Meet the Startmate class of 2012: Part two – Page 2 of 2 – StartupSmart
Young Republic
What? Dubs itself “Australia’s first interactive marketplace for fashion, jewellery, homewares, art and lifestyle products from home-grown upcoming and independent designers.”
Founders? Michael Mironowicz, Andrew Yang and Marianne Sea
Andrew, how did this venture come about?
Marianne and I ran a digital agency and some of our clients were designers who wanted to sell using eCommerce but didn’t really know how to do it or handle it.
We thought it would be a good idea to build an online marketplace so they didn’t have to do all of the selling themselves.
We set up a Facebook page to test the demand and had a few hundred people asking when we were going to launch the site. It was clear there was a lot of interest.
We ran Young Republic on the side for a little while until we got into Startmate and we made the decision to commit ourselves to it.
Why did you want to leave the comfort of an established business to do it all over again?
We enjoyed working at the agency, but it was very full-on. We ran it for nearly five years and it was time to look at other challenges that would provide a different lifestyle.
I think we learnt everything we could at the agency and the only way we could go forward was to start another business. We had to make the jump.
How is Young Republic going now?
We got more than 300 designers from the launch and they have uploaded more than 2,000 products to the site.
Initially, the problem was getting good quality designers, but we only have very strong designers on the site. Between us as a team, we have the skills we need across each aspect of the business.
What was the attraction to Startmate?
The key was the learning aspect and being able to pitch and refine a product. That was all worth more than anything else – we were given some really thought-provoking questions.
Leveraging 25 mentors, especially in the tech space, is very rare and that was a real attraction to us. We’ve had other people give us advice, but this is a different level. When people are invested in your business, they are brutally honest.
We heard about Startmate from StartupSmart last year. It wasn’t quite the right time to apply then, so we registered our interest and got a reminder the last day that entries were open.
We rushed our application but we got into the interview round. We were challenged on things that weren’t at the forefront of our mind by the mentors.
What did you learn?
Well, one of the mentors said that we didn’t probably articulate the problem that we were tackling. It’s important to know the difference between a vitamin and a pain killer, or how much a consumer needs a product.
We can now articulate the business better but we are still refining it.
Who is the site aimed at?
Primarily, the 18- to 35-year-old demographic in the fashion and homewares areas. We’re keeping it nice and simple – it’s free for designers to sign up and we take a 10% commission on sales.
It’s pretty much a no brainer for designers as most don’t have an eCommerce site. It’s no risk to them and provides them with another sales channel.
Last year, we didn’t actively market the site but still got 65,000 visitors, which is reasonable. We’re looking to grow that.
We’ve had mixed feedback from the mentors. Niki Scevak said that we have more than 300 designers on board now and that we need to make it more meaningful for them, rather than aim on quickly getting 4,000.
We want to get a community feel to it. We’ve been looking at sites like Etsy to see how they do it, but one of our competitive advantages is that there are no sign-up fees and the commission cut is lower.
Also, Etsy just features hand-made products. We will list manufactured items too, so we’re aiming for that middle ground.
What do you hope to get out of the experience?
The main goal isn’t to actually raise investment dollars but to get operational revenue as a baseline and then raise angel funding in the future.
We’ve registered as a US entity and we want to go after the consumer market in the US and UK. I think if we try to own the space around youth culture, we’ll have a fighting chance.
Ninja Blocks
What? A software/hardware proposition that aims to link up online apps for tasks such as home automation
Founders? Mark Wotton, Madeleine Moore and Marcus Schappi
You’ve got another business haven’t you, Marcus?
Yes, my wife Madeleine and I run Little Bird Electronics, which sells electronics for hobbyists and has been going since 2007.
Mark worked for me on another business and we teamed up in late October to work on Ninja Blocks.
So, what’s the idea behind Ninja Blocks?
Through our other business, we sell lots of Arduino products. It is a popular control that can remotely automate things like the TV and temperature in the home.
The problem is that it’s quite hard for someone to use if they haven’t got a technical background. In fact, even people with a programming background can find it hard.
If you want to operate your Twitter from it, for example, you would need a fair bit of knowledge to know how to link Arduino to your tweets.
Our idea is a web app called Ninja Cloud, which allows you to easily automate things to work under certain conditions – for example, the air-conditioning comes on if the temperature hits 30 degrees.
To operate this, we have developed a piece of hardware, called Ninja Blocks, which people can use for the automation.
Sounds like hard work on your behalf.
Yes. We are the only Startmate company that has to develop hardware as well as software and it’s tough.
We thought about making it available on the iPhone, and we may do that in the future, but for now we want it available to as many people as possible, so it is a web-based app.
Parts are sourced and made in China and here and we do the software programming so that the apps talk to each other.
One of the major challenges is the hardware. As software developers, we are used to coming up with an idea and being able to quickly test it and then change it. You can’t do that with hardware.
With the Ninja Block, there are sensors built into it such as for temperature. You can then add other sensors in the home, such as motion sensors and water sensors, so you can tell if your dog’s water bowl needs filling up.
We’ve had to create the sensors too, so that’s a lot of work. But we are trying to do all the hard work so the user doesn’t have to – there’s no username and password involved, you just use the Ninja Block and get on with it. We are making it as easy as possible.
Is there a large potential market for home automation?
Well, automation is a subset of what we do, which is about organising the internet of “things”. The system centrally manages all your devices.
Most households have four to five devices connected to the internet. It’s estimated that 39 billion devices in the world will be internet-connected within the next few years and I think that figure is conservative.
On Friday, we posted our project onto Kickstarter and within three days we got the $24,000 we were asking for. We’re up to $35,000 now.
Unlike some of the other businesses, we didn’t go for Startmate for the money. When you’re building hardware, $25,000 doesn’t get you very far. But the value of the help is immeasurable – it’s a huge advantage to have these mentors, we wouldn’t have been able to do Kickstarter without them.
How has the process been?
We pitched the idea to Startmate and were ranked number one at the pitch day, which was encouraging.
I think we were helped by the fact we already run a business, as well as the fact we said we didn’t need the money, which is the easiest way to raise money, funnily enough.
It’s still hard to explain the product to a lay person as it is a platform, rather than just a product. It’s something we’ll have to work on.
We started work on the platform two weeks before the Startmate program started. The hardware has been built and although the software isn’t as far down the line as we’d like, Kickstarter is a great validation and we’re confident we’ll get there.
What price will you charge?
$145 for the hardware. The software will be a freemium model – some channels will be free while other premium ones will be charged for.
What’s next?
We want to do $1 million in hardware in the next year. We already have relationships with buyers in China and the US, so we are looking for worldwide distribution.