous.
Alan Noble: So that was the initial focus, but really the backdrop was essentially making sure that folks in Canberra and elsewhere understood the value that tech startups could bring to the Australian economy. And obviously we’ve seen a real groundswell and awareness in the decades since, but going back to the formation of StartupAUS, that was very, very nascent back then.
Adam Spencer: You mentioned talent and how important that was for the ecosystem at the time. Can we rewind the clock a little bit and go back to 2010, because I’d love to get your view and share the story here around Google Wave, because we’ve brought that up in an email exchange. You told me about your years at Google Wave and how it didn’t work out, but that unleashed all this talent into the ecosystem.
Alan Noble: Yeah. That’s a great question. So I’ll go back to 2007, which is when I joined Google. So I was hired by Google to grow their R&D presence in Australia to run the R&D center in Sydney. And I got to know a lot of the players in the Aussie startup ecosystem back then, obviously Mike and Scott, over at Atlassian and Mel over at Canva and many of the VCs such as bill Bartee. But also my main role of course was essentially engineering recruitment. I was given the task of essentially growing the engineering center from 20 engineers to 150 engineers in three years. Well, I didn’t stop there I kept hiring and growing the center. We ended up, by the time I finally moved on from Google in 2018, there were over 650 engineers working for Google in Australia.
Alan Noble: Now, along the way, a few interesting things happened. Shortly after I joined in 2007, Lars and Jens Rasmussen set about to build Google Wave. And that became a huge focus for Google’s engineering center in Sydney. In fact, about 50% of the engineers that Google employed in Sydney worked on Google Wave, reaching about 55 at its peak. So Google wave was released in May 2009 at Google I/O that year amid a flurry of excitement and activity. Unfortunately, although the product was incredibly innovative and probably for your listeners, I should explain what Google Wave is actually. So essentially Google Wave was a really, really bold attempt to reimagine workplace collaboration and communication. You can kind of think of it as email meets instant messaging, meets Google docs, all kind of integrated together. That’s probably not doing it justice.
Alan Noble: And it had a very innovative UI to kind of pull that off. Unfortunately, it didn’t really achieve the traction with consumers that Google had hoped for. My personal view was that Google Wave would’ve been an excellent enterprise product because it really was a great way for workplaces to collaborate. But the Wave team weren’t focused on the enterprise at the time, they were focused on consumers, which was a big part of Google’s focus. So again, no criticism, it was just, well, do we go after consumers or do we go after the enterprise? Obviously you want both.
Alan Noble: It was a bit of a disappointment, unfortunately, and Google canceled the product barely a year later, it was August 2010. Now that was a very hard decision for Google, but it turned out it had very great unintended consequences for the Aussie tech startup ecosystem because it unleashed a flood of tech talent onto the local ecosystem. Because the kinds of engineers that had been attracted to work on Google Wave tended to be the engineers that were perhaps a bit less risk averse, a bit more inclined to work on something a bit radically different.
Alan Noble: And so many of those engineers, when they found themselves no longer working on Wave, they started chomping at the bit. They thought, well maybe I should be looking at startups instead. It didn’t happen overnight, but it certainly has happened. And in the intervening years, we’ve seen dozens, if not possibly now in the low hundreds of former Google Australian engineers essentially go out into dozens of Aussie startups, perhaps the most famous example would be Canva’s Cameron Adams.
Adam Spencer: I’m so happy you mentioned that because I interviewed Cameron a few weeks ago and he told part of this story that you are telling now. And that’s a really interesting to see those two worlds overlap.
Alan Noble: Yes. And of course Cameron was the lead UI designer for Google Wave. So he was really the UI architect for that product. So the experience I think he acquired at Google was very, very important when he moved over to Canva. But there were many, many, many other senior engineers, including their CTO David Hearnden was on Google Wave. Adam Shook was in Google Wave, David Wang, and to name a few. It’s hard for me to keep track, but there probably are a couple of dozen Google engineers and product folks over at Canva alone, of course. And there are others who have gone to other companies as many at Atlassian and smaller startups as well.
