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A premature pat on the back

Australia’s startup scene is thriving. If it weren’t for a few regulatory speed bumps like the Employee Share Scheme and crowdfunding regulation, we’d be taking the world by storm. At least, that’s the impression you get from reading startup coverage in this country.

The reality is a little more complex. We have a large and growing interest in startups at the early, or idea, stage. That’s the good news. Unfortunately, we have precious few companies at the later (scaling and courting investors) stages, and fewer still at the ‘globally relevant success story’ stage.

Of course, it takes time and effort to build successful companies. And it takes even more time and effort to build them in an environment where startups are still a novelty, and not the norm. Australian entrepreneurs know two things: they always have a lot of hard work ahead of them, and the local startup community can’t always fulfil their needs.

That’s why rankings like this one – an RJMetrics survey that purportedly shows Sydney, Melbourne, and Brisbane as sitting in the top 20 ‘most vibrant’ startup scenes outside the US – often do more harm than good. The basic assumption of a ranking like this is a problem.

The idea that the number of people attending startup meetups is a good indicator of the ‘vibrance’ or value of a startup community is ridiculous. At best, it tells us there are a lot of people interested in startups.

From my experience of the Brisbane startup scene, I’d say it’s just proof that if you offer free beer and pizza, people will show up to your event. Those people will not always be as committed to startups as you would like. They are often the ones who cheerfully introduce themselves, saying “I’m working on three or four startups myself” or tell you they’ve given great advice to other companies – for a small fee.

In short, they’re the hangers-on.

Every startup scene has people like that, and I don’t mean to suggest that they make networking events useless, or – heaven forbid – that we do away with free food and beer. But acknowledging the existence of hangers-on in the local scene is a good reminder that we have a long way to go to build a viable startup ecosystem in Brisbane, Sydney, Melbourne, or Australia as a whole.

There are some problems, like the regulatory ones mentioned earlier, that require government intervention, but there are plenty that don’t. Cultural change and skill development have to come from the bottom up. And if there’s a dearth of experienced entrepreneurs to offer expertise locally, we need to reach out as individuals or as a community to successful founders elsewhere.

As a marketer, I understand the power that good news stories about Australian startups can have. I know the value of a little hype. It would be wrong not to spruik our achievements.

But the most dangerous thing about meaningless rankings of vibrance is that they can breed complacency. Too much unjustified good news can be a bad thing.

We should never mistake noise for activity, or activity for achievement.

There is always more we can and should be doing. In the startup world, you simply can’t sit on your hands, especially if you’re patting yourself on the back.

Kit Kriewaldt is an entrepreneur and strategic communications specialist. He loves to talk James Bond, cocktails, and psychology – focussing particularly on decision making and consumer behaviour. He is also Chief Marketing Officer of digital communications platform Liquid State.

About Kit Kriewaldt

Kit Kriewaldt is an entrepreneur and strategic communications specialist. He loves to talk James Bond, cocktails, and psychology - particularly the topics of decision making and consumer behaviour. He is also former Chief Marketing Officer of digital communications platform Liquid State.