While the US will always be dominant, there are some advantages for Australian Tech companies to take advantage of:
Cheaper tech teams with less competition. Australia has a lot of talent in the software space, but without the eye watering wage bills. Even in the most expensive cities of Sydney and Melbourne, software developers generally cost a lot less than in the Bay Area. You can get even better value if you can build your team outside of Sydney/Melbourne.
You can build more slowly, there is alot less pressure to build grow fast and fail type startups. While venture capital heavy startups are the most celebrated in the press, there are plenty of great smaller scale self/revenue funded startups that can build up over time. Most of our celebrated tech successes built their business models over a long time and focused on building a good business first.
There are also great incentives to keep the development team in Australia. As a pre revenue startup you can get over 43.5% of your development cost back through the R&D Tax Incentive. While its a tax incentive, the way that they designed it was to provide tax refunds to loss making companies. Plus there are other great grants/incentives you can also take advantage of. (disclaimer: I'm a consultant for software startups/companies in this area)
The best course of action is to take a global approach, don't limit yourself to selling or developing in only one location.
> Cheaper tech teams with less competition. Australia has a lot of talent in the software space, but without the eye watering wage bills.
Since you're referring to all of Australia - those advantages are all neutralized by choosing any of two dozen other US cities to start in. You get the advantages of the vast US market, other cities have far lower real estate costs than you see in most of Australia, you can choose states like Texas and Florida which have no income tax and large local talent pools, you can choose various cities based on their unique value propositions such as eg Pittsburgh due to Carnegie Mellon, or perhaps Denver Colorado due to lifestyle. You can also still choose Seattle, Los Angeles, NYC, Boston if you want to just step down one notch in cost on engineering salaries, while still being at a world-class level of talent (with each of those having their own distinct value propositions).
The US has 280 million people living outside of California and an economy 16 times the size of Australia that is now growing far faster than Australia.
You do gain something keeping the tech team in Australia which is Australians are much more “team” orientated than Americans. “Mateship” really is a thing here that means something. A tight team with focus will beat a group of talented individuals every time.
According to Hofstede's cultural dimensions theory, the USA and Australia have very similar cultures, although 'mateship' is not a dimension considered I will admit. :D
I would suggest that all national cultures value loyal friendship and working as a team.
That said, 'mateship' has a sense of egalitarianism to it, and while Australia and the USA are egalitarian cultures, that is lacking in other nations, e.g., China.
Australia and the USA have deceptively similar cultures. On the surface we are very similiar, but there are a lot of important differences that can bite you on the backside when you least expect it. Group dynamics are probably one of the more important differences.
I think the real strength of Australians is our cheerful cynicism and laconic humour; these allow for honest appraisal. We are optimistic ("she'll be right"), but it is a different species from American optimism ("I'm going to build the impossible").
I work in NYC and my office has, at any time, between 5 and 10 Australians working there, out of ~100. It is a tremendous comfort to have that common sense of humour at hand. If I had my way we'd have a few more.
Australians tend to lack confidence on their own in the greater world, but when put together as a team they think they can beat everyone (and often do).
One thing we don't make is good managers of Americans - cynicism and laconic humour does not come across well with American employees.
I’d work for an Aussie, but my auxiliary national affiliation in New Zealand would mandate I give them some good natured grief :-)
I’d say it takes all kinds. I work with one Aussie who is a great manager, and she enjoys good rapport with everyone above and below as far as I can tell.
Kiwis and Aussies that I’ve known have had a tendency to project a feeling place inferiority which I think is rubbish. Everyone has imposter syndrome, but being from Aussie or NZ is no reason to feel inferior. Stand tall!
Yes there are good Aussie (and Kiwi) managers of Americans, just as a rule they tend to run into problems - the approaches that work with Australian employees can fail spectacularly with US employees.
Yes the Australian cultural cringe (the Kiwi version is even worse) is pretty terrible. The way to overcome it is work as a team. In a team Aussies/Kiwis really beleive they can beat the world. It is a very intersting cultural trait.
>One thing we don't make is good managers of Americans - cynicism and laconic humour does not come across well with American employees.
So how does cynicism come across to Americans? As a New Yorker by birth/upbringing/family, I often wonder if this is part of the gap between my family and "Americans".
> You can get even better value if you can build your team outside of Sydney/Melbourne.
So much this, but talent outside the big cities is rare. I lived in Queensland for a while and would have taken a massive pay cut for any tech work... but there just isn't any. I knew more people working in Sydney (fly-in-fly-out) than working in local companies.
