The harsh reality is that failure fucking sucks. Don’t let the startup mantras and hashtags fool you. Failure is emotionally draining, physically exhausting and psychologically frustrating. In some circles, it’s externally glorified, and in others, overwhelmingly demonised. I know this today, more than most days. Today we shut the doors down on OutTrippin, our company, our baby and the love of our life for the past two years. Notice how I struggle to even say the word failure in that sentence? It’s not a strategic choice of words; it’s just agonising to say the words: My company failed. I keep telling myself failure is an opportunity. Based on the generally positive demeanour I’ve had over the past few days, many might think I do believe it. Sometimes, I think I believe it too. I can logically draw the lines and understand why failure can be, and should be an opportunity, but sometimes logic just goes out the window. Because when I dig deep, behind the pleasant demeanour, behind the words, behind the actions, late at night as I lie awake, tossing and turning, a paralysing realization starts to sink in and the “truths” you keep telling yourself during the day can no longer mask the reality. Failure. Fucking. Sucks. It’s a funny little world. I remember when we started this adventure two years ago. Indi, my cofounder, and I met in a hostel in Buenos Aires. Traveling through, we became fast friends and when we happened to find ourselves in the same beautiful city a few months later, this time to live, ended up as flatmates and eventually as co-founders. We’ve been all over the shop, from Buenos Aires to Santiago, Melbourne to New York, and San Francisco to Dubai. We put it all on the line to realize our vision of what this world may look like if each person travelled more, travelled better and found experiences that they found truly amazing and eye opening. We think it would make us a happier people, a more understanding civilization, a more loving race. And so we tried. And try hard we did. We started OutTrippin, to build products that let people get personalised recommendations for truly amazing experiences on their travels. Our first product was a service that let travel experts compete to build your vacation. We took investment, we moved continents, we dealt with visa bullshit, joined an accelerator, found mentors and experimented with product, partners and business models. We failed, we learned, and we got up and tried again. And never thought that one day, we would get up to try again, but OutTrippin would not. We never thought OutTrippin would fail. Nine out of 10 startups fail. That’s a statistical fact (well, more like just an estimate). And yet, every account from an entrepreneur with a failed startup, the recurring theme always is: ‘I never thought my startup would fail.’ It’s the combination of the narcissistic nature of entrepreneurship (that I, as a single human can change this world of 7 billion people). It is also the stressed importance and almost glorification of hardship (Airbnb and their one thousand days of failure) that has allowed us to create this magical bubble of optimism. We allow ourselves to reach for unimaginable heights and work our asses off, all with the belief that we are the outlier – we are not the 90%, even if statistical reality says otherwise. And boy that bubble is simply amazing. It’s energising in the face of impossible (improbable) odds. It’s invigorating even in the darkest hours, when all seems lost, and it gives you permission to go after goals that most others have deemed impossible. Because, you, your beautiful, intelligent, passionate self is the person to achieve the impossible (improbable). And. It. Is. Glorious. Right up until it all comes crashing down. And 90% of the time, it does. Today, it came crashing down for my startup and my life for the past two years. People ask me, what happened? It all seemed to be going so well, I thought? I was back in Santiago, Chile in April 2013 when I was skyping with Indi on a Wednesday evening, who was stopping by Melbourne for a friend’s wedding. She said I’d love this city. She said I’d love all the cute hipster girls (she knows me well) and that we should totally think about moving there. I considered it for half a second and thought I’d see who’s investing in Melbourne on AngelList. After a few messages with Adrian Stone and Nathan Sampimon, by Friday morning just two days later, Indi was pitching OutTrippin to a crew of angels. We all got on a Saturday group skype, and by Monday AngelCube invited us to join their 2014 batch. The only catch was I had to move to Melbourne in four days – by Friday morning. Many would say “no way, that’s absolutely ridiculous”. For us, it was a no-brainer. A day of packing, some serious hustling for visas and few tearful and sudden goodbyes later, we were off to Melbourne, myself from Santiago and João from Portugal, just one week since Indi suggested we consider Melbourne as the next stop on OutTrippin’s journey. Startup founders get used to living on the knife’s edge because anything can happen. In fact, anything happens all the time. For every amazing thing I tell you is happening, there is an equally destructive thing that could also happen to the company. For every potential ascension and growth opportunity, there is a