In response to Mark Pesce

May 22, 2009 — 9 Comments

On Nick Hodge’s excellent video podcast last night, noted futurist Mark Pesce said (and I quote) that I should “shut the fuck up.”

He’s entitled to his views, but it’s what he said around it that I take offense at (and the reason I’m writing this post), in particular the idea that I ignore the excellent work done by a range of Australian startups when I don’t. I’ve never met Mark, let alone swapped an email with him, so I find his claims bizarre to say the least given he had never read my views (outside of one post), nor asked me about them. Australia has a vibrant startup community, full of people who are succeeding despite the lack of support (specifically a vibrant VC community that invests in web based startups.) Not only have I had the privilege of meeting many fine people in the community, I’ve also written about them.

I do find it odd though that a futurist who earlier in the interview spoke about reading so extensively doesn’t understand the meaning of context as well.

This post was in the context of the Future Summit, an event that was suppose to be a show case of Australia’s biggest and brightest leaders. If we accept that underlying premise of it representing the best, tech doesn’t have a bright future in this country because they don’t get it. Conversations I had the day after that post horrified me even more and confirmed what I had written. Tech, and particularly web based startups just aren’t on the radar for these people. The idea that millions are employed directly and indirectly in web based industries in the United States is foreign to them. I can’t help that they don’t get it, but stating that they don’t is stating fact.

That is in no way to say that Australian startups don’t exist today, or more will emerge tomorrow: they will because of bright people like Mick Liubinskas at Pollenizer (a company I should note that builds projects for other startups), but likewise given what I heard, the Australian web startup industry will remain at its current low and slow rate (again, we have startups, but we’re not even close to a range of other comparable countries by volume.)

But Pesce wasn’t there. A few smart people in the room (and there was some) doesn’t balance the sheer weight of tech ignorance from the rest.

Pesce also claims incorrectly that I’m some how a big Government interventionist, again having never once spoken to me. Quite the contrary, and this can be confirmed by many others (including Bronwen Clune who heard me speak on this over lunch at the Summit), or in the submission I made yesterday to Elias Bizannes who is compiling submissions for the Government on the question “what do we need to tell Australia’s Government to build our tech industry?”

Indeed Pesce and I agree: Government should get out of the way, and direct Government support isn’t necessarily the answer either.

But here’s the part Pesce either doesn’t understand, or is ignoring: we don’t have a level playing field, and this is holding us back. Here’s part of what I wrote in my submission:

The Government needs to level the playing field when it comes to investment within the various sectors of ICT, and with investment opportunities outside the sector. That can come in two forms: removal of investment incentives in sectors that currently receive it, or the extension of investment incentives to those that currently miss out, specifically web focused companies. For example, there are tax incentives offered currently in areas such as Biotech and Blue Gum trees, but not in web based industries (tax credits, R+D etc). The problem today is simple: those with money to invest favor those investments that offer tax incentives over investments that don’t.

Then there’s the CGT problem vs the United States

The Government should consider reviewing CGT, in particular with consideration to CGT deferment on rollover where the capital gain is reinvested in ICT, and more specifically web based industries. This has been cited in the United States as being one of the big drivers behind the VC industry there (I can provide references later if required.)

Government does have a role here, and that’s in creating a favorable environment for investment in web based startups. Even if you hate Government intervention like Pesce does, you can’t ignore the role of Government in the United Sates in creating a favorable investment environment that has fueled the growth of web startups, particularly in the San Francisco Bay region.

The alternative of course is Government intervention and spending. It’s not my preferred outcome, but it is a point strongly argued by others. If CGT and incentive reforms can’t be undertaken to create a favorable investment environment, only then do I become a supporter of direct Government intervention. Consider that millions, billions have been spent on legacy industries such as clothing and car making. If only a small amount of that money was allocated to supporting local web industries, it has to help.

I’ll guess I’ll shut the fuck up now, because I don’t know what I’m talking about. PS: we were up one spot on the Top 100 Australian Web Startups yesterday.