The Australian startup ecosystem has been growing year-on-year: In the past two years, VC funding was larger than the totals raised over the preceding six years combined. Moreover, startups added 1.6 million new jobs to the Australian economy between 2003 and 2014.
The rise of the internet economy, and surge in cloud tool development, correlates with this growth curve. Australian startups assert that this new “startup stack” is making it 75% easier and 67% cheaper to launch a technology company in Australia compared to just five years ago.
The new generation of Australian startups deploy 150+ tools to run daily operations. The tools most favoured by Australian startups were only developed in the past 6 years — indicating a trend of startups building for other startups. Furthermore, 75% of Australian startups believe they wouldn’t exist today without these tools.
A springboard for startups with global ambitions
As little as five years ago building a global company was reserved for large incumbents and heavily capitalised startups. While startups still face numerous hurdles, the startup stack is emerging as a springboard for startups looking to take on new markets:
- Two in three Australian startups (68%) say that entering new markets is one of their greatest challenges. However, many of the most complex challenges to scaling globally — from compliance and managing global teams to accepting international payments — are being solved by cloud tools.
- In fact, almost all respondents (97%) agreed technology tools make it easier to scale a tech startup globally from Australia.
Doing more with less resources
By automating some of the most resource-intensive parts of building a business, the startup stack is swiftly becoming the secret sauce of Australia’s entrepreneurs — helping them to reallocate engineering time and do more with less resources.
- 89% of the participating startups have been in existence for less than 5 years, with 31% having not raised funding, while only 24% had raised upwards of $500k.
- 53% of respondents employ 5 or fewer staff, yet had fully operable businesses.
The full stack is greater than the sum its parts
For decades, one of the greatest constraints on CIOs and IT depts was to get all of the pieces of their company’s software systems to not only work — but to work together. Today, this arduous manual process is being replaced by APIs:
- When choosing third-party tools, the most important factor for startups is ease of integration (30%), followed by reliability and stability (17%), interoperability between tools and affordability (both 15%).
- By comparison, in the UK cost efficiency was most important, suggesting Australian startups are more often ‘going it alone’ and integrating tools on the go
By building on an “interoperable stack”, startups say the biggest benefits are the ability to quicken their entry into new markets (25%), reduce operating costs (18%), increase productivity and accelerate product development (both 17%).
But there’s still room for development
Presenting a potential business opportunity for enterprising Aussie founders, local startups identified cybersecurity (16%), CRM (14%) and analytics (12%) as the top three areas in need of better tooling.
Mac Wang, the Head of AU Growth for Stripe: ‘Startups today are no longer reinventing the wheel. Given that they’re often nimble innovators themselves, startups are trusting other startups with handling some of the most fundamental parts of their business. While this is in stark contrast to how incumbents have historically approached their technology systems, these Goliaths are starting to realise that the new breed of cloud tools are the proverbial stone in David’s sling.
“We partnered with Australia’s leading accelerators and startup hubs on the Startup Stack research to better understand how this global trend is catalysing the new generation of Australian startups and ameliorating many of the most complex challenges to scaling globally — from compliance and managing global teams to accepting international payments.
“By automating some of the most resource-intensive parts of building a business, the startup stack is emerging as the secret sauce of Australia’s entrepreneurs.”