Where are Australian startups headed this year? What are they looking to achieve? What new trends do they expect to see in business?
To kick off the new year we have decided to do a predictions piece for 2017 looking at the key trends that startup founders and industry leaders expect to see shape startup land this year.
Several Australian entrepreneurs shared their hopes and dreams in great detail with Anthill. Check them out below for both insight and inspiration.
Trevor Townsend – Managing Director Startupbootcamp Internet of Things & Data, Melbourne
Melbourne’s startup eco-system will come of age in 2017, after years of striving to catch up, be like somewhere else, or pondering its purpose in life, we will finally have the confidence to take our place in the world. We will celebrate how our diversity and multi-cultural background has helped us achieve and retain the ‘most livable’ city crown and we will wear it proudly.
Our expertise in medical research and health care, education, hosting world leading events, and our food and service culture, will form the basis for expertise-driven startups who are able to envision and deliver digital disruption globally from Melbourne. Our proximity to Asia and our strong connections with former students who have studied at our leading universities will make Melbourne the place to be, to start your company and to concur the world.
Technologies such as Internet of Things, Virtual Reality and Augmented Reality will start to enter the trough of disillusionment in 2017 – they have been much hyped and although us in the industry will be working long and hard in our startups to make the technology vision come true – the overshoot of expectations and the reality of what is actually possible and the difficulties of delivering the vision will dampen the enthusiasm for these topics. Issues of privacy and security will loom large in IoT and some large-scale disruptions will surface as early solutions reveal their vulnerabilities.
Startups and corporates will be working hard to devise solutions that solve the real implementation problems. VR and AR will still be solutions looking for problems, and like 3D TV, people will be slow to adopt such technology that means they need to drastically alter the way they consume entertainment. Immersive experiences will arrive, but probably still not in the way we have envisioned.
Artificial Intelligence and Machine Learning will be the hype technologies for 2017 and we will hear of the many applications that are possible and how these technologies will fundamentally disrupt work as we know it. Many stories will appear about how machines will take over the world, how all our jobs will disappear and how every mundane task that we can think of will be automated.
People will question ‘why’ we are doing this and what outcome we are seeking. These are big questions and hopefully, we will start to debate the ‘ends’ rather than the means of technologies. What outcomes are we seeking and how are they going to support society. We will start to see some real life examples of AI in 2017, and technologies such a messenger bots will become mainstream. I can’t wait until I can ask my phone to book my next trip to Sydney, and it will work out from my calendar and my preferences when to book, automatically make the payment and delivery the boarding pass to my phone!
And finally, Melbourne Victory win the A-league title!
Gautam Mishra – CEO and founder of news industry startup Inkl
2016 was a massive year for fundraising in the ustralian VC space, so we can only assume next year will be a massive year for spending.
My gut says that the majority of this money will got towards growth funding for tried and true businesses — perhaps stopping them from hitting up US VCs for series B funding.
But I wouldn’t be surprised if a portion of it finds its way into new and innovative early stage companies in sectors that aren’t traditionally a hot spot for VC funding. We’re a small market, and can only really have so many viable marketplaces and fintechs before investors start turning their gaze towards the next big thing.
Nazar Musa – CEO of digital out-of-home media startup Medical Channel
I reckon 2017 will signal a pretty significant shift in the startup sector.
We heard a lot last year about building startups from the ground up and early stage incentives to get investors and entrepreneurs into the space. There’s been a spike in new startups that are using the newly available grants and being funnelled through the collection of different incubators that have cropped up.
My experience was different, last year we took an existing startup and we got an injection of $25 million from investors, which allowed us to acquire our closest rival and recruit rapidly. By getting enough high-net worths on side, we were able to grow fast and take advantage of the market opportunities available to us. I think we’ll be seeing more of this in 2017, as businesses look for investors and fast capital to quickly scale from startup to more established, known and thereby better able to leverage the market.
Tim Moylan – COO and co-founder, Shootsta
In 2016 we saw some massive raises and huge funding rounds — bigger than years past. But we also saw a trend towards companies investing in startups. Perhaps the largest of this kind was Airtasker’s $22 million raise with top ASX-listed media firm Seven West Media earlier this year.
There is also a shift with companies investing in smaller startups too. ASX-listed AdCorp was happy to sink $1 million into Shootsta earlier last year.
It creates an interesting dynamic where Australian startups have more sources for funding than ever before, and we’ll likely see this trend grow in 2017. It’s interesting to see that companies keep looking to fund innovation and whether funding actually impacts the outcomes of the startup.
Jeff McAlister – CEO TryBooking
The rise of Amazon will continue – Amazon is already dominating hosting and they are starting to dominate the hosting SaaS market. Why use a third-party product when AWS provides a service much cheaper that is already bundled into their hosting service?
AWS is covering off the entire software ecosystem one service at a time. One invoice plus the ability soon to scale up and down per transaction – a great solution but leading towards monopoly territory.
Joel Thomson – Co-founder of SalesPreso
The big tipping point that I think we’ll see next year is the shift in enterprises and Governments actively planning and executing digital transformation strategies by engaging with startups. This is a huge opportunity for the industry as we’re able to deliver fast and effective change and be the innovation catalyst to the more slow-moving traditional businesses. It’s already happening with banks and retailers and other industries will know that if they don’t innovate, their competitors will, which will affect the bottom line.
For us, we’re taking advantage of the ongoing adoption of enterprise-scale cloud solutions. Over the last few years, we’ve seen companies moving IT workloads to the cloud to reduce costs. But now, we’re seeing companies using cloud as not a “cost saving” initiative, rather a “revenue generation” one.
