A survey has revealed the cloud technology stack favoured by Australian start-ups.
Three quarters of the 208 start-ups questioned said they “couldn’t exist” without the cloud-based tools they used.
The research, led by Stripe and a cohort of accelerators and hubs, questioned local start-ups about the SaaS tools they used and the impacts they had on their businesses.
More than 150 tools were cited by the businesses, with the most favoured developed in the past six years – indicating a trend of start-ups building for other start-ups, the researchers said.
A quarter said SaaS tools meant quicker entry to market, 18 per cent said it helped them reduce operating costs, 17 per cent said the tools helped increase productivity and 17 per cent said they enabled quicker product development.
The average start-up used between six and 10 cloud-based tools. The top three most popular in each business function were as follows:
Accounting: MYOB, Xero, QuickBooks
Analytics: Google Analytics, Mixpanel, Power BI
Customer support: Jira, Zendesk, Intercom
Code repositories: Bitbucket, GitHub, AMazon Web Services
CRM: ZOHO, HubSport, Salesforce
Cybersecurity: Cloudflare, Bugcrowd, Amazon Web Services
Hosting and data storage: Heroku, Rackspace, Amazon Web Services
Human Resources: EmploymentHero BambooHR, Workflow Max
Mobile and web payments: Stripe, Square, Braintree
Team collaboration and communication: Trello, Slack, Skype
When choosing third-party tools, the most important factor for startups is ease of integration (30 per cent), followed by reliability and stability (17 per cent), interoperability between tools and affordability (both 15 per cent), according to the survey.
The top three tools in terms of impact on growth were reported as hosting and data storage (26 per cent, team collaboration tools (22 per cent), and online payment tools (14 per cent).
Two in three start-ups (68 per cent) said their biggest challenge was entering new markets. The most cited barriers in doing so were access to capital, access to talent and regulation and compliance. Nearly all of those questioned (97 per cent), however, said cloud tools have made it easier to go global.
Cloud tools, however, weren't found to be solving all the needs of local startups, which identified cybersecurity (16 per cent), CRM (14 per cent) and analytics (12 per cent) as the top three areas in need of better tooling.
API ready ecosystem
“These tools have made a massive impact. I don’t think even seven years ago we would be able to create a company like we have. We have an ecosystem now of API ready companies that are solving a niche problem and building a company on a niche solution that entrepreneurs can use to build their own company and that’s creating lots of interesting startups as well,” said Asim Brown, founder of Bountye, an app which allows users to buy, sell and donate secondhand items locally.
“I worked in Silicon Valley in the '90s and back then it used to be a lot more difficult and expensive to start a company. Twenty years ago, there was no way to outsource servers and hosting the same way you can with AWS today, and no easy way to accept payments,” Brown adds.
“We look for a scalable solution so our challenges are more around growing. We have 50,000 users today and we want to grow to 10 times that. How we scale our business to meet that demand is critical for us. In the past I would have maybe been pretty nervous about that as it used to involve considerable capital requirements but there are so many cloud tools that offer an affordable solution,” he said.
More with less
Most of the start-ups taking part in the survey (89 per cent) were less than five years old. More than half (53 per cent) employed five or fewer staff, indicating how cloud tools were helping to new businesses to “reallocate engineering time and do more with less resources”, researchers concluded.
“Startups today are no longer reinventing the wheel. Given that they’re often nimble innovators themselves, startups are trusting other startups with handling some of the most fundamental parts of their business,” said Mac Wang, head of AU growth for Stripe.
“By automating some of the most resource-intensive parts of building a business, the startup stack is emerging as the secret sauce of Australia’s entrepreneurs.”
The research was commissioned by Stripe, Squarepeg, Blackbird Ventures, Startmate, Airtree, muru-D, York Butter Factory, Stone & Chalk, River City Labs, H2 ventures, BlueChilli, Blue Sky Venture Capital, Bailador, Onestack and Melbourne Accelerator Program.