The rivalry between Melbourne and Sydney is heating up again, this time in the battle for supremacy in Australia's start-up ecosystem.
A recent report by Oddup has thrown another spanner in the works, claiming that Sydney is streets ahead in investor support but Melbourne continues to produce the start-up talent.
![Alan Jones is a start-up evangelist at BlueChilli Group.](/web/20161028190125im_/http://www.theage.com.au/content/dam/images/g/i/p/x/y/d/image.related.articleLeadwide.620x349.gs6jza.png/1477276761586.jpg)
Alan Jones, a start-up evangelist at start-up incubator BlueChilli, which operates in both Sydney and Melbourne, said it largely comes down to the cities' different characters.
"Sydney and Melbourne are different start-up economies, with different characters, but they are [both] growing rapidly," he said.
![Colin Kinner, chief executive of Spark Innovation](/web/20161028190125im_/http://www.theage.com.au/content/dam/images/g/s/9/6/9/u/image.related.articleLeadNarrow.300x0.gs6jza.png/1477276761586.jpg)
"There is more capital in Sydney at the moment than there is in Melbourne and I think there always has been ... Sydney is a bigger market than Melbourne, no question."
A 2015 Global Start-up Ecosystem Ranking put Sydney 16th worldwide, while Melbourne didn't get a mention in the top 20 at all, and it seems the city can blame its northern neighbours.
"Smaller ecosystems with close proximity to larger ecosystems often have a hard time continuing to grow due to new and existing talent and capital migrating to the larger nearby ecosystem," the report said.
Yet, despite the promising signs for Australia's start-up ecosystem, Mr Jones said neither city will win the race to become Silicon Valley 2.0.
"Neither Sydney nor Melbourne is going to be the next Silicon Valley. There is never going to be another Silicon Valley."
Colin Kinner, chief executive of Spark Innovation, a consultancy firm for entrepreneurs and start-ups, said Australia needs to solve its "chicken and egg" problem before it even reaches Silicon Valley's size.
"If you look at Silicon Valley, almost everyone who attended a university whether it be Stanford or somewhere else knows 10 start-up founders and probably a couple that have been wildly successful," he said.
"We don't yet have that in Australia. We have something of a chicken and an egg problem where until we can produce more successful start-ups, we're not exposing students and young people to the idea of forming a tech company."
Although the number of start-ups is increasing, their location is still skewed between Sydney and Melbourne rather than being evenly distributed across the country.
A 2015 survey by Startup Muster, which surveyed 602 start-ups around Australia, found almost half of respondents were located in Sydney, while just 17 per cent called Melbourne home.
Mr Jones said the level of Sydney v Melbourne rivalry was largely spurred on by corporate Australia and governments.
"There's real dollars at stake in trying to make one city's start-up economy grow faster than the others, because investment dollars can only be spent once," he said.
"Most of the professionals working in the industry don't really have any rivalry. There's some gentle ribbing, but in the same way we rib each other about our different football codes and coffee."
Melbourne now has huge potential to increase its tech capacity, with almost a third of Australia's total tech workforce calling Melbourne home. The Oddup report found 20,000 new technical professionals have relocated themselves to Melbourne over the past five years.
This is in addition to the 2500 IT graduates Melbourne produces every year from its universities and the 91,300 people employed in technology companies.
"In terms of the number of people that would define themselves as working in the start-up industry, I think it's really possible that there are more start-up industry people in Melbourne than there are in Sydney," Mr Jones said.
Mr Kinner said a huge part of improving the number of start-ups begins at our universities, and once this problem is solved, there needs to be greater focus on expertise.
"I see a lot of people doing things that can predictably lead to failure and it's not because they're not smart people ... it's because they've been badly advised or not advised at all," he said.
"In Australia we don't have a lot of people who have been through that cycle a number of times and so we see start-up founders kind of learning in the job."
Melbourne is actively working to capitalise on its university talent through university accelerator programs, hoping to provide the expertise and support needed to launch a successful start-up.
The University of Melbourne's program, the Melbourne Accelerator Program (MAP), has been operating since 2012.
In 2015 it was ranked the No. 1 university accelerator program in Australia, and eighth in the world, by Swedish firm UBI Global, an international group specialising in the analysis of business incubation around the world.
Rohan Workman, an entrepreneur and director of the program, said it's seen a number of strong entrepreneurs come through the program.
"The talent has been nothing short of extraordinary. We are seeing some really ambitious, really intelligent people coming through and working on some really diverse ideas," he said.
One start-up, Nura, which went through the program in 2015, raised $US1.8 million in Australia's biggest Kickstarter campaign to fund its idea.
Nura will enter production in April 2017, creating the world's first personalised headphones that will be moulded to how you personally hear sound.
"That is an extraordinary product and an extraordinary team and is just one example of the talent coming through our program," he said.
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