Serial entrepreneur Andrew Birt is looking for Melbourne-based start-ups to become the first group of participants for his latest venture AngelCube, an early stage incubator for web-based businesses.
Birt, who founded marketing agency StartUP Marketing in 2009, is also the founder of start-up job board Snowballer and co-founder of small cap investment firm Catvielle Capital.
He’s now focused on the early stage investment market, as the lead investor and chief executive of AngelCube.
In addition to Birt, the AngelCube team consists of co-founder Adrian Stone and Nathan Sampimon, founder of web development firm Inspire9.
Initially, AngelCube will have about $200,000 to invest in four to five online ventures. It’s believed the group’s first project is Cub.io, which lets users win prizes among their friends.
Successful applicants will be given an average of $25,000 and free office space in StartUP Marketing’s Melbourne office. They will also undertake a three-month mentorship program.
Mentors include Scott Handsaker, co-founder of online event registration system Eventarc, and Crowdmass co-founder David Wei. AngelCube also hopes to take participants to the United States to meet investors based in Silicon Valley.
AngelCube’s program is based on local and international incubators such as Startmate, Y Combinator, TechStars, Seedcamp and 500 Startups.
“We’re looking to back a handful of exceptional, Melbourne-based web entrepreneurs and help them get to the next level with funding, mentorship, marketing and pathways,” Birt says.
“Our focus will be on getting customers onto the start-up from day one and building product around those customers, then learning to pitch to investors.”
Birt says many entrepreneurs are convinced their product or service has a wide appeal, but the key is to identify a niche market and develop a loyal band of passionate customers as a base for growth.
“Probably the biggest thing I have learned is that people need to scale the idea down,” he says.
“Nearly every time I have seen people fail is when they get ahead of themselves and the idea is too big and they spend too much.”
“If you’re going to fail, fail fast. Make any mistake a small one and learn from it quickly. I have seen customers go too heavy too early, which doesn’t give them a chance to refine their product.”
“You need to build something lean and mean. It doesn’t matter what industry it is in; just build it lean and create the demand and get some initial customers.”
“Once you are at the next phase, then you can dip into the pocket and start spending but don’t go too heavy too early.”
According to Birt, the other fatal mistake made by many start-ups is overspending on the launch.
“You’re in it for the long haul, so it is not about one big bang; it is about slowly and patiently building credibility and the brand and building that passionate user base,” he says.