In the wake of Startup Muster handing down its fourth annual report, co-founder and CEO Monica Wulff spoke to Dynamic Business about the portrait it paints of the local startup ecosystem including her concern for the one in five founders whose cash runways are fast running out.
This year’s report was informed by data from the largest online survey of the Australian community, conducted between July and August 2017, with participation from 1184 startup founders, 472 people who want to found a startup in the future and 739 respondents who identified as a business that could support startups.
We’re definitely seeing, year on year, not only more participation in the startup ecosystem but more startups overall as well as more people thinking about founding startups,” Wulff said. “It’s comes quite far since we began Startup Muster in 2013.”
Startup Muster found that 52.9% of startup founders were aged between 30 and 45, with the average age being 39 – last year, it was 36. Wulff said that while Australian founders have consistently placed in this age bracket since the company first began reporting on startups in 2014, people continue to be surprised by the finding.
“It’s not as if one year the average age is 25, and the next it’s 39,” she said. “The media, including TV shows about the US startup community, portray founders as being younger men but in Australia, that’s not the case. Our founders are in their late thirties, they have financial dependents, a majority are in the B2B space and they’re trying to solve problems they’ve previously encountered in business. We need to get away from the idea that the typical founder is an 18-year-old drinking Red Bull while they run a startup from their parents’ garage. That’s not the narrative in Australia.
“Another fact about the startup ecosystem that might surprise people is that more than a third (35.7%) were born overseas. Australia is a very multicultural and diverse nation and there are a lot of parallels between immigration and entrepreneurialism. Building a business is a really awesome pathway for new Australians seeking to support themselves and succeed.”
Despite the fact that founders are typically aged in their thirties, Wulff said that amongst future founders, there was a younger age profile due to the fact that it’s becoming ‘more vogue’ to launch a startup as well as an increasing number of tertiary education courses for budding startup founders.
“We are seeing more and more younger people thinking about founding startups, which is great because the more experience you have with founding startups the more successful they’ll likely end up being,” she said.
Although the number of female founders in Australia increased from 17.4% to 23.5% between 2015 and 2016, tis number only rose marginally in 2017 (25.4%); however, Wulff wasn’t concerned about this finding, adding that it was “still on the rise” with many more programs geared towards helping women in business at all stages of the lifecycle.
“If you are early stage, you have access to program’s like BlueChilli’s Shestarts and if you’re business is more developed, you have programs like Springboard,” she said. “A lot of work has gone into promoting startups to women and what we know is that some might be running one without even realising because haven’t identified with the stereotype of a startup founder that’s been proliferated by the media.
“So, even though there’s more work to be done, it’s quite positive. Conversely, what’s concerning is that 38.5% of startups in Australia don’t have a single full-time female employee – come one!”
Based on Startup Muster’s findings, Wulff said her biggest concern was that “a fifth of startup founders told us that if they didn’t get additional funding, whether it be through investments or other types of cash injections, they wouldn’t exist beyond 2018”.
She continued, “The entry and exit into the startup community can be quite severe and the fact that one fifth of the sample said they have no more runwayA fifth of after 2018 is concerning because we want to be building sustainable businesses.”
Asked about the industries where startups are pursuing work, Wulff said “they’re giving everything a go”.
“There’s a lot of focus on the fact that Fintech, Internet of Things (IoT) and education have remained quite high for a couple of years running but I love the jump and changes in other emerging technology areas like HR, blockchain, AI, cybersecurity – we’re seeing a lot of movement there,” she said.
“When you look at the distribution of what our startups are working on, it’s really varied and that’s because everyone wants to target a different type of problem, we’re not pigeonholing ourselves into any specific industry. Our startups are being very inventive and they are seek opportunities wherever they can.”