One of Sydney’s leading start-ups, e-commerce platform Bigcommerce, has confirmed it will be leaving Australia to exit by listing on the tech-dominated Nasdaq market in the next two years. Founders Eddie Machaalani and Mitch Harper are passionate advocates for building and running world-leading businesses from Australia since launching the company in 2010. This commitment to stay within the Sydney start-up community has meant they spend “appalling amounts of time on planes” and pay particular attention to who they hire and their commitment to the company culture. Their three rounds of external capital investment, totaling $US75 million ($A83m), have all come from US venture capital firms, the first two rounds from General Catalyst and the third from Revolution Ventures. Harper told StartupSmart while they personally plan to stay in Australia for as long as possible, they will be looking to list the business soon. “Investors expect exits. Whether that’s a sale or a listing, when you take investment that’s part of the package,” Harper says. “We haven’t locked anything in yet, but we will be looking to list on the Nasdaq in the next 18 to 24 months.” Harper and Machaalani currently serve as co-chief executives. Harper says becoming a public company could require one or both of them to move on from the company or remain with the company and move to the US. The company recently launched a new product and passed over $3 billion worth of transactions processed through the site. It employs over 300 people, just over 100 here and with a slightly larger team in Austin, Texas. The company is a US entity with an Australian subsidiary. Putting Sydney on the start-up map as the home of what could soon become a billion dollar business has always been a goal for these co-founders. “We wanted to build this from Sydney and exit it while we live here,” Harper says. “We want to put a big gold star on this city and show the new guys coming through we can build global businesses from here.” Bigcommerce recently passed $3 billion in transactions processed through the site and launched a new product. In February, they shared their scariest moment so far with StartupSmart, and how they overcame their fear of raising capital and becoming a big business too quickly.
E-commerce platform Bigcommerce is booming. It has passed 50,000 paying customers, has a team of 300 and has raised $75 million to fuel its ambitious growth plans. But to reach any of these goals, its founders had to overcome their fear of raising capital. Mitch Harper told StartupSmart the biggest challenge he and co-founder and co-chief executive Eddie Machaalani have faced in their start-up journey was battling through their fears of taking on external capital and growing too quickly. “The idea of raising money was scary because we hadn’t done it before and we had seen you could have massive success if you took the risk but also massive failure grew too quickly and let it kill you,” Harper says. Bigcommerce grew out of one of the six products in Machaalani and Harper’s earlier start-up. Launched in 2010 with about $10,000 worth of credit card cash, Harper says transitioning their approach to the business was hard. At the time, they had over 10,000 paying customers and reached profitability with a team of 10 in Sydney and 20 in Austin, Texas. The executive team had been batting away advances from US venture capital groups for over a year. But some of them kept calling. “We realised maybe this Bigcommerce thing really had legs,” Harper says. “Eddie and I kept talking about it, trying to overcome the fear of getting big and turning into a boring enterprise rather than a fast start-up. In the end, we decided to go all in.” With their sights set on becoming a billion dollar business, they knew they’d need investment to grow. But they had a lot to learn first. Harper says they’d never known a VC, had no idea what they wanted to hear, which metrics they’d be interested, or even how to build a pitch deck. After trawling through their inboxes to find all the contact details of the investors who had reached out, the pair booked a two-week trip to the US. They received over 15 invitations to pitch and planned to spend a week on the west coast followed by one on the east coast. After a week of pitching in Silicon Valley, they headed to their first pitch on the east coast with General Catalyst. The meeting went so well they had a term sheet the next day, which they signed for a first investment of $15 million in July 2011. With the cash heading into their account, Harper and Machaalani flew back to Sydney and began to implement the plans they’d developed to keep their company true to their values. “Once we got over that fear, we really changed our mindset from how do we avoid needing other people’s money to how do we become a billion dollar business quickly, and put a Sydney start-up on the map for doing exactly that,” Harper says. Their chief concern was maintaining their company culture, a challenge complicated by the fact both founders wanted to stay based in Sydney while their Austin team took off. Beyond “spending appalling amounts of time on planes”, it was taking the time to find the right executive team that has helped keep them intact as they’ve grown to 300-strong. “Growing your business from tens to hundreds can kill you if you don’t have the right strategies and management,” Harper says. “We knew hiring the right people was critical, so we agreed on a no-jerk policy we still have today.” The commitment to never hiring someone they wouldn’t want to grab a beer or glass of wine with became the guiding principle as they invested their first round of $15 million into launching marketing campaigns and growing the team. They added over 70 people to the team in under a year. “Once you’ve got them, trusting them is make-or-break. Our CFO Rob is the perfect example. He’s based in Austin and he’s not the typical bean counter, he’s the cultural beacon of the business,” Harper says. With their fear of external capital leading to killer quick growth vanquished, they went on to raise a further $20 million from General Catalyst in August 2012 and then $40 million from Revolution Ventures in August 2013. Bigcommerce plans to hire between 100 to 150 new staff in the next year. It has also got a new product launch coming up and almost $3 billion of payments processed through the site. Harper says in retrospect it was self-doubt that held them back. “The biggest fear and doubt we had was if we were really a viable business that someone would want to put millions into or maybe it was all in our heads and we were kidding ourselves.” While all the external funding and over half of their team are based in the US, Harper says they’re committed to building and exiting the company from Sydney.
