TAS startups eat humble pie to cut it in mainland

Tasmanian startups are quietly confident they are carving an identity in Australia's IT industry, appointing themselves the "clever" companies, despite failed venture capital rounds on the mainland.

But this has made them determined to enter the global e-commerce market. According to Gary Burgess, director of software and accounting systems developer Burgess Business Systems, "There's a lot of clever people down there."

Burgess, however, said that Tasmanian startups lacked marketing clout and would need to "get off (their) backside" to raise local brand awareness.

Burgess Business Systems exhibited at the Australian Information Industry Association's (AIIA) Software Showcase this week for the first time, both to gauge the calibre of mainstream vendors in the IT market and to exploit the show for marketing mileage, according to Burgess.

But Tasmanian IT companies were rather better at writing programs, Burgess said. "We can mix it and match it with the best of the world," he said. "We can't always afford solutions available in the mainland, but that's where the innovation comes in. We've been able to start from the ground up and use the technology we have," Burgess said.

Burgess Business Systems retails its automated faxing application, Spin-A-Fax, for $1200, whereas local competitors charge up to $4000 for their products, Burgess said. The company has recorded $500,000 in profit since forming in 1993.

Graeme Wheller, director of e-commerce and web solution provider Buypoint, another first-time exhibitor at the AIIA show, agreed that Tasmanian startups should "think in small budgets" before setting their sights on global markets.

This meant remaining gracious in the face of constant rejections from VC firms, Wheller said. He believes Tasmania's startups had little influence on blue-chip VC providers.

First Tasmania Investments, for instance, rejected Buypoint's pitch for $2 million, saying the dot-com needed to prove it had a steady revenue stream in place. Since Wheller was running a husband and wife show, had only one local boutique winery as a business customer, and multi-tasked across web design, programming and accounts to keep Buypoint afloat on a $50,000 budget, the firm closed the door on the dot-com, sending it home to "grow more organically" before reapplying.

Wheller warned startups not to develop for the local market alone. "You won't survive. Keep your market outlook wide," he said. Wheller also advised new IT players to produce a stable flagship product before diversifying into niche areas to top up profits. Other success factors he cited were aligning with local and overseas "expert" IT partners from the private and government sector.

Senior analyst at www.consult, Ramin Marzbani, resented the often-quoted notion of Tasmania being an "alternative" industry, calling the concept "crap".

"What are they if they're not the Intelligent Island? The dumb island?" he scoffed. "Tasmania is a far better user of e-commerce and online education services," Marzbani asserted.

Marzbani regarded Tasmania as a breeding ground for IT talent, calling the state's 25 ISP and e-commerce startups Tasmania's IT "pioneers".

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