WebEquity.com.au is a new service providing access to internet business development specialists (web developers, designers, marketers, etc.) who are willing to work on an equity or revenue share basis rather than cash payment.

It’s a mix between outsourcing sites like eLance and rentacoder and crowdsourcing sites like Cambrian House and CrowdSpringin that you outsource development but for equity in the project rather than cash. I know a little about both of these types of services having used both eLance and rentacoder and because I’m  working on my own crowdsourcing projects, so I can see the potential in the idea.

The project was started by Paul Middleton because he needed something like this to get his own ideas realised. I’ve always thought a personal need is an excellent reason to kick a project off  - no matter what happens at least you’ll get one user. I asked Paul about revenue streams and his answer was great.

The site was initially inspired by my need to get my own ideas realised - that’s where I’m hoping my personal revenue stream will come from.

There are actually a heap of obvious revenue streams here, but the fact that the value for Paul will come from a good solution rather than money, at the moment, bodes well for the site.

So, now you know a little about the site, let’s get back to the title and why I think Web Equity might be able to save the Aussie tech startup industry.

A real problem for the Aussie tech startup industry is that developers and entrepreneurs generally have little experience in working on startups and there’s little cross-pollenization of ideas and skills. The recent Top 100 web 2.0 list showed that we’re struggling to get even 100 serious web 2.0 startups in Australia. Sure, some very important sites were left off that list, but there was more than enough filling in there to suggest that even those sites might not have gotten us to a solid list of 100.

Part of the reason for this is that generally what happens in Australia is individuals, or fixed teams of people, come up with ideas who then try to develop and release them. I’m going to put it out there now and say that we don’t currently have a lot of individuals or teams who are capable of world-beating ideation and development of value-creating, sustainable startups, so the vast majority of projects are limited in their potential before they even begin.

What Web Equity does is provide an opportunity to change that. It allows people to create fluid startup teams so that success is no longer based on the ability to find that rare combination of excellence in an individual or a static team. As teams form and dissipate, ideas, skills and experience in all aspects of a startup will start to flow throughout the local industry.

Better put, instead of experience and skill being locked in fixed teams, behind corporate walls or being outsourced to India or China, they now have the opportunity to be released and reapplied to more and more Australian startups.

That could very well prove to be something that enables more local success than anything the Government or investors can hope to achieve and is up there with awareness of what’s going on as one of the most important challenges that, if we are able to overcome, will finally turn the current momentum into a real local tech industry.

At the moment the site is very Aussie focused, which I think is perfect. Paul suggests that he’ll open it up to anyone, anywhere in the world. I understand why he might want to do that, but I think it’s a shame.The 3 main reasons are:

• Firstly because it will limit the site’s ability to change things locally.
• Secondly because it might push it a little too close, a little too soon, to the types of sites I mentioned earlier and it will struggle to compete.
• Thirdly because when dealing with commercial and legal concepts such as equity and agreements there’s potential for massive problems when working across jurisdictions.

I spoke to Paul about the third of these and asked how hands on he’s going to be. Having had a dispute with an eLance provider I know full well that arguments will arise. Paul said he wants to take as much of a laissez-faire approach as possible but I’m dubious about the long-term sustainability of that approach. I think a better solution would be to offer a standard agreement to facilitate the teaming process and to deal with IP issues etc. People could work out their own thing if they want, but better to give some guidance to remove barriers to participation.

Whether Paul is able to turn the site itself into a success is something we’ll have to wait and see. He has something which could be game changing for all of us but, then again, maybe we’ll find out that people are too tied to cash/jobs to want to work for equity. I’m hoping that’s not the case and that the community supports his efforts.

Only time will tell if we’re ready to help ourselves.