Turning online marketplaces into global businesses
Written on the 21 March 2018 by David Simmons
Online marketplaces which connect buyers and sellers are more than just a startup scene in Victoria - they're well and truly big business these days.
According to LaunchVic, Victoria's leading startup ecosystem development agency, online marketplace startups founded in the state contribute around $1.6 billion in profit.
Additionally, these startups, which include business like RedBubble and Envato, employ 13,000 people and create 80,000 indirect jobs. Pretty good for a group of online startups.
These startups have received a wealth of advice and assistance from LaunchVic, who invests in organisations and projects like accelerators, incubators, education programs, research and events to empower entrepreneurs.
Business News Australia spoke to Dr Kate Cornick, CEO of LaunchVic, about how Victorian online marketplace startups became so big, what sectors we should keep an eye on, and some key trends she's noticed in the scene.
What are some major trends in startups right now?
The biggest one is growth. We are growing very strongly. We have got a very strong grassroots community of lots of early stage founders and we're seeing those founders be successful and growing into successful business, and that's what we want, we want more companies that are going to contribute to the economy, creating jobs and contributing to gross state product.
What sectors are really taking off at the moment?
We're very strong at digital marketplaces. Three of Victoria's four unicorns are all marketplaces. These are businesses that have platforms that connect buyers and sellers. We also know that Victoria's also got a really strong track record in health-related startups. Last year we surveyed the startup ecosystem and we found that one in five startups were in health, wellbeing, or sports technologies.
What would be your top tip for entrepreneurs wanting to break into online retail?
I think it's a very exciting space. I think the top tip for any founder is make sure that they are ready for the journey which is a deep learning curve and make sure you understand your strengths and weaknesses so that you can go out and build upon your strengths and seek help where you have weakness. And it's one of the things that we really work to do is help founders with programs that are going to help them grow and develop faster.
What's the number one mistake that you see some founders making?
I think one of the biggest mistakes that I see is founders not establishing their company in such a way that it's attractive to investors. I think this is a really easy mistake for founders to make and it may be a simple thing like the way the constitution is written or the way the angel investment has been made or the number of angel investors involved. This can really be prohibitive when you start to grow and want to attract a series A or series B round from a venture capital company. I think it's a great shame when you see these great companies that are set up doing great business but they aren't a very attractive business proposition because of the way they've been structured. We're certainly working with groups like Startmate to help overcome that through investor pitch coaching sessions to make sure that founders have got the skills and knowledge they need to make sure they're going to be investor ready.
Why are entrepreneurs so attracted to Victoria?
I think part of it is our strong grassroots communities. We know that entrepreneurs that come here from interstate and overseas remark consistently on how easy it is to connect into the ecosystem and find some support networks, whether it's through a meet-ups, accelerator groups, or special interest groups. We also are renowned for having a fabulous coffee scene and a lot of entrepreneurship happens over coffees. And of course we're also a very liveable city; we're the world's most liveable city and that makes it very attractive for people to come here.
Business News Australia
Author: David Simmons