Australian business leaders will readily buy from local technology companies but are alarmingly hesitant to embrace startups, according to new research commissioned by local startup, turned global tech sensation, Nitro.
The survey of 300 of Australia’s business decision makers, from medium to large companies, found 71% ‘prefer to support Australian tech companies over global tech brands’, however when it comes to supporting startups just 6% of business leaders indicated ‘they trust and support startups over long standing brands’ – of this group no business leader over 55 said they’d trust and support a startup over a long standing brand.
This lack of trust appears to be correlating with relative inaction when it comes to buying startup products or services with only 14% of respondents indicating they purchase from startups frequently.
Interestingly decision makers, including C- Suite, senior executives and senior management, were actually more likely to buy from a startup with 53% indicating their company purchases from startups frequently – just 11% of middle management said the same.
Aussie startups should be supported more
Nitro APAC Director, Adam Nowiski, said it was promising to see the top echelons of management backing startups – indicating a growing desire for business leaders to transform their organisations through disruption.
“Our research speaks volumes to how deeply informed and connected senior management are with the benefits startup solutions can bring to big business. Even so, it’s disappointing to see that overall there is still hesitancy when it comes to embracing startups,” he said.
Nowiski outlined how this distrust stems from a widespread lack of clarity among the business community on what a ‘startup’ encompasses.
“There needs to be a distinction between startups in their infancy and companies, such as Nitro, that have startup roots but have since developed a global brand presence and now have customer success systems in place.”
He added that while having this clarity is necessary, it’s also important that young startups aren’t discouraged by big businesses not giving them a look in.
“Startups need capital, talent and above all customers to grow. So, without Aussie businesses backing them and integrating their ideas into organisational strategy, we’re at risk of stifling the growth of our innovation sector.”
“You’d be amazed at the systems and advanced processes in place, even at some of the most early stage companies. What you see on the surface often doesn’t reflect the depth of capability and innovation when it comes to startups of any shape or size.”
What else did this Nitro research find out?
Other key findings include:
- Global tech companies vs local
Business leaders say they are more likely to buy from an Australian tech company (55%) than a global tech brand (38%). Interestingly, more C-suite (52%) don’t pay attention to the origin of their tech product than do (44%)
- Startups vs long standing brands
Just 4% of business leaders said they prefer doing business with startups because ‘they’re innovative and in tune with customer’s needs’.
14% of respondents said their company buys products and services from startups frequently, of this group those aged 18-34 were most likely to buy from a startup (18%) while just half the number of 55-74 year olds indicated they would do the same (9%).
Of the 20% of respondents who said their company never buys products or services from startups, older generations were again less inclined to show support with 30% of those aged 55-74 saying their company never buys from startups while just 17% of those aged 18-54 said the same.
When it came to the 13% of respondents who trust and prefer to support a long standing brand over a startup, Baby Boomers showed the least confidence in startups with nearly double the number of over 55’s (17%) indicating they would support a long standing brand over a startup – only 9% of Gen Y’s said the same.
Victoria’s Minister for Small Business, Innovation and Trade, Philip Dalidakis, said research such as Nitro’s is a great indicator for government decision making.
“Research like this is great for state and federal governments to get a better understanding of how big business is looking at the local tech industry and where they see opportunities for growth,” Dalidakis said.
“It’s great to see Nitro, one of Victoria’s great startup success stories, getting behind the local industry to help others like them attract investment and grow.”