Startup Status year one – Review, reflections, and what’s next
We established Startup Status just over a year ago to impact entrepreneur support in Australia. As we pass our initial 12 months of operation, I pause to reflect on lessons learned, impacts made, and what’s coming up.
The reason for Startup Status
Startup Status helps those who support entrepreneurs, with a focus on non-metro areas. It developed out of the experience managing Fire Station 101, a local government innovation hub in Ipswich, Queensland. It was there that we immersed ourselves in the “ecosystem” – entrepreneurs, government, educators, researchers, service providers, investors, and others involved in supporting high-growth potential entrepreneurs.
“Startups” and “ecosystems” are not new, but the rapid pace of market, social, and technology changes require new approaches and present new opportunities. Entrepreneurs offer a form of diversification and renewal to a region. Distinct from traditional service-based businesses, “startups” can introduce new revenue and technology to a region and share local knowledge to the world.
This “boundary spanning” activity does not need to come from new businesses, either. Some of the best startups are new ideas commercialised out of established businesses that leverage existing supply chains and practical experience from managing a traditional business.
Particularly in regional areas, developing a thriving entrepreneur ecosystem can be a challenge. There is a constant tension resulting from an entrepreneur’s customers, markets, talent, service providers, and investment drawing them outside the region. At the same time, a region wants to retain new forms of business for economic and cultural diversity. A region’s natural resource assets can attract new entrepreneurs to a region for unique local opportunities and customers. All this happens in a rapidly changing environment and complex relationships.
How this happens can vary significantly for different regions based on geography, industry strengths, history, political climate, and more. Efforts to support startup activity can fall in an in-between niche that includes both economic development and community development portfolios. Entrepreneur ecosystems offer potential for significant wealth as well as pathways to success for those previously without access to opportunities.
As a not-for-profit, the aim of Startup Status is to ensure everyone has access to entrepreneur opportunities. Innovation is morally neutral. Entrepreneur ecosystems can provide opportunities but without intentional action those opportunities my only be available for a few and further increase gaps in wealth between segments of a community and between regions. To this end, we focus on research, support frameworks and models, and data that helps provide equal opportunities for anyone who wants to give it a go.
The past year: Discover and develop
Startup Status joins an emerging sector of businesses supporting the entrepreneur ecosystem that are themselves startups. Around half of the entrepreneur support services and programs in Australia did not exist two years ago. The rapid growth of new actors is likely to slow as the sector continues to rationalise and specialise as it matures.
Nearly 50% of Australian businesses with less than five employees will not continue beyond three years. Businesses in the emerging and uncertain field of entrepreneur support services can be expected to fall in the more terminal side of that statistic as the sector matures. It is a challenging and heavily subsidised business model and constantly changing to meet the dynamic needs of entrepreneur clients and government, university, corporate, and investor customers. It is also a highly impacting, exciting, and worthwhile field.
Startup Status can be seen to have had three phases over the past year as we developed a base platform, tested and collected data, and further refined through practical application.
Phase 1: Platform development
One of the challenges we initially focused on is how to measure impact over time. Services provided by accelerator programs and innovation hubs offer to create jobs, investment, and economic diversification and growth. The actual impact can result much later than when services are provided, in a different region from the original investment, and be attributed to whoever had the last engagement with the entrepreneur.
We also wanted a way to make data and insights we collected visible and accessible to as many as possible. Regions need to have better access to research and data, particularly when they are the ones who provide it in the first place.
So from January to September 2018, we developed and tested a platform to support innovation hubs and programs measure their impact over time. As the technology platform developed, we onboarded data from 25 hubs, engaged with federal and local programs, and produced a dynamic digital map of the Australian innovation ecosystem.
Phase 2: Test and data collection
The next stage was to collect data for the research and test the hypothesis with as many different scenarios as possible on the ground. We hit the road from October to January 2019, covering around 12,000 km across Queensland in the first leg of a national tour to deeply understand the perspectives of those in the ecosystem.
We spoke with governments, universities, service providers, entrepreneur support organisations, entrepreneurs, investors, local businesses, chambers of commerce, high schools, and anyone involved in the “entrepreneur ecosystem”. We presented in national forums and local governments to continue to raise awareness and gain feedback, aligning traditional economic and community development with the emerging narrative of the entrepreneur ecosystem.
The structured interviews and workshops provided data for PhD research on “the role of the innovation hub in building community resilience.” PhD research is like a startup in that there is an initial hypothesis that may or may not be true. In this case, the hypothesis was that innovation hubs play a key role in contributing to community resilience.
Phase 3: Write up and test through practical application
The research from the first leg of the tour challenged the hypothesis. Innovation hubs certainly provide a support function for regional communities through leadership and program and events. But the magnitude and complexity of the challenge to build an ecosystem is greater than what can be achieved by a single hub, particularly when they are supported by an individual rather than owned by a government, university, corporation, or investor.
As a result of the feedback, we are exploring a framework called “collective impact” and the establishment of what are known as “backbone organisations” for the development of entrepreneur ecosystem. Collective impact is an approach used when the complexity and scale of the challenge is greater than any single organisation can address. Backbone organisations are formed to facilitate collective impact outcomes.
