Payday lender Nimble is reportedly in the process of pulling an ad promoting its loans as a means to pay utility bills, after it was accused of misleading consumers and exploiting people in financial hardship. Nimble is the latest payday lender to face scrutiny for its advertising, after Paid International was last year fined $30,600 by the Australian Securities and Investment Commission over ads found to have misled customer about the time it took to process loans. The Nimble television commercial shows a man taking a shower when his hot water is suddenly cut off. He is then encouraged by Nimble’s rabbit mascot to use a loan to pay for the bill. The ABC reports the advertisement will be pulled from airwaves but it was still available on YouTube at the time of publication. Consumer advocacy groups have accused Nimble of misleading customers about their options when facing financial hardship. Gerard Brody, chief executive of the Consumer Law Centre Victoria, told SmartCompany utility companies are legally required to offer hardship payment options to customers, which would be at a significantly lower cost to a consumer than that of a loan obtained through a payday lender. “The ad suggested customers should get a Nimble payday loan to cover financial hardship and we think that is pretty irresponsible,” says Brody. “No one needs to get a payday loan.” Brody says Nimble has “wilfully ignored” including a legal warning about other payment options in the advertisement. He says Nimble has a second commercial that relates to telephone bills, which is still being broadcast, and the Consumer Law Centre has raised similar complaints about the ad. He says telecommunications companies have similar legal obligations to their customers to provide payment schemes in times of financial hardship. When asked if the matter could potentially be referred to the Australian Consumer and Competition Commission, Brody said it would be hard to argue Nimble had engaged in misleading conduct. “But we think it’s irresponsible and against the spirit of the law, even if it’s actually not misleading anyone,” he says. “A payday lender should not be advertising or offering quick cash to those experiencing financial hardship. There are much better options." Brody says Nimble also offers very expensive default fees and dishonour fees that could potentially create a “double effect” for those struggling financially. *Nimble chief executive Sami Malia told SmartCompany Nimble's advertising is in line with all relevant codes and regulation and was not intended to be taken literally. "Most people find themselves short of money at one time or another, and our ads are designed to engage people around that generic situation," says Malia. "However, following feedback that some people could take one of our ads literally, and despite the fact we advise applicants to speak to their utility provider on our application form, we have decided to cancel the ad around the gas bill and are currently reviewing all our ads." He says Nimble's customers are not "who you would expect". "Our customers may not be who you would expect. They are employed, many have incomes over $100,000, and are financially responsible, typically with a perfect credit history," he says. Malia noted Nimble does not lend to people who are fully dependent on Centrelink benefits, approves only one in four applicants and "protect[s] our customers with capped fees and revised schedules, so there’s no chance of a long term debt spiral." This story originally appeared on SmartCompany.
A who’s who of the tech and startup scene gathered in Melbourne to watch the filming of the first episode of That Startup Show, a new web and TV series aimed at the startup community. The panel discussion show uses a format reminiscent of the ABC’s The Gruen Transfer. The first half of each episode is spent discussing the issues startups face, such as what constitutes a tech startup and developing effective social media strategy. Meanwhile, the second half sees entrepreneurs pitch their businesses ideas for a chance to win a trip to Silicon Valley. The program is hosted by Dan Ilic, who some say bears an uncanny resemblance to Futurist Techspert Rambotia Jones. The panel for the first episode comprised of Google Australia’s Alan Noble, BlueChilli’s Sebastien Eckersley-Maslin, and StartupSmart’s own Bronwen Clune. While Melbourne produced the type of winter weather it’s infamous for, the event attracted an enthusiastic crowd to the recently refurbished Savoy Tavern, across the road from Melbourne’s busy Southern Cross Station. Behind the scenes, there was a full television production crew, including multiple cameras, lighting, video, and sound editing staff. Many of the tech entrepreneurs couldn’t help but take a quick peek at the array of video and sound switching systems used to put the show together. That Start Up Show producer Anna Reeves told Private Media "from the moment people walked in, you could feel a fun, collegiate mood". "We're putting that down to the support we've had from our sponsors, community partners and crew who collaborated on so many aspects of the event," Reeves says. That Start Up Show creative director Ahmed Salama told Private Media the turnout exceeded the crew's wildest expectations. "We look forward to sharing the diverse and inspiring discussions around startups in this country in the coming episodes. And with some luck, inspire many others on the entrepreneurial journey," Salama says. