Adelaide might seem an unlikely epicentre to redesign the way startups get built, but that’s exactly what local firm LeapSheep are attempting in pursuit of their vision to radically transform startup success rates globally.
LeapSheep founders Kirk Drage and Kathryn Heaton explain “startups fail in such numbers it’s like having a mass extinction event every year”.
Friends for over 20 years, Kirk and Kathryn incorporated LeapSheep in 2016 after finding their first paying customer a year earlier in Thailand which provided some initial validation of their business.
“We regularly hear about startup success in the media. What we don’t hear is that startup ecosystems the world over are fundamentally broken.” says Drage.
“To be a startup founder you need a contrarian world view, you have to believe something few others believe, otherwise you wouldn’t be trying to change the world.” explains Heaton.
“Startup ecosystems are broken. That’s our contrarian insight, and what an opportunity” says Drage.
Having lived and worked in Silicon Valley, and headed up the Microsoft Asia Pacific startup arm, Drage knows a thing or two about startups.
Heaton explains “2021 was a record year for venture investing – $681b was spent pursing startup building. When you consider 95% of startups fail, that’s a lot of wasted capital. Creating a more efficient market with numbers of this scale is a huge opportunity.”
She goes on to explain, “Startup failure rates are baked into startup building models. They are an accepted cost of innovation. This works for top investment firms who seek out those rare rough diamonds we call unicorns. The true cost to produce these unicorns is borne by every founder and investor that’s not successful.
Drage asserts, “The little discussed fact in the world of startups is most startups don’t fail because their technology is too fanciful. They overwhelmingly fail for mundane and completely avoidable reasons. If only they could access highly specialist startup guidance, success rates would transform.”
Drage describes two fundamental barriers. First, specialist startup support is typically sourced from lived experience – successful startup founders. This is a scarce and difficult to replicate resource, constraining supply.
Secondly, because of constrained supply, most startup support is just re-packaged from the world of small business entrepreneurship designed to create copies of proven business models. Startup entrepreneurs have different challenges, they must manage a plethora of innovation risks.
LeapSheep’s solution, to create a software-based Startup Building body of knowledge. This includes specialist startup diagnostic tools to enable completely personalised support. Using these diagnostic tools allows LeapSheep to prescribe best practice startup building approaches. The usage data LeapSheep collects makes the system better, and better, and better. The goal isn’t to replace human advisors, rather give them superhuman capabilities – like a chess computer.
To date, LeapSheep has supported over 200 startup subscribers from around the world. Jed Durdin, co-founder and Director of Maximum Energy said “LeapSheep is the best guide to get us from idea towards a future exit for our business”.
Silicon Valley produces an impressive 40 unicorns a year. You can see why they’d be happy with the status quo. This is why Adelaide is such a great place to attempt this. Innovation always comes from the edge.
