Startup business models

Startup business models adopted by Australia’s richest and most powerful entrepreneurs are rarely an accident. The best way to start a business in Australia, is to learn from those who have been there, done that. I suggest you start by engaging with my list of brilliant startup experts.

Google Startups and you will probably see a list dominated by Silicon Valley born tech companies. Well, I’m here to bust a few myths you might have about startups and explain how smart business design can give you a strategic competitive advantage.

Startups in Australia

According to the Australian Bureau of Statistics, there were 406,365 new businesses in Australia in 2023. You could be forgiven for defining new businesses as startups, however, that might not complete the picture.

According to Smart Company, 61% of Aussie Entrepreneurs run their business as a side hustle, so while it is probably fair to add these businesses to the definition, this tends to muddy the picture further. As a matter of opinion, do you think startup business models running part time are still in the startup space if they operate for more than a year?

What is a Startup Business?

When searching for answers to, “What is a Startup?”, you are likely to find more questions than answers. According to Steve Blank, (a respected innovator in Silicon Valley) “A start-up is a temporary organisation designed to search for a repeatable and scalable business model.”

In layman’s terms, “A startup isn’t sure what it wants to be when it grows up.”

Understanding this is possibly why I keep reminding my clients to test everything and only commit what they can afford to lose, until they have evidence (not just wishful thinking) that a business idea is going to work. In my opinion, every new business should behave as if they are a startup.

Characteristics of Startups

While there’s no clear definition, wider reading and analysis of successful startups, in addition to this writer’s experience in the startup and incubation space, have led me to believe there are several characteristics shared by most successful startups.

Find Your Niche

Startups can create a strategic competitive advantage by first creating a niche product or service that is difficult for others to copy. We all know legends the likes of Amazon, Facebook and Google but even they started with a narrow focus. A mistake I see repeated over and over with my clients is they try to grow too big, too quickly.

Grow too quickly and you will become inefficient and bloated as an organisation. My suggestion is to test one product, in one location, with one target market. If that doesn’t work, drop it before you do your next test. Eventually you will find a product that works, which is when you can look at ways to grow:

  • Invest more in your current opportunity
  • Create related or add on products (or services)
  • Find new customers or clients
  • Enter new locations with your existing offer
  • New pricing tactics to reach a new type of client
  • Position your product or service for new uses

While growth may require you to take on a new product (or service), new location or new target customer, you can significantly reduce the risk of failure if you change only one of these things at a time.

Improvise, Adapt and Overcome

“Improvise, adapt and overcome” is an unofficial US Marines slogan, made popular by Clint Eastwood’s character in Heartbreak Ridge. Back in the real world, one way to view startups is like projects. A popular term you may hear doing the rounds in project management is “agile”, which basically means developing a product (or in this case, a service) in iterations and being flexible enough to respond to changes in the environment.

Fast Company’s list of popular brands from the past century shows the accelerated pace at which companies can grow to earn their first $1 billion in revenue. From the oldest, which took 79 years, to the most recent, which took only 5 years to achieve the same target. Imagine the pace of change startup founders need to anticipate in the years to come. While some argue for skipping a business plan, I’d suggest your planning needs to be more thorough and you need to allow the felxibility to quickly adapt to changing circumstances.

Build Teams

I remember when I attended a Tony Robbins event in Sydney, in 2023, Dean Graziosi joined us live and shared his wisdom for building wealth. One thing he said, which stood out for me, was not to think of what or how you’re going to do something but rather who can help you.

This reminded me of my time in Miccrosoft, as part of the Asia Pacific Inucbation Team. When I was trying to sell to individual clients, my managers encouraged me to connect in with the existing Microsoft Sales Network to get things done. No one was going to sell my services because they had to. I know I run the risk of sounding like a “stage 5” clinger (for those who’ve seen Wedding Crashers) but I needed them more than they needed me.

In essence, I created value added partnerships. It didn’t matter they were in the same company. They had a choice to sell hundreds of products to their clients. So, if you don’t have a team in your startup, you can win faster if you find the right partners to joint venture with you.

Smart Startup Business Models

Thousands of specialist skills, educational fields, training qualifications and experiences exist in isolation. Multiply that by the seemingly unlimited number of combinations …and it’s highly unlikely (if not impossible) there will ever be another you.