Despite being kicked out of a Founder Institute entrepreneur training program in its early weeks, Pixc founder Holly Cardew wasn’t discouraged. “He didn’t like my pitch,” she tells StartupSmart of the reaction of a Founder Institute mentor to her idea for a business. But she refused to be discouraged by the feedback on Pixc, a web-based service that Photoshops the background out of pictures of products online retailers want to display on their websites within 24 hours. “I knew this was a big problem for shop owners,” she says. Cardew, 26, discovered a need for a service such as Pixc’s while running her Country & Co. marketplace website and finding retailers in country areas needed help with their sites, especially pictures. She launched Pixc in May and soon had an order asking for 800 images to be edited and, after relaunching around September/October, is now processing hundreds of images a week, with a goal to process thousands next year. Last month, Cardew pitched Pixc as part of the Telstra Digital Summit and won a scholarship to visit San Francisco and the SXSW festival in Austin next year. She says she’ll be visiting payments giant PayPal, as well as marketplace eBay and Google. Pixc charges $US2 for each image it edits, with designers around the world accessing them from the cloud to work on them and then return the image when it’s finished for the customer to access. Cardew says a product displayed on a contrasting background can increase sales online by 39%. She says she’s been selling products on the internet since she was 13, but this year feels like she’s solved a problem faced by retailers. “I’m really passionate about helping people sell online and get a thrill out of seeing sales increase.” Cardew has experienced the ups and downs of starting up in the online world. When she was 18, she tried to develop an online travel website and spent all her savings on a digital agency that couldn’t build what she wanted. As a result, she says she taught herself Wordpress to build her own sites. Cardew says her ambition for Pixc is for it to process thousands of images a day, create thousands of jobs in developing countries, and to one day be acquired by a larger online retailer.
An estimated 20,000 aspiring start-up founders will take part in a Global Startup Battle in mid-November as part of Global Entrepreneurs Week, coordinated by entrepreneur training and education network Up Global. The battle is made up of Startup Weekends all over the world. Attendees will pitch ideas and form teams around the most popular ones to create start-ups by the end of a weekend. The team behind Australian ecommerce start-up Bigcommerce will lead the judging panel for the ecommerce focused component, known as a Circle, of the Global Startup Battle. Founded in 2009, Bigcommerce is an online store platform, with teams in Sydney and Texas. The winners will receive a mentoring and month-long internship at Bigcommerce (including $1500 per team member for up to four towards travel costs to Austin, US), their own online store and tickets to leading start-up conference South by SouthWest Interactive in Austin. Kirsten Knipp, the vice president of marketing, product marketing and brand at Bigcommerce, told StartupSmart from Austin that they wanted to encourage entrepreneurialism beyond just tech and software. “We’re most excited to see what they come up with. Startup Weekends typically tend to spawn technology or software companies, but we’re really hoping to encourage other kinds of ideas as well because entrepreneurship is not limited to technology,” she says. She adds the team is already excited about having a young start-up team join them for a month. “Getting to sit side by side gives us a chance to share our best practices, and we want that winner to go home and share those with the world. Whoever ends up being that winner will have a platform to make a big difference,” Knipp says. Bigcommerce now hosts over 40,000 stores. In a statement, Up Global chairman and chief executive Steve Case said the ecommerce focus space is increasingly accessible and attractive to start-ups. "As access to the $250 billion global online marketplace for retailers and merchants is increasingly democratised, ecommerce provides a compelling opportunity for young start-ups to go toe-to-toe with giants in their space,” Case said.