You can pick up uni students cheaply. They're grateful for relevant work.
I knew a few founders living cheap but pretty much all knew that moving to the US was an inevitability.
> focused on building a good business first
This is a massive plus of starting in Australia. The business has to make sense. Local funding sources aren't as willing to build perceived value and flip the company -- it's important to have a genuine sustainable business with customers and cashflow.
> 43.5% of your development cost back through the R&D Tax Incentive
Probably half of my lifetime earnings have been paid for with the R&D Tax Incentive and other grants. It's such a good deal that every incorporated company with a tech component should be trying to claim it.
I'm not grumpy or anything, but in Queensland, claiming government grants for tech companies is probably more lucrative than working in a tech company. There's an abundance of funding and a shortage of people able to use it.
> don't limit yourself to selling or developing in only one location
I forget who gave the talk, but it was from Muru-D at Co Spaces in the Gold Coast, and guy said (paraphrasing):
"New Zealanders have an advantage over Australians because they know from day one that they will have to sell overseas to make their company a success. Australia is big enough that you can fool yourself for a while, but it won't take long before you reach saturation and need to move anyway. Better to get it done sooner."
> So much this, but talent outside the big cities is rare. I lived in Queensland for a while and would have taken a massive pay cut for any tech work... but there just isn't any. I knew more people working in Sydney (fly-in-fly-out) than working in local companies.
This is what playing the long game is for. Take a lesson from Texas Instruments. The founders decided to start a tech company in North Texas, where there wasn't much talent. So they decided to grow their own: they started their own university with a strong focus on STEM subjects, located not too far from the corporate headquarters, and once it grew large enough, they turned it over to the state. To this day, the University of Texas at Dallas supplies TI with a lot of fresh grads, and Richardson, TX has grown up to be a large tech hub.
Of course, this takes a lot of time and a lot of money, but a particularly ambitious and rich team of founders can open a university on the outskirts of, say, Brisbane or the Gold Coast, and given enough time, they'll have people to feed their tech company and turn the area into a tech hub.
The trouble though is that UT-Dallas is still not a spectacular school, so the talent does not rank among the best. It's serviceable for what TI needs, but not the best. And few people will relocate to Dallas just to go UT-Dallas. TI may have gotten by with that level of talent in the past, but if you're a company that is pushing the boundaries, that level of talent may not be sufficient.
If you locate near an already great university in an already attractive city (e.g. UT-Austin), you can tap into a talent magnet that already draws people from around the world. Remember, the talent pool is now global and tech companies that aim from anything short of that would be depriving themselves.
Talent pool size is a real problem. To cite an example: for years, many French-speaking universities in Montreal had a hard time drawing global talent due to the language of instruction; on that basis alone they were less competitive than English-speaking universities in the same city (e.g. global English-speaking universities like McGill draw a from a larger and much more competitive pool of students from around the world) simply because their pool of students are constrained to French speakers. Just as an example: most Asian students will probably not bother to learn French, but many are already learning English in grade school. This means French-only universities lose out on the two biggest pools of engineering graduate students: those from India and those from China. To make things worse, French students from France rarely want to study in Quebec because most of them believe their own grande-ecoles to be better (there is also an element of French snobbery involved when it comes to Quebec).
Anyway, my sense is by setting up shop in a city that already draws global talent, the premium you pay in salaries over the long run is going to be far less than setting up your own university (considering how expensive it is to run a really good university). The payoff is much greater. University reputations are expensive and slow to build, and as can be seen in the UT-Dallas case, one is uncertain to succeed even with sizable investments.
p.s. of course, this argument breaks down if your company does not require a very high level talent.
That's an interesting quote on New Zealanders (I am from NZ, but live in SF).
My take on it is that places like NZ are great in that if you can make the jump internationally, you're highly likely to be extremely successful overseas as investing isn't really a thing and the market is so small. The downside is that any investors want more than a pound of flesh for dollar sums that would be seen as laughable in the valley. It's going to be interesting seeing how the sector does over the next ten years - and while it's been great seeing the success of Xero and Pushpay, I'm really excited about the current cohort coming through.
I lived in the Gold Coast for 18 months. I did weekly flights to Sydney and drove to Brisbane twice a week.
I didn't have good results looking for work in Brisbane. I could get a job, but not a job I wanted to do, and not for much money. I would've had to move to make the commute feasible, especially with the state of Brisbane parking prices.
