Australia is all set for a promising startup future. Owing to the country’s year-on-year GDP growth, an efficient public education system, and a business culture rooted in embracing change and innovation, it has the conditions conducive for a robust startup economy.
Nonetheless, a major factor contributing to the enterprising economy is Australian startup incubators. These organizations provide collaborative programs and support to help startups acquire the much-needed expertise and experience to take the business into the real world.
In this post, I will look at how incubators are leading the change in the Australian startup industry and what it means for getting your own small business off the ground.
Australia Startup Industry Insights
Although the Australian startup industry shows signs of growth, it is grappling with many challenges. Firstly, there is a polarization of startup growth. According to the 2017 Startup Muster survey, startups are predominantly located in Sydney (41%). On the other hand, Victoria has witnessed a dramatic decline of more than 4 percent in the previous year.
Secondly, startup owners face the challenge of setting up their business with minimum of hassles and roadblocks. The survey found the average owner was in the 36-38 age range. These owners faced three main challenges: difficulty in raising funds, lack of technical skills, and high financial risk.
Funding remains an issue owing to the unpopularity (an unavailability) of government grants that increased the financial risk. Technical skills are a much needed resource due to the popularity of Fintech, Edutech, and IoT as the three most popular startup sectors. Most startups owners do not have the relevant education background and have difficulty leveraging technical competences and resources.
How Incubators Help Startups
Incubators provide a wide range of programs and services to address the startups’ most pressing challenges. In particular, the impact of incubators is felt in the following five areas:
Invest in Startups
Incubators offer considerable financial support and help raise funds either through grants or investing directly into the business in exchange for equity. This way, both the startup and incubator share a common goal of achieving financial success and return on the investment.
Connect With Investors
Incubators are well connected with investors and venture capitalists. This offers a unique edge to startups that partner with these incubators. Startup owners often get to network with people that would be otherwise inaccessible for various reasons.
Startups usually lack the capital to invest in office space. Incubators fill the gap by providing shared or co-working spaces that help eliminate or minimize overheads such as office rent and utilities.
Expert Training and Feedback
Many incubators hire business coaches and consultants who are often owners of successful companies and startups. These coaches bring in the breadth of experience that enhance the startup’s knowledge and experience and offer insightful opinions as per the requirements of specific industries.
In many instances, startups couldn’t afford to visit domestic and foreign startups that are working on similar ideas. Many incubators arrange trips to Silicon Valley and Europe to provide the much-needed exposure. Startup owners get a first-hand glimpse of what works and what they need to gain a competitive advantage.
Popular Australian Startup Incubator Success Stories
Undoubtedly, the role incubators play in providing startups the necessary environment to develop and leverage their resources is significant.
But what does this mean in practical terms?
Here are three popular Australian startups that have grown through the support of incubators.
Syntopy is pioneering Artificial Intelligence for business process automation. This startup incubated at Startmate.
A drone-delivery startup business, Flirtey has successfully raised $16 million dollars, also through Startmate. Flirtey has successfully tested and launched its drone delivery system and is expected to become a major UPS provider/partner in the coming years.
Data Republic offers specialized analytics insights covering a wide range of industries including retail, automotive, and insurance. Data Republic is a graduate of incubator program of Stone and Chalk.
List of Australian incubators
If you’re keen on enrolling in a quality Australian incubator program for your startup, the following are a number of incubators that you can enlist the support and expertise.
As you can see, startup incubators in Australia are paving the way for startup growth in a myriad of ways. From providing expert training to research funding, they are serving a key role as change agents.
This leaves you with one question: ‘How do you intend to make use of incubators for your own startup idea?’ Let us know in the comments below.