A startup chief executive has claimed that the startup sector is receiving too much focus in contrast to the amount of tangible contribution it makes to the Australian economy.
The boss of business-to-customer matching platform OneFlare, Billy Tucker, told Business Insider that there is a “disproportionate” level of attention on the startup industry in Australia.
“There is a lot of appeal in high-energy groups of people getting together to solve a big problem in a garage somewhere,” he said.
“Whereas the real powerhouse behind the Australian economy – the businesses, the trades, the professionals, the one man band – don’t get anywhere near the amount of kudos, but in fact take every bit as much risk, if not more so.”
Tucker, who was appointed as CEO last month, is no stranger to the startup industry, having founded successful online group buying site Cudo after working for Microsoft.
“When we talk about the ‘innovation agenda’, most often we talk about ‘let’s go find our next Atlassian’,” he said.
“But let’s be honest, what’s more likely is that we’ll build 50 new plumbing businesses that will hire 10 new employees each — that’s 500 people in the workforce. Whereas in most cases those small entrepreneurial ventures never make it past three poorly paid employees.”
OneFlare cited Australian Bureau of Statistics numbers that 97.5% of the two million trading entities in the country are small businesses, compared to just 635 that were counted as startups.
Tucker said those small businesses deserve more coverage and public focus for putting their heads on the chopping block, as more upfront capital was required to begin a traditional business compared to a startup.
“Startups can be formed with a couple of entrepreneurs in a garage. So you don’t [have] a lot of risk at first,” he said.
“Whereas businesses tend to have to buy a lot of equipment, potentially premises, they have to buy transport and they have to find customers. They can all be expensive.”
“I think that’s why I find it disappointing that so much less admiration is given to those brave souls that go out on their own, knowing how tough that can be.”
Oneflare is itself a startup that matches businesses to potential customers, allowing them to bid for tasks. In May last year, the company attracted a $15 million investment from online classifieds site Domain, which is about to separate from Fairfax, as a counter to News Corp’s backing of rival Hipages.
Oneflare had also secured $1 million of funding back in 2014.
“The secret sauce that we have in the business is around our algorithms and our matching technology,” said Tucker.
Oneflare, established in 2011, now has more than 80 staff and claims to connect more than 61,000 customers every month with 92,000 businesses.
* Disclosure: Fairfax Media owns 100% of Allure Media, the publisher of Business Insider.