Reclaiming The Truth About Start-Ups

Look around you and you will see the vibrant tapestry of small businesses that form the backbone of your local community. From the barber that expertly cuts your hair, to the mechanics that fix your car, these enterprises were all once humble ‘start ups’. These businesses are often overshadowed by a distorted perception of entrepreneurship, which has been hijacked by a start-up culture heavily influenced by venture capitalists in the US, and it is time to reclaim the true spirit of small businesses.

Each year, 30,000 Western Australian’s start their own small business, which is an increase of 10,000 per year since 2019. However, this surge in entrepreneurial spirit is not reflected among young people, who face various obstacles such as mounting debt from education or mortgages, a surplus of available job opportunities, and entrepreneurship being promoted through a very narrow lens.

The hijacking of small business culture by the startup-centric mindset is largely attributed to Silicon Valley venture capitalists (VCs) in the United States. These financiers have shaped their own vision of starting a business, one that aligns with their investment interests, focusing on technology-based firms that promise exponential returns of up to 100 times the initial capital invested. They have successfully exported this model, encouraging global adoption and perpetuating their pursuit of astronomical profits.

While VCs have successfully propagated their vision of business creation worldwide, it is important to recognise that their model does not necessarily foster sustainable businesses that genuinely serve their customers or contribute to the local economy. The primary focus of these businesses is rapid growth and capturing large markets, often at the expense of long-term sustainability. For venture capitalists, the ultimate goal is to sell the business and maximise their financial gains, without concern for the future of the business or its employees.

Starting a business does not require a pitch deck, venture capital, or a technology-focused approach. Businesses can take on a multitude of forms, and innovation comes in various shapes and sizes. Most small businesses are not centered around innovation but instead rely on income from their customers to fuel their growth. Whilst entrepreneurship is challenging with half of all businesses surviving the first five years, the journey is a testament to the resilience and determination of business owners.

Innovation isn’t exclusively tied to technology, it exists in various forms within different industries. Consider the industrial innovations revolutionising sectors such as marine and mining, or the creative solutions emerging within the circular economy. Additionally, there has been a resurgence of revival businesses in recent years, including the renewed popularity of barbershops, furniture refurbishment and upcycling boutiques, and appliance repair services. These businesses contribute to the vitality and diversity of our communities.

As we reflect on the small businesses that shape our communities, it’s crucial to recognise their true essence. They are not just ‘start-ups’ hijacked by venture capitalists, but rather the lifeblood of our local economies. Embracing entrepreneurship means embracing the multifaceted nature of business, where innovation takes many forms and success is measured not only in financial gain but also in the positive impact on customers and communities. So, the next time you get a haircut, visit your local coffee shop, or have your car repaired, remember the incredible individuals behind these small businesses and the invaluable contributions they make every day.

Business Foundations offers a range of services to people starting a small business. The free Self-Employment Assistance program can provide you with the tools and information to support you through your start-up journey.