In mid-June, Australia’s Communications Minister Stephen Conroy announced the launch of the country’s brand-new digital strategy, whose ultimate aim is to capitalize on this economic segment’s potential. The current Government’s self-imposed deadline for turning Australia into one of the world’s ‘leading digital economies’ is 2020 and the action plan is complex enough to warrant such a long implementation period. Aside from the governmental measures (which we’re briefly going to outline below), the move has elicited a rekindled interest in talking about startups. Are startups still a valid business model? If so, can Australia provide the requisite backdrop for growth, including incubators, accelerators, and financing opportunities? Read on, to learn how the Labor government sees things, as well as to find out what an established startup CEO thinks.
2020, a digital odyssey
Many of the measures included in the government strategy have to do with federal agencies, which should be taking most of their services online by 2017. But some also specifically target startups. According to one such component of the plan, the government needs to review the crowd-funding equity system and align it with the provisions of currently enforced corporate law. By April of next year, a governmental commission will have thoroughly reviewed this financing process, which has thus far allowed numerous digital startups acquire the capital they needed in order to get going. Another measure targets share schemes, under which the employees of a startup would be able to receive company stocks within their salary packages. At the moment, not many startups employ this method of payment, since the amount of red tape involved runs high. However, such a system of benefits could promote upward mobility and public listings in the SME milieu.
Other measures, which will implicitly aid in the development of new digital startups include a school curriculum focus on digital tech and design, digital career programs for students, and aid for organizations that provide support for startups. For, as the minister himself put it, no government can come up with a highly successful online startup idea, such as Twitter or Instagram, but they can provide the needed infrastructure and scene for them to emerge, develop, and thrive in.
Beyond governmental policies
While it is true that the health of an economy largely based on small and medium enterprises depends on the government to a great extent, the remainder of responsibilities for startup success lies with none other than the entrepreneurs. In Australia, 60 per cent of employees work for companies with four employees or fewer, which makes it highly likely that startups in general (and tech startups in particular) will continue to appear. But do they have what it takes to succeed? Office rental company Regus provides affordable solutions for short-term rentals, which can help managers save on headquarters-related overheads. And, yes, cost control is important, according to CTO Nate Blecharczyk. However, the businessman says, it is not the only aspect entrepreneurs need to take into account, if long-term success is their target.
Blecharczyk cites a number of essential elements behind the success of a startup. One of them is persistence in the face of adversity, be that adversity a lack of money or initial negative responses from investors. However, he also explains that it’s not worth insisting against all odds, if this persistence isn’t accompanied by focus and effort. Flexibility is also an important ingredient, especially in the digital realm, where best practice guidelines change by the day and new technologies emerge from behind every corner. As for further development opportunities, he offers two areas to exploit: the local Australian market, with its major potential for growth, but also Asia. Though the industry he works in is not digital, it is likely the same still holds for the online segment.
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