Sixty percent of Australian startups fail within three years. Globally, the figure sits at around 90%. And according to Jane Korneyko, founder of Sova, the most frustrating part is that these numbers haven't really changed in decades.
At our latest Lunch & Learn, Jane took a different approach to the usual founder topics. Rather than focusing on one skill set like pitching, branding or product, she looked at the health of the whole startup, and why so many founders fall into the same common pitfalls.
Three Years of Research, Distilled
Jane describes herself as a recovering executive, a business theory nerd and a systems thinker. After years spent untangling complex mergers and projects that had gone off track, she left her corporate career to work with startups, the businesses she believes need help the most.
Over the past three years, she worked through around 4,500 articles on why startups fail and how they succeed, well before AI could do the heavy lifting. The patterns were clear. In her research, 74% of failed startups scaled prematurely, 70% ran out of cash, 43% missed product-market fit, and 65% experienced co-founder conflict.
What's Above and Below the Iceberg
Jane argues that much of the standard advice founders receive doesn't serve them as well as it could.
Founders are often told to get into an accelerator, but the best programs accept a tiny fraction of applicants, frequently take equity before a startup has made a cent, and ask for six to twelve weeks of time many founders simply don't have. With the average founder in their late forties, often juggling a mortgage, family and a job, that isn't always realistic.
Consultants and mentors bring genuine expertise, but usually across one or two domains. A founder might need several of them to cover strategy, finance, governance, HR and technology, and most early-stage startups don't have the runway for that.
Then there's investment. Jane was clear that chasing funding before earning revenue can work against most startups. Early-stage deals are down significantly globally, and many founders who have raised told her they'd skip investment next time. Revenue, not funding, is the more sustainable measure of success.
Beneath all of this sits a tougher picture. Australia ranks near the bottom of the OECD for economic complexity, the ecosystem is fragmented, and a new wave of people displaced by AI is likely to enter startup land, putting even more pressure on the support available.
The AI Trap
AI came up throughout the session. Jane's view is that AI is a powerful tool, but only if you know what to ask. Because it's now so easy to build something quickly, it's also easier than ever to jump straight to solution mode and skip the hard thinking about the problem you're solving.
As Darren put it during the session, your moat is no longer your technology. It's your understanding of your customer, your market and your competitors.
The Nine Elements
Jane's answer is self-reliance, backed by evidence. Sova brings decades of research, due diligence checklists and proven frameworks together into nine interrelated elements, grouped into three areas.
Direction
Purpose is your reason for being: the problem you solve, who you solve it for, and the values you won't trade. Strategy is your plan to win, including what makes you different and what you say no to. Governance covers your legal structure, agreements, risk and, crucially, how decisions get made.
Traction
Performance means tracking the metrics that show whether you're genuinely progressing, not just busy, and knowing when to pivot. Finance covers runway, burn, pricing and cash flow, which Jane noted is behind the closure of more than four in five businesses that shut down. Marketing should be grounded in a clear understanding of your customer and linked directly to your strategy.
Engine
People, process and technology work together as the operational core of your startup and can't really be separated.
For each element, Jane pointed to tools that already exist and have been proven to work, from the golden circle and value proposition canvas to the lean canvas, RACI, pirate metrics and cash flow forecasting.
Doing the Homework
Jane's closing message was simple. You don't need every element perfected before you start, but you do need the right fraction of them for your stage, and the willingness to do the hard work of truly knowing your business.
Watch the full session on the Cremorne Digital Hub YouTube channel:
