One of the most critical components of any world-class startup ecosystem is its ability to produce high-impact companies. Those successful companies tend to create a virtuous cycle in which their employees are endowed with skills and capital to deploy across the system, boosting the likelihood that other companies will also succeed. The ‘Paypal Mafia’ (Figure 2) is the most frequently cited example - Paypal’s early employees and founders went on to create many of Silicon Valley’s most prominent and successful firms, with over $100 billion in combined value.

Australia has some history of creating high-value digital tech businesses. In the 90s, companies like SEEK (1997), REA (1995), and carsales.com (1997) were founded in Australia. These businesses grew into highly successful public companies with global reach. Together they are worth around $25 billion today (Figure 1).

There have also been some significant success stories in the period since the tech boom of the late 90s, of which Atlassian is the most notable. Founded in 2003, the Sydney-based software business went public in 2016 and is now worth about $45 billion - more than Telstra. If it were listed on the ASX, Atlassian would be the 10th biggest company in Australia today. Other successes include Aconex, a Melbourne-based construction technology software company founded in 2000, which was acquired in 2018 by Oracle for $1.6 billion and Afterpay, a Sydney fintech company founded in 2014, listed on the ASX in 2016 and now worth more than $8 billion.

FIGURE 2: “THE PAYPAL MAFIA”
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FIGURE 1: AUSTRALIA’S PRE DOT-COM DIGITAL SUCCESS STORIES
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Governments can’t conjure up entrepreneurs. But they can set the conditions under which entrepreneurs flourish.
Mark Cully, Chief Economist, Department of Industry (2015)