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Monetising content is a major challenge confronting all media outlets, but one Australian entrepreneur thinks he may have found the perfect answer. Nick Ross, the ABC's editor of technology and games, has begun crowdfunding a project called Nanotransactions, which allows publishers and blogging communities to charge users a few cents to access each piece of content. As with prepaid mobile accounts, Ross’ model sees users top their accounts using the online payment system of their choice, including bitcoin, to a minimum amount of $5. Unlike current micropayment systems, which charge publishers up to 30 cents per transaction, the Nanotransaction model is envisaged to involve a charge of just one cent for an article with an access charge of up to nine cents. The system will also be web-based, meaning users won’t need to download a specific app in order to access content. While Nanotransactions would see users charged a few cents once-off to access an article forever, the same model could be used to provide pay-per-view videos or pay-per-minute access to content. Ross told StartupSmart that Nanotransactions fulfils an urgent need for the media industry, which is desperate for a business model that can support quality online journalism. “We lost the Global Mail, a publication employing long-form journalists, when its sugar daddy decided he was no longer interested. We almost lost New Matilda, which is now run by one person effectively as a charity,” Ross says. “Then a few days ago we lost Delimiter, which covered politics and tech issues that no one else covers. That was run by just one person. It was a good living for him, but he was so overworked doing four long articles of his own every day of the week.” The problem that comes about with the closure of a publication like Delimiter, according to Ross, is that it means certain issues are no longer covered, which in turn damages democracy. As one of Australia’s leading tech journalists, Ross knows first-hand the problems faced by publishers. “I was editor of PC Authority and left to do my own publications around 2008, when we launched four mags in a year – just at the global financial crisis hit,” Ross says. “They never lost money, they broke even… but I’d spend six weeks trying to sell the ads. Then the ABC editor job came up. It’s one of the most prestigious tech journalism jobs in the country, offering a full-time wage.” While Nanotransactions could be used alongside either a paid advertising or subscription paywall model, Ross says there are deep flaws to both models “A lot of people don’t realise newspaper websites charge less than $5 per 1000 views for advertising. That’s less than half-a-cent per article,” Ross says. “Paywalls don’t work. They lock out 98% of pre-paywall traffic… Everyone who uses social media knows how annoying they are and they’re easy to get around.” “Something needs to be done and no one’s doing it.” Ross says he has received strong support from the startup community. “I’ve spent a year on this so far, and it’s been quite amazing. I’ve already had to knock back offers,” he says.
I spent a large part of my career in a marketing capacity working for large consumer goods companies – in fact, two of the world’s biggest. In doing so, and through having such blue chip training, I thought I knew a thing or two about business. I thought I’d march into my first startup and show the world how it’s done. Clearly, I was delusional. What I did learn though, and very quickly, was that there are fundamental differences in being an employee versus an entrepreneur. Knowing a lot about business, doesn’t necessarily mean we can build a business. Knowing how to write code as a developer doesn’t necessarily mean we can build a community. So here are my top 10 things employees need to know before becoming entrepreneurs. 1. The market doesn’t care how much your boss liked you… Or how smart you are. It only cares about what you give it and if you create value within it – that is, value for the end users. The market doesn’t make judgment calls; it only feeds back reality on value creation. It does it in real time, too. Your boss on the other hand makes judgment calls, which are often based on personality, friendship, values and corporate politics. 2. Your idea has little real value Ideas are like water; they are life giving, but they are omnipresent. We all have them. If the idea is good, then you can guarantee others have thought of it, are working on it, and some are probably already in market. When YouTube launched there were more than 400 other video-sharing websites. What matters is execution and building a user base – they are the bits that matter. In fact, new ideas are harder to sell because you need to invent demand. Ideas are a small part of the success equation. 