We’re all about helping startups in their expansion, whether that be by fuelling local growth or powering international expansion.


As part of this, we have a proactive interest in the current state of affairs experienced by the startup community. This is why we’d like to share our views on one of the most engaging startup reports with the community: The 2016 Startup Muster.


What Is Startup Muster & Why Is It Helpful?


Startup Muster is one of the most enlightening annual reports for ambitious startups and all actors of the ecosystem.

Co-founded by Monica Wulff and Murray Hurps, Startup Muster is the largest survey of its kind. Using over 100,000 questions, the survey explores current trends in the Australian startup scene. Every year, Startup Muster shares these telling statistics with the world. This means entrepreneurs and government bodies have access to a wealth of insights, right at their fingertips.

The annual report for 2016 is now available for curious pioneers to observe. Not one to pass up on an opportunity, The Polyglot Group has seized the chance to analyse the findings. Our conclusions are worth sharing—so that’s exactly what we’re doing.

From the statistics, we’ve come to know some of the most common challenges faced by startups. The beauty of the Startup Muster report is it also reveals how these challenges are commonly overcome by entrepreneurs. Moreover, the data suggests certain areas of opportunity for entrepreneurs looking to launch their own startup, and how to cleverly take advantage of these existing opportunities whilst minimalising risk.

Here’s what we took from the report:


Startups Are More Ambitious Than Ever…

The 2016 report makes one thing clear—founders want to expand. And they’re not only looking for local growth—it’s global expansion that’s on the agenda. Founders said they need to expand, with international growth as a key goal shared amongst many. A massive 52.3% of startups planned to expand sales significantly outside of Australia after 12 months. This is an immense increase, more than doubling from the previous annual report which showed a 25% looking to undertake capital raising overseas. It appears that international markets are certainly appealing to many startups.

With their glances turning overseas, startups are showing investment in some countries more than others. The US is clearly the biggest winner, with 25.9% of startups having majority of their customers there. This is followed by the UK, where 4.1% of startups have most of their clientele. So, both the US and UK appear fruitful for startups considering international expansion. Present in both the US and Europe, we can conqur that businesses are constantly looking to thrive and join both ever growing markets.

Overall, more and more startups are taking international expansion into consideration, with global growth being a popular ambition. And, for an overwhelming majority, this is a profitable approach. A massive 92% of Australian startups generated export revenue in 2016.


…But, They Lack Some Essential Skills

Whilst the 2016 Startup Muster does show many positive trends for new startups looking to expand, these benefits certainly come with some challenges. A lack of technical skills appears to be a common setback, with 25.6% of founders reporting that this is what hindered them from launching their startup earlier. Accounting, HR and legal skills appear to be some of the most lacking.  Only 10.8% of founders said they had HR/Recruitment skills, and a mere 7.4% of founders said they had the legal skills.

An obvious solution to fulfilling the skills gap would be to recruit a team of talented employees. However, it could be inferred that many startups simply cannot afford this, especially during their founding years.

The 2016 StartUp Muster has highlighted the financial pinch felt by many founders, with funding proving to be relatively minimal. A massive 70.6% of founders said they used their own cash contributions, with 28.8% obtaining funding from family and friends. Loans were not uncommon, with 14.9% of them resorting to a credit card, and 8.2% taking out a bank loan. Only 14.3% of founders received a government grant.


“A lack of technical skills appears to be
a common setback, with 25.6% of founders reporting that this is what hindered them from launching their startup earlier.”


So, although the skills shortage is a pressing issue, founders are not in the position to recruit talented teams. A huge majority of founders (47.1%) have just 1 other full-time team member, if any. Most founders (66.2%) recruit this other employee to help with general business operations, rather than to specialise in the lacking technical skills.

In accordance with this data, founders realise the importance of getting the required technical help. Only 7.6% said they had enough skills in their founding team.

The obvious question is, “how do startups overcome the skills gap and continue to grow?”. Fortunately, the 2016 Startup Muster reveals where startups are finding the necessary help.


An Overwhelming Majority Are Outsourcing Work

One of the most startling statistics is the percentage of startups who use outsourcing. A massive 89.8% of startups outsourced work in 2016, with 63.5% reporting that they used 4 or more contractors in the last 12 months.

Interestingly, the most outsourced function is accounting (59.3%), highlighting its importance. This is closely followed by legal functions (54.5%), suggesting that the seriousness of compliance issues is understood by many. This is echoed in the fact that 22.9% of founders planned to obtain tax compliance assistance in the next 6 months.


Perseverance Proves to Be Fruitful

The 2016 Startup Muster report demonstrates that launching a startup is far from an easy feat. As discussed, the combination of skills shortage and a lack of funding makes establishing the startup challenging.

However, the availability of outsourcing services seems to ease the implications of both barriers.

International markets are also proving to be fruitful, as sported by the increasing open-mindedness towards global expansion.

For the great majority looking for the opportunity to earn revenue overseas—the report suggests good prospects. A majority of startups (56.9%) reported that more than half of their revenue is generated from overseas customers.

After analysing the report, we feel that with the right tools and affordable help, startups really do have the world at their feet.

About the Author:

Jacqueline Harding is passionate about sharing information, news and stories in a user-friendly way to educate and uplift people from all across the globe.
Read more about Jacqueline Harding.