The largest and only comprehensive survey of Australian startups is at risk of shutting down entirely, with the federal government ending its ongoing funding and support for Startup Muster.
Speaking to StartupSmart ahead of Startup Muster’s announcement today, founder Murray Hurps says he has been told by the Department of Industry, Innovation and Science it would no longer be looking to procure data from the survey, effectively ending the company’s main source of revenue.
Since 2016, the Department of Innovation has provided a total of $660,000 in funding to the startup, with $330,000 of that being a one-off grant and the remaining $330,000 for procurement of data.
In a statement to StartupSmart, a spokesperson for the Department of Innovation said its most recent contract with Startup Muster had concluded in October and would not be renewed.
The Department also said while the collection of data was useful for designing startup policy, the Department no longer viewed the purchasing of Startup Muster’s data as being in line with its “value for money principles”.
Considering the lack of startup-focused policy developed by the federal government in recent times, ceasing the purchase of data essential to building those policies is hardly surprising.
Hurps puts it more simply, saying the current federal government “does not care about innovation”.
“They announce millions of dollars for innovation but then put no money into collecting data to drive support of the industry,” he says.
“I am continuously amazed at how they don’t understand that better data allows for better decision-making. That should not be surprising for anyone.”
The Australian government is the biggest benefactor of the local startup ecosystem doing well, says Hurps, which is why they should be supporting effective data collection such as Startup Muster, he says.
Though Startup Muster has also received support from companies such as MYOB, UTS and Google (who he says have been a “wonderful supporter”), if the survey can’t receive funding from the government or another appropriate source it “won’t exist”.
This includes jobs for the five employees at Startup Muster, who have all been laid off due to the government ending its support.
“Right now there’s no staff, just myself,” Hurps says.
“It’s heartbreaking to find these incredible people, and then tell them I can’t afford to pay their salaries anymore. This is a sad situation we’re in, and I think it could have been entirely avoided,” he says.
A spokesperson for Ed Husic, Shadow Minister for the Digital Economy and staunch supporter of the startup ecosystem said Husic “recognised the value of Startup Muster” and noted he had worked with them for a long time and respects their contribution.
“Mr Husic is surprised the government hasn’t seen fit to fund them. Labor will consider what we do in relation to this in the lead up to the election,” the spokesperson said.
Ecosystem support needed
Currently, Hurps is asking for the Australian startup ecosystem’s support, wanting founders, VCs and employees to share how they’ve used Startup Muster data over the past five years, calling on them to share their stories on social or reach out to him and let him know.
“Share how you’ve used the Startup Muster data, and whatever it’s enabled you to do, or drop us a note and let us know, we’d massively appreciate that,” he says.
“Any introductions or suggestions on how we can replace our funding would also be appreciated.”
However, Hurps notes that finding an alternate source of funding for Startup Muster is easier said than done, with the survey struggling to find support from corporate Australia. The startup also has a deadline of April 2019 to secure new funding.
“I’ve knocked on a lot of doors in the corporate world, but no one in corporate Australia seems to care about Australian startups. They seem to care more about startup activity globally,” he says.
Funding from individual Australian companies or VC firms could be a potential solution, but Hurps raises concerns about the data appearing independent, labelling the situation “tricky”.
“Our source of revenue has to be chosen carefully in a way which won’t affect how we collect data. So, say if we collected it with the purpose of sharing it with VCs, people might be more hesitant about filling it out,” he says.
“I think it really needs to be either philanthropic or government support.”
Government support could be a long time coming, however, with Hurps himself admitting the government is beholden to what voters want, and voters don’t seem to want startup support.
“I’ve got confidence any government will need Startup Muster data in the future, as the number of jobs we are set to lose over the next 10 years in Australia is disastrous. We need the startup sector to grow,” he says.
“The government needs to understand the impact startup companies can have.”