3. There are no resources at your disposal All of the things you took for granted in your company are gone. There are no resources at your disposal. No departments, no staff, no supply chain, no existing customers. The job of the entrepreneur is to invent resources, to build an infrastructure. 4. 90% of what you did in your company is irrelevant You used to manage situations, people, and politics, now you need to get things in market and invent distribution streams, usage and revenue. You are no longer managing a system, but building one. The tasks you did in the company are rarely what you’ll do when starting from scratch. Employees tweak an existing machine – they are maintenance managers. Entrepreneurs need to be inventors, builders, creators, they need to make something from nothing. 5. Startup finance is different to corporate finance In a company, we manage budgets. We spend allocations on projects and manage a P&L. In a startup, we manage cash flow: money in and money out. Startups need to remember they can go broke while making a profit, but going broke is not possible while a company is cash flow positive. 6. Entrepreneurship is not a path to riches You’ve got to want the lifestyle more than a successful outcome, because the latter has a low probability. You’ve got to want it for what it is. The having needs to be in the doing. If you want to get rich, just stay in corporate and get good at property and share investing – that’s a more certain path to wealth. Entrepreneurship is about the human spirit and exploration – that needs to be the ‘why’. 7. Nothing is automatic, there’s nowhere to hide There is no paid annual leave, no paid public holidays, no weekends, and no official hours. The 15th of the month will roll around without a pay day. You need to be able to cope with that. Slack days or weeks for that matter aren’t something you can ride and the company picks up the bill on with a wage. You’re fully exposed. 8. A startup is different to a business Business and startups are not the same thing. Startups are about building something new. If you want to own and run a business, then buy a system which has proven success, like a McDonald’s franchise. You need to know whether you really want to create something, or just have more independence in your working or business life. There are other options outside of being an employer which might suit you more. Be honest with yourself. 9. You need to unlearn corporate thinking It’s mostly the opposite of what happens in established companies. Companies test off market; startups test in market. Companies are risk averse; startups are risk tolerant. Companies avoid failure; startups must fail often and quickly. Companies reward internal performance; startups reward external performance. You need to flip your perspective pre-exit. 10. You won’t go hungry If you’re well-off enough to be reading this (you’re on the web), then, if your first entrepreneurial venture fails drastically, you won’t go hungry. The sun will come up and your human spirit will be better for the journey. So while entrepreneurship is hard and different, remember life is about having a crack and seeing what’s possible. Best you get started soon. Steve Sammartino is a startup coach for Pollenizer. Steve is known for helping companies transition from industrial era thinking into the digital age. He guest lectures in marketing at Melbourne University, writes for the ABC on business & technology issues and his blog has over 30,000 readers a month. This post first appeared on the Pollenizer blog.
Telstra looks set to have a big role in the construction of the national broadband network, with negotiations on a fibre-to-the-node pilot due to be completed within a month. It would involve more than 300 node cabinet units, each capable of connecting about 300 homes and businesses to the NBN. If successful, Telstra's pilot could become one of Australia's biggest fibre-to-the-node rollouts and a blueprint for any increased partnership with Telstra in the construction of the NBN. Bitcoin tax ruling The IRS has spoken: Bitcoins are property, not currency. The US Internal Revenue Service made the ruling last week, saying that bitcoin should be classified as a tradable commodity such as stock or property rather than as a currency. Charles Allen, chief executive officer of online marketplace BitcoinShop Inc, told Bloomberg he’d like to see the IRS reconsider its decision as virtual currencies develop. “The implications this decision will have on the bitcoin ecosystem are far reaching, and will be burdensome for both individual users of bitcoins, bitcoin-focused business and for the general adoption of virtual currencies,” he said, adding that bitcoin users will adapt to the rules.” This was hardly a surprise, but it has some important implications that tell us a lot about what it takes to make a currency work. Turnbull lays down the law to ABC board Communications Minister Malcolm Turnbull has warned ABC board members that if they are not willing to ensure the accuracy of content on the national broadcaster then they should resign. Turnbull says the “law of the land” couldn’t be clearer and the board needs to take responsibility for accuracy and impartiality. Aussie Dollar The Aussie dollar is trading at 92.42 US cents, down from 92.66 cents on Friday.