I found it more convenient cheaper to travel to Sydney. Gold Coast airport is remarkably efficient and cheap. I met a lot of people doing the same thing; 5:15pm at Sydney Domestic is packed with workers commuting by air.
I live near Munich now and it's amazing to see so many big companies and so much opportunity in such a small place. There are literally hundreds of tech jobs available within 1km of my rural apartment. There are jobs ads on the buses and trains.
Your LinkedIn says you work on embedded systems. Perhaps that is just too niche for an industry the size of Brisbane’s? The frontend market isn’t great, but it does exist.
Just curious: what is some cool stuff happening in Brisbane these days? I grew up there but I moved away to find more interesting work a long time ago. It would be nice to hear about interesting things happen there nowadays.
We have dev offices for quite a few majors (Oracle, SAP, IBM, ToughtWorks, Boeing, Boeing Defense etc.), but lots of little interesting companies too.
I’m in Systems programming/electronics design - it’s probably a different story for a front end dev - I don’t think there’s much of that at all!
One little company I used to work for was in traffic systems, basically IoT/sensor networks before it was cool (all on private networks though!) and we developed a system that GPS tracked ambulances and fire engines, and predicted their likely path (destination was known) and ran interventions on traffic signals to both minimise travel time for the emergency vehicle and minimise disruption to other traffic. It’s a lot more effective than the dumb IR blaster systems used elsewhere. We also had a ramp system that staggered cars coming in down on-ramps near chokepoints that significantly increased highway flow and reduced nose-to-tail accidents (from the stop-start traffic) by something like 30%. I think they’re rolling out that tech now with some US cities departments of transport.
Now I work at a little company that makes class-leading satellite/microwave equipment, including maritime and road-vehicle satellite-tracking terminals, frequently up- and down-converters, etc.
There’s actually a surprising amount of microwave engineering, and lots of aviation/defence work (some in the city with Boeing Defense and some out in Ipswich at Amberley), as well as Virgin Australia being headquartered here.
I moved from the Bay Area to Brisbane. The market is pretty sparse. Seems like Flight Centre, Suncorp, Virgin, TAB, and Auto and General are the big companies.
Console seem interesting, they were recently acquired by Macquarie. Console Connect and Rex are hiring.
I’ve met people trying to take advantage of lack of competition to set up dev offices. I talked with a well funded US startup who seems interesting.
One of the common mistakes I see Australian (and other incoming) startups make is "hiring/setting up a sales person in SF".
It seems like a highly leveraged thing to do. Surely someone in-market, full-time, with sales experience should do 10x.
But you learn so much in the sales process. If you have someone remote, new and purely incentivized on sales you lose much of that information.
Quite often the sales person "fails". The company notches it up to being the wrong person, fires them and tries again. However, more often it's the product, the positioning, so many other things.
Really depends on your business, but getting on a plane is the easy solution. It's relatively cheap to fly AU-US nowadays.
If it's a bigger deal, you can probably justify it. Or you stack smaller deals in to one 2-4 week trip.
Sounds inefficient, but you can pack a lot in - plus you'd be surprised how convincing getting on a plane and flying around the world to a customer is. "I'm coming in from Australia" is also a great door-opener.
Doesn't work in all businesses - but for a lot of B2B it is effective.
You can’t sell remotely from Australia via a US sales team. You either sell directly from Australia (with all the downsides this involves) or you move the management team to the USA.
The third option is to acquire a US competitor, let them sell your product into the US market, and make sure they have the same executive decision making power as the team in Australia
Yes - I am actually considering doing this right now. The difficulty is the massive mismatch in valuation between Australian and US companies makes this difficult.
One massive advantage of our company doing the build local, sell global strategy from Australia is that in our game (satellite/microwave comms, mostly for the defence industry) is that if we were in the US, our products would be under ITAR. Not having to do all that paperwork is a huge selling point for our European and Asian customers. I do spend a lot more time on planes than I might otherwise, but at least we are close to Asia.
The liveability of places like Adelaide (and even Melbourne, Sydney, Brisbane, and Perth) is such an undersold secret. Personally I'm so torn between wanting to tell everyone how good we have it and wanting to keep it to ourselves.
Melbourne, Adelaide, and Perth are all in the top 10 cities to live in the world.
