Nathan Tinkler’s fall from the top of BRW’s Young Rich List has grabbed all the headlines in the last few days, with most saying the list highlights a shift from mining to technology.
That’s true, but what it also highlights is the shift from one giant trader to an army of business builders.
Nathan Tinkler became very rich, very quickly by buying and selling a series of assets and using debt to constantly trade up.
The vast majority of the other members of the list – from the new list leaders Mike Cannon-Brookes and Scott Farquhar through to leading women Carolyn Creswell and online retail guru Ruslan Kogan – have built fast-growth, profitable and sustainable businesses that have changed their sectors and have a long future ahead of them.
In some ways, Tinkler’s drop is a little victory for entrepreneurialism.
Of course, the Young Rich list is full of 100 other fantastic stories and some great money-making trends.
Let’s look at the top 10:
It’s important to note that it took two people to depose Nathan Tinkler at the top of the Young Rich – Mike Cannon-Brookes and Scott Farquhar are one of 17 joint listings on the list, and one of eight partnerships from the tech sector.
It’s hard to say what’s behind this trend. Perhaps tech companies require such a range of skills (technical, marketing, operations) that it’s impossible for one person to manage everything. Perhaps two heads are just better than one. Regardless, my favourite partnership story involves Mitchell Harper and Eddie Machaalani, who met in an internet chat room in 2003 and started their first business a year later.
Nathan Tinkler might have lost top spot, but with $400 million he is still a force to be reckoned with. In addition, there are two more mining-related entrepreneurs in the top five: Mark Ackroyd, founder of National Plant & Equipment, who debuts with $290 million; and Ashley Fraser, who is valued at $195 million and owns a mine machinery leasing business called Orionstone. The growth these entrepreneurs see might slow but, like the mining boom, they’ve got many good years ahead.
The retail industry is having a tough time of it, but you wouldn’t know it from the Young Rich list. Catch of the Day’s Hezi Leibovich; Kogan founder Ruslan Kogan; BigCommerce’s Mitchell Harper and Eddie Machaalani; RetailMeNot.com founder Bevan Clark and Guy King; and Malaysian-based entrepreneur Patrick Grove are all leaders of an emerging group of online retail leaders. Their prominence on the list – all of these men are in the top 20 – shows that not only is online retail a growing force, but it’s a highly profitable one too.
One trend from Australia’s main Rich List is that entrepreneurs tend to retain 100% of their businesses. That’s not the case on the Young Rich list, where founders are willing to sell down to get capital to expand. Mark Ackroyd sold half of his machinery hire business National Plant & Equipment to Japan’s Mitsui in July for $150 million, while Ashley Fraser sold a minority stake to private equity group Advent Capital last year for $68 million. Cannon-Brookes and Farquhar of Atlassian, Harper and Machaalani of BigCommerce, and Leibovich of Catch of the Day have all taken in private equity in the last 12 months. It’s the balancing act for entrepreneurs: Is a smaller slice of a bigger pie better than a bigger slice of a smaller one?
If you want to get onto the Young Rich list, then being female is not the way to do it. In the last decade, the proportion of women on the list has fallen from 9.5% in 2003 (six of the 63 members of the original list) to just six out of 100 on this year’s list. I feel like a broken record, but to state again: getting more women into entrepreneurship is just as urgent as getting more women on to corporate boards.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
