Caitlin Fitzsimmons Online editor

Caitlin covers social media, marketing and technology and is BRW's social media editor. She has worked as a journalist in Sydney, London and San Francisco, writing for titles including The Guardian and The Australian Financial Review.

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Why Melbourne is the best place to hire software developers and there is no bad time to IPO: Zendesk CEO Mikkel Svane

Published 22 July 2014 13:48, Updated 23 July 2014 05:17

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Why Melbourne is the best place to hire software developers and there is no bad time to IPO: Zendesk CEO Mikkel Svane

Zendesk CEO Mikkel Svane.

When someone talks about sending software development work offshore to save money, they usually mean Manila rather than Melbourne.

But in a global economy, it’s all relative.

“Melbourne is definitely cheaper than San Francisco,” says Mikkel Svane, the co-founder and chief executive of US-based Zendesk.

“Our head of product and engineering says Melbourne is the best place for us to hire right now because of the combination of expectations, talent and production. People tend to be looking for a job to grow with and we stand out a bit because there are not so many other product software companies in Melbourne.”

Svane was in Australia this week to open the Zendesk APAC development centre in Melbourne. The company, which makes cloud-based customer service software, already employs about 40 people in Melbourne, mostly software engineers, and plans to expand that to 100.

The Melbourne office specialises in analytics, insights and the application programming interface (API) for developers. Zendesk also has development hubs in San Francisco, Dublin, Copenhagen and Singapore, each with a different focus. The company has about 600 people worldwide.

Australian customers include Lonely Planet, REA Group, LJ Hooker, Kwik Kopy, Victoria University, Forever New and Cotton On.

Zendesk listed on the New York Stock Exchange in May 2014 at $9 per share and is now trading at nearly double that, at $17.32.

Last week US Federal Reserve chair Janet Yellen described the valuations for some technology stocks as “substantially stretched”, though she singled out social media and biotechnology in particular.

Svane says preparing for the initial public offering was a long process that started in 2011 and became a major effort in 2012. He says it was good for business maturity, not just because of ticking boxes for compliance but to put serious thought into defining the business and strategy.

For Zendesk, the reason to be a public company was to be “open and proud of what we do in our business” and play a role in defining the next generation of enterprise software.

Svane is not concerned about Yellen’s comments because he says the decision about when to list was driven by the business goals rather than trying to pick the right time in the market.

“If you look at the broader picture of stock over many years, of course there have been corrections, that’s what happens in a market: people buy, people sell, it goes up, it goes down,” Svane says.

“It’s not about the market, it’s about your business; what’s a bad time to list, what does that even mean?”

However, some other cloud software companies have delayed their IPOs, including Box.

Svane and two other co-founders started Zendesk in Copenhagen, Denmark seven years ago. They bootstrapped for two years and moved to San Francisco at the same time as securing their first venture capital investment.

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