Mick Liubinskas, one of the directors at incubator and accelerator Pollenizer, is calling for urgent action from the government to overcome the steep challenges facing growing start-ups after seed stage.
Liubinskas told StartupSmart support for the post-seed stage was critical to get entrepreneurs through the “the valley of death for start-ups”.
“If we don’t support our start-ups then, too many just won’t make it and won’t get to the Series A funding. Or they go to the US and we miss out. The anguish I feel for that gap is awful,” Liubinskas says.
While the depth and breadth of start-ups and angel investors is growing in Australia, it’s still much harder to get a start-up really growing in Australia than it needs to be, he says.
“We don’t have a big enough well of high-risk capital,” Liubinskas says. “Australian companies are registering as US companies from day one because they know it will be a lot harder if they don’t. It’s disastrous.”
Having recently returned from a trip to Israel, where the government funds start-ups who graduate from the 24 approved incubators with five to one funding after their seed stage development, Liubinskas says the Australian government needs to get serious if we want to lead the entrepreneurial world.
Liubinskas says Australian entrepreneurs and investors are going to keep getting on with the job, but the upcoming election is a great time to discuss the role of the start-up sector, and how to support it best.
“We need to attack on all fronts. It’ll happen regardless, entrepreneurs are feisty and we don’t take no for an answer, but it’ll take a lot longer. If the government wants a world-class, top five, technologically leading nation in 10 years, we absolutely need additional support.”
As part of this, Liubinskas is diversifying his Pollenizer work and is looking to work directly with five start-ups to coach them through the difficult growth stage.
While start-up services and products vary, Liubinskas says there is some advice that works for all of them.
“I say to absolutely every start-up, launch as soon as you can. Learning doesn’t start until you launch, and far too many first time start-ups wait far too long. Launch a smaller product to a smaller market, just get it out there,” he says.
Liubinskas says start-ups need to navigate a series of compromises to be successful. These include listening to customers closely, but keeping their focus tight and their target market specific.
“Picking the right market is key. It’s tempting to have a really wide funnel to see what comes in, but that usually ends up with a bland product that doesn’t appeal to anyone,” he says.
“The important thing is to differentiate between research and testing. The most important thing you can do is talk to customers. One conversation is about asking them questions and getting feedback: what are their problems and how can you solve them, and how valuable would your solution be? But the other is about crafting an offer and trying out it. Just try it, and learn from the response.”
Liubinskas says it usually takes 10 significant modifications to a product or service before it really starts cranking. He adds start-ups with a team of two or more will almost always get further, faster.
“All of the research and certainly all of my experience says a team of two at least is significantly stronger,” he says.
“Like much of the start-up world, it’s about managing contradictions. Founders need to be wonderful, optimistic and caring, but also brutal, aggressive and hold the other person accountable.
It’s about focus, and focusing on getting it done fast. On your own, it’s easier to languish and never get anything done or constantly be distracted.”