deep dark valley we could plunge into. Things can be amazing and terrible at the same time. For every huge deal we close, it can all fall apart before we’ve even had a chance to finish the champagne. So we learn to drink up quickly. We learn to manage the constant threat of things falling apart. We mask it behind the amazing potential. But masking it doesn’t make it go away. It’s always there. It’s a condition without a cure, the best we can do is manage it, mitigate it, and accept it. And that’s just how it goes. Sometimes it all comes crashing down like a house of cards. So what went wrong? I don’t believe that only one thing going wrong can kill a company. Usually it’s a catalogue of things that go wrong that brings any company to this point. It was no different for us. Everything that could have gone wrong did. That includes everything from business model failure, partial failures in team dynamics, general tiredness of doing this thing this long and go through yet another product and biz failure and a difficult investor climate in the travel industry. But, most of all, market dynamics pushed us onto a mountain that we kept trying to ascend only to eventually realize that that mountain was not our Everest. It wasn’t our Everest Startups are hard. And it’s not made easier when life things happen. Back in 2013, we were going through AngelCube, an intense three month accelerator program that essentially takes over your life. Similar to other accelerators, the non-stop ferocious nature of the program requires you to park your life entirely for 90 days and focus on your company and company alone. But life, as you might expect, makes other plans. From 7000 thousand miles away, I got a call no son should ever get: A hysterical sister and mother trying to tell you that your dad, the man who you could always turn to, is no longer there. And suddenly, everything changes. Everything that you knew to be true no longer is. Everything you knew about life is shrouded in doubt. Everything you were you no longer are. I left immediately to return home (obviously), leaving my cofounders to keep the company going while I tried to simply accept what had just happened. You never realise the strength of the bonds you create with those who you start a company with until it’s put to the test. We fought through what was the worst moment of my life and my co-founders Indi and João helped me put myself back together in a way that made me think that nothing could stop us from ascending our Everest, all because we had just survived the worst moment of my life. With all the sleepless nights, grey hair and the financial disaster that is your personal bank account, you’d think we’re nuts to go after the impossible (improbable) odds. But the truth is, when it’s a vision you so passionately believe in, everything else fades away. You say “who cares about the grey hair, I’m on the George Clooney aging plan”. You say “you’ll sleep when you’re dead”. Money schmoney, this is why you have credit cards. It’s all good if you can keep going after your vision. It’s all good as long as you have your Everest. And that’s why, it’s so very, very, very crucial to find your Everest. No other mountain is worth climbing OutTrippin was our Everest for a long time. But we were also open to following the market to wherever it might lead us. And this time, we were led astray. In the world of travel planning, finding a business model that works is like hunting for unicorns. It’s why there has been little to no competition to TripAdvisor on the travel planning front for the past decade. We’ve always had an amazing community of travel writers and bloggers and we’ve always had a concept that got people really excited. The problem has always been to find a business model that could scale. From OTAs to airlines, from content companies to hotels, we experimented for a sustainable route to create high quality expert generated travel content at scale. What a mouthful, I know. With a recently launched B2B (business to business) product targeting hotels, we came damn close too. But it dragged the company to a place where we dealt with slow moving behemoths and a B2B sales cycle that makes movements of glaciers look like that of a Ferrari. We could make peace with that, I think, but we couldn’t make peace with the fact that this wasn’t the mountain we wanted to climb. We wanted to focus on creating more magic with our apps on the consumer side. But without the revenue from hotel partners to cover content costs, it would all come crashing down like a house of cards. The travel industry’s investor climate is colder than the arctic. It is notoriously difficult. There are fair few success stories (Airbnb and HotelTonight are the only ones that come to mind and are essentially in the accommodation booking space) and there hasn’t been a legitimate challenger to TripAdvisor in over a decade. Investors are sceptical and rightfully so. Many don’t understand the space and those that do know exactly how hard it is. Either way, doesn’t make quite the savvy investment, does it?! What that means is that most travel startups are going to have to prove 10 times more than their counterparts for similar valuations and investment, all in an effort to overcome the industry bias. Doesn’t make it impossible, just a whole lot