Flickr co-founder Caterina Fake has launched her latest online venture in Australia, a social media platform which allows users to “annotate the world”. Findery, Fake’s latest creation, is a free app (currently available through the Apple app store) which lets people leave digital notes anywhere in the world and then users are able to search for locations and find information and unexpected stories about the world around them. Effectively a new way to document history (past and present), Findery is about annotating the globe “from Adelaide to Austin”, says Fake. Fake told SmartCompany she came up with the idea on a camping trip with her daughter. “We were camping in Northern California and she was three at the time, we fell asleep inside a circle of Redwood trees and I had the thought that I wanted to be able to preserve the memory forever,” she says. “I started thinking about how I could do that, I wasn’t about to carve my initials into the bark of the tree, but being a tech entrepreneur the obvious answer was to create the technology to do it.” Fake says she discussed the idea with Flickr co-founder Stewart Butterfield, who turned out to have had a similar idea in 2005, but at the time no technology existed to make the idea feasible. Prior to launching the new social platform, Fake worked on making sure content was available around the world for users to engage with. “We’re excited to see it being in the users’ hands for the first time. It’s exciting for us to see its adoption and help people discover things they didn’t know about the world around them and encourage them to contribute their own stories,” she says. SmartCompany was given a preview of the new app and already users are able to read up on historically significant locations around them. A picture of people dancing in the street in celebration of the end of World War II adorns 350 Bourke Street’s geographical mark, Sydney’s Circular Quay has a description attached of when a fleet of 16 United States ships arrived on August 20, 1908, and at Woody Point Jetty in Queensland there is a photo of two fisherman and their human-sized catch from 1913. Fake hopes that users will start posting notes with information about what is going to happen in the future too. “Say for example someone is walking through the streets of San Francisco and they see a big hole in the ground, I want them to be able to click on the site using Findery and read people’s notes about what’s going on there and if it’s going to be turned into an apartment block.” Even when Fake created Flickr, she’d always had a desire to help build connections and communities of people. “This is what I care most about. The internet is great for people to interact and everything I’ve built has some element of an investigatory nature,” she says. “On Flickr people would have conversations about what they were experiencing, and Findery is very similar to that.” Fake’s experiences starting Flickr and then Hunch (a platform which aims to personalise the internet), have influenced the way she’s approaching Findery. “As entrepreneurs we all have the experience of some kind of catastrophic failure, it’s the nature of start-ups. One of the hardest things is raising capital and financing,” she says. “A lot find their way by boot-strapping, although now it’s easier for tech entrepreneurs because the software and technology is cheaper, but there are always things you can do better.” Fake says one of the biggest lessons she’s learnt is how to hire staff. “The most important thing is building a great team, everyone has to be excellent at what they do. You need to have really high standards, but a lot of start-ups have difficulty taking the time to find the best people,” she says. “Everybody can have a great idea, but fail to execute it because the team members can’t make it happen. The main thing is to start off with a standard of excellence and don’t ever compromise.” Fake says with Flickr she was so desperate at times that she hired the wrong people, but now realises it was a mistake. “Starting Findery was a very slow process, we’d get resumes and just say ‘not awesome, not awesome, not awesome’,” she says. “Starting out you don’t necessarily have any idea what awesome looks like, but you need to have a really good idea of the benchmark.” Flickr was acquired by Yahoo! in 2005 for a reported $35 million. Following the acquisition Fake started work at Yahoo! until she left in 2009. “I tried to take as much as I could from a start-up with me in terms of our product development and agile nature and bring it into the environment at Yahoo! … I called it ‘Yahoo University’, I knew there were certain things I could learn there I couldn’t at other companies.” Fake spent most of her time at Yahoo! in the search department and she took the lessons she learnt there with her when she started Hunch and now Findery. “I really do think that when Findery becomes a rich environment you’ll be able to go to San Francisco and take a tour just of the Victorian age or the summer of love in the 1960s,” she says. This story first appeared on SmartCompany.
