Unicorns Build Monocultures

Every few months, Australia’s business press discovers a new emergency. Right now it’s the capital gains tax. According to the usual commentators — founders, VCs, and their aligned media — Labor’s move to replace the 50% CGT discount with inflation-adjusted indexation is an act of vandalism against Australian ingenuity. Entrepreneurs will flee. Talent will dry up. The unicorns won’t come.

I’ve been working in and around Australian agtech and startups for the better part of two decades. I’ve watched the same arguments recycled through every policy debate: the R&D tax credit, the ESVCLP scheme, the startup visa. The answer is always the same — give us more upside, or we’ll take our toys elsewhere.

What’s never asked is whether the unicorn is what we should be building towards in the first place.

The Unicorn Is Not the Economy

A unicorn — a startup valued above $1 billion — is not a measure of public benefit. It’s a measure of investor return. The two are not the same thing, and treating them as synonyms has cost us dearly.

The venture capital model has a specific and narrow logic: find companies where a handful might return 10 to 100 times the original investment, then use those windfalls to cover the many that fail. This isn’t a model designed to build resilient, diverse economies. It’s a model designed to produce extraordinary exits for a small number of investors and founders. The selection pressure is relentless: VC money flows to companies with winner-take-all potential. Scale fast, capture the market, lock in the users, build the moat.

The CGT discount — and before that, the R&D incentives, the co-investment funds, the incubator subsidies — are tax-funded sweeteners attached to this model. We’re not funding new approaches. We’re funding the retirement packages of the people who get lucky in a high-risk gamble. When they succeed, the gains are private. When they fail — and most do — the loss is theirs too, but the public subsidy is already gone.

The question Australians should be asking right now isn’t “how much CGT discount do founder-employees need?” It’s “what kind of ingenuity do we actually want, and who should it serve?”

Who Actually Pays?

Economist Mariana Mazzucato has spent years making an argument that the business press persistently ignores: the foundational technologies of the modern economy were not invented by private entrepreneurs. They were funded by the public.

The internet grew from DARPA research. GPS came from US Department of Defense research. The touchscreen technology in your phone traces to publicly funded university labs. The mRNA vaccine platform that underpinned COVID-19 jabs was built on decades of NIH-funded basic research. In each case, the risk was socialised — borne by taxpayers — while the reward was privatised by the companies that commercialised the technology downstream.

This is not an argument against private companies building on public research. It’s an argument against pretending that growth happens only when individual founders are given sufficient tax incentives. The soil was already rich before the VC arrived.

Australia’s own agtech sector illustrates this directly. The plant science that underpins precision agriculture — varietal development, soil biology, remote sensing — has decades of CSIRO, university, and state agricultural department research behind it. Startups didn’t create that knowledge base. They’re building on it. The question is whether the tools they build will be accessible to Australian farmers and communities, or whether we’ll end up paying rent to whoever captures the market.

The Harvest of Monocultures

Here’s what unicorns actually produce at maturity: monopolies. And monopolies, like agricultural monocultures, are brittle, extractive, and hostile to the diversity that makes systems resilient.

Cory Doctorow calls the end stage “enshittification”: a platform attracts users with good terms, then shifts to extracting maximum value once they’re locked in. We’ve watched this play out with social media, cloud storage, e-commerce platforms, and SaaS tools that started free and now charge you to breathe. There is no structural reason to expect tech startups in agriculture, health, or education to behave differently. The incentive is built into the funding model: someone has to pay for the investor’s 10x return.

When a VC-backed agtech company achieves market dominance in, say, farm management software or soil testing services, Australian farmers don’t gain a tool — they gain a dependency. The pricing will reflect that dependency, eventually. It always does. And unlike Bunnings, where you can walk out with the same bolt from a competitor, platform lock-in in digital agriculture is real and deep. Your data is in their system. Your workflow is built around their API. Switching is expensive.

Monocultures don’t just squeeze the people inside them. They squeeze out alternatives. When one platform captures most of a market, the diversity of approaches that might have produced better answers for different farms, different climates, different communities — that diversity dies. We plant one crop across the whole paddock, then wonder why the system collapses when conditions change.