harder. And that just meant that we had become a company that did things the bootstrapped way. A specific conversation I had with my cofounder still rings out in my mind. I told her of a random idea I concocted in the shower the night before. It combined the Tinder and Swipe concepts, presenting amazing things to do in the city, and an ‘algorithm’ that would put together a timely version of an itinerary with the things you like most with the time constraints you had. Groundbreaking? Not at all. But her response is what was most telling. She asked: “How do we make money from this?” It wasn’t one sided, there were many conversations where I played the role of “show me the money!” We had just become a company with a “show me the money” culture. Remarkably, it helped us become self-sufficient and we probably made more revenue than most travel startups our stage, mostly because we had no choice but to keep on hustling. But it also left no room for errors. And it meant that any new idea came constrained with the question: How do we make money from this? And that, ultimately stifled our creativity. All that pressure took its toll on the team too. It did us no favours that part of the team, mainly João, was on the other side of the world with a 12 hour timezone difference. Sure, tools like Github, Google Hangout, Slack, Basecamp and countless others help you manage team workflow no matter where they are, but there are no tools to help manage emotions and morale. And startups are just as much an emotional journey as anything else. When the person you work with day in and day out sits next to you, you can see how they feel, when to push, when to support and when to get them a glass of wine or a gin and tonic. But when you have a two hour window in a day to work together, you barely have time to get past work to really get to know how they are truly feeling and how you might help. I caught up with Indi last week after her trip to visit family in Sydney, and mine to visit family in Dubai. It seemed like a moment away from the home base of OutTrippin had helped us clear our heads and understand who we were and what we believed. We had a glass of wine and our thoughts and, dare I say it, “feelings” just seemed to come rolling out. We talked about how this B2B product we created for hotels as the revenue and content driver for OutTrippin had become the bane of our existence. It seemed to have pushed us in a corner of the market we had no interest in. How the god awful B2B sales cycle with hotels made me crave a shot of vodka simply to answer an email. We talked about how it was convoluted that we never believed in this new product but were willing to do it if it made it easier to pursue our core vision. About how the reality was that it didn’t. It didn’t make it easier to pursue. It didn’t follow our core vision. And it certainly wasn’t our Everest. Eventually, it became clear to us that it was tiresome to even feign excitement over this new direction we were taking, all to keep surviving as a company. We spent the past two years of our lives on OutTrippin because we were driven by the magical memories that we helped create. From sci-fi themed honeymoons in New York City to diving trips in Malaysia, from bachelor parties in Austin to a girls’ trip to Iceland, these stories and countless others that we’ve helped make are absolutely epic. And for this we are prouder than a dog with two tails. But the more we moved in this new direction to keep surviving, the more the magic faded. And that was the straw that broke the camel’s back. It was the stark realization that in an effort to keep surviving as a company, we had started climbing a mountain that wasn’t our Everest. And that wasn’t fair to our users, our customers, our community and it definitely wasn’t fair to us. There is no logic in building a company whose direction you no longer believe in So, it’s time for us to find a new challenge, and bring this crazy train we’ve been on to its final destination. As I sit here, listening to Frank Sinatra lay down some truth bombs, I can’t help but resonate with ol’ blue eyes: “I’ve been a puppet, a pauper, a pirate, a poet, a pawn and a king. I’ve been up and down and over and out but I know one thing: Each time I find myself flat on my face, I pick myself up and get back in the race.” And that, ladies and gentlemen, is life (and I can’t deny it). I feel a surprising ease that I cannot explain. Considering all of the above, one would think that I would be a wreck but it’s quite the opposite. I’m energised by the decision as opposed to burdened by it. There isn’t a trace of regret. Maybe it’s because I’ve made my peace with it. Maybe it’s because I don’t know what’s next but that excites the living hell out of me. Maybe it’s because I get to restart the search for my Everest, because I am just as thrilled to climb it now as I was when I started OutTrippin. Or maybe, just maybe, it’s because failure is just another opportunity to start again. This time, faster, better, stronger, and (most importantly) more intelligently. Kunal Kalro is the founder and chief executive of @OutTrippin. Kalro speaks four languages and is perpetually living out of his suitcase. He has spent most of his time last year in Chile, Australia, Dubai, India and US. This article first appeared on Medium.