Alan Noble: So Google Wave may well go down in history as like Australia’s mini Fairchild Semiconductor in that that company Fairchild Semi is often considered to be kind of the grandfather company of Silicon Valley because it was the first semiconductor company in the Valley and Fairchild then, essentially the engineers of Fairchild went on to create companies such as Intel and AMD, and of course the dozens of other tech companies that followed. So perhaps Google and Wave in the fullness of time, historians might say, yep, that was a really instrumental event in Australia’s ecosystem. Time will tell. It’s certainly been quite apparent that the talent has benefited Australia’s startups immensely, although it was bad for Google in a sense, but it was good for Australia.
Adam Spencer: This part of the story is definitely going into the documentary. That’s amazing. So what happened in your opinion, between those 2010 years and now to kind of… What were some of the big, big movements that have really pushed the ecosystem forward in the last decade?
Alan Noble: Well, I would, without a hint of modesty, I would point to March 2013, which is when we convened that first StartupAUS Roundtable. So 2013 was at the start of that decade. Honestly, I just thought let’s see what we can do if we can get a bunch of smart people in the room, a bunch of entrepreneurs, a few policy wonks, a few investors and just see what needs to be done to kind of kick start the startup ecosystem. But StartupAUS was really about influencing government attitudes, as I mentioned, and in particular working with treasury and immigration. So I definitely think the work that StartupAUS did on the policy side did help get the settings right for startups, made it easy for startups to essentially reward their employees with incentive stock options.
Alan Noble: Because think about a startup startups in the early days, they’re really competing for talent. They can’t compete with salaries, so they really need other ways of incentivize their early employees. And that’s why incentive stock options and stock restriction and such are so, so important for startups. And so getting those tax settings right, was super important. I’m very proud of the work we did with immigration too, and the new entrepreneurship visas, which made a lot easier for startups to bring in the talent they needed in the early days. Even though there was no shortage of engineers in Australia, it seems like Australia has always produced strong engineers ever since engineers existed, or even before we called engineers engineers. So there was no shortage of smart software engineers, computer science graduates. What we lacked were those other vital roles, the user experience and the user interface designers, the product managers. Those were job descriptions that weren’t even considered real job descriptions back in 2013.
Alan Noble: So we worked hard to make sure that those jobs were known to immigration and were then fast tracked because startups were crying out for that kind of talent, as indeed was Google. It’s interesting, I was working for Google at the time, but I often found that I thought that we had, in terms of our needs, I thought we often had more in common with tech startups than we did with other multinationals in Australia. And the reason was Google was doing R&D in Australia. We weren’t just some branch office doing sales and marketing, like the vast majority of multinationals, we were actually trying to build products in Australia.
Alan Noble: So we needed those product managers. We needed those UX and UI designers. So I think the influx of talent was something that started to kick off in that decade that made a big difference. And I think there was probably just… The other thing that I wasn’t directly involved in, but you could see more universities thinking hard about entrepreneurship and starting to produce graduates that were thinking, Hmm, maybe instead of taking a job, I should be making a job, so that was happening about then too.
Adam Spencer: Jumping forward to today for a minute. A lot of great work had been done by StartupAUS from 2013, what still needs to be done in your opinion? Like what are some of the gaps that are still in the ecosystem that we need to fill?
Alan Noble: Yeah, I think what’s missing now perhaps arguably the biggest issue, it’s not a single thing. It’s a sense of urgency as a country that we need a vibrant tech ecosystem. Not just tech startup, but tech ecosystem, of course the fuel of a tech ecosystem are tech startups and fuel that fuels tech startups is innovation. So I think we still have this bit of this attitude in Australia. Oh, she’ll be right. We’ve got incredible resources, both renewable and non-renewable and we kind of have this tendency to kind of be a bit laid back about these matters.
