Want to build a sustainable Aussie startup ecosystem? Fix the local talent and knowledge haemorrhage.

April 23rd, 2014 § 0 comments

Last month I wrote an article for the From Little Things blog called – Startups are sacrifice… for ALL involved.

Now I’ve been thinking long and hard about this. Why should entrepreneurs and the wider startup ecosystem care about startuppers and the points I raise in that piece? And how do we make them care?

There’s been a lot of talk about what the Australian startup ecosystem needs in order to grow and establish itself as a key player alongside other startup hubs like Silicon Valley and Israel. These discussions tend to focus on venture capital, government support and the ‘brain drain’ which happens with local startups having to leave our shores to secure vc funding.
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What is missing from this debate is the local brain drain happening right under our noses. Aussie-based startuppers work in a startup or two and leave the ecosystem for corporate jobs, taking a wealth of learnings and experience with them. Anecdotally, just by looking at my LinkedIn contacts, I estimate that up to 90% of all startuppers I have worked with on about 10 startups have left the Aussie startup ecosystem. Of that 90%, about 10% are in startups overseas, 5% are now freelancers, and the rest are now in local corporate jobs. Very rough numbers and a tiny sample, but those numbers should worry anyone currently contributing to building our startup ecosystem.

There are serious implications of this local talent drain. A high churn rate is an obvious talent loss. There is also a time and monetary loss when we take into account what is then spent on bringing in new talent and training them up. It means that we have a really small pool of mature startuppers who could support an entrepreneur new to the industry. With a knowledge haemorrhage as severe as this, we will never get to a sustainable startup ecosystem. Not when every new startup is literally starting from scratch on all fronts. We absolutely need to keep knowledge transfer going, from entrepreneur to entrepreneur, entrepreneur to startupper, startupper to startupper and startupper to entrepreneur. We’ve done well with the first two flows with things like the Silicon Beach mailing list and the explosion of networking events over the last 4 to 5 years. The latter two flows however need a lot of work.

I admit it was heartening to see the Crossroads Report list increasing the numbers of people with ICT skills and improve access to startup expertise as two of their 7 key actions, but I think it would be akin to bailing water from a leaky boat using a colander if talent retention isn’t addressed. If we want to build a sustainable Aussie startup ecosystem, we HAVE to build a startup talent ecosystem inside it. And when someone like me, who used to proudly declare ‘I’m a startupper for life!’ has been interviewing for corporate jobs 7 years into a startup career, Australia, we have a problem.

 

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