This year’s BRW Young Rich List may be striking due to the dip in overall wealth of the top 100, including a $700 million plummet by mining mogul Nathan Tinker, but there are encouraging signs for start-ups.
While most budding entrepreneurs won’t match the list-topping $480 million fortune amassed by Atlassian duo Mike Cannon-Brookes and Scott Farquhar, the trends appear to be moving in the favour of nimble, tech-savvy innovators rather than resources and property tycoons.
This year’s list throws up a number of key lessons for new entrepreneurs. Here are the five most important:
1. The tech sector is making its move
The usurping of Nathan Tinkler by Atlassian duo Mike Cannon-Brookes and Scott Farquhar at the top of the list is symbolic of the way Australia’s economy is moving.
With all due respect to Tinkler, it is refreshing to see an innovative tech company such as Atlassian, which has taken the US by storm, overtaking a mining magnate. Australia always has been more than a quarry but now the figures are starting to show it.
Tech entrepreneurs make up 24 of the 100-strong Rich List – by far the best represented industry. Catch of the Day co-founder Hezi Leibovich is in the top 10, as is outspoken online retailer Ruslan Kogan.
There are also debut appearances by the founders of eCommerce platform BigCommerce, which has found an admirer in an early Twitter investor, and games maker Halfbrick Studios.
The trend is clear – the world is twigging onto Australian tech innovation and the brains behind the businesses are starting to reap the rewards. Long may it continue and, indeed, accelerate.
As Cannon-Brookes put it to BRW: “We can only go pulling stuff out of the ground at super-inflated prices for so long.”
2. Starting lean can lead to huge rewards
The term ‘lean start-up’ has recently entered Australian business vernacular, but it appears from the Rich List that many enterprises were using the method before it was even coined.
Starting lean, as popularised by a book by US entrepreneur Eric Ries, is all about ‘validated learning.’ You test as many assumptions about your business or product as possible, at minimum cost, before moving on to an improved model.
The five main strands of the concept can be summed up here.
The lean method has paid off for several of the Rich Listers, including the founders of BigCommerce and Atlassian. The latter was founded in an apartment and has become a $1 billion business without any sales team whatsoever.
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The falling cost of technology and flexible working should allow you to work lean, too. Get yourself a minimum viable product and expose the market to it. Get feedback, improve and repeat if necessary.