From January to June 2019, we have been writing up the results of the research, continuing to develop the platform for hubs and programs, and providing practical support for regions to test principles identified relating to collective impact. This has included in-depth reviews in a cross-section of regions such as the Northern Territories , Goondiwindi, Logan, Bundaberg, and Mandurah.
Strategy and future focus
Our vision is for Australia to provide world-leading entrepreneur support to ensure everyone can give it a go. There are a number of focus areas to achieve this vision, including: capital, talent, policy, data, measurement, advocacy, media, spaces, mentoring, programs, events, and more. Picking a specific focus area is a challenge, and opportunities easily exceed capacity. Our strategy for 2020 matches our core strengths with the current context for where we feel we can realise the most immediate and sustainable impact.
Focus area one: Build and Support
Regions and leaders are equipped to better support entrepreneurs.
We build capability and capacity in those who support entrepreneurs by developing frameworks and plans for local programs, sharing stories, and equipping leaders with the models and frameworks to be sustainable. This has included development of business plans and feasibility studies, creating innovation hubs and can be hands-on engagement to determine feasibility in the early-days of a regional innovation hub to facilitating workshops and hackathons in an established community.
Examples include supporting work on the Logan City Council Kingston Butter Factory innovation hub and Innov8 Logan, the Goondiwindi entrepreneur ecosystem, Northern Territories and Darwin Innovation Hub, and Mandurah, WA. Rather than a standard consultancy fee-for-service model, our aim is to develop frameworks and train-the-trainer models that equip local providers, mobilise local funding, and attract external intellectual and financial capital.
This is a national challenge with global impact. We will continue to share and learn, collaborating with leaders in the field such as the Global Entrepreneurship Network and the Kauffman Foundation.
Focus area two: Ecosystem Mapping
An accessible and accurate map allows for efficient and effective entrepreneur acceleration.
We maintain a map of those who support entrepreneurs in Australia and measure the impact of that support. We partner with others around Australia and the world who are committed to understanding how we can use data to better understand how to help regions better support entrepreneurs.
Examples include views on female entrepreneur support and the creative industry sector. We will continue with similar approaches, collaborating with those who have specialist mapping needs focused on industry, region, and community groups. The aim is to minimise the focus on mapping to get on with making rapid decisions based on information the map provides.
Focus area three: Research and measure
Academic research provides rigour for data-driven decision making.
We build on the growing body of research and knowledge around entrepreneur support activity. This adds rigour to the work and allows as many as possible to benefit from the activities.
We will complete the PhD by the end of 2019, continue to development and implementation of the hub measurement platform, and contribute to other’s for a more complete view of entrepreneur ecosystem development with an emphasis on Australia and non-metro regions.
Personal closing reflections – The Tour, on being an entrepreneur, and a startup for startups
A year ago I had an idea for a national tour to collect data for my PhD and deeply understand the challenges and opportunities of entrepreneur support in Australia. I was guided by mentors and supervisors to stick to Queensland for the PhD data and submit before I continued the journey rather than biting off all of Australia in one go.
Just as I have personally changed from when I first had the idea, the narrative will shift when I continue the loop later in 2020. The focus will go from investigative and discovery to providing tools and frameworks that have been developed over the initial leg.
Startup Status will also expand. While it will continue to be driven by my personal vision and supported by a board and additional project staff as needed, the challenges and opportunities are larger than a single person can achieve in a short amount of time. The focus is on better integrating the entrepreneur ecosystem with traditional economic and community development activities. There is also a need to develop a national narrative for entrepreneur support beyond state by state comparisons. Collaboration and alignment with national and global brands will be key to achieve desired outcomes in a reasonable amount of time.
Like all new businesses, Startup Status is also the personal journey of an entrepreneur. I have been fortunate to work for governments, companies, and consultancies in paid positions to support entrepreneurs and small businesses. I have also grown businesses in digital and manufacturing sectors as an employee. A paid position allowed me to focus on the task at hand.
But there are unique challenges when the company is your own with personal risk and potential for gain. I find it difficult to propose that founders invest their own capital into their vision if I am not doing the same. So in the past 18 months I have established a for-profit consultancy, a for-profit software company, and a not-for-profit company providing ecosystem development services and platforms. These challenges support the various outcomes we want to achieve and provide areas to experiment with different services, products, and platforms.
I am also not immune to the trap of connecting my identity to the success of my business. The thought of business failure can be paralysing particularly when the aim of my business is to help regions and programs prevent business failure. The result has been a daily practice of applying my own principles, setting and learning from short-term goals, and putting one foot in front of the other. I can empathise with founder stories of 2am wake ups, 7-day weeks, the ongoing hustle, and navigating an uncertain landscape. My hope is that living the journey adds a degree of integrity to the services provided.
Join the Startup Status journey
Entrepreneurship is a community sport. If you wish to be involved, or simply keep up to date, please connect with me at chad@startupstatus.com, on LinkedIn, and sign up for the newsletter at www.startupstatus.co.
Thank you for joining me on the journey. We have a brief time to make an impact in this world. The vision of Startup Status is greater than any one person or organisation can achieve. I look forward to working with you as we work together to help anyone who is keen to be able to give it a go.