A little slice of Silicon Valley down under

Australia has a woeful IT skills shortage. Australia doesn’t invest enough in STEM (science, technology, engineering and mathematics) education. Australian investors are too risk-averse. You can’t make it here as a tech entrepreneur -- go to Silicon Valley or give up.

Time and again, the Australian start-up scene’s talking heads trot out the same old gripes to anyone who’ll listen: policymakers, VC funds, school leavers, graduates. It’s not that any of these points are untrue per se, but the persistent focus on what we can’t do does, at times, have a tendency to detract from what we can.

One commonly held view is that Australia cannot and should not attempt to replicate the kind of inspirational, money-spinning melting-pot environment that Silicon Valley is so lauded for. Last year’s much-quoted PricewaterhouseCoopers report on the start-up economy, commissioned by Google, highlighted “the need to stop trying to emulate Silicon Valley” and focus instead on what we are already good at.

But Jason Smale, a young IT graduate from Swinburne University of Technology, formed a different view after he visited the US and became well and truly infected with the culture of the Valley.

“When I moved back I really wanted to bring some of the excitement and passion and speed and agility that I’d seen over in the Valley back to Melbourne, because I knew that the engineering talent existed here and that we needed to be able to be on the world stage from an engineering perspective,” Smale says.

So when the connections Smale had forged in the US landed him a job at the newly-opened Zendesk office in Melbourne two years ago, that’s exactly what he did.

The Valley Down Under

Many global tech companies have made the journey down under, with Hightail, Dropbox and MapR Technologies just a few names to have opened up shop here in recent months. Yet most of these Asia-Pacific ‘headquarters’ are merely sales and support offices, and do little to nurture local ICT skills.

Not so with Zendesk, a customer service enterprise software provider founded seven years ago in a Copenhagen loft. Since its humble beginnings the firm now boasts more than 600 staff globally, servicing upwards of 40,000 enterprise clients in over 140 countries. Zendesk moved its headquarters to San Francisco in 2009 and made its inevitable leap onto the NYSE in May, with a market capitalisation of $US1.26 billion ($1.35bn).

Zendesk opened its Australian sales and support office in September 2011 and now has more than 1500 clients in Australia and New Zealand, including REA Group, Lonely Planet and New Zealand Post.

But it was the decision to launch a local development and operations centre just 12 months later that has proved fortuitous not only for Zendesk but also for the talented locals involved.

“We just started with a handful of sales and support people but we later discovered that this area, this region, really had great talent in engineering and development,” says Zendesk chief executive officer and co-founder Mikkel Svane. “So we decided to launch an APAC development centre, an engineering hub here in Melbourne.”

In the last year Zendesk's Australian office has grown from 20 staff to 40, and last month expanded its offices with extra capacity to add 100 new employees.

Under Smale’s guidance as Asia-Pacific director of engineering, Svane says the Melbourne team has played a “huge role in making our product so useful to the company”, having played a critical part in Zendesk's last two major product releases.

The team's work has included Zendesk’s most recent and biggest ever product launch, Zendesk Insights -- “basically a way to query and slice and dice and aggregate your data and every interaction a company has with their customers," says Smale.

The local team has also been responsible for developing the company’s app framework, which is used by over 100 public apps and thousands of private apps built by individual customers. Their role has included integrating a telephony function into the Zendesk platform as well as integrating chat features following the acquisition of Singapore’s Zopim earlier this year.

Think global

At its core Zendesk is a product company whose starting mission was to develop, in Svane’s words, an affordable, “beautifully simple” service “that any company could use”. Its formidable success in that mission may in part be due to the unique way it thinks about global scale.

Zendesk has doubled the size of its Melbourne team in the last year. Image: Andrew Jarvie.

When it comes to product development, Zendesk may just be the perfect start-up franchise, with its all-hands-on deck approach instilling a sense of ownership at the local level. Svane says that unlike many other product companies whose local engineering resources are directed towards “special regional products or special regional customers”, the work Zendesk’s local developers contribute is designed to benefit the company as a whole.

“We now have five development centres around the world and while they are local, we give them global responsibility for the product,” Svane says. “We have taken the chance because we found the tech talent exists around the world, not only in San Francisco, and there is an opportunity to impact users globally. We are able to extract the best and the brightest and we are very, very proud of that.”

So to those who say it can’t be done here -- quit complaining, print some company merchandise and start thinking Zen.