Today, the government has revealed its economic stimulus package, designed to give Aussie business a boost in the face of a coronavirus-related downturn.
But, according to GO1 founder Vu Tran, while there are some helpful elements in the mix for small businesses, startups are at risk of falling through the cracks.
“My initial reaction is that it’s good that they’re doing something, but … is it enough? And has it been soon enough?”
The key for startups, especially B2B startups such as GO1, is confidence in the government, he explains.
“As businesses, no matter how big or small we are, we need confidence,” he says.
“We sell B2B, so if I feel the businesses buying from GO1 don’t have confidence, I’m not going to have confidence.”
“It’s a domino effect.”
Often, when it comes to measures like this, startups are not exactly front-of-mind for the government. But in this case, Tran says, that’s something of a concern.
Startups may fall through the cracks in this stimulus package. But they could also be pivotal in getting the government back on its feet.
“It’s inevitable that you will see people lose jobs across a whole bunch of sectors,” Tran explains.
Already, we’ve seen Qantas, a huge corporate, cancel 25% of its flights and call 2,000 jobs into question. This stimulus package will not prevent layoffs altogether, Tran says.
“They’re trying to curb the volume of layoffs that are going to occur regardless.”
The question is, then, who will provide new jobs for those displaced people. And this is where startups come into play.
“Adversity is the opportunity for evolution,” Tran says.
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“What other industry is going to benefit from people with potential experience in large industries and large corporates?
“Startups fit this really great niche of being able to get significant value out of people with experience, while also creating jobs that are going to lead to growth.”
While the stimulus package is certainly a step in the right direction, Tran says the government could be thinking bigger in its economic approach to the coronavirus crisis.
“This is a new virus, that needs a new way of thinking,” he says.
“We can be more innovative in the way we think of this as an opportunity over adversity,” he adds.
“There’s an opportunity here for government to think about how we create new economies and support new businesses off the back of these challenges.”
Although he hasn’t reviewed the full details yet, Tran says it appears “it’s aimed at people who are building things and digging things out of the ground”.
“In the startup and technology space, you won’t necessarily see us benefiting from it,” he says.
For example, the significant expansion of the instant asset write-off scheme likely won’t come in handy for many startups.
“How many startups are purchasing large amounts of equipment, to be able to write it off?”
“You’ve got to be profitable enough to be able to take advantage of being able to write off an asset,” he says.
“Guess what? Our profits are going towards giving people jobs.”
“I don’t want to come across as someone who is being ‘woe is me’, it’s just important not to forget the startup sector.
“We’re potentially the ones who will fall through the cracks, but also potentially the ones who have an opportunity to help fix this problem as well.”
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