Alan Noble: But I think we need to do much, much more to kind of instill that sense of urgency that actually building this tech ecosystem is super important for Australia’s future. And it’s really about creating not just the jobs of the future, but the opportunities of the future. So we’ve made great progress for sure, but we are by no means done. And that’s, I think that explains why the Tech Council of Australia is so important to StartupAUS essentially wound itself down and has been replaced earlier this year by the Tech Council, which I’m excited about and will hopefully drive that mission forward.
Adam Spencer: Just out of curiosity, like what’s the difference in objective or mandate or makeup between StartupAUS and the Tech Council.
Alan Noble: Yeah, it’s actually quite a big difference actually. So StartupAUS was almost like a startup itself in that it was very agile. We felt this overwhelming sense of urgency. We needed to get something up and running quickly. So we literally went around, tapping people on the shoulders. People that we thought could bring something and kind of bootstrap the whole organization very, very quickly. We didn’t go out saying we represent the tech startup ecosystem per se. We weren’t a membership based organization. So that’s a major point of difference. The Tech Council has structured itself as a membership based organization so tech companies are members and those members will have representation on the board. StartupAUS was much more agile, much looser in a sense. We just basically roped in people that we thought could bring value and bring value quickly. Because we wanted to move quickly.
Alan Noble: I always had the vision that StartupAUS would essentially have a planned obsolescence. I always thought, gee, if we’re successful StartupAUS should one day go away because we won’t be needed anymore, we won’t need to be promoting tech startups. That’s partially true in the sense that we believe now the focus should be on the tech ecosystem as a whole, not just startups, which is why we could enlist much, much larger companies, scale ups and larger companies, such as Atlassian and Canva over to the Tech Council. It was harder to attract those companies to tech, to StartupAUS because they were already large scale ups by the time StartupAUS came along. So it was really… StartupAUS was an attempt to move very quickly and hopefully get some runs on the board, which I believe we achieved. Tech Council has more structure, is a membership based organization and also honestly represents a much larger industry. And if you look at the combined value of the companies that the Tech Council represents it’s billions of dollars of contribution to the Australian economy and many jobs.
Adam Spencer: What do you think we’re doing really well?
Alan Noble: I think Australia has always done a good job in the innovation department. We are creative. We can produce graduates that are able to solve difficult problems; solve problems that can make a difference. I think the universities and the graduates by and large, that’s a plus for the Australian ecosystem. Some might argue perhaps, commercialization is still not as strong as it needs to be. I do think that’s probably improving. There seems to be much greater awareness on sovereign capabilities now that’s been brought upon by COVID, there seems to be a new awareness that perhaps we should be making things again as a country.
Alan Noble: So I’m quite optimistic about that. I think we just have to not let our guard down because it’s a very competitive world in which we live and there are a lot of other smart people around the world doing innovative things. So I’d like to see us continue to invest heavily in the programs that have a proven track record in R&D, tax incentive, commercialization Australia programs that have been very, very important to startups in the past. I think I’d love to see us continue to invest in those programs fully because they’ve been of proven value to Australia. So yeah, I’m optimistic. I think we’re moving in the right direction. You think about how far we’ve come in less than two decades. It’s actually quite impressive.
Adam Spencer: According to your LinkedIn, the founding of AusOcean overlapped with working as the engineering director for Google Australia, was that the case and was that challenging founding a startup while also working, I imagine full time.?
Alan Noble: That’s a great question. Yes, you’re quite right. I overlapped, in fact, I started AusOcean back in 2017. What made it work? I would say two things made it work. One, I was working part-time at Google at the time, so that freed up some time. And secondly, Google was quite supportive. A lot of employers wouldn’t let an employee go off and do something like that on the side, but AusOcean was not competitive with Google. It’s probably one of the few things that isn’t competitive with Google. So I was able to go off and start to spin up AusOcean. I only really spun up AusOcean in earnest though when I quit Google in 2018. So my message to entrepreneurs is it’s really hard to be a part-time entrepreneur. I tried and I realized now if I’m going to focus on AusOcean, I need to be doing it full time.
