Last year, the total number of startups in Australia dropped for the first time in five years, by 12.5%. Is it the fear of striking out solo that’s to blame for this recent downturn? Or is it a lack of support on home turf that’s to blame for this dwindling entrepreneurial spirit? Enablo co-founders Daragh McGrath, Mark Wyman and Dave Nixon share insight on the challenges and payoffs of founding a business, the evolving landscape for startups in Australia, and their advice for future founders.
Daragh McGrath: “Dave, Mark and I have worked together for the best part of the last decade. Our common bond is a deep desire to help people be more productive, collaborative and connected at work, using the tools that are familiar to them in their personal lives. For a number of years, we helped organisations across Australia and New Zealand leverage Google's G-Suite (Google Apps) to transform the way they collaborate.
Just over 3 years ago, whilst catching up as friends, we also realised that we shared an interest in leveraging our complementary skills to start a business of our own. At the same time, Facebook had just launched a platform called Facebook for Work (now Workplace by Facebook) which resonated with us.
Knowing that I could lead sales, Dave had the consulting cred to deliver beautiful client experiences, and Mark had the tech and engineering nous to deliver any outcome our clients would require led us to quit our jobs and jump straight in!”
Research firm Forrester Consulting recently released the findings of a global study into the Total Economic Impact of Workplace by Facebook. Results include a 3.9 x return on investment in Workplace over a three year period, and $13.1 million in quantified benefits over three years. Before a startup can deliver any real return on investment, founders need to secure funding. Notable funding ventures in Australia so far this year include car mileage software startup GoFar, which raised $1.3 million, and conversational AI startup Curious Thing, which bagged $1.5 million in seed funding.
DM: “There are three things that stand out to me:
1) The leap of faith that it takes to back yourself and your idea, quit a well-paying job and trust that your judgement and execution is sound.
2) I recall a point in the early days - just a few months in - where we had closed some business, but our customers had not yet paid us and our bank account was rapidly draining. I don't want to recall the details too closely as I didn't sleep for several months before or after that due to the stress, but needless to say that was quite possibly the most stressful point in my life.
3) Finding awesome talent. We're lucky to have amazing employees at Enablo, but the hardest part of building and scaling this business is finding the right people. Not just those who are the best for doing the particular job we are recruiting for, but also those who are the best cultural fit for our team and who will be the culture carriers as we scale.”
Another set of Australian startup founders who have experienced all these challenges and more are Mike Cannon-Brookes and Scott Farquhar, co-founders of Atlassian. Their journey from college friends who shared an idea about starting their own software business to becoming the fifth and sixth richest people in Australia from the success of that business, is legend. But they have faced their fair share of challenges and criticism. Their business decision to not employ sales staff, and to keep the company’s HQ in Australia, draws persistent scepticism to this day. Mike’s advice is to stick to your guns when it comes to your own world view as an entrepreneur. “Part of an entrepreneur's job is to change the world in some way. You don't do that by adopting someone else's world view. You just never really know until after you make a decision if their idea or yours was a better plan,“ Mike tells the Australian Financial Review.
DM: “I think we're getting better for sure! We've certainly made some long-term bets for the business based on government benefits such as the R&D Tax Incentive or the Export Market Development Grant (which has been key in our decision to expand to the US).
I think there's still a perception amongst potential employees that jumping into a small but growing startup is a risky move - and many people like to play it safe and take the job with the more established company. But those who do make the jump thrive, rapidly grow their career and learn and develop at a pace that far exceeds anything they will get in a big corporate.”
An annual report by Startup Muster revealed that last year, Artificial Intelligence was the most popular sector for startups in Australia, with 20.6% of new businesses falling under this umbrella. Fintech came in at a close second, with 18.1% of new Aussie startups joining this industry.
DM: “Regardless of whether you're doing it tough or not, anyone thinking about a startup needs to put a few key things in place before they make the jump, as this will help in the hard times.
Mark Wyman: “Great question. Step back, take a breath, evaluate what it is that you're doing, ask for help and feedback, learn. Once you've had a chance to do that, go for it, don't half-ass it, be ready to make sacrifices. It's funny how the harder you work, the luckier you become. Now, I just work harder. At the sacrifice of time off, having holidays, spending time with my kids and family, sometimes I don't follow my own advice.”
Dave Nixon: “If you’re doing it tough in the startup world, you’re not alone. Remember that. Every startup journey has its peaks and troughs. My advice (ideally before you hit the ground running your startup) is to have a very clear North Star for your startup:
I often go back to these questions during hard times and ask myself if I still feel as passionate about the purpose and mission as I did when I started. Right now at Enablo, I’m still just as committed to that North Star as I was when we started the company 2.5 years ago. The last startup I self-funded, Obsurfation, I lost my passion for the mission and the market I was servicing. It was clear to me that I needed to take my learnings and move on.”
At the age of 22, fellow Australian startup founder Melanie Perkins got her big break pitching her company Canva to an audience in Silicon Valley. Today, her graphic design software company is worth $1 billion, making it one of Australia’s most successful startup stories. A key to success for Melanie and other startup founders like her is the ability to delegate, says Danielle Logue, associate professor at UTS Business School.
DM: “I am a huge believer in having mentors to support your growth, regardless of whether you are in a startup or not. I am very fortunate to count two very good friends as my best mentors as well, and even more fortunate that they were the founders of Cloud Sherpas - a company that has been on a very similar journey to Enablo. For many of the challenges I encounter, they have already lived through it.
I also have in recent times come to realise the benefits of having someone assist with driving mental coaching and performance. Many of us (though for those who know me, they know I don't personally!) focus on physical fitness and performance, but don't spend any time focusing on our mental fitness and performance. I have taken huge inspiration from former Formula One driver Nico Rosberg in recent years. Sitting in the same team with the same equipment as Lewis Hamilton - who is widely acknowledged as one of the greatest Formula One drivers of all time, Nico focused on his mental performance and attributes. This is the single reason why he was able to beat Lewis to win the F1 World Championship in 2016.”
MW: “I've never actively sought role models or mentors; it's not something I felt that I have needed, right or wrong. However, I'm lucky to have people around me who I respect and have guided me through life and instilled me with the values that I believe have helped me with Enablo. Be it my parents, brother, fiancée, in-laws, friends or colleagues, they've all positively contributed to me and helped me get to where I am today.
Should you or shouldn't you have one? That's a personal thing, but my advice is that talk is cheap, find someone who has done the hard yards and has the bruises to prove it. You learn a lot more through failure than success.”
DN: “I don’t have any go-to mentors and role models top of mind. I’m content experimenting and navigating my way through life and business via self-learning. There are so many great online resources (podcasts, e-books, articles) available on-demand today that I seek out what I need when I need it.
However, I do feel the same as Daragh and am thankful to have investors and board members who have walked this walk before — building successful global B2B services businesses. People that give us open and timely feedback and don’t just care about business growth, but also about our own and our families health and wellbeing.”
Have you got a question for the Enablo team? Contact us and we'll be sure to respond. Happy collaborating!