Microsoft is believed to have spent over $US20 million to a startup called Acompli, which makes an email app for Android smartphones and iPhones. The news was reported by Re/Code, with Microsoft later confirming the deal in an official blog post from the company’s corporate vice president for Outlook and Office 365, Rajesh Jha. The email client was developed by veterans from Zimbra and VMWare, and supports both Microsoft and Google email services. US retailers concerned about Chinese online marketplace Alibaba A number of leading US retailers have called on Congress to end special tax treatment for online retailers, citing fears Chinese marketplace Alibaba could “decimate” their businesses. According to Reuters, claims were made in a series of TV and radio ads by a lobby group called Alliance for Main Street Fairness, which includes major US retail chains such as Best Buy, Target and JC Penney. While Alibaba has not yet launched in the US market, the retailers are concerned the company could use some of the money raised through its recent IPO on a US expansion. Google Fiber signups in Texas Google Fiber has opened up signups in the US city of Austin, Texas, according to The Verge. The fibre-to-the-premises internet service costs $US70 per month for data only, with 1 terabyte of cloud storage and TV setting consumers back $US130 per month, and a slower 5Mbps download and 1Mbps upload service available for a once-off $US300 fee. Overnight The Dow Jones Industrial Average is down 43.45 points to 17784.8. The Aussie dollar is down to US85.04 cents.
Startup Spring is gearing up for three weeks of events celebrating Australia’s vibrant tech startup community. Here are 10 of our top picks (in no particular order) for this year’s festival. Startup Spring launch party Melbourne, October 10 The festival will be launched on Friday October 10th from 5pm at York Butter Factory in collaboration with other participating organisations and Startup companies. There will be food, drinks and lots of good company. Get tickets here. OzAPP Awards Road Show: York Butter Factory, October 14 York Butter Factory will host the final stop on the OzAPP Awards Australia leg of the Road Show. Join professionals and startups from around Victoria in an open discussion with Bill Tai and the OzAPP Awards. Get tickets here. 66 MeetUps: Networking is not A Dirty Word, Sydney Lots of newly-started businesses find themselves working at the kitchen table or a desk in a shared studio. While Instagram is fantastic for connecting with creatives, if you want to met people face-to-face it seems there are limited opportunities aside from occasional exhibition openings and product launches. While tech startups pride themselves on being “well networked”, it can seem a little challenging for creatives to connect to their industry in ways that really matter. Get tickets here Slingshot Jumpstart Launch Melbourne, October 15 NRMA and Slingshot accelerator would love you to join them to help launch Jumpstart, Australia’s newest accelerator programme for high tech entrepreneurs. Jumpstart is looking for people with an idea in the high tech space who want help getting that idea off the ground. We are also seeking scale-ups who already have a product, but need help acquiring a large customer base. Get tickets here. DiG Festival 2014, Newcastle, October 16 The DiG Festival is a two-day event loosely based on the extremely successful SXSW festivals in Austin, Texas, which are run over three weeks and cover film, music and interactive. Over the three years SXSW has helped Austin become recognised as a leading technology centre with a vibrant artistic culture. SXW now contributes over $100 million to the Austin economy annually. The Australasian DiG Festival features a series of keynote presentations, panels and workshops by international, national and local industry leaders. There is a strong emphasis on innovation, entrepreneurial spirit and ethical business. Get tickets here. Get started in digital marketing: a free lunchtime class, October 16 The digital landscape is moving at a lightning fast pace. Every industry has been affected by the advances in digital, from retailers to brands and agencies. In this free class, you will learn the basics to get started on a digital marketing campaign for your business or startup. Get an overview on the different ways digital marketing can be used to optimise and measure the success of campaigns across various marketing channels. Get tickets here. Open Day at Fishburners, October 17 Come experience Australia’s largest startup space for a day. The open day will include a full tour of the co-working space, a chat with members over morning tea, five workshops ranging from online marketing to outsourcing and an afternoon pitch and networking event with Fishburner members. More details here. Dare Festival & GA Presents: The future of the workplace Dare Festival Melbourne presents Jurgen Appelo and Jim Breeze for a discussion that explores the changing world of work and how workers, managers and companies need to change too. Jurgen will be previewing his talk at Dare festival and will be giving you an insight into what he sees the future trends are in workplaces from his travels around the world. Jim will be passing on his observations about how this affects Australia. We will have an opportunity for questions, before having drink courtesy of General Assembly. Get tickets here. Health tech innovation Queensland meetup, Brisbane, October 21 This inaugural event will be very focused on networking Queensland health tech stakeholders, in particular, showcasing and supporting a foundation cohort of exciting healthcare innovations. These include an amazing wound opening/closing device, a new synthetic protein technology for healing difficult to treat wounds, world best practice nutrition and exercise programs – and many more. The aim is to help create an ongoing format or charter for the group to encourage innovation and support the next generation of health entrepreneurs. Get tickets here. Meetup – writing for entrepreneurs, Adelaide, October 23 This meetup is for entrepreneurs who want to talk strategy, learn writing skills, and bounce their writing off other like-minded people before putting it out into the world. Develop your tone, voice, and style… and discover things about what you’ve already written, of which you may not be aware. Step back from the trees and into the forest. This meetup is a writers’ group, but specifically for those who need to create written content for their startups. Get tickets here.
