Do Aussie start-ups really lack ambition?
Australian entrepreneurs are less ambitious than their US counterparts, less likely to develop global businesses and are not keen on getting rich or changing the world, according to new research.
A survey by Deloitte Private, start-up incubator Pollenizer, Australian start-up publication From Little Things and global research group Startup Genome Project has highlighted concerning findings about Australian early-stage ventures.
Silicon Beach: A study of the Australian Startup Ecosystem, which compared 1000 Australian technology start-up businesses with 50,000 similar companies around the world, has found less than 5 per cent of Australian start-ups are building businesses that could expand globally.
Alexx Stuart says the findings paint a picture of failure, but she believes the start-up scene has shown positive signs in the past five years.
The study also shows US companies raise 4.8 times more capital in their early years than Australian businesses. But here's the truly alarming figure. When it comes time to scale up their operations, US businesses raise 100 times more in funds than Australians.
Some Australian entrepreneurs are shocked at these findings.
Alexx Stuart is the founder of Luxury Tastings, a gourmet cuisine business and a member of the Australian start-up community. ''The findings paint a picture of failure and that the start-up community is not trying hard enough. But it's only 20 years old. If you looked at the last five years in isolation, you'd see a positive picture [with start-ups] headed in a great direction,'' Stuart says.
One of the findings was that Australian start-ups are 14 per cent more likely to tackle niche rather than major markets, suggesting a lack of ambition among entrepreneurs. Stuart says this could be due to cultural factors.
''We're not encouraged to promote ourselves. But there are some fantastic people fostering change in that mentality because you have to be cool about promoting yourself to play the bigger game,'' she says.
Only 39 per cent of Australians surveyed for the research have applied for a government grant. Stuart says the federal government should do more to drive innovation.
But Stuart Richardson, founder of Australian venture capital firm Adventure Capital and Melbourne co-working space York Butter Factory, says the government has provided a comprehensive innovation infrastructure for start-ups.
The Innovation Investment Fund and grants accessed through Commercialisation Australia are examples of government-sponsored programs to help fledgling businesses.
Richardson argues it's critical for entrepreneurs to be resilient and build sustainable businesses. ''Welfare-reliant entrepreneurship is not going to produce globally competitive businesses,'' he says.
Deloitte partner Joshua Tanchel, the co-author of the report, says it's not all bad news when it comes to Australian start-ups. A companion survey to Deloitte's, the Startup Genome Report, ranked Sydney and Melbourne respectively 12th and 18th in the top cities for start-ups.
Tanchel is calling on the government to simplify the application process for government grants.