A move by the Reserve Bank to reform credit card regulations is likely to open up new competition by shifting oversight for credit card issuers away from banking regulator Australian Prudential Regulation Authority. The reforms will likely mean companies will no longer need to register as a bank in order to issue credit cards, with analysts saying the move is likely to open up competition in the sector. “The issue with the access arrangements currently is that they're quite restrictive. Companies essentially need to be an authorised deposit taking institution, a bank,” BIS World senior analyst Caroline Finch told the ABC. “Banks are under a lot of regulation so this has been a significant barrier to entry, particularly to foreign players, and for anybody who's not already a bank it's quite hard to get yourself registered as a bank.” Alan Joyce defends Qantas job cuts Qantas chief executive Alan Joyce has defending plans to slash jobs at the airline during a Senate hearing late last week. “I absolutely believe that the Qantas staff are in the need for the company to change and know that the best way to secure as many jobs in the Qantas group is to have a successful, profitable business going forward,” Joyce told the Senate inquiry. “We have to make, I will say again, some tough decisions. It is not easy having to make 5000 people redundant.” Super pressure grows on small funds The pressure on superannuation funds is growing, with smaller funds overseeing less than $5 billion in assets increasingly being pushed to merge or be swallowed up by their larger competitors. According to Financial Services Council chief executive John Brogden, the federal government’s introduction of the MySuper scheme and reforms to SuperStream were pushing compliance costs beyond the reach of many smaller funds. “Most of the pressure is coming from government changes, whether they be the cost of changing internal processes or adopting new IT systems,” Brogden says. “The smaller funds will have a lot of pressure on them to prove that they're viable beyond the next two or three years. The smaller you are, the more pressure is going to be on you.” Overnight The Dow Jones Industrial Average closed down to 16065.7 points. The Aussie dollar is down to US90.04 cents.
Troubled food processor SPC Ardmona has signed a key deal with Woolworths worth $70 million, which will see it supply an additional 24,000 tonnes of product to the supermarket giant over five years. The landmark deal comes after the company, owned by Coca-Cola Amatil, received $22 million from the Victorian government, after Prime Minister Tony Abbott turned down a request for assistance. “There is no question that the fact of the government being prepared to support the package with SPC has been the determining factor in this [deal],” Victorian Deputy Premier Peter Ryan says. “The company could well have been lost. But with the $22 million coupled with the $78 million being contributed by the company, that $100 million investment is now literally going to bear fruit.” Iron ore price tumbles as concerns grow about China’s economic outlook The price of iron ore has dropped below $105 per tonne, in its biggest single-day fall in five years, over mounting concerns about the outlook for the Chinese economy. The fall saw the benchmark iron ore price for Tianjin in China drop by 8.3% to $US104.70 a tonne, down 22% for the year. It comes after a string of official figures, showing exports plunged 18.1% in February, along with weaker than expected credit figures and a larger than expected fall in producer prices. Hochtief looks to boost stake in Leighton, ASIC to investigate share price rice Spanish-controlled German firm Hochtief is looking to increase its stake in Leighton, announcing an offer to buy three out of every eight shares owned by other shareholders at $22.15 each. The offer represents an 18.8% premium over the construction giant’s adjusted average share price of $18.65. However, ASIC is set to investigate a spike in Leighton’s share price last week, ahead of the announcement. “As part of our normal market surveillance, ASIC of course will look at the latest movements in Leighton share price, ahead of this announcement from Hochtief,” an ASIC spokesperson told the ABC. Overnight The Dow Jones Industrial Average is down to 16418.7. The US dollar is down to US90.23 cents.
Embattled Qantas chief executive Alan Joyce is set to begin talks with union heavyweights today after announcing 5000 job cuts and a wage freeze, following a massive $252 million loss for the December half. “The current position is unsustainable. There are many Australian companies that have failed because they were not prepared to make the hard decisions. Qantas is not one of them,” Joyce says. Meanwhile, Prime Minister Tony Abbott has poured cold water on the idea of a federal government debt guarantee for the troubled airline. “Why should the government do for one what it is not prepared to do for all, or what is not necessarily available for all?” Abbott says. Air New Zealand posts record profit Air New Zealand has posted a record half-year profit of $NZ140 million ($A130 million) despite expectations of a $49 million loss at Virgin Australia, in which it holds a 24.5% stake. “We have worked hard on improving our cost base in an environment where we have not grown,” Air New Zealand chief executive Christopher Luxon says. “In fact, we have reduced our capacity flown overall as we realigned our long-haul network.” Nationals MP raises doubts over paid parental leave New South Wales National Party Senator John Williams has raised doubts over the future of Prime Minister Tony Abbott’s proposed paid parental leave scheme, telling the ABC the economy is too weak to support the plan. “I've said all along, I don't have a problem with the paid parental leave scheme. That is our policy so long as the economy is strong, but I do have concerns about the strength of the Australian economy,” Williams says. “To me a strong economy in Australia [has] a four in front of unemployment – that's currently got a six in front of it and a four or close to four in front of economic growth - and we're currently growing at 2.5%.” Williams says he will have talks with Abbott before announcing whether he’s willing to cross the floor over the proposal. Overnight The Dow Jones Industrial Average is up to 16248. The Aussie dollar is down to US89.6 cents.
