Lack of trust in start-ups rife among Australian businesses
New research demonstrates that while businesses prefer to support Australian tech companies, only 6% would trust and support start-ups.
The research was commissioned by Nitro and surveyed 300 business decision-makers from around Australia.
It found that decision-makers, including C-suite, senior executives and senior management, were more likely to buy from a start-up, with 53% indicating their company made purchases from start-ups quite frequently. However, only 11% of middle management reported doing the same.
Only 4% of business leaders said they prefer doing business with start-ups because of their innovation and the fact that they are in tune with customer needs.
Nitro APAC Director Adam Nowiski said it was promising to see the top echelons of management backing start-ups — indicating a growing desire for business leaders to transform their organisations through disruption.
“Our research speaks volumes to how deeply informed and connected senior management are with the benefits start-up solutions can bring to big business. Even so, it’s disappointing to see that overall there is still hesitancy when it comes to embracing start-ups,” he said.
Of the 20% of survey respondents who said their company never buys products or services from start-ups, older generations were less inclined to show support, with 30% of those aged 55–74 saying their company never buys from start-ups. Only 17% of those aged 18–54 said the same.
The research suggests that there is some distrust among the business community, particularly stemming from a lack of clarity around what a ‘start-up’ encompasses.
“There needs to be a distinction between start-ups in their infancy and companies, such as Nitro, that have start-up roots but have since developed a global brand presence and now have customer success systems in place,” said Nowiski.
“Start-ups need capital, talent and above all, customers to grow. So, without Aussie businesses backing them and integrating their ideas into organisational strategy, we’re at risk of stifling the growth of our innovation sector.”
Victoria’s Minister for Small Business, Innovation and Trade, Philip Dalidakis, said research such as Nitro’s is a great indicator for government decision-making.
"Research like this is great for state and federal governments to get a better understanding of how big business is looking at the local tech industry and where they see opportunities for growth," Dalidakis said.
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