It seems surreal that we are in December already. The year has flown past and, what a year it has been. Change seemed to be the only constant through 2014. For Australian startups and small businesses, it has been a mixed bag of optimism fuelled by a growing tech startup environment, increased funding, favourable changes in last budget, and increased business confidence; coupled with caution and worry over weaker stocks, falling mineral and fuel prices and unemployment figures.
Business confidence is high with the recently published Commonwealth Bank SME Confidence Report stating that 43% expect higher revenue and profit this Christmas (compared to last year) and 87% anticipate conditions to improve or stay the same next six months. With more that two million SME’s employing over seven million Australians, the health and confidence of this segment is crucial to the development of the nation.
Many startups and small businesses are using the optimism to focus on growth – in Australia and globally. Likewise, inspired by success stories on our shores and from places such as the Silicon Valley, more people are starting their own businesses.
So what are some of the trends that will continue to shape this segment in 2015?
Cloud technology will support growth and scalability
Cloud technology transformed industries and how we do business in 2014. Here’s how it will continue to shape the market next year:
- The levelling effects of technology, increased need for consumer control and easier access to data will see more businesses ramping up their presence on the cloud to offer innovative solutions. Consumers can expect to see more apps and tools that give them increased connectivity across different touch points, more control in all areas of their lives and better engagement with brands they like.
- The infrastructure / enterprise cost of doing business will continue to drop with more cloud systems becoming available to startups and small businesses. Easier collection and management of data will also result in more streamlined processes and increased productivity that can help SME’s scale.
- More opportunities for people with innovative ideas to enter the market and turn around a solution quicker than they have ever been able to. Going global – especially for service industries – is easier than ever.
Niche and community focused businesses
Australian companies tackle niche markets 14% more often than those in Silicon Valley. A great case study is handmade and creative community focused tickle your imagination magazine (of which I am an investor), that in an age where print magazines are fading out, has successfully crowdfunded its print editions – receiving higher than expected amounts in just over 10 days. The magazine has recognised a niche segment, started small by building a product for the community and grown. The magazine recently went global as well.
While mass consumerism will not go away anytime soon, business ideas and growth will spring from people working together to integrate technical capabilities true to the needs of communities. Collaborative consumption will also fuel businesses such as TuShare that enables people to give and receive unused household items for free to anyone in Australia. 2015 will see more people start businesses that help overcome a challenge they faced, a passion they share with others or help address a problem close to their heart.
Scaling will make or break companies
2014 has been a good year for Australian startups – particularly tech startups. Most followed the momentum from 2013 to pitch for and receive funding to grow their business. 2015 will be the year for these small businesses to scale up and grow significantly, or face some harsh realities about their ventures.
With increased funding support from angel investors, banks and other institutions, the pitching platform has never been as active. The mood is similar to that of the dotcom era. 2015 could be the reality check that will either reiterate the strength of Australian startups and small businesses that, in turn, will help bring more VC money into our shores, or go the same way as dotcom companies 10 years ago. A lot of this will also depend on how much more entrenched technology will get into our lives and subsequently, the infrastructure around us. Are we reaching a saturation point or is this just the tip of the iceberg? Next year will tell.
Plug and play
Business operations are getting leaner every day. Technological capabilities have enabled people to start organisations offering world-class service – from employees and partners based anywhere in the world. Gone are the days of rigidity and aspiring to become a corporate mega structure.
Many entrepreneurs have increasingly adopted the ‘plug and play’ model to pursue their dreams. Through flexible collaborations, co-working and remote working arrangements, entrepreneurs have built global businesses, offering worldwide solutions from people who could be anywhere in the world. In a service realm, more organisations are also shedding big structures in favour of bringing together teams of experts as required for individual projects. Businesses looking to avail of these facilities will benefit from being able to access combined brains trust without high overheads. This model will evolve further in 2015 and continue to shape how we work together.
The changing nature of competitiveness
The ubiquitous nature of technology has made everyone an expert on everything – particularly in service industries. Reduced manufacturing costs have also resulted in very minimal product differences across any range. Where previously competition was based on product, design and price, wars are now being fought on whole new battlegrounds.
Value, conversations, content and customer experience is setting brands apart. Those who are doing it well are getting ahead in the game and others are playing catch up. Every brand, from the biggest in the world to small startups, is trying to engage in positive dialogues with its communities in the hope of drawing them closer for the long run. The focus on customer service will continue to grow in 2015.
As 2014 draws to a close, here’s to a more dynamic 2015. Dream big, think big and take action!
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About the Author:
Renata Cooper, CEO of Forming Circles and angel investor.
Renata Cooper is the founder of social and ethical investment company Forming Circles. Committed to empowering people and ideas, through Forming Circles, Renata has invested in over 100 local and national businesses, individuals and organisations since its inception in 2011.
