Over a coffee last week, I was asked to provide a snapshot of the current state of the entrepreneurial scene in Australia to a returning entrepreneur. I outlined a number of structural matters that I believe affect the depth of the Australian entrepreneurial community.
As I fly now, London-bound, having watched one too many Glee episodes, I am fully charged with the confidence to express these feelings publicly. If you’re reading this, then the benefits of a thriving entrepreneurial community are clear to you, so I won’t labour that point.
My team and I work with entrepreneurs to help turn their ideas into a reality. Our work encompasses management consultancy and technology development across all internet applications — mobile and web.
As a relatively large supplier to the entrepreneur sector, I have noticed the different attitudes and approaches taken by entrepreneurs and consequently the results that follow. I witness firsthand the role and importance of the entrepreneurial community for these businesses, as do many of us, but also how small it is compared to what it could, or rather, should be.
The entrepreneurial community in Australia is probably best described as an amorphous collection of independent and decentralised operators of entrepreneurial events, publications, conferences, competitions, networks and websites.
I have highlighted four areas of concern in the organic development of Australia’s broader entrepreneurial community and some approaches that we might take to become more inclusive, representative and ultimately prosperous.
Identity Crisis: “But I’m not an entrepreneur!?”
I was quite surprised when I first discovered that many of my best entrepreneurial clients do not identify themselves as entrepreneurs.
In much the same way as environmental social governance (ESG) of companies is now recognised as just “good governance”, many of my clients consider an entrepreneurial approach to management simply “good management”. In addition to this, once a company reaches a certain size, it ceases to be an entrepreneurial venture and becomes a ‘real’ company.
This often prompts the management team, who are often the founders, to reclassify themselves as business people or CEOs, rather than entrepreneurs.
I would estimate that around 40% of the best entrepreneurs I know would consider themselves businesspeople or managers, rather than entrepreneurs. This creates an identification problem for the entrepreneurial community – there is a widening identity chasm between the entrepreneurial and the identifying entrepreneur, which makes targeting this valuable audience more challenging.
Incentives: “What’s in it for me?”
There is also an incentives problem from the perspective of seasoned entrepreneurs.
The more an entrepreneur has to offer to an entrepreneurial community, the higher the opportunity cost and the less prospective gains of participation generally become. Therefore, a rational high-value community participant would actually not participate at all.
As your business becomes more successful, it is increasingly easier to “not have the time” to attend events or contribute.
Participant Balance: “Take my business card…. pleeeease!”
Stemming from the incentives problem above, the entrepreneurial community is heavier in takers than in givers.
This creates a self-perpetuating problem – the high-value community participants that do brave the traffic and the cold to attend the event are bombarded with 25 new kids-on-the-block waving business plans and handing out cards like a Blackjack dealer at Crown.
Not surprisingly, they get very little out the event and are somewhat less likely to attend next time.
Technology Bias: “Groupon-meets-facebook-meets-Google.”
I believe there is an over-representation of Web 2.0-esqe and retail entrepreneurs that are active in the Australian entrepreneurial community.
On one hand, this is no surprise. Web entrepreneurship is relatively accessible and can have a large payoff. Given the quantum of media focussed on Silicon Valley, with tales of massive, regular and hype-based acquisitions, it’s no wonder that there is a dominant view that internet entrepreneurship is a good pathway for aspiring entrepreneurs.
(As a side note, the unfortunate reality is that almost all risk capital goes into mining exploration in Australia, which probably also influences this scenario.)
As there is a psychographic bias towards tech start-ups. Community leaders focus events toward tech (as is rational), which can alienate non-tech entrepreneurs and perpetuates fewer and fewer non-tech entrepreneurs’ participation.
Furthermore, almost all community participation that involves real-world meetings are CBD based, which causes obvious practical issues for rural and regional entrepreneurs. Unfortunately, regional and rural entrepreneurship is so (perhaps the most) crucial for long term Australian prosperity.
- Marketing: Some Australians associate entrepreneurship as a negative thing — a misperception that needs to be recognised and carefully managed. The entrepreneurial community needs to try targeting events at more seasoned entrepreneurs, who no longer necessarily identify their ventures as start-ups (or themselves as entrepreneurs). Events aimed at this more mature demographic, and the use of different descriptors may yield better participation rates in the business community.
- Centralisation: Online communities need to become better at building goodwill and facilitating user generated events. Meet-ups between participants should be commonplace. These should be small, geographically diverse and subject matter focused.
- Innovation: Entrepreneur panels and talks are mature products that might be losing their appeal. Panels are very exposed to time blowout and one-speaker dominance. Talks can fall into the trap of trying to speak to everyone and reach no one. I believe the now-standard formats of events need to be challenged.
- Telescopic: Achieving high attendance rates at events can be challenging. Real world interaction needs to be more telescopic. Ideally, an event should provide a similar value proposition and be economically sustainable whether there are three attendees or 50.
It is in the interests of all stakeholders of the entrepreneur to maximise the size, engagement and participation of entrepreneurs in an entrepreneurial community. While the foundations are promising, we all stand to gain by building an even more inclusive, diverse network of people.
Phillip Kingston is the author of the War for Eyeballs, the Managing Director of Kingston Development, Vice Chairman of the Centre for Sustainability Leadership and Managing Director of Voyance Capital.