Australia doesn't need a startup capital, and certainly not one that operates at the expense of other communities that are popping up around the nation. Even if we did, there is no evidence Sydney would be the best place for it. When Mike Cannon-Brookes opined at Sydstart this week that “Australia needs a single city where all its tech startups are concentrated, and that city should be Sydney”, he was essentially suggesting two things: 1. That a single city needs to be the dominant player in Australia in order for our startup industry to be successful. 2. That Sydney has already won the race to be crowned the startup capital of Australia, and that all future community building and government support should be focused on Sydney. Let’s look at whether these arguments stack up. Do we need a single city to be successful? The idea that Australia needs one city to dominate the scene in order to be successful is unlikely to be true. The creation of startup communities is a hard thing to get right, and success does not always go to the biggest and the loudest. Take Boulder, Colorado as an example. Boulder is a better place to do a startup than Sydney by almost any measure you can conceive of, and yet it has a population of just over 100,000 people. Clearly size is not nearly as important as quality. You can get great, stand-alone communities operating in various locales quite successfully without worrying about fragmentation of effort. What about Israel? Tel Aviv is ranked as the second best startup ecosystem in the world by the Startup Genome Project, with more startups per capita than anywhere else and 61 companies on the NASDAQ. And yet there are other startup communities in Israel that have popped up and been incredibly successful, including Haifa and Jerusalem. Israel is now widely seen as a “startup nation”, rather than focusing solely on Tel Aviv. With a population of just over 8 million, not even Israel has adopted the centrally planned startup model advocated by Cannon-Brookes. Cannon-Brookes asks us to adopt the Texas model, arguing that Austin is the leading startup city in Texas. While that is true, it is hardly an argument for focusing an entire country’s efforts on one city. It's not even an argument that the people of NSW should focus all their energies into the Sydney scene, given that there are still other places in Texas with supportive and successful startup ecosystems. Perhaps then, that is not how successful communities get built? If we were going to pick one city, would we pick Sydney? Even if it were true that one city is eventually going to be the best place to do a startup in Australia, it doesn't necessarily follow that we know who that is going to be. I cannot think of a single global example where a community has picked an ecosystem winner in advance and set about focusing all their energies in that direction. It’s the equivalent of trying to “pick a winner” before the race has even been run. Think back to our example of Boulder. Go back 25 years and ask whether the inhabitants of Colorado would have picked Denver (pop. 634,000) to be their startup capital over Boulder (pop. 100,000)? They would have been wrong, because no one can predict where and how a startup community will emerge. It's harder than that. That is where we are in Australia. We are Colorado 25 years ago, with all our startup communities in their very early stages of growth. Strong startup ecosystems are built by founders over very long periods of time. Over the next 25 years, amazing communities will be built in Perth, Adelaide, Hobart, Melbourne, Brisbane, Sydney and others. Some will become bigger and more successful than others, but it will come about through natural, healthy competition. In 25 years, Sydney may indeed be the best place in Australia to do a startup. Then again, maybe it will be Hobart, Melbourne, Geelong or Newcastle. It really doesn't matter, and we will be far better off as a nation if we encourage all founders to be successful no matter where they live. Scott Handsaker is the cofounder of Startup Victoria.
