Below 5% of Aussie startups scale into sustainable businesses!!

- November 21, 2012 2 MIN READ


We have all heard the rough facts around “only 1 in 5 startups ever make it” etc, which is quite general and not location specific, but a new Australian report released today – Silicon Beach; A study of the Australian startup ecosystem reveals some startling facts about our local startup scene that we all should be taking notice of.

The report was co-authored by Deloitte Private, Pollenizer, Australian startup publication From Little Things and the global Startup Genome Project compared more than 1,000 Australian tech start-up companies with more than 50,000 early-stage companies being tracked worldwide.

The objective was to inform startups, investors and policy makers as well as industry leaders understand what factors contribute to a healthy startup system. The report is 32 pages and there is a copy to download for free at the end of this post so you can read it on your tablet with a cup of tea [I recommend Blossom Blends Get up and Go flavour as you’ll be motivated to pull your finger out and hop to it after reading it through]

Some of the findings that I thought were really interesting were, according to the research, Sydney entrepreneurs are 86% less likely to want to get rich, 45% less likely to want to change the world, and 37% more likely to want to build a great product, than their counterparts in Silicon Valley.

“Without a doubt, Sydney is the largest startup ecosystem in Australia. We’re seeing some good companies come out of Melbourne and the other capital cities, but Sydney demonstrates the most established network of startup founders, investors, and accelerators and incubators,” said Joshua Tanchel, a co-author of the report and Partner at Deloitte Private.

“We’re seeing lots of people now starting their own businesses, but the startup ecosystem is relatively young,” said Mr Tanchel. “There are some constraints that make it harder to launch a global company here than in the U.S. We think this report contains some useful information to help build that ecosystem.”

I was a bit startled that in the report they found less than 5% of startups actually become sustainable businesses, this is not good news and shows that further education needs to be happening in the startup space from more people that know what they are talking about, across the whole country.

As a passionate supporter for having more women in tech, I was disappointed that females only accounted for 4.3% of the people within the study. This does however conflict with the widely reported “mumpreneur” media craze in May of this year where according to the Australian Bureau of Statistics women were starting businesses at twice the rate of men. However I am betting a large amount of those are sole trader businesses and not company structures as most tech startups in the ecosystem indeed are.

The report is full of great information and awesome recommendations. Download your free copy below!

Silicon Beach Australian startup ecosystem copy


Listen in to Eagle Waves Startup Show on Thursday where we will be discussing the findings further.