China Has More Opportunities Than Challenges For Aussie Startups: Q&A With Austrade Exec Karen Surmon

4 min read

For Australian startups, or any startup, expanding to a new market could be quite daunting, especially when you are looking at China, but according to Karen Surmon, commissioner from Australian Trade and Investment Commission (Austrade), the difficulty in this mission is way over exaggerated. The challenges are true, but people shouldn’t back out without even give it a try.

“Australian startups should embrace a global vision and come to markets like China, which has huge potential.  But it can be a bit complicated and daunting when you are sitting in Australia and thinking of how to do it.”

In an attempt to achieve this goal, Austrade launched Landing Pad, a support program that helps Australian entrepreneurs bring their ideas innovative ideas globally. As part of the program, Shanghai Landing Pad opened this September in line with Australia’s National Innovation and Science Agenda.

We caught up with Ms. Karen Surmon, who has taken change in the establishment of Landing Pad Shanghai, to learn more about the program and what it is hoping to do in China and globally.

What is Landing Pad about and what kind of support does it provide to Australian startups?

The Landing Pad is a global program with five locations in San Francisco, Tel Aviv, Singapore, Berlin and Shanghai. The idea is to give Australian-founded startups an opportunity to expand globally by accessing these regional landing pads.

We provide a 90-day free residency to startups admitted to the program. They will have access to industry insights, partner and investor networks from Austrade, as well as direct support from a dedicated Landing Pad Manager. Additionally, we are developing our partnerships with stakeholders in the ecosystem and with professional services companies that can help in advisory, infrastructure, taxation, and legal areas.

Do you have any standard for startups to enter the program?

When startups apply online they have to address several particular criteria, first they have to demonstrate a clear vision and a distinct value proposition. Second, they have to tell us their traction in the Australian market. We don’t have a specific expectation of what they have but we want to understand their current stage of development. We also need to know whether the  idea is scalable. Finally, because there are five locations, we also ask startups to tell us why they want to go to a specific market and what do they want to achieve in that particular market.

Shanghai is just one of the five global hubs where Landing Pad is located. How is the Shanghai branch different from others? How will the different locations cooperate with each other?

For us, Tel Aviv has a two-fold function: firstly, it is positioned to absorb the entrepreneurship culture that is very much engrained in the people of Israel. Second, the country is known as the R&D center of many multinationals, so Tel Aviv landing pad also serves as an effective gateway to global markets.

San Francisco has a very competitive market, so it’s better suited for more mature Australian startups if they got a vision to enter the U.S. market. Similarly, the Landing Pads in Singapore, Shanghai and Berlin are about entering a specific geographical market in Southeast Asia, China and European markets, respectively.

There are five locations in global innovation hotspots. The cross-referencing and the value for businesses to potentially grow from one market to another through this program are really powerful.

What challenges do Australian startups face when expanding into China?

I think there’s a lot of work for us to do in helping to educate Australian startups about the opportunities in China. When they think about the opportunities to go global, they will choose the U.S market first, because there’s a lot more startup history, visibility and opportunity.

The first thing for us is sharing information about the opportunities that are in China. Secondly, it is about helping startups to get over the idea that it’s too difficult with such things as IP protection, complicated regulations, and other localization issues. All of these are real, but that’s why we have set up our program. We can help Australian startups navigate these complexities.

Chinese startups are eagerly expanding to overseas markets. Does Austrade have any similar initiatives to bring Chinese startups to the Australian market?

Initially, this is about bringing Australian startups to China and other Landing Pad markets. But we do see interest also having startups from around the world come to Australia; we are already talking to incubators and accelerators in Australia that might be interested in hosting local Chinese teams.

The Australian capital market is experiencing an upturn. How do you see this trend and its possible impacts on Australian startup ecosystem?

Before 2012, the Australian VC market was quite slow. About 150 million USD sized-rounds were raised per year. This year the market has exceeded the 1 billion USD mark, so in a really short period of time things really kick started again. There’s more businesses looking to the Australian market or looking to access funds in the Australian market, partly thanks to some of the support policies as well the evolution of the market.

What are the most promising verticals coming from Australia?

It’s very broad. Sydney is positioned itself as a hub for fintech and education tech. Also, things like agri-tech are also on the rise because we have a strong agricultural sector now adopting a much more tech-savvy way of operating. Healthcare, tourism, lifestyle and VR/AI are also seeing very exciting developments.