What businesses can learn from start-ups, and vice versa! Let’s get talking!
There is no industry more awash with talk of start-ups than the tech industry. And let’s face it – it’s inspiring to hear their origin stories, exciting to watch their growth trajectories, even better if they have some fantastic new platform, technology or product that taps into our inner geek persona!
And there have certainly been some high-profile success stories, but what of the 97% of start-ups and new businesses that fail in Australia?
Whilst the Australian start-up community has typically been hampered by a lacklustre venture capital and investment appetite in Australia and a strong aversion to risk amongst established businesses, the growing focus on start-up support programs and activities should be a signal to more businesses that the Australian start-up space is one to watch!
Why we need to know more about start-ups, and vice versa!
Australia is just now coming off the back of 25-plus years of economic stability, but productivity growth, whilst positive, remains depressingly flat, and we continue to be routinely outranked by our global counterparts in the innovation and business efficiency stakes. (Forging Our Digital Future 2019)
A deeper analysis of this state of affairs has uncovered that the Australian business sector at large needs to pursue “innovation” more proactively, but not just through technology – but in a more strategic and outcome-driven way by enhancing and embracing new business models and processes. (PwC 2019)
Meanwhile, more start-ups are reporting that they are not process-driven enough to meet the governance, regulatory and compliance roadblocks that seem to appear out of nowhere during a fast scale-up. What they have in technical ability, they often lack in marketing, finance or business management rigour and often struggle to articulate a broader mission, vision or strategy they can make informed business choices against. (AICD 2019)
Surely the biggest win-win innovation opportunity for all involves having start-ups, scale-ups and long-term stayer businesses all bringing their A-games to the table and sharing what we all collectively know about the quest for operational excellence.
For an existing business, learning from, partnering with, or even investing in a start-up might just be what it will take to push your growth-hungry business to the innovation forefront in your industry.
And for start-ups in an ever faster evolving marketplace, there is immense value in understanding how experienced growth-focused stayer businesses approach business process pivots and resourcing decisions in their businesses to guardrail against high-impact shocks and weather fast-paced change.
Let’s take a look at how this might happen!
Are start-ups and small businesses the same?
Around 70% of Australian start-ups are looking to bring some type of all-new product, process or innovation offering to market. Start-ups are generally new businesses focused on a fast ramp-up to high growth and revenue, unlike their small business counterparts who may be more strategically focused on generating long-term value and profit.
Typically start-ups are looking for investment and mentorship so as to provide capital and business coaching and planning advice at the right time, so they can transition to operating as a sustainable business and scale up fast to meet market demand or expand their reach.
What are the benefits of a longer standing business getting involved with a start-up?
Inject a new lease of life into your business by reaching out to start-ups that might be able to give you new insights into markets and consumer sentiment. Many start-ups have been born out a direct niche market need or a distinct customer pain point – topics that longer standing businesses often find themselves paying big dollars to participate in endless workshops for to try to rediscover in their market category!
Tapping into the passion and drive of a visionary start-up founder’s mentality can inject new insight and energy into your team or existing projects.
And who knows? Take the collaboration far enough and you might find that your relationship bears fruit in the form of new joint IP, market offerings or revenue streams!
What can start-ups learn from stayer businesses?
Heard they saying, “the pace of change will never again be as slow as it is today”? Well those businesses that have survived, revitalised and are still thriving in the digital age know something about building out guardrail processes, about vetting ideas and backing winning initiatives, about coming back from or surviving the impact of sudden, disruptive change, and most importantly about customer-centricity and what it takes to look at what sits beyond “making a sale”.
Not only this, many stayer businesses have lived through unprecedented periods of hefty governance and regulatory change, and know something (often based on their own painful experiences!) about the importance of building transparency and compliance “by design” into a business model.
I want to tap into an start-up or existing business ecosystem! Is there a dating app for that?
There are plenty of connector apps, groups and forums out there, but on a more local level, here are some ecosystem-building ideas for you!
• Attend business events (especially in your industry category), network and listen out for customer pain points and inefficiencies where your offering could offer something new (or get ideas for your next one!)
• Attend and network at local business body and local council business networking events.
• Approach established businesses more broadly related to your category – get to know what they do and who their customers are, and where your offering might relate to a need in their businesses. If they are at all innovation focused or customer-centric, they will want to take the time to talk to you!
• Actively looking for M&A opportunities to grow revenue streams? Think about expanding your IP portfolio through support or investment in the start-up space.
• If “innovation” is sitting as an agenda item on your strategic plan, get busy bringing it to life by finding out what innovative start-ups in your business categories are looking to bring to market!
• Go where the innovation is! Get online and see when and where start-up communities are meeting and talking in your market and even offer your services as an adviser or mentor to a start-up community to get some two-way communication happening.
• Perhaps even offer your any unused office space to start-ups as co-working space – bring a new energy and vibe into your team environment.
So as you start planning what’s next on your agenda for 2020 and beyond, go check out what’s happening on the other side of the fence!