Newcastle is gearing up to host Australia’s first attempt at a massive digital conference with the Design Interactive and Green Tech (DiG) festival in early October. Inspired by Austin-based South by Southwest (SXSW) festival, the festival will include a wide range of panels, keynotes, workshops and pitching competitions to boost the start-up and tech industries. Festival coordinator and entrepreneur Craig Wilson told StartupSmart Australia needed a huge community event like SXSW. “We went to SXSW a few times and found it to be amazing. We decided we needed something like that in Australia, and didn’t recognise anything like that around, so we realised the opportunity to create something like it,” Wilson says. The theme for the first festival is “adapt or die”. Wilson says they chose this theme to challenge and encourage existing businesses to embrace technological change. “We’re trying to reach out to say we need to start addressing the amount of change that’s happening and not get left behind. We want to help them to adapt and take advantage of new technology and new thinking,” Wilson says. “There has been such a massive change in techno in the last decade and I see it with businesses, too many are dragging the chain and don’t want to recognise the difference.” Wilson says they’re looking forward to covering the rapidly evolving technical business world each year. “This is only the beginning of a very big evolutionary cycle, so we need to start informing businesses as much as possible,” he says. The event is being designed for 1000 people and will be held in Newcastle. “Newcastle is the right sort of town to host something like this. We believe a capital city is not the place to pull off an event like this, as it’s a community focused event that takes over the whole town. It’d get lost in Sydney or Melbourne,” Wilson says. Much of the program has been crowdsourced directly from the tech start-up and wider business community. The DiG team did a call out for speakers and recommendations, and have compiled the program based on demand. The program includes a pitching competition for start-ups, who will be pitching for $30,000 and a 12-week development program. The competition is coordinated by the Slingshot Accelerator program. Slingshot Accelerator co-founder Trent Bagnall told StartupSmart the growing start-up community in Newcastle and the Hunter Valley region was looking forward to the event. “Events are really important for building digital ecosystems. There is a growing enthusiasm for the growing ecosystem in the Hunter region,” Bagnall says. “The coordinating team have lofty aims for this to be a very large digital festival going forward, and it’ll be really important to keep growing the community up here.” Bagnall says they’ll be looking for globally scalable ideas and business models from teams of at least two people. “What we really want to see is something different. We see a lot of ideas, so a new idea and a really passionate person is what will make you stand out. What’s often missing is the passion component, so it really makes us notice your idea,” Bagnall says.
Last Friday marked the start of another year at SXSW.
From humble beginnings meeting my co-founder in an online chat room, we've grown Bigcommerce to the fastest growing eCommerce platform in the world that helps SMEs get online and sell more.
US-based retail giant Target Corporation will launch its Target Retail Accelerator tomorrow to coincide with the 2013 South by Southwest festival, where developers will vie for cash prizes.
The organisers of SeaChange StartUp Camp Merimbula have launched Australia’s first-ever StartUp Bus, inspired by the Startup Bus in the United States, but it will only take in the far south coast of NSW.
Deloitte has partnered with law firm Norton Rose to conduct a survey on employee share option plans in order to present the government with hard-and-fast data on the issues affecting start-ups.
Australian entrepreneur Simon Walker has made a documentary called the Leaap Project, which saw him visit 10 US cities in 20 days to gain insight into America’s complex start-up scene.
The commercialisation arm of Flinders University is setting up a new course called Venture Dorm, which will include a trip to Austin, Texas for participants with the best business models.
Early Twitter investor Mike Maples has joined US venture capital firm General Catalyst Partners in backing Sydney-based tech start-up Bigcommerce, which has secured $20 million in funding.
In the blistering Texas heat, hundreds of representatives from eight Austin-based tech start-ups congregated at the Krieg Softball Complex to compete in the 2012 Summer Start-Up Olympics.
Sydney and Melbourne are among the world’s top 25 start-up ecosystems, according to new findings, ranked 21st and 22nd respectively, but experts say they should be higher up the list.
The South by Southwest festival in Austin, Texas, is an annual magnet for business innovators and start-ups hoping to strike it big.
California-based company Cadence Design Systems has partnered with National ICT Australia to launch a business incubation program for Australian integrated circuit start-ups.
The South by Southwest festival kicks off in Texas next week, aiming to build upon the momentum of last year’s 25th anniversary, with the Startup Bus making its return.
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