How you package and deliver a business service can make all the difference. When you’re just starting out, for example, an hourly pricing model seems to make sense. However, as time goes on, you may realise that the hourly business model can eventually lead you to burnout or lost revenue opportunity.

Here are a handful of models to get you thinking about how you can structure your business.

Clubs and Memberships

Our world is increasingly fragmented and everyone, regardless of race, background or gender, wants to belong somewhere. Create a club or association to bring like minded people together in your niche and profit from memberships fees, advertising or product endorsements.

Finding Emerging Opportunities

Find a realted industry and work out how you can act as the conduit or missing link to ride the wave. For example, new developments in technology (along with COVID lockdowns) gave rise to fast food delivery services. Emerging artifical intelligence technology will require skilled people to learn and apply prompts to produce higher quality output than an amateur user.

Innovative Product or Service Delivery

Find a product or service where there are inefficiencies you believe you can fix and innovate on the process. Delivering an old service, in a new way, can help you carve a successful niche. Consider what discount airline carriers like Webjet and Virgin Airlines (Atlantic and Blue) did to disrupt the airline industry with “no frills” options.

One-on-One Consulting or Training

When you’re in demand, especially if you coach in an elite field, you may be able to charge a premium for hands on, one-on-one coaching. Remember to charge not only for your one-on-one time but also any preparation or follow up that you need to deliver for your client.

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Publishing and Influencing

Some bloggers still make money in 2024, however, it’s a less popular medium than it once was. Thankfully there are so many ways to make money online, such as selling advertising on your blog or podcast, to charging for access to premium content on social media sites.

Selling Digital Templates

Welcome to the age of DIY, where technology is lowering the barriers to graphic design, web desing, creating systems, automating processes and then some. Find something that’s in demand by validating your idea and then create and sell templates to meet that demand. Usually there’s a marketplace just for your field but if not, you can try selling on Etsy or Gumroad.

Sell Shovels

During the Califiornian gold rush, those who sold prospecting tools and equipment often made more money than those searching for gold. From that, came the saying, “during the gold rush, sell shovels. What’s the gold rush of your time? In the early days of the internet, fortunes were made buying and selling domain names. Later, pre-built e-commerce platforms invited sellers to pay a monthly fee and sometimes a commission. If you can work out what’s trending, you can probably find a way to get behind it.

Shared Resources

We live in an age of resourcefulness, which means you don’t need to own an asset to get access to it. Some refer to this as the sharing economy. Consider the range of things we share now, like website hosting platforms, public wi-fi, car rides, hire scooters, work spaces, our own houses (think Airbnb). Maybe your business model could include renting share of an asset that consumers might otherwise find it difficult to afford or access.

Time Share

Some platforms invite you to sell your digital content and then pay you based on the time visitors invested in consuming your content. This is a sort of pay for performance model and you might find it makes sense to include it as part of your mix.

Webinars and Semiars

You can deliver webinars and seminars to generate leads, to sell tickets or to attract new members to a group or membership site. Delivering content in this way scales significantly bigger than the one-on-one business model.

VOD Online Training Courses

Create video training courses and publish them on sites like Udemy, Coursera or Uplyrn. You can get paid commissions for everyone who purchases your course but be aware, it can take a long time to build enough sustainable revenue to quit your job.

Perhaps it is easy to confuse the concepts of startup business models and legal structure because they sound similar. Most startup businesses in Australia will fall under one of the following legal structures:

  • Sole Trader (or Proprietor)
  • Partnership
  • Company
  • Trust
  • Co-operative OR
  • Indigenous Corporation

Learn more about business legal structures by speaking with your accountant, solicitor or visiting the Australian Government Business Website.

Learn More About Startup Business Models

Books to Read

Earlier in this post I mentioned the wider reading I have done in relation to startup businesses and the characteristics common to the most successful ones. Those books include:

Find Help

Connect in with local help too with a few startup resources you can tap into from anywhere in Australia. You might also do well to connect yourself with local business support services, such as @ejsservices for bookkeeping, @emma-hoffman for marketing on a budget or @adminlouise for admin support.

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