Taking Adelaide for example (1.2 million people), we can live within 10-15 minutes of the CBD in a roomy townhouse for highly-affordable rent, get paid pretty well, be 20 minutes from the beach, 20-60 minutes from four different world-class wine regions, have a great festival culture, delicious local food and wine, and a highly safe and welcoming culture.
If you want a larger city you have Melbourne (3.9 million) with a fantastic bar and food culture and endless high-paying work.
As a company, and this is somewhat anecdotal, you have high availability of highly-educated workers who are used to working collaboratively and doing whatever's needed to get things done to cover the work of N other people (low population after all).
I feel like they are highly livable if you do not need to work for a living.
Otherwise:
- Adelaide: It's cheap but there are no jobs.
- Brisbane: It's cheap(ish) but there are no(t many) jobs.
- Perth: It's expensive but there are no jobs.
- Sydney: You can't afford it. A one-hour commute is starting to look appealing.
- Melbourne: Can't complain.
They are lovely cities to visit as a tourist. As a worker, there are much better opportunities out there. Australia tech workers have easy access to working visas in practically every country in the world.
I can agree there are more opportunities elsewhere, but ive never met a developer or similar in Aus struggling to do well, and have generally found US devs shocked by our salaries and living costs.
On the other hand, if you want career advancement there's something pretty cool to the US idea of "have managed 15 people after 2 years experience" which just doesn't happen here in Aus.
They may be liveable, but the work on offer is really nothing like the US market.
I tell folk that the NYC technology scene is larger than every Australian technology scene combined. The Bay Area's tech scene is large than every Australian scene multiplied. It is a stark difference.
In Darwin, I could get a job but not, as my father said, a career. In Perth I could get a career, but it would be in moving from backoffice to backoffice, with a lot of pleading for the job in-between. "Why yes, I have 152 years experience in .NET 72.8.1"
Having lived and worked in NYC for a few years, I am pestered by recruiters. Every week I will get one or two emails pitching startups and giants. There is fierce competition for talent -- it's the same position tradies were in during the height of the mining boom.
And I like it here. I am not a beach person, I can buy wine, it's a cultural capital and so on and so forth. I love Darwin, I miss it, but it was never going to be a big enough canvas. I miss my family in Perth but again, not enough of a canvas.
If NYC isn't enough, you are rapidly running out of places to go.
Great analogy and completely agree that we couldn't compete on overall opportunities. Would still argue we have a pretty unbeatable lifestyle though, which it sounds like you're pretty familiar with :-)
As far as recruiters, I can't recall a week here without at least one contact, but it sounds like it's even busier in NYC!
I am in Sydney now and yes, if I was already wealthy and lived near the beach and had lots of free time I would have an amazing lifestyle.
But if you are a busy professional, you just won't have the time to really enjoy all of this unless you just don't care about your career much and clock out at 5 on the dot.
My weekdays are an absolute blur. I lose one weekend day to chores / errands. So I have one day to actually enjoy my surroundings and I need the weather to co-operate that day too.
I agree though Adelaide is under utilized. It could be such a great place if it had a strong economy. Unfortunately it's hampered by lack of vision. I also think Darwin has been a complete lost opportunity. They should lease the whole place to the Singaporean government and see what happens ;)
Completely agree. I love in Melbourne and it is rated as the "most livable city" for some reason. With having a full time job and the constant pressure to outperform everyone else, the ever increasing rent of tiny apartments and the overcrowded public transportation during peak times, there's not much living to be had. That and the weather is terrible most of the times.
I mean sure it is mostly safe and the economy is doing fine at the moment but those are the bare minimum of survivability. The rest, you are paying a premium for.
Depends on your skills of course, but most dev jobs on seek / I run into and hire for are paying quite a bit more than that, particularly contract. When the AUD was stronger than USD this was an even more compelling argument.
However I acknowledge the opportunities of equity returns are far higher in the states.
Do you have a reference? What industry, what technologies, what city? I find established businesses in Melbourne, paying permanent senior software devs $120k-$130k, so I find it hard to believe that mid-level developers are getting paid $150k+, unless they're contractors in a somewhat niche field.
Melbourne is liveable; Adelaide is a retirement village. The population has been stagnant for two decades, and the brain drain continues to worsen. I can count the number of people worth working with on both of my hands.
I'm in the US at the moment (Silicon Alley), and it's staggering the funds available compared to Australia. Fairfax County, where I'm currently based, has half the population of Australia. I've always been bullish about the US, but I don't think I can afford to ignore this market once I get started on my own adventures.
