IMPACT, HUBS, HURDLES & STANDARDS
“Startups are always about growth. For them, it's important to become the new normal. To become the new normal, why not just start right at the beginning? Create a new standard, get involved in the process of designing a whole new infrastructure for a new technology -it’s a great opportunity, and should be used much more.”
This very logical sounding statement comes from Markus Raunig, managing director of AustrianStartups, a non-profit platform for startups and a think tank for innovative entrepreneurship in Austria. We meet Raunig in his quintessentially startup-looking collaborative working space (called ImpactHub) in Vienna, where about half of all the startups in Austria are based.
“We have a core team of seven people here in Vienna, and about 50 volunteers all over Austria. Together we try to inspire people to start up. We connect them with other inspirational and bright minds, and shape an environment where they can actually flourish. We're very active on social media, and we organize about 50 to 60 events per year. In addition, we also do quantitative research,” says Raunig.
“For example, we publish the annual Austrian Startup Monitor, the biggest study about startups in Austria. Last year, we questioned more than 700 founders about the challenges they face and their current status. And we found out that startups in Austria employ nearly up to 20.000 people already. And that more than 40% of the startups in Austria are following social or ecological goals, with a strong focus on Green Tech. So there already is some clear value for society in what they're doing,” says Raunig. “But we could unlock even greater potential, if Austria manages to become more of a startup hub. Based on our findings, we try to advise government on what needs to change to maximise the impact these startups can have.”
AustrianStartups and Austrian Standards
The funding for AustrianStartups comes from partnerships. They partner up with companies, institutions, service providers that in some way want to support their work. One of these partners is Austrian Standards, the national standards organization in Austria.
“There is clear value for society in what startups are doing.”
AustrianStartups, Vienna, Austria
“Together with Austrian Standards, we try to promote standardization by sharing content on our channels that shows the potential for startups. We try to get the message out there.”
The message about standardization
What message is that? Raunig: “That there's currently unused potential, and that startups could benefit from. There is very little knowledge about standardization in general. People know that A4 is a paper standard, but they have no idea how that standard was made, and what the implications are. For example, that it's actually useful for printers if they have certain standard sizes, and stuff like that.”
He continues: “And I think the same is true for startups. Not enough entrepreneurs understand that shaping these standards and getting involved could actually be an interesting opportunity. That standardization can support innovation, and help you overcome some of the common hurdles on the road to success.”
Standards support innovation
How can standardization support innovation at the level of startups? Raunig has a clear answer: “I think what standardization enables is interoperability. So it allows a certain framework and infrastructure within which the innovation can happen. That's very useful for startups, because once you have this initial ecosystem, and this initial framework, you can build applications for that. And that's something that usually allows innovation.”
“Innovation is in the DNA of startups.”
AustrianStartups, Vienna, Austria
This statement becomes even more poignant if you consider that 'innovation' is literally part of the definition of what makes a startup. “We define startups by being young enterprises that are growth-oriented, and innovative when it comes to technology, business model, or in their approach to customers. Innovation is in the DNA of startups.”
Reactive versus proactive approach
According to Raunig startups can both be reactive and proactive when it comes to standardization. “Both approaches can work. Whenever a new standard is created, with it comes a lot of room for new products and new applications based on this standard. Startups can signal these trends and react to them. On the other hand, proactively pursuing the developing of standards presents a great business opportunity. Because other people can then interact with this standard, and continue to build on it.”
Finding talent in a community of experts
And what about these hurdles that startups face? Raunig talks us through the three main scarce resources for startups: Time, Money, and Talent. In his opinion, standardization can help with at least two of those: Money and Talent.
“Good talent is hard to come by. If you really want to compete with the big guys, you need an exceptional team. And for that you need an education that prepares people to work in such an environment. Our education system is more geared towards teaching people how to solve structured problems, whereas in a startup you usually encounter unstructured problems, without a clear how-to manual,” Raunig explains.
“By actively engaging with the standardization community, young companies can build a network in a highly technical or specialized field.”
AustrianStartups, Vienna, Austria
“But by actively engaging with the standardization community, young companies can build a network in a highly technical or specialized field. They can connect with a lot of experts that might be interested in joining, or in any other way helping the startup find talented people who work within the framework and have expertise in the field.”
Attracting investors with standards
When it comes to money, Raunig continues, “in the early stages, you just want to buy yourself time to work on the product, and to really create something that people love. We're actually doing quite well here. It's when a startup reaches the phase where they want to scale up and get their product to the market, that Austria is not in the best shape. That's why you see a lot of successful startups leaving the country, to raise funds abroad.”
Raunig himself is only too aware of the importance of funding due to his own experiences in the startup world. “I actually had my own startup, called SponsorBar, a matching platform for sponsoring. We connected organizations that wanted to sponsor with events or initiatives that needed sponsoring.” A month after he left the startup to join AustrianStartups, the accelerator programme funding them went bankrupt from one day to the next, leaving his co-founders suddenly without funding.
Standards can help with the money issue. “In the end,” Raunig agrees, “working within a standardized ecosystem gives startups a certain kind of security. There is not this cloud of insecurity hovering over the startups at the end, like, Will this actually work with other platforms? This is very attractive for an investor too because they then know that this has a certain framework that works, and they can be pretty sure that interoperability is possible in that context.”
Inspiring stories of standardization
To illustrate it's not all just theory, Raunig gives us a shining example of an Austrian startup that benefited from standardization.
“Bitmovin is one of the most famous Austrian startups, although by now they're a scale-up. They were involved really, really early in the standardization process of a new video technology. This started as a university research project. In this process of being involved and creating this new standard, they realized the business opportunity it represented. It was an essential part of their founding story, and it helped them a lot to be the creator of a whole ecosystem of innovation happening around that.
It's also a classic case of a deep tech company, where there's these hidden champions that are really successful, even if consumers are not aware of them, because they don't know that the videos they're watching are actually powered by Bitmovin. Without Bitmovin and this video standard, you might not be watching videos at all.”