The chairman of National Australia Bank, Michael Chaney, has painted a lukewarm outlook for the Australian economy, saying the country is faced with “at best” modest economic growth and rising unemployment. “Business conditions are subdued and, unless economic reform and restructuring continue, are likely to remain so,” he told shareholders at the company’s annual general meeting. “That is the challenge facing governments and all participants in the economy.” Zuckerberg to sell shares in Facebook Facebook chief executive Mark Zuckerberg is to sell a part of his stake in the company as part of a new share offering by the social media giant. The company said in a regulatory filing it would sell 70 million shares in a follow-on offering to the huge initial public offering in May 2012. Of that, Zuckerberg will sell around 41 million shares, mainly to satisfy his tax obligations, it said. The sale will have little impact on his control of the company, however. The 27 million new shares at Facebook's latest closing price of $US55.57 would raise some $US1.5 billion for the company "for working capital and other general corporate purposes," the statement said. Ksubi jeans placed in receivership Australian jeans fashion label Ksubi has been placed in receivership, the ABC reports. It says receivers have been appointed to find a buyer for the denim and street wear brand that’s been operating for 13 years. The action follows other Australian fashion labels that have faced financial difficulty this year, including Lisa Ho and Collette Dinnigan. Markets The Dow Jones Industrial Average is up 0.1% at 16,177.47 points while the Australian dollars is up at 88.6 US cents.
The US Federal Reserve has announced it will begin to scale down its massive stimulus program from next month, the first step towards winding back the program that helped the US recover from recession. The Fed has spent $US85 billion a month for a year as it sought to keep long-term interest rates in check and stimulate jobs and the economy. "Today's policy actions reflect the committee's assessment that the economy is continuing to make progress, that it also has much farther to travel before conditions can be judged normal," outgoing Fed chief Ben Bernanke said. The Fed will reduce its monthly asset purchases by $US10 billion from January, bringing them down to $US75 billion. Government close to rejecting assistance for SPC Ardmona The federal government is close to rejecting calls for financial help from food processor SPC Ardmona, amid fears it could set a “dangerous precedent”, The Australian reports. It says ministers believe the company has itself to blame for cost pressures it faces. The move comes as the government pledges $100 million to help create jobs for manufacturing workers following GM Holden’s announcement it will stop production of cars in 2017. Apple to amend consumer guarantees and warranties Apple has agreed to take action over its consumer guarantees and warranties to avoid being taken to court by Australia’s consumer watchdog. The Australian Competition and Consumer Commission had been investigating the technology giant over its consumer guarantee policies, the ABC reports. "The ACCC was concerned that Apple was applying its own warranties and refund policies effectively to the exclusion of the consumer guarantees contained in the Australian Consumer Law," ACCC chairman Rod Sims said. Apple has acknowledged some of its practices may have contravened Australian Consumer Law (ACL), and is taking a number of compliance measures including retraining staff. Markets The Dow Jones Industrial Average is up 1.9% at 16,172.08 points, while the Australian dollar is down at 88.5 US cents.
Federal Treasurer Joe Hockey has warned the entire community will have to accept government spending cuts as Australia heads for an economic trough as the budget deficit deepens and federal debt on track to hit $667 billion. Hockey says harsh measures will be needed to prevent deficits from continuing for a decade, The Australian reports. “Every area of government expenditure is being examined, not just for its immediate impact, but for its sustainability as well. I think that is a key issue," Hockey said. Holden workers to hear assistance package Prime Minister Tony Abbott is expected to announce an assistance package for Holden workers who face losing their jobs as the car maker prepares to stop production in Australia in 2017, the ABC reports. It says Abbott has indicated he wants to help workers move into new jobs by focusing on the existing strengths of communities affected by the closure. The aim will be to reskill and retrain the workers with a view to keeping them in the sector, the ABC reports. Holden’s decision to quit manufacturing in Australia will see 2900 workers lose their jobs in South Australia and Victoria. Saputo raises offer for Warrnambool Cheese & Butter Canadian dairy giant Saputo has raised its offer for takeover target Warrnambool Cheese & Butter, taking the company’s value to as much as $538 million. The move came after the Takeovers Panel said the offer put in place arrangements that were complex, created uncertainty and “were most undesirable”. As a result, Saputo added a condition whereby investors would receive $9.40 per share, on the provision it won acceptances of 75%, and $9.60 per share with 90% approval, The Australian reports. The Dow Jones Industrial Average is down 0.1% at 15,875.26 points while the Australian dollar is at 89 US cents.