In my view with Australia cancelling the 457 visa that a lot of tech talent uses its pretty much over for everything tech related in AU. If you're looking for a fast growing tech city thats less expensive than the valley then head to Toronto
I think that an Australian business going deeply into the US market is going to struggle with the E3 visa. It is so easy for a talented technologist to be recruited by a US firm that once someone works it out, you will see a rapid turnover unless you offer US rates.
> Build local, sell global. This is the ideal. Hire the local talent (keeps government people happy) but sell into the big market.
Yes. But if you're selling components (pretty rare TBH, most sell a service provided via a web page, or maybe a desktop or mobile app), you have to pay "royalty" tax to the IRS. Only about 5% IIRC under the us-aust tax treaty, and you're not double-taxed by the ATO - but it's paperwork, complex, and a little scary. Being subject to one jurisdiction's set of tax legislation is bad enough....
Was a few years ago, I'd have to google it myself.
google: US australia tax treaty; search: "royalty" within it (has a particular meaning in the act). The term "component" is not actually used, IIRC. When the IRS audited a US firm I know, they had to sort it out with their non-US component suppliers.
I'm not at all sure, but maybe "w8-ben" is the relevant form (though it serves several purposes). Whatever the form is, I noted that Atlassian had a pdf of it on their site, and avoided all the complexity because their products were used directly by users (i.e. aren't components).
Doesn't sound like it but unfortunately that's not enough information for me to tell. It might be. BTW a "contract" includes pretty much every transaction, even if immediately performed.
> (a) payments or credits of any kind to the extent to which they are consideration for the use of or the right to use any:
> (i) copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right;
So, by 12.(a)(4)(i), if a customer pays you so they can redistribute your copyrighted code (i.e. a component), it's a "royalty".
BTW Reading it literally, this "right" includes the mere use of copyrighted material - but here it's meant as more serious aspects of copyright, like the right of (re)distribution.
IIRC, there's a wrinkle: in something like a compiler, which is used by the customer and not redistributed, but includes some part that is redistributed (like stdlib), this anxilliary distribution doesn't alter the character of the primary transaction. IIRC, the ATO stated this in what I think is called a "tax note" - a decision made internally (i.e. not held by a court).
tl;dr you can get away with a little redistribution
It's a barrier to entry, favouring big caps that can afford international tax law specialist accountants/lawyers.
I think that works: free means no royalty paid; and the convention above specifically excludes ordinary services (IIRC). It includes "scientific" etc advice in the next point (ii), and I never looked into exactly what that covers... services/support for an ordinary component doesn't sound like it's covered (and if it was, it wouldn't be because it was a component - the issue I raised).
As a separate business issue, there's other problems with getting people to pay services for something they already have - in that sense, it's not "a way around". Of course, some market segments do really want that support. And if that's already your business model, well no problem.
I can't think of any examples of an open source component with services/support. SleepcatDB and ghostscript are opensource components, but are dual-licensed (i.e. have a second proprietary license permitting redistribution as closed source). MySQL? Cygwin? Hibernate/JBoss? Red Hat?... not sure these are components that are often redistributed (though of course users could, license permitting).
One of the strange things about Australia's startup scene over the last decade or so is the sheer number of what I like to call "meta-entrepreneurs" - people who help other people become entrepreneurs, and present themselves as experts on technology, business, Silicon Valley etc, but have declined to actually do the hard work of setting up a business, let alone growing it to success.
So when Australians give advice about "how to start a tech company", the first question to ask is "How many have you personally started? And how did they go?".
One of the things that I've come to understand about Australia since leaving (I've live in Berlin now, before that I was in London) is that the average level of professional work is quite mediocre by global standards - this is not just in tech, but across all industries. Australians have had it very easy for about 2 decades now, getting rich through a property boom and a mining boom, but most have never had to really compete on a global level. An awful lot of people cruise in their jobs, doing something that's good enough for the Australian market, and they've had a comfortable career doing it. So why change?
The problem is, that if you do achieve PMF in an economy that operates primarily at this level, you're not going to have PMF in an economy that operates at a higher level of sophistication and competence. That's why I think the strategy of "start local, grow global" is a fool's errand, and risks turning into "start local, burn some cash trying to go global, stay local".
I also dispute that there is an advantage to keeping a tech team in Australia. The salaries are still quite high (particularly in Sydney) but the talent is again, not that good. This is both in tech and tech management, however there ARE exceptions[1], and the situation is improving - Atlassian have produced a lot of people who know what it takes to run a global, successful tech business, and now we are starting to see a second generation of top-notch people being developed in fast-growing Australian startups like Canva and SafetyCulture[2].
