CK slides - QUT Business School - 23 Aug 2012


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CK slides - QUT Business School - 23 Aug 2012

  1. 1. High-growth startups:Ingredients for success Colin Kinner QUT Business School 23 August 2012
  2. 2. Topics• What is a high-growth startup?• Why are they important?• Ingredients for success• The local startup ecosystem
  3. 3. Types of Startups Extreme growth potential, born >$100m global $5-100m High growth, national / globalPotential value of company focus $1-5m Modest growth (SMEs), Talent migration domestic focus Lifestyle business / small <$1m business Number of companies
  4. 4. High-growth Startup• Globally scalable business model• Typically not cash-flow positive• Growth fuelled by via external investment• Financial gains via an exit / liquidity event• Generally not a source of income for the founder(s)• Different to a “small business” or “lifestyle business” or SME
  5. 5. BUT. . . Most startups fail
  6. 6. So why do it?
  7. 7. Web businesses are cheap to start Software Hardware Marketing Customer service Tech supportSoftware development $$$$ $
  8. 8. Huge growing markets
  9. 9. Kauffman Foundation• Existing firms are net job destroyers, collectively losing 1 million jobs net per year• By contrast, new firms collectively add 3 million jobs in their first year
  10. 10. What are the ingredients for success?1. A world-class team2. A real problem that many people would pay money to solve3. A compelling solution that is superior to competitors4. Disruptive innovation5. A large global market6. A sound business model7. Competitive advantage8. Access to capital9. Access to advice and expertise10. Exit strategy
  11. 11. A real problem that needs to be solved
  12. 12. A compelling solution
  13. 13. Disruptive Innovation
  14. 14. Transition from “old economy” businesses to disruptive startupsOld economy Disruptive startups International clones businesses $14bn $40m $2bn $200m
  15. 15. A large global market
  16. 16. A large global marketConsumer Business
  17. 17. A sound business model
  18. 18. A sound business model
  19. 19. Competitive advantage
  20. 20. Competitive advantage
  21. 21. Competitive advantage
  22. 22. Access to capital
  23. 23. Local investorsNon-affiliated HNWs
  24. 24. Investors invest in <1% of businesses that approach them
  25. 25. Venture Capital in AustraliaVC $ per capita Australia $5.45 ($120m total) Melbourne Cup bets $7.27 ($160m total) Australia’s Olympic Games preparation $14.10 ($310m total)
  26. 26. Access to experienced mentors
  27. 27. Exit strategy
  28. 28. Brisbane’s startup ecosystem IdeationNetworking Funding Blackbird Fund Non-affiliated HNWs Support Mentoring for Growth Innovation Start-Up Scheme Discontinued
  29. 29. Incubators• Owned by QUT • Owned by University of Queensland• Supported by Qld Govt • Funded by Qld Govt• Focus on creative sectors: • Space at Long Pocket fashion, design, new media, • $20k grant program – for for product film, TV, music development and/or business• Space at Kelvin Grove consulting• Interest free loans to $15k • Mentoring program• Commercial support programs • Events and bootcamps• Events
  30. 30. Incubators (cont)• Owned by Griffith University • Owned by University of Sunshine• Supported by Qld Govt Coast• Office space at Griffith Uni Gold • Supported by Qld Govt Coast campus • Office space at USC (Sippy Downs)• Experienced team • Structured mentoring program• Mentoring program • Events
  31. 31. What companies do incubators support? Unproven concepts / Mature ideas businesses High  Capacity to scale Low-growth businesses Low Concept Mature business Stage of company’s development
  32. 32. Grants / government fundingCommercialisation grants R&D Tax Incentive Export Market Development GrantsSkills and Knowledge • 45% refundable tax• $50k [80:20] for specialist offset (equivalent • Reimburses up to 50% advice and services to a 150 per cent of eligible exportProof of Concept deduction) promotion expenses• $250k [50:50] to prove • Activity must above $10,000 commercial viability qualify as eligibleExperienced Executive R&D• $350k [50:50] to engage CEO / senior execEarly Stage Commercialisation• $2m [50:50] to take a new product / service to market
  33. 33. Trend 1: Co-working spaces• Space and basic facilities for startup teams• Mentoring and events• Objective is to build a community
  34. 34. Trend 2: Crowd-funding
  35. 35. Thank youColin Kinneremail @colinkinner