Beep, beep, beep – the alarm sounds and the chances are you do one of two things: (a) leap out of bed with a spring in your step, or (b) roll over grumbling and pretend it’s not yet morning. Successful entrepreneurs almost always fall into group ‘a’. Whether it’s throwing a few punches, jogging or fist pumping to some tunes, one thing is certain – for Australian entrepreneurs, sleeping in isn’t on the agenda. Healthy body, healthy mind is a motto embodied by many in the entrepreneurial community, who put the rest to shame. Early morning interviews, coffees and daily prioritising also feature heavily among the morning activities of the business-minded. SmartCompany spoke to 10 of Australia’s most successful entrepreneurs, ranging from restaurateurs, fitness franchise owners, crowdsourcing platform creators and retail experts, to discover how they begin their day. Early starts While the average worker can get away with sleeping until 7.30am, entrepreneurs are typically up at the crack of dawn (if not before). Board of Directors 12 founder Stefan Kazakis kicks off his day at 5.30am, while five:am yoghurt, founded by David Prior, isn’t called five:am for no reason. “That’s when we milk our cows, but it is a personal thing for me too – I get up every day at 5am,” Prior says. Wealth Enhancer co-founder Sarah Riegelhuth is also no stranger to early mornings. “I wake up every day at 5.30am at the latest and workout,” she says. “I usually go straight to the office from there and shower and have my breakfast.” Exercise Exercise gets the blood pumping and is thought to improve brain function and general productivity, so it’s no surprise entrepreneurs generally start the day with a workout. “I run every day and usually I meet my friends at the Tan [the track around the Botanic Gardens in Melbourne] for a run or do yoga,” Riegelhuth says. “I usually go straight to the office from there and shower and have my breakfast.” KeepCup co-founder Abigail Forsyth starts her day with a morning ride, but unlike some it’s not primarily for fitness. “I always cycle; it’s part of our sustainability plan. My brother Jamie (the other co-founder) also cycles to work and he lives 10 minutes in the other direction,” she says. The founder of iconic Melbourne restaurants David’s and Oriental Teahouse, David Zhou, exercises in a more unconventional way. “I have a quick wash and then I go into the office early and do some exercises on the punching bag, a wooden dummy and speed bag I have set up in different locations around the office. Then I’ll leave again before everyone else arrives and get a bite to eat – it always looks like I’m the last person to arrive,” he says. Stefan Kazakis hits the gym as soon as he gets up, three times a week: “Whether it’s personal training or a cycle class, something to get the blood running.” Jetts Fitness founder Brendon Levenson goes for a more peaceful approach. “I start the day with 10 minutes of stretching and breathing exercises, which is great for getting me focused on the present and setting me up for the day,” he says. Routine While the daily life of entrepreneurs is often unpredictable, their morning routine is an exception. Whether it’s eating the same cereal, running the same route or getting up at precisely 6.02am, a little bit of routine allows entrepreneurs to waste no time thinking about mundane issues like whether peanut butter or Vegemite is better. This article continues on page 2. Founder of online cosmetics retailer Ry.com.au James Patten eats toast with English marmite each morning. “It's a habit I can’t break even though I am now an Australian citizen. I normally make a few early morning phone calls on the way to work for people I am trying to chase down,” he says. “I like to arrive at the office between 8.30 and 9am. I listen to ABC radio and will often spend 10 minutes sitting in the car park mentally thinking about the day with the radio on before I hit the office.” Prior also starts his day in the same way each morning. “I start with a good, long meditation then I do yoga, then I go for a run, then I sit down to a big breakfast of fruit, yoghurt and granola. I’ve been like that for long, long time,” he says. Freelancer.com founder Matt Barrie’s whole day is planned. It’s as simple as “get up, go to work and stay at work”, even on weekends. “It’s all-consuming,” he says. Family For entrepreneurs with families, finding time to spend with their children and partners is often a challenge, but many set aside time in the mornings to see their loved ones. Net-a-porter founder Megan Quinn juggles business commitments (she now has a small consultancy firm called Q&CO) and spending time with her kids. “Unless I'm giving a business breakfast speech, the day starts at 6.15am, when I wake my eldest daughter and let the dogs out,” she says. “After dropping Imogen to the school bus, it's back to turn music on throughout the house, wake my younger daughter and get her off to school. While it's a nuisance having to do two school runs, I love