There are plenty of companies who have sold into the US market from day 1 from outside the US. HotJar from Malta. My current employer, ChartMogul. Travis CI, also from here in Berlin. There are hundreds more, but those are the ones that just jumped to mind.
If you want to be a global company, then think like a global company from day one. This is as true in Australia as anywhere else, but it's taken a long time to sink in there.
[1] Of course, the exceptional people generally know it, and command matching salaries. As an aside (to this aside), I'm currently reading Camille Fournier's excellent "The Manager's Path", which is like a museum of management practises that I've never seen in Australia.
[2] SafetyCulture is an exception to my "start global" thesis. They did start locally, then grow. I think this is because of two main things: In health and safety things, Australia does generally lead the world, or come close to it. I used to work in construction in Australia, and am continually shocked at the practises I see in the EU and the US when I visit. The other thing is that I've seen SafetyCulture hire a lot of very good people, which is never a bad thing for a business to do.
I find your comments about technical competency of Australians being less than elsewhere interesting. My own experience over the decades is the opposite. I have had to deal professionally with various fly-in gurus (from the US and Europe) and they have had little success in understanding how we implemented the projects we were involved in.
what was more ridiculous was the major discrepancy in pay. If US or European, then you were paid 3+ times the Australian rates. Yet you couldn't solve what we thought were simple problems.
There is no doubt that there are many who claim technological acumen here who have much less than they advertise. But there are many here who have much more technological acumen than what you find overseas.
The biggest problem is the extensive need to use buzzwords in the various technologically based industries. If you are not up with the latest buzzword craze, you are considered backward and inferior, even though those buzzwords are just a renaming of various "stuff" that has been around for decades.
Likewise - I spent 6 months back in 2004 working in the US office at a large company doing data management as part of a big team. I was the only person in the entire group who tried to understand how our whole team fit together and what my inputs and outputs in the data chain did - and why they needed what they needed. Everyone else was a narrow specialist in their little bit, and the project managers were specialist project managers who knew how to gantt, but didn't understand what we all did.
I'd been used to working in a smaller company where I HAD to understand everything because I was building tooling for the entire chain. Obviously I didn't know enough to do everyone else's job, but I understood what their job meant and what kind of problems they existed to solve.
What I actually found was that they were unable to think outside of the box they were stuck in. They were in a position of "you can't do that" when the problem at hand required that "you need to do that" so find a way to do it.
I think one of the problems of today is the limited education that many in technical fields have. They are taught how to do something in one language or system and they do not get to see that other ways are possible in other languages and systems.
One of my former colleagues (from decades ago) was a brilliant programmer. We had a particularly pernicious problem to solve. He had spent some hours programming a solution around the problem and had written about half the code needed. In discussions with him, I brought up that old chestnut of Karnaugh Maps and Don't Cares. He had never heard of either. Once explained to him, he fixed the entire problem with 5 lines of code, throwing away all the previous work. He was very capable of thinking outside the box.
I have worked with many very capable Australian technical people over the years and they have been less valued than foreign people even though the Australians were vastly superior to their overseas counterparts.
It is pretty pathetic to go to any coworking space in an Australian major city and realise that people there are just playing the 'startup game'. These people will typically spend a few months playing the game, burning a bit of their severance package until finding another permanent job.
Cheaper tech teams with less competition. Australia has a lot of talent in the software space, but without the eye watering wage bills. Even in the most expensive cities of Sydney and Melbourne, software developers generally cost a lot less than in the Bay Area. You can get even better value if you can build your team outside of Sydney/Melbourne.
You can build more slowly, there is alot less pressure to build grow fast and fail type startups. While venture capital heavy startups are the most celebrated in the press, there are plenty of great smaller scale self/revenue funded startups that can build up over time. Most of our celebrated tech successes built their business models over a long time and focused on building a good business first.
There are also great incentives to keep the development team in Australia. As a pre revenue startup you can get over 43.5% of your development cost back through the R&D Tax Incentive. While its a tax incentive, the way that they designed it was to provide tax refunds to loss making companies. Plus there are other great grants/incentives you can also take advantage of. (disclaimer: I'm a consultant for software startups/companies in this area)
The best course of action is to take a global approach, don't limit yourself to selling or developing in only one location.