Australia needs a single city where all its tech startups are concentrated, and that city should be Sydney, according to Atlassian cofounder Mike Cannon-Brookes. Speaking at startup conference SydStart on Tuesday, he says while it makes sense for some startups, like those operating in the agriculture industry to stay in regional areas, Australia would benefit if all its startups were gathered in a single startup capital. “I think a lot of the regional stuff the government tries to do is bunkus,” he says. “I have a lot of good friends from the country and stuff. The problem is you need critical mass for a lot of these things to work. And I’m not even sure in Sydney we have critical mass yet for certain things. “So the more we start spreading out, the more difficult and dangerous it becomes that we diffuse ourselves, and all that we’ve got just withers away into nothing.” Cannon-Brookes compared the Australian ecosystem to Texas in the United States. The population of Texas is similar to Australia, roughly 26 million, and has a single startup scene focused around the city of Austin. “They have one critical mass centre, in a population the size of Texas and we’re trying to build, two three, four, and get out to (Wollongong), Newcastle and other places and you’re getting to seven, eight, nine, and I don’t think we can support that. “I don’t think we have the population size and the density of companies that you need.” He says if one single individual was making decisions for the Australian tech industry they would “shut down everything other than Sydney in terms of tech”. “That’s a reason one guy making all the decisions is probably not a good idea,” he says with a smile. “You can’t tell people to do that, and people are going to make amazing businesses in other places and some of that is good. “(But) the one thing the tech industry needs is a lot of free atoms, radicals bouncing off each other on a constant basis. That requires somewhat of a co-location.” Cannon-Brookes says the exception was agritech startups which made sense to be regionally based, noting it's important for startups to choose a location that suits their product or service. “If you think of someone starting Uber, for example, starting in regional Australia doesn’t make any sense. “(A) you don’t have many taxis; (B) you don’t have a taxi problem. So you just don’t have the problem set to solve. You’re not going to be able to attract engineers. You’re not going to be able to attract capital and it becomes negative reinforcement that you don’t want.”
Australian e-commerce company Bigcommerce has refused to confirm or deny a report that it has negotiated a deal to acquire the customers of eBay-owned competitor Magento’s Go service. Recently a source told Re/code that Magento was killing off Go, a platform which helps small businesses build an online store to sell their products and services, and the company had agreed a deal with Bigcommerce to move Magento’s Go customers to Bigcommerce’s service. It follows eBay cutting close to 50 jobs at Magento in March. Re/code sources say Go never gained traction against competitors like Bigcommerce and Shopify. StartupSmart contacted Bigcommerce, but the company refused to comment. Bigcommerce was founded in 2009 by Australians Eddie Machaalani and Mitchell Harper and has offices in Sydney, San Francisco and Austin. More than 50,000 companies use Bigcommerce’s services to manage all aspects of their online stores, from web design, through to checkout and growth services. The company has raised $75 million to fuel its growth. Last month former Google executive Tim Schulz joined the company as senior vice president of product management.
United States online storage business Dropbox has announced it’s opening its first Australian office, with the business opening in Sydney to better support users in this geographical region. But the announcement of the new move has been overshadowed by reports Dropbox buried an announcement about being affected by the Heartbleed bug in a user forum. The Australianreports Dropbox executives admitted to only posting a blog post about the vulnerability. Heartbleed is a web encryption flaw which makes it easier for hackers to steal users’ passwords and personal information. According to the Dropbox blog post the company has patched all its public-facing systems running OpenSSL and re-keyed and re-issued SSL certificates for all Dropbox domains and services in response to the Heartbleed bug. It also urged users to change their passwords regularly. Most forum commenters were thankful for the information, but others indicated official communication via email would have been more helpful and some expressed frustration with how long it took Dropbox to post about Heartbleed. Dropbox’s services are used by major Australian companies such as Macquarie Group, Mirvac and Atlassian and the company said yesterday it believes opening an office in Australia is the right move for the business. Dropbox’s new Sydney office will be the first for the business in the Australia Pacific region and indicates its intention to attract more local businesses. “By opening our first APAC office in Sydney we gain access to Australia’s great pool of talent, and can serve more local users and businesses as we continue to grow,” Dropbox chief executive Dennis Woodside said in a statement. However, as well as copping criticisms over its handling of the Heartbleed bug, the company has also recently angered some users by appointing Condoleezza Rice to its board of directors. Dropbox is currently used by more than 275 million people and in over 4 million businesses. Each day more than 1 billion files are saved using Dropbox. The business currently has offices in San Francisco, Dublin, Austin and New York. New South Wales deputy premier and minister for trade and investment Andrew Stoner said in a statement Sydney was a “natural home” for Dropbox. “Sydney is quickly building a reputation as the hub for many of the world’s most advanced and innovative companies, illustrated by the arrival of another top US company like Dropbox,” he said. “Sydney is a natural home for Dropbox and our talented workforce will play a major part in the expanding Dropbox story as the company continues to build its international presence.” This story first appeared on SmartCompany.
