In early January, ACS released a book, Rockstar Aussie Founders Living in the US, showcasing 26 local tech talents making it in the word's most competitive market.
Here is an excerpt from the book: a chat with David Cannington, founder of Nuheara, which makes intelligent customisable wireless earbuds.
What got you to where you are?
We had a powerful motivation to change people’s lives. We knew how to build technology and products to be able to do that. We are an outstanding example of why Australia is a great place to build a technology company, even in Perth, which is one of the most isolated cities in the world.
We have incredible talent here [in Australia]. We have six PhD’s working in our company. Some of the world’s best audio digital signal processing engineers work at Nuheara. Now we don’t pay them anywhere near Silicon Valley salaries; I mean they’re very well paid, but it’s not out of control the way it is in the Valley. We get 42 cents in the dollar for every dollar we spend in R&D down here [in Australia] and there’s an exchange rate benefit so the cost of building our business, which is very heavily research and development orientated, is significantly less than what any other company could do in Silicon Valley.
A good example of that is our largest competitor in the first three years of our life was a company called Doppler Labs, who had 100 people on staff. They raised $60 million and they were out of business within three and a half years by just spending a lot of money and just building the business in Silicon Valley. We were further advanced than them and probably had spent one third of that!
We also went the route of a reverse listing on the ASX, which was a way for us to raise money because we couldn’t find any Australian VCs that would be able to give us that kind of risk capital in that early stage, particularly as an Australian hardware company. We’re a unique breed in Australia because we are a hardware and a software company, so it was really tough to raise capital, but we had a burning desire to build this business, and so we went where the capital was.
So, I would say my motivation was to build something and build something really successful. Rather than start a company so I can make a shitload of money and exit eventually, I would love to think that Nuheara’s going to be around for many, many years, and hopefully one day it will garner the same kind of respect that Cochlear does in the hearing space, just that it’s a different end of the market.
We’ve just been accepted by the National Health Service in the UK as a product that people can go and get if they suffer from mild to moderate hearing loss through their program. So, it’s been an interesting journey and it’s been a challenging one, not an easy one but a very fulfilling one.
What does getting to the US look like?
I’m a big believer right now that Silicon Valley may not be the perfect place for an Australian company to land. It’s an expensive place; talent is really expensive, and they don’t have any loyalty. Silicon Valley is out of control at the moment from my perspective. I mean, you’re competing against the big tech companies who offer really big salaries and benefits – it’s hard to compete if you’re a start-up.
So my advice to Aussie start-ups is to have an open mind as to where you land in the USA. There are other tech centres in the USA that are way more affordable and you’ll find great talent, whether it’s Seattle or Boston, Austin, San Diego, or Denver. There are a lot of really interesting tech hubs in the USA that aren’t just Silicon Valley.
I think Australian entrepreneurs and Australian businesses bring a different mindset to the challenges of doing business in the US. You know culturally we have a unique ability to make things happen, and make things happen quickly, to break down barriers, to not accept “no” for an answer, to not overthink things and act, to be more action-oriented than thinking-oriented. There’s got to be a combination of both, and I’ve always believed that you can’t pick up half a dozen Aussies from Sydney and bring them to Silicon Valley and expect that they will get immediate traction.
I’m a big believer if you’re an Australian start-up you need to find some USA people to work in your company here in the USA. Having those Australian innate characteristics with USA know-how and experience is an awesome combination.
What should a first-time founder know?
The best advice I can offer is get out and network, build your network, surround yourself with really smart people that believe in what you’re doing and you trust and have faith in.
When we started Nuheara, we were essentially in the wearables space and I didn’t have a strong network, so I got involved in a wearables incubator and built a network of people. You’ve got to surround yourself with people who understand what you’re doing and you can learn from and you can share war stories with but ultimately find people that can give you great advice and you trust.
We’ve had many instances where people didn’t believe in what we were doing. We actually tried to list on the ASX twice; the first time we tried to list on the ASX it was basically stopped within 24 hours of actually listing because some regulatory authorities down in Australia didn’t think that we could build the product that we said we were going to build. We proved them wrong.
I think as an entrepreneur you have to accept that people will tell you that you can’t do it, or you’re crazy or you’ll hear ‘no’ plenty of times. You’ve just got to believe in what you’re doing, and that’s why there’s got to be a bigger purpose around starting a business than just making money, because if it’s just money making you’re probably not going to get through those really hard times.
Requests for hard copies of the book may be registered at email@example.com.