being able to chat one-on-one with the girls at the start of every day.” With three kids, Anytime Fitness co-founder Jacinta McDonell-Jimenez’s mornings are understandably hectic. “I get up around 6am. I’ve got to get my eldest daughter off to high school and then one going to day care, and then the six-week-old baby to take care of,” she says. “For me, it’s really important when the kids are as young as they are to have the time with them. Until they’re at school I wouldn’t look at going back to full-time.” Prioritising Setting priorities is crucial for every business owner to save feeling swamped under an endless pile of tasks. Using the morning to prioritise the day’s tasks is an effective way for entrepreneurs to get the most out of each day. Zhou prioritises his day while eating breakfast, before returning to the office and meeting with his team. “I make sure everyone is on the same page and then we get into action,” he says. Riegelhuth has a daily meeting with the whole Wealth Enhancers team to make sure everyone is on track. “We have an 8.45am dial-in meeting and every one across the country dials in and we go through the challenges we’re facing and the critical numbers and this takes five to 10 minutes and then everyone is on with their day,” she says. This story first appeared on SmartCompany.
Omny, an app allowing users to combine news clips, emails, social media updates and articles via voice-to-text software, launches today after over 20 months in development. Created by 121Cast, the app allows people to create their own customised audio channel. The app also includes a recommendation algorithm to suggest content. 121Cast co-founder and chief operations officer Ed Hooper told StartupSmart they were excited to see it finally launch. “Seeing how it can change people and their behaviour is really exciting, as is the opportunity make that commute period really productive all over the world,” Hooper says. “We’ve all been doing this for so long and everyone knows about it, so how this goes is tied to our personal brands, what we stand for, and our credibility.” Co-founders Long Zheng and Hooper began exploring the idea for the app in 2011. They had previously worked on an international award winning start-up involving farm irrigation automation software. “But it was the GFC and we were still students, so for a whole lot of factors it didn’t work out but it was an amazing journey,” Hooper says, who gave up studying at Stanford to return to Australia to work in the Groupon team just as coupon sales were taking off. He was working at Groupon when Zheng got in touch to talk about how to turn the issue of commute productivity into a business opportunity. “I was constantly looking for a good opportunity, but I didn’t want to jump on something unless it was awesome, because you want to put everything into it. When Long called me up and we started talking about an audio solution that read you your emails and updates, I realised this was it. I literally could not stop thinking about it,” Hooper says. Omny sources content from over 30 providers, from music apps such as Spotify, to news groups such as the ABC and BBC, to Facebook, Google and Microsoft. Hooper says all the early conversations were focused on the difficulties of developing such an app, rather than building a business around it. “Whenever we’ve spoken to potential partners or investors, the assumption is always if we can make the app work, the money stuff will be fine,” Hooper says. “The feedback we got was the idea was there and it could definitely be a business, but also that it was going to be really hard to build and we’d need significant expertise.” They brought on third co-founder and chief technology officer Andrew Armstrong in February 2012. They’ve gone on to hire a front-end developer and a data scientist as well. To guide the development, the 121Cast team launched a test app, SoundGecko, in mid-2012. “We realised we didn’t have a clear idea of what we were creating and needed some real data. We tried surveys and interviews, but it didn’t really get us there. So we took a small fraction of this app, and bundled it as a standalone,” Hooper says. SoundGecko, an app which read websites and PDF documents for users, has almost 50,000 active monthly users. It allowed 121Cast the opportunity to test the reception of voice-to-text, and also the data requirements for sending audio to thousands of users across the world. Over 210,000 people have downloaded SoundGecko on iOS, Android and Microsoft phones. “We found that managing all three platforms was quite hard. As soon as we’d launch a version, we’d see things we needed to change and there were always things we should have done on the first one,” Hooper says. “For the resources we have, it just isn’t feasible to be updating the app on all three platforms. So we’re fine tuning the iOS one while we do the core Android development.” Omny is currently a free app. 121Cast will introduce ads and affiliate marketing in the coming months, and