Welcome back to Neural Notes, a weekly column where I look at how Australia is influencing Australia. In this edition: are the traditional advantages of Silicon Valley starting to matter less in the age of AI?
For years, Australian founders have been sold a familiar story: if you want to build a global startup, you’ll have to go to the US. Or, more specifically, San Francisco.
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That idea has shaped much of Australia’s tech industry over the past decade. Raise locally if you have to, but move quickly towards the US. Be closer to the capital, the customers, the talent, and the momentum.
But a panel at Blackbird’s Sunrise festival last month suggested something more complicated may now be happening thanks to AI.
The panel featured Dr Thomas Kelly (founder and CEO, Heidi Health), Jacky Koh (founder and co-CEO, Relevance AI), with Guillaume Princen (head of international startups, Anthropic) moderating. And they weren’t arguing that Australia has suddenly become an easier place to build a startup. Quite the opposite.
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And it’s not that Australia has suddenly become an easier place to build a startup. Quite the opposite.
In fact, one of the more interesting parts of the discussion was about Australia’s disadvantages… but why that might be a positive.
Australians are hard to impress
“I do think the Australians are generally less innovative,” Kelly said.
“They’re less obsessed with being productive and profitable and driving revenue, and they’re generally worse customers, so it is harder to get someone excited about something new here than in other countries, especially in the US.”
It was a surprisingly blunt assessment of the local market, particularly at an ultra-hypey startup conference where Australian founders more commonly frame the country’s problems around funding gaps, talent shortages, or a lack of scale.
But despite this brutal assessment of the local market, Kelly’s point was this dynamic may create stronger products in the long run.
“[The] US is the opposite problem,” he said.
“They’re too excited, too easy. They’ll churn, and they’ll move on to the next thing.”
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The idea was Australia may still be “worse” for startup hype cycles, but hype cycles may matter less in AI than they did in previous tech waves.
That’s not to say the founders were discounting the US. Australia’s smaller capital pools, conservative customers, and distance from Silicon Valley were still framed as genuine constraints.
Koh spoke about the reality of staying awake until “7am, 3am, 4am” while working with US customers and teams.
And Kelly openly questioned whether Heidi might have grown faster or built stronger enterprise recognition if it had raised more aggressively in the US earlier on.
But both founders also implied those same constraints can force a different kind of company-building discipline, with less reliance on hype and more pressure to build products customers actually keep using.
When access stops being the moat
“The limiting factor is your ability to execute,” Kelly said, arguing access to frontier AI models is increasingly becoming democratised.
For years, geography mattered enormously in startups because access itself was uneven.
In previous startup waves, access itself was often the advantage — access to infrastructure, engineering talent, or technical capability.
The AI era may be different. Increasingly, the same frontier models are available to everyone, which places more pressure on founders to differentiate through product design and domain expertise.
And while this doesn’t eliminate Silicon Valley’s advantages, it could reduce some of their importance.
Princen said he was seeing startup activity become more geographically distributed as AI tools lowered barriers to building products globally with smaller teams.
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Koh, meanwhile, argued there are advantages to building further away from Silicon Valley’s intensity.
“Australia is a great country to do a lot of deep thinking,” he said.
Kelly also argued Australia’s healthcare system gave Heidi a useful environment to build in due to the mix of public and private.
So while the lure of the US and Silicon Valley isn’t going away anytime soon, it was interesting to hear founders theorise on how and why AI may be reshaping where that leverage comes from.
It doesn’t seem to be about simple access anymore in the way previous startup eras often were. Increasingly, the same models and tools are available to everyone, including those without a technical background.
And in an increasingly saturated AI market, the harder part may be building something genuinely useful and unique. A GPT skin isn’t going to cut it.
And perhaps that’s where Australia’s historically low tolerance for hype and BS becomes an advantage. Because mature founders with a good product on their hands shouldn’t need to be coddled.