Startups leap into fault lines of disruption

OPINION: A less-certain world means more opportunities for Perth’s startups.

Another Christmas approaches, another year nears its end. I hope you’re happy, hale and hearty, surrounded by family and friends, with nothing more sinister in your future than mild dyspepsia.

One of the advantages of Perth in the global startup community is our climate and culture. We do Christmas on the beach and live in a safe, comfortable, family-friendly environment.

I’ve described it previously as the ‘salmon effect’ – Perth is a fantastic place to bring up kids. We export talented individuals who then insist on coming back to Perth to breed. There are some amazing people in the community here who are doing incredible things on the global stage.

Perth has always been a comfortable place to live. This has been cited as one of the reasons the startup scene here is small; people are too comfortably well off to risk it all on a startup. We’re not hungry enough to really take the big risks.

But there has been a lot of change this past year. Who can predict what happens next in a world where a man like Donald Trump can become president? Maybe there’s some advantage to being small and very predictable, or even adaptable. And we know we’re going to get hungry for new opportunities as our resources-based economy wobbles.

The political uncertainty is also creating opportunity. The division between left and right, the anti-establishment rhetoric from both sides, has huge political ramifications. The political class’s belief in sticking to the middle ground and appearing to be a safe pair of hands is no longer working.

We’ve always been a few years behind the rest of the world in feeling these effects. Whether that’s still true in the globally connected, media-saturated environment we now inhabit is debatable, however. The coming state election will tell. The government’s involvement in the innovation community may play a part in that.

Uncertainty and change breed opportunity. The cracks in the old ways of doing things, the old establishments, allow new growth to occur. Startups are where this growth will occur. An opportunity can be seized by a fast-moving small team and turned into profit very quickly.

Spotting these opportunities can be hard. Sometimes it needs someone to try something to see if it actually is possible. The key here is that the attempt must be allowed to fail if it’s not possible. Failure is part of the process. The founders of 100 startups, all busy testing new opportunities and business models, will fail 90 per cent of the time. But the 10 per cent who don’t will discover the best way of taking advantage of those opportunities.

Viewed from the founder’s point of view, this looks like a 90 per cent chance of failure. Viewed from the opportunity’s point of view, this looks like 100 per cent chance of success. Someone will win, it’s just hard to predict beforehand who that ‘someone’ will be.

More founders means more failure, but also more opportunities being taken advantage of. More uncertainty means more opportunities. Perth’s current cosy security is being shaken up in many different ways. That will generate more people willing to take risks, and more opportunities to be risked.

More founders trying more startups also means more success. We are seeing some of the early successful startups really get their growth on at the moment. More startups getting through the idea stage means more people being employed by startups and learning how to do this. They, in turn, become founders for the next wave.

This is the silver lining of uncertainty, instability and the winds of change. The old truth that business hates uncertainty is only true for established businesses. New businesses love uncertainty. Change brings opportunity, and opportunity brings success. The community is growing, and starting to show what can be done from little old Perth. There are people doing globally visible businesses here.

Because we’re also seeing fewer founders leave for other states to make it big. There are always some, and the market size here is always going to be a factor, but the old certainties that ‘to get funding you need to go east’, and ‘to succeed you need to go east’ are no longer so certain. It’s possible to make it big here now. The more people see that, the more will try to do it themselves.

So here’s to Christmas, and turkey sandwiches on the beach in our comfortable little bubble on the edge of the desert. I hope it doesn’t pop too dramatically. I hope we get everything we want and not just what we deserve.