are exploring a premium subscription for launch later next year. “SoundGecko definitely validated that people would pay for the premium features, such as more voices, and the Omny premium subscription will probably not include ads,” Hooper says. Hooper adds financial opportunities will emerge from the user data over time. In order to fund the development, the 121Cast team used their own capital and raised a series of seed investments. “We burnt our own savings and lived off them for quite a while. We decided we were going to do this regardless, and between us we could go for about a year without raising funds. Let’s just build this because we have to do it,” Hooper says. They went on to raise $250,000 from Adventure Capital and the SingTel Optus Innov8 program in November 2012; $20,000 from the University of Melbourne Accelerator program in late 2012, and just over $250,000 from Commercialisation Australia in July 2013. “With the investment, if we knew we need to do something in the future, we started building the relationship as early as possible and find out what’s important to our potential partners and match them on multiple data points,” Hooper says. Hooper says they’re focused on Australia at this stage, but will be looking to expand to the US, United Kingdom and other English speaking markets in the next few years.
The Abbott government is drawing up plans for a “root and branch” review of the financial system, with draft terms of reference to be released as soon as next month. The review will deliver an interim report one year after it starts, with its final report coming in two years’ time and implementation during the second term of a Coalition government. Bendigo Bank looks for potential takeover targets Community banking giant the Bendigo and Adelaide Bank has revealed it is looking at possible takeovers in a bid to lift its market share from 3% to 10%. In an interview with the ABC’s Inside Business over the weekend, Bendigo Bank chief executive officer Mike Hirst revealed while a merger with the Bank of Queensland was now off the agenda, the bank is examining a number of smaller lenders. “I think everybody is having to look at what the future holds and if there's opportunities there for us, and it makes sense for us and it makes sense for the credit unions, we'll certainly look to explore that,” Hirst says. Warrnambool boss calls Bega bid “inadequate” Warrnambool Cheese and Butter Factory (WCB) chief executive David Lord has conceded the Victorian dairy processor is “in play”, but describes a $320 million takeover bid by Bega as “inadequate”. “Certainly, I think we're in play. I think that's a fair assessment of things and the board is focused on the best possible outcome for shareholders,” Lord says. “We really believe that the Bega offer is inadequate in terms of not recognising the full value of the strategic nature, the unique nature of our assets and also the synergistic value of putting these two companies together.” Overnight The Dow Jones Industrial Average is up to 15072.6. The Aussie dollar is up to US94.28 cents.
The United States is one step closer to a government shutdown after Democrats rejected a proposal by Republicans to delay the Affordable Care Act by one year in exchange for passing temporary funding for the US federal government. Failure to pass a funding bill by midnight – 2pm AEST – would see thousands of US government employees forced to take unpaid leave. “One faction of one party in one house of Congress in one branch of government doesn't get to shut down the entire government just to refight the results of an election,” US President Barack Obama says. “Congress needs to keep our government open, needs to pay our bills on time, and never, ever threaten the full faith and credit of the United States of America.” Online sales growth slips in August Online sales slipped by 0.1% during August to an annual growth rate of 9.6%, the slowest since 2010, according to new NAB figures. The figures also show that online sales now equate to 6.2% of spending in traditional retailers. “What we're also seeing is weakness just about everywhere, but particularly in fashion, which is one of our largest sub-sectors online," NAB chief economist Alan Oster says. “I think what you're really seeing is weak levels of retail sales and that's being affected both in the traditional sales and online.” Alan Kohler pulls the plug on Inside Business Alan Kohler is stepping aside from the ABC’s Inside Business program after 12 years on air, citing the “ridiculous workload” created by the program in addition to his other commitments. ‘‘I’ve been doing Inside Business for 12 years, it really has been great. I’ve really enjoyed it. I designed the program, started it off, had fantastic people working on it,” Kohler says. ‘‘I really enjoyed doing the TV interviews, so I’m going to miss that. I’d like to find a way to continue doing interviews, if I can.’’ The national broadcaster says it remains committed to its business news coverage, despite