We should have learned this from industrial agriculture itself. Instead, we’re applying the same thinking to digital infrastructure and calling it a breakthrough.

What Europe Is Actually Building

While Australia debates the precise size of the tax concession that will summon the unicorns, the European Union has been quietly building something more interesting: a funded commons.

Germany’s Sovereign Tech Agency runs a fund that provides sustained support for the open digital infrastructure that underpins a significant chunk of the world’s software. Not to produce a unicorn. Not to generate a return. To maintain and strengthen the shared foundations — encryption libraries, networking tools, open protocols — that everyone builds on. By 2024, the fund had committed over €23 million to this work.

The NLnet Foundation, backed by European public money through the Next Generation Internet initiative, manages the €21.6 million NGI0 Commons Fund. It awards hundreds of small grants — from €5,000 to €50,000 — to individual engineers and small teams doing foundational work. No equity. No exit. No return to investors. Just infrastructure, built and maintained in the open, available to anyone.

These aren’t charity programmes. They’re strategic investments in the digital equivalent of roads and water pipes. The EU has understood something that Australian policy hasn’t grasped: digital commons are infrastructure, and infrastructure that is privately owned and profit-maximising will, over time, charge tolls for everything.

The contrast with Australia is blunt. We have the ESVCLP and VCLP — tax-advantaged vehicles for private venture funds. We have the Industry Growth Programme, which funds co-investment with private capital. What we don’t have is anything resembling a Sovereign Tech Fund: a public commitment to maintaining the shared digital foundations that benefit everyone, with no private equity required.

The EU isn’t being idealistic. It’s being strategic. Australia is being parochial, mistaking Silicon Valley’s funding model for the only model that exists.

Seeds That Are Already Growing

The cooperative and open-source models being dismissed as impractical in Australian startup discourse are operating at real scale right now, elsewhere in the world.

Mondragon, the Basque cooperative corporation, was founded in 1956 with five workers and a polytechnic school. Today it employs over 70,000 people across finance, manufacturing, retail, and research. Executive pay is set by democratic vote of worker-owners — the ratio runs between 3:1 and 9:1 against the minimum, compared to the 350:1 typical of US listed companies. Profits are largely reinvested. There are no external shareholders to extract rent.

Mondragon survived the 2008 financial crisis better than Spain’s investor-owned banks. It’s not a utopian experiment. It’s a 70-year-old, multi-billion-dollar cooperative that has consistently outperformed the conventional model in resilience and community benefit. Nobody in the Australian startup scene wants to talk about it, because it doesn’t produce billionaires, and billionaires are what the current mental model points towards.

Platform cooperatives — worker and user-owned digital platforms — now employ over 1 million people across 60 countries, in sectors from ride-sharing and home care to freelance services and food delivery. The Platform Cooperativism Consortium, founded by Trebor Scholz at The New School in New York, documents and supports this movement. These aren’t cottage industries. They’re market-competing services structured so the value flows to the people doing the work rather than to distant investors.

The “Exit to Community” movement, led by Nathan Schneider at the University of Colorado and backed by the Open Collective infrastructure, is building legal and financial frameworks for startups that want to mature into community ownership rather than acquisition or IPO. The model exists. The tools exist. The question is whether Australian founders are even aware it’s an option — and whether Australian policy gives them any reason to choose it.

In agtech, we are seeing the first sprouts of this alternative. The Open Food Network, founded in Australia, has become a global software commons for short food supply chains, enabling thousands of farmers to sell directly to their communities without a middleman taking a cut. SwarmFarm Robotics has taken a deliberately open-platform approach with SwarmConnect, allowing external developers to contribute tools rather than locking the entire stack behind proprietary walls.

At the University of Sydney, Guy Coleman’s OpenWeedLocator (OWL) project has released low-cost, open-source designs for weed detection hardware, putting precision tools directly into the hands of farmers. In my own work with Growgood, we are building these principles into the heart of our community infrastructure — alongside open and public sensor networks that deliberately refuse to privatise the data they collect. Environmental intelligence built from Australian soils should stay a public good, not become someone’s proprietary asset. These aren’t naive experiments. They’re commercially thoughtful approaches to building tools that the farming community can actually own and adapt.

