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Ex-Googler picks Melbourne as Aussie home for fast-growing software firm

Former Google investments principal turned tech entrepreneur Karl Sun has picked Melbourne as the Asia Pacific home for his burgeoning collaborative digital diagram software company, Lucidchart.

The business, which has raised upwards of $US100 million ($152 million) and employs 600 people, will be based out of innovation hub YBF Ventures, with a team of 10 local employees, which he intends to more than double by year's end.

Lucidchart chief executive Karl Sun left Google in 2010 to co-found the now 600-person digital diagram start-up. Wayne Taylor

Lucidchart enables users to collaborate on drawing and editing diagrams, flowcharts, process maps, software models or anything that requires visualisation.

It's software is used by 15 million people across 180 countries. The business already has 3 million users in the Asia Pacific and counts companies such as Woolworths, Xero and Indian e-commerce giant Flipkart as customers.

Mr Sun said he decided to make Melbourne the company's second international office, having previously opened in Amsterdam in late 2018.

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"There's a lot of great organic growth happening," he said. "Melbourne, as a region, already has great tech and it's accelerating its growth. It's also continually producing some of the best talent in tech and it has a great reputation as a liveable city."

"The Victorian state government was also super helpful in the process."

Lucidchart's setting up shop in Melbourne is a reflection of the state government's strategy of trying to attract businesses that would support "high-value job creation", said Victorian Minister for Economic Development Tim Pallas.

Over the next five years, Lucidchart plans to have more than 100 people on the ground in Melbourne, focused on sales, customer support and marketing.

Having been founded in 2010 by its chief technology officer Ben Dilts as a side project while he was in university, Mr Sun said he left Google to join the start-up, after realising that all the perks offered by Google weren't as important as doing meaningful work.

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At Google he had led its Asian business development efforts, prior to setting up Google's patent strategy and then Google's investments in advanced wind and battery technologies. 

"I was at Google for seven years, which was a good amount of time, and saw it grow from about 500 employees to up to 20,000 and as it had gotten quite large, I missed it being a place where you felt like you could have more of an impact and move faster," he told The Australian Financial Review.

"All the perks you hear about at Google are true. There was the free food, the on-site dentist and you could get your hair cut and laundry done there. It makes your life convenient, but at the end of the day fulfilment means doing work that gives you a sense that you're doing something meaningful."

Like home-grown success story Atlassian, Lucidchart is usually used first by IT teams within a company, before then being picked up by other departments like marketing or finance.

After meeting Mr Dilts, Mr Sun joined Lucidchart as an adviser, before also investing in the company and then joining as chief executive.

For his first year Mr Sun didn't take a salary - something he acknowledges he was fortunate to be able to do thanks to his earnings from Google.

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Our goal is to become a platform where we can help anyone reason and think visually.

Karl Sun, Lucidchart CEO

The decision is one he'd make again, saying it helps you to build a better business when you've got skin in the game.

"The scrappiness comes from being all in at that point. You have to make it work and that mentality goes a long way," he said.

"One of the things that's happened as a result of funding being easier is that while it allows more people to take the chance, but you also lose some of that early stage scrappiness that sets the foundation for the business."

Lucidchart provides users with automated templates for diagrams as well as enabling them to upload their own. It then layers the visuals with supporting information, with the idea being that in one snapshot a user can understand how the business project is functioning and what needs improvement.

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"That's a new area and we don't see any specific competitors in that space," Mr Sun said. "Our goal is to become a platform where we can help anyone reason and think visually."

The platform tends to be adopted from the outset by two groups of people - technical users like engineers and developers who are used to using traditional diagramming methods, plus those who like to think visually.

It integrates with a wide range of third party products, including the Google suite, Atlassian's tools Jira and Confluence, Slack and also Microsoft Teams and Office products.

Mr Sun says a key lesson from his time at Google was that the ability to turn a good product into a great business came down to people.

Even when the business surpassed 200 people in 2017, Mr Sun still interviewed every hire personally. At 600 people now, he admits that's no longer possible, but he says he created a hiring committee which ensures the best people are still found for each role.

"Unfortunately I don't get the chance to meet everyone, but it's important for me and the leadership team to know who we're hiring, so we have a weekly hiring committee meeting and every single hire is brought to the committee," he said. "The person who makes the hire is responsible for making the case for why they're right and what they'll bring to the role." 

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Reflecting on his time at Google in light of the recent crackdown on big tech companies by regulators worldwide - be it for their market power or use of consumer data - Mr Sun said historically these companies had a "basic and naive view of their influence".

But, he said the people he's met at these firms want to do the right thing and regulators need to strike the right balance between introducing some government oversight, especially in regards to privacy, but not too much regulation.

"There needs to be a middle ground. I don't think governments dictating what happens and breaking up companies is the right answer, but at the same time the company could do a lot better themselves," he said.

"Early on people didn't understand their responsibility and the impact [of the companies] was much less.

"[These companies] need to do a lot better job of self-regulating and understanding their impact and even how they shape the way people interact with tech."

Yolanda Redrup is an award-winning senior journalist who writes on technology, healthcare and occasionally covers Street Talk from our Melbourne newsroom. Connect with Yolanda on Twitter. Email Yolanda at yolanda.redrup@afr.com

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