We’re currently working across multiple sectors including logistics (Australia Post; StarTrack), real estate (REA Group) and accountancy (MYOB). Every time we demonstrate our cloud-based presentation platform to company leaders, they can see the potential cost and time savings and more importantly, the critical ROI when compared to their current and competitor solutions. As a result, many of our newer pilot projects are moving onto more widespread deployment. It’s a great time to be a startup with a viable enterprise-scale cloud solution!”
Joe Hoolahan – Co-founder & CEO, JESI
More global expansion from startups: Technology is enabling business to be conducted from anywhere on the globe, due to the increase in Cloud and other innovations that allow the business world to stay connected in real time. The impact of globalisation means that startups can develop a product market fit for most regions, yet keep operations within Australia. JESI, for example, has scaled out its platform across the US, Europe, APAC and the Middle East all from its humble Townsville HQ.
Mobile workforce trends: The mobile workforce is fast gaining ground, with IDC predicting this will encompass 73 per cent of the workforce by 2020. This is fueling many startups to build products to support this new way of working, which has never been needed before now. Suddenly, we’re faced with the prospect of a hugely transient workforce that needs supporting with new tools, including the rise in organisations that integrate travel into their central business model, like Remote Year. Emerging businesses are much more able to support this new market than older businesses with already defined product suites.
The rise of regional startups: Recent government support for regional startups – such as the Queensland Government’s Advance Queensland scheme – is helping startups operate and pursue growth from their original locale, rather than having to uproot to the nearest state capital in order to succeed. Local innovation fosters a long-term effect that we should start to see the results of in 2017, due to the increase in resources and infrastructure to support local entrepreneurs, such as co-working spaces and access to technology.
Anna Rooke, CEO of QUT Creative Enterprise Australia (CEA)
Creative-tech will go mainstream as more creative entrepreneurs use technology as a central component of their business model to disrupt their industry, which is currently worth around $90 billion in Australia. In 2016, we witnessed Redbubble’s $288 million IPO, Canva’s second $20 million raise, and Envato reaching $400 million in transaction volume with 300 employees and seven million users spread across 150 countries. In 2017 we will see even more investment in this space as these success stories continue to highlight the potential in creative tech.
As technology continues to advance and startups are developing more unique ways to corner a market, in 2017 we should expect to see AI hit its stride. Machine learning is fast gaining traction off the back of the recent move into data analytics. With more data accessible than ever before, we will see more innovators building their platforms with an AI focus, such as Romanian startup Eterni.me heading to CEA in 2017 to scale its AI social platform.
In 2017, we will see more startups arise in the fashion space as the way we shop becomes more refined. An omnichannel approach has been utilised by the biggest industry players over recent years, which has made way for a variety of different platforms to emerge, such as the rise in m-commerce for smart device browsing, and the influx of online custom fashion brands such as Shoes of Prey, Mon Purse and Fame & Partners.
Wayne Gerard – Co-founder & CEO, RedEye and board member at StartupAUS
In 2017 enterprise will begin to fully immerse itself into the cloud. The majority (67 per cent) of enterprises now operate at least partially within the cloud, but only 13 per cent of businesses believe they have an optimised approach to cloud.
In 2017 we will see more enterprises working with startups that are developing Platform as a Service (PaaS) products. This will save a lot of cost, pain and risk over the next ten years. If we look back to ten years previously, organisations learnt a lot of lessons from implementing ERP and best of breed software. The next cycle is about to begin with PaaS at its core.
Next year the global mobile workforce will account for 42 per cent of all workers. This trend is being driven by a combination of the declining costs of mobile technology (tablets, laptops, smart phones), a growing demand for real time accurate data and emerging technologies like Internet of Things (IoT), machine learning and drones. Mobility delivers efficiency, improves safety and provides real time insight into work progress and performance. Those businesses that aren’t working in a mobile way by next year can expect to find themselves on the back foot and missing business opportunities.
Peter Bradd – Co-founder & CEO of The Beanstalk Factory and Founding Director of StartupAUS
Increasingly, workers will have a portfolio of interests rather than one fixed role. Once upon a time people trained for a single career. In 2017 work will increasingly become “piecemeal’, with more part-time jobs and a focus on project-based work. It’s tapping into the concept of the solopreneur where you work for yourself or in a small collective, work from a shared office space, and work for multiple companies a week rather than just one. It’s very exciting for workers but this will need an increased emphasis on education and staying up to date with skills.
Enterprise will collaborate more with SME’s to achieve innovation outcomes. Currently, emerging innovative companies are often seen as competition for corporations. However, more often than not they offer complementary products and services and a unique way of thinking which larger corporations can vastly benefit from. For example, emerging, innovative companies can actually help their acquirers power up their growth and tap into new markets that they would not have been able to before.
Demand will grow for innovation skills and roles. New occupations recorded in the 2016 Census reflected just how much rapid advances in technology are reshaping the Australian workforce. One US researcher has predicted that sixty-five per cent of children who entered primary school in 2011 will end up working in careers that have not yet been invented. In 2017 we’ll see new jobs added to the list such as Chief Innovation Officer, Innovation Strategist, Innovation Engineer and Innovation Catalyst.
Innovation will become more of a core focus (shifting from a ‘nice box to be ticked’ to part of our operational DNA within enterprise). Innovation is undoubtedly changing the business landscape so in order to survive it’s imperative companies shift the way they operate. As Prime Minister Turnbull said in a recent opinion piece, ‘a culture of innovation must run through the economy’. The same is true within enterprise operations. Companies that were able to prosper by moving at a deliberate and slow pace will be extinct within as little as five years if they don’t innovate. Those companies that stay on the cutting edge of innovation will direct where we are going.