What Regenerative Renewal Actually Looks Like

Regenerative agriculture doesn’t mean low-yield sentimentality. It means building soil health so the system becomes more productive over time rather than burning through fertility for short-term returns. The same logic applies to digital renewal.

A regenerative approach to building tech doesn’t mean abandoning ambition. It means building in ways that increase the capacity of the system — the commons, the community, the knowledge base — rather than strip-mining it. Open source is regenerative: every improvement you make is available to the next person who builds on it. A cooperative is regenerative: the value created stays in the hands of the people who created it. A digital commons — openly maintained, publicly funded infrastructure — is regenerative: it gets richer as more people contribute to it.

The VC-unicorn model is extractive by design. It has to be. The return targets require it. The pressure to monopolise, then monetise, then enshittify — that’s not a bug or a moral failure. It’s what the model selects for.

When Australian agtech founders are pushed towards VC funding as the only credible path, we’re not nurturing new ways of thinking. We’re selecting for extractive outcomes. We’re growing monocultures and then acting surprised when they crowd out everything else.

The Questions We Should Be Asking Instead

The CGT debate is asking: how much of their individual gain should founders keep?

That’s a legitimate question in a narrow sense. But it’s the wrong frame for a conversation about what kind of ingenuity Australia needs and who it should serve.

Better questions:

Who owns the tools Australian farmers build their operations around? If it’s a Delaware-incorporated VC-backed company with a Californian board, that’s a sovereign risk question, not just a business one.

What happens to the data generated by Australian farms, forests, and soils? The agricultural intelligence built from our climate and our conditions — does it stay here, available to us? Or does it flow into proprietary training sets for tools we’ll pay to access?

What does success look like after the exit? When a VC-backed agtech company is acquired by a US agribusiness, the founders get paid. The tool may survive, or it may not. The community of farmers who built their practice around it has no say.

Could we fund the commons instead of the exit? Germany is proving it’s possible by funding foundational digital infrastructure. NLnet is proving it by funding the individual builders of the digital commons. What would the Australian equivalent look like for agtech?

Time to Plant Different Seeds

I’m not arguing that tax policy should be unchanged, or that private companies and investors don’t have a role. They clearly do. The agtech companies doing good work — and there are genuine ones — deserve to operate over the long term.

But the right policy response to a broken model isn’t to make the broken model cheaper. It’s to fund the alternatives.

Australia could establish a Sovereign Tech Fund for agricultural and rural digital infrastructure: publicly maintained, openly licensed, available to any farmer or cooperative. We could reform the co-investment programmes to explicitly include cooperatives and community ownership structures, not just VC-compatible entities. We could fund university-spun open-source agtech research through direct grants rather than routing everything through commercialisation offices with equity requirements. We could ask, as a condition of any public funding, that tools built with public money are accessible to the public.

None of this requires abolishing the startup community. It requires stopping the pretence that the startup scene — as currently configured — is the same thing as tech policy.

The soil of Australian agriculture is genuinely extraordinary. The people working it — farmers, agronomists, researchers, community members — are ingenious, adaptable, and experienced in ways that no imported software can replicate. The tragedy is not that we lack ingenuity. It’s that we keep letting the harvest be taken offshore, into proprietary platforms and private equity funds, while calling that outcome success.

Monocultures produce big yields in good years. Then conditions change and the whole field fails. We know this from every agricultural disaster of the past century.

We’re building the digital equivalent right now. We’re being told the CGT discount is what stands between us and a flourishing economy.

It’s the wrong argument, about the wrong model, asking the wrong question.

Time to plant different seeds.

Related reading: Don’t Let the Asphalt Bury the Garden on AI, open-source, and the commons. Open Source Is the Hope, But It Needs Our Help on sustaining the builders. Where Is Our Digital Heartbeat? on why Australia lacks the cultural infrastructure to have this argument properly.

• Open Source
• Startups
• Digital Commons
• Cooperatives
• Agtech
• Australia
• Policy
• Innovation