StartUp Advice
Startup Muster released its third annual survey of Australian startups, recently. It has much to say about the thoughts, aspirations and achievements of the community, but also outlines what is next.
Any business is subject to risk, and the startups surveyed are no different, though many are ‘bootstrapping’, i.e. self-funding the venture and keeping overheads low – interestingly, they do see that the opportunity for the business is global even if they have started locally.
Employing people is always a challenge, and on average startups employ four full-time people. Finding, keeping and maximising the efforts of team members has not gotten easier despite the plethora of recruiting sites.
Seventy-two percent of startups believe they need funding to continue operating (and even more funds to take on significant growth and employ more people). Finding the right source of funding is taking much time and energy – with many startups unsure of what is available to them.
All startups are dependent on others (and large enterprises) for support and services. However, often enterprise businesses are inflexible or have difficulty in engaging with smaller businesses. This can lead to considerable inefficiencies on both sides.
The Reports key findings:
Startup industry focus
Not everyone shared the industry focus as part of the survey… close to 16% are focused on Fintech applications, with almost 15% in retail, and another 14% in content and media.
Australian startups are thinking global
More than 90% of startups earned some export revenue, and have aspirations to be truly global – half have plans to expand overseas. Overseas investment is also appealing to a quarter of founders.
Not young and not foolish
The average age of startups surveyed is 37! This concurs with the research that I did for my book Ready to Soar. It is not just age that is bringing experience – so does tertiary education, previous employment and previous business ownership.
Just over half surveyed are first-time founders, a third started the business because he or she wanted a better life and were dissatisfied the job they held (as an employee), but three-quarters wanted to create their own wealth and be in charge of their own destiny by creating something of value.
25% moonlight (or have other jobs to fund the startup initiative) and three-quarters have a Bachelor’s degree or higher level of education.
I was surprised to see that the survey reported that only 24% of Australian founders are female, as the work that I did for the book said that that number was much closer to parity. I suggest that this number is reflective of who completed the survey – because if we look at the number of new business registered then gender imbalance is not so marked.
Provide business to others
70% are keeping local and onshore when they choose outsourced partners. That is small businesses supporting other small businesses, which supports the whole ecosystem. They are working out what they want to be good at and getting others to provide the services to support them.
Government is not helping
Despite the pledges of supporting startups with grants and tax incentives it appears to have had no material impact on the community. Most feel ineligible for government programs of assistance citing that they thought they would not get them (almost 40%), and 28% said that grants are too time-consuming to do.
Startups are opting for considered and well thought out approaches to capital and working capital – using their early success as a basis for those conversations. Impressively, the startups surveyed top line revenues in the first year were close to $350k and they on average raised $450k in investment in the past year.
Fear of failure is a barrier
Often it is the emotional aspects of being a founder which are not explored in these reports. There is a considerable fear of failure, risk and responsibility. I know this for myself, being an employer brings considerable responsibility, borrowing money or having investors also adds to the pressure in terms of risk taking and likely returns.
What is stopping people starting businesses is funding, financial risk and technical skills.
I often speak about fear in my presentations, fear of failure, fear of missing out, fear of making a fool of yourself… for more on these thoughts {link to post here]
However, the founders who now have some traction love being an owner, the personal development/learning and the independence.
Being an entrepreneur, founder and small business owner is a brave thing to do – it is not for the faint-hearted – and I can assure you that it does not get any smoother. Failure or disaster could be around the corner no matter the size of the enterprise.
It is now twelve months since I launched ‘Ready To Soar; How to turn your brilliant idea into a business you love’… If you have a business and find people ask you ‘I’ve got this business idea… what do you think?’, please give them a copy. If you are thinking of starting a business… please invest in your success by reading it… you can still get copies online.
I want founders to be wide-eyed and informed as they take the plunge into the thrilling world of business ownership.
About the survey
2500 people responded with 100,000 answers and the Startup Muster’s survey, was supported by the Commonwealth Department of Industry, Innovation and Science.
Respondents included founders, soon-to-be founders and other members of the startup ecosystem, including accelerators, incubators, investors, mentors, educators, service providers and government.
