Australia has recently seen a 108% increase in startups. This shows that Australia is really on the up. Bigcommerce is one company that was featured on Business Insider. After raising millions via American venture capitalists, this eCommerce platform became the most funded startup in Australia.
But why are companies starting to establish themselves in Australia? This article will attempt to understand why it's the case.
Australia Loves Startups!
Governments across Australia's regions are realizing the value of creating business communities. The barriers to creating a company and the various legal obligations a new company has to abide by are relatively small. It's not like the US where setting up a company can take many days to accomplish.
There are more coworking spaces, more grants, and more business help available for companies in all sectors.
The Economic Landscape
What separates an economically depressed area of the world from an economically prosperous area of the world is the current political and economic climate. But a by-product is this is the number of businesses opening their doors.
Take areas of Europe as an example. In countries like Greece, Spain, and Portugal businesses are not opening their doors, instead, for the first time they are closing them for the last time. The same can be said for many areas of North America.
Australia has managed to remain relatively isolated from the economic woes of the rest of the world. It's managed to keep its economy afloat. As a result, startups are seeing Australia as a stable place to begin following their dreams.
A Strong Community Attracts More
Startups communities tend to form clusters. They are not spread over a wide area and the community tends to be extremely dense. This comes as a result of people wanting to associate with those with the same beliefs and goals in mind. Even businesses operating in different niches can benefit from associating with other small businesses.
Many startups are one-man operations. Support is often in slow supply. In many areas of Australia, including Melbourne and Sydney, coworking spaces have exploded in order to facilitate this.
For the startup community, this leads to a snowballing effect where more and more companies want to get in on the action. It's why Silicon Valley grew so quickly, along with the startup communities in Tel Aviv and Paris.
The Australian Lifestyle
It's important to mention that what makes the Australian startup community so unique is it isn't just about local people deciding to start their own organizations. There are people from all over the world coming to Australia to benefit from the infrastructure in place.
To begin with, they find the lifestyle extremely welcoming. Yes, living costs are much higher than in other countries, but wages are also higher and it's possible to charge higher prices for the same products and services.
Australia is a pleasant place to live with lots to do. Most cities in Australia are extremely modern and come with all the resources needed for businesses to grow.
Will the Trend Continue?
Like all instances of growth, particularly with the tech industry, there are fears that it could end in tears. The same concerns have been raised among unicorns in the US. Unicorn companies are startups valued at over a billion dollars.
There's the feeling that this could turn into a bubble, and this bubble could burst, taking a lot of Australia's startup industry with it.
As of the start of 2016, there are no signs of slowing. Startups are gaining more and more investment from venture capitalists, but there are no indications that this could lead to many companies failing to meet expectations. Granted, the biggest tests are still to come. Many of these companies have yet to reach their potential and few of them have opted for an IPO.
The success or failure of Australia's most promising startups will inform speculators about the wider industry and its future.
One benefit of the Australian startup industry is that there is only one unicorn. The other billion dollar companies have justified their high valuations through billion dollar progress.
Regardless of whether Australia's startup bubble will burst, it's clear that this country is the place to be for ambitious startups. There are few barriers to starting a company here and there is an established network ready and waiting for newcomers to take advantage of it. Everything a startup needs is available in Australia.
What do you think of the future of the Australian startup industry today?