Entrepreneur Helen Mitchell is getting ready for the “world’s biggest commute”, splitting her time evenly between her startup’s office in the Central Coast and its new one in Texas. Mitchell’s startup Busivid, a corporate video management system, has set up a subsidiary in Austin and hired their first two US employees. This is the second time Mitchell has set up a startup in the US. She moved to Dallas, Texas in the late 1980s to raise funds for engine management system startup Haltech. Mitchell told StartupSmart they almost picked San Francisco. “I’d sworn never again about Texas. It was quite an adjustment to go from a beautiful high nature environment to a huge city in the desert,” she says. “We were almost committed, boots and all to San Francisco. It’s easier to fly back and forth to Australia, and the culture is more similar.” But after chatting to a startup at a Cleveland trade show that was moving from Silicon Valley to Austin, they decided to check out the city. They were swayed by the creative culture of Austin coupled with the can-do attitude, as well as the better tax arrangements for local employees. According to an infographic published by Austin Business Journal, the city is ranked fifth in the US based on number of tech startups per capita with over 2500 tech companies. Australian startups such as BigCommerce have also opted for Austin over Silicon Valley, employing over 200 people there, and have only recently opened an office in San Francisco. Mitchell says they’re following the 99designs model of having their tech and product teams in Sydney with their sales and marketing team based in the US. “There level of customer service expectations from the day Americans born inspires us. They expect a bit more and just don’t tolerate anything less. We want lift our game to that level.” They also intend to raise funds from US investors. Launched in 2011, the 11-person team has built a business they believe is ready to start really scaling. They’ve recently signed a cobranding agreement with Telstra and deliver their app to over 30,000 corporate phones. Busivid has thrived so far on angel investments and bootstrapping, but will be doing a small series A round in Australia as “top-up” before they begin pitching to US funds for millions. “We don’t want to come from a position of hunger so we can pursue a partnership centric approach to funding,” Mitchell says. “We’ve attended so many summits in the US, and learned the hard way that you need to be very, very prepared to pitch over there.”
Australia’s shortage of startup capital emerged as a major discussion this week, with Malcolm Turnbull wading into the discussions about funding and contributing his blog post on how Australia can become a startup nation. In other funding news, a finance leader has called for a more dynamic approach, a new $50 million fund may launch soon, mining investors are increasingly scoping out tech opportunities and a $24 million fund is open for applications again for Geelong startups. While funding was the catalyst for this startup’s pivot, we also heard from two founders about the benefits of bootstrapping. We heard from startup people who were in Austin for South by Southwest and about who got involved in data-seeking initiative Startup Muster. New opportunities are emerging for startups as Pollenizer moves into a coworking space, the World Cup Tech Challenge seeks new products to promote and not-for-profit ecosystem development group Startup Victoria reopens applications for their founding chief executive. We explored the rise of hardware startups and the future of bitcoin, and discovered that female founders pay themselves less and re-discovered our first tweets. Also this week, four Australian Founder Institute graduates were named as the stand outs, a phone startup is off to a Brazilian accelerator and UTS announced a partnership with Blue Chilli X. We heard how to not send a potential tech co-founder running in the opposite direction to you, why heading to the US too early can kill your startup and how to create a culture that can scale as you grow. We also shared lots of advice, from how to get started on your business today, to five tips from the founders of Eventbrite, why collaborating with other business can boost your bottom line and why entrepreneurship can be taught, provided it’s to the right people.
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.