Alan Noble: And so eventually I made that decision in 2018 to leave Google. It’s a tough decision. By then I’d been there 11 years. I expected I would stay at Google only three years, achieve that original goal of a hiring 150 engineers and then I would go on do another startup. That’s what I told myself, that’s what I told my family. So I was quite surprised that that three years stretched out to become 11 years, but AusOcean was the thing that really made me really want to focus full time again on something different. And I’ve always had obviously a love of technology, which has drawn me to tech opportunities throughout my entire career, but I’ve also always had a love of the ocean. So AusOcean was a chance to kind of marry those two loves – my love of tech and my love of our oceans and see how we could use tech for the good of our oceans.
Adam Spencer: I really love the logo. It looks like a combination between some kind of vessel on the water and also with like a squid.
Alan Noble: Yeah, it’s a cuttlefish, but-
Adam Spencer: Cuttle, sorry.
Alan Noble: You got, you got cephalopod so cuttlefish are in the cephalopod family. So they’ve got basically squid, cuttlefish and octopus, all very, very smart animals.
Adam Spencer: It’s interesting that you said you would caution entrepreneurs that it’s very difficult to be a part-time entrepreneur, which is a great segue into my advice question. Like what advice would you give a brand new founder?
Alan Noble: My advice to a brand new founder is basically follow your passion. If you’re passionate about something, don’t just sit on it, figure out a way to do it and nothing’s going to happen unless you actually throw yourself into that startup idea and start working on it. You can have all the best ideas in the world, but if you don’t actually take the time to actually start to work on those ideas and transform those years into an implementation or prototype or product. So yeah. Basically follow your passion. Life is surprisingly short. You don’t know how much time you have, so don’t wait too long. I think the entrepreneurs that do that are the ones that will ultimately succeed. So yeah, follow your passion.
Adam Spencer: The last question I have for you today is not exactly a question, but I want you to just share something that’s on your mind, but keeping in mind that we’re trying to put together here, a documentary that will wholistically, hopefully as honestly as possible, tell the entire history of the Australian startup ecosystem to the best of our ability. We want people from all corners of the ecosystem to hear this story. What do you think people need to hear from you? What message do you have to share?
Alan Noble: The message I would like to share for entrepreneurs and potential entrepreneurs is make sure that you choose carefully and make sure that your choices have the right impact, the impact that you care about, the impact that makes a positive difference. And this is not just for nonprofits like AusOcean, I mean obviously AusOcean and other nonprofits, we’re in the business of helping our oceans and delivering on positive environmental impacts. But I’m also of the view that regardless of whether you are a not-for-profit or for profit, you should be thinking about how your business and how your decisions impacts on the world, whether it’s impacts on the environment or impacts on people, impacts on social justice, impacts on the way that essentially people live. So choose.
Alan Noble: I’d like more entrepreneurs to be a bit less concerned about building the product and a little bit more concerned about how that product sits in the world and how that product hopefully improves people’s lives and possibly also improves the world in general. So yeah think about that. It’s very easy for an entrepreneur, especially with all the pressures that founders face, I have to build a product or I have to get funding, I have to pay my employees. So it’s understandable that founders, entrepreneurs might lose track of some of these bigger issues, but I would be encouraging all entrepreneurs to be thinking broadly about the impact of their decisions, of their choices.
Adam Spencer: Thank you so much for your time today, Alan.
Alan Noble: Thank you Adam.
Adam Spencer: Is there anything at all to you want to talk about that I didn’t ask you about?
Alan Noble: I mean, I’m optimistic. I’m optimistic about Australia’s tech future. I’m optimistic that Australians can continue to innovate and build world leading businesses. And it is our future and there’s no doubt about it we can’t be relying on resources indefinitely. And so it’s essential that we continue to invest in these new industries, and those new industries are tech based. But we’ve come a long way in a few years. And I have every expectation that we’ll continue to make great strides.
Adam Spencer: I hope you enjoyed that interview. More interviews are on the way, follow the podcast wherever you’re listening right now, stay tuned for more interviews with many, many more amazing people from the Australian startup ecosystem. Thanks for listening and see you next time.