Thee availability of technical talent is the great challenge startups face according to a poll by Startup Muster.
The survey of more than 600 Australian startups shows access to talent cited by 42% edging out funding, both government and private, on the list of external challenges.
Other data within the report helps explain the concern. Founders with skills in business were slightly more predominant than those with a background in technology – 80.4% to 77.9%. And more startup founders claimed their strongest skill set was in business than technical matters – 35.2% compared to 33%.
Just 25% of founders previously worked in a “technical” role, and 50% have no startup experience.
Despite the business background of the founders, most of the employees are focused on technical operations. Further, most of the outsourcing conducted by Australian startups is also in software development, as companies build products using a variety of coding languages.
Half of Australian startup outsourcing is in done in Australia, but India takes 17% of the jobs and Philippines manages 9%.
However, a scarcity of Australian technical talent is also driving up the cost, which could be leading more startups to look overseas.
“It’s an absolute national tragedy what is happening in technology” Freelancer CEO Matt Barrie has said about the IT skills shortage.
“Basically, it’s more expensive to me on a cash basis to hire a University of Sydney graduate than a Stanford graduate.”
The reason, according to Barrie, is that there are too few Australian tech graduates, especially those with the necessary skills. So companies have to bid against each other for a small core of talent.
Posse founder Rebekah Campbell has written similar things about the cost of talent in Australia.
Campbell says it cost $40,000 to build her platform, of which $15,000 was used on six developers in India. The rest was spent on two part-time workers in Sydney. Since then, Campbell now spends $20,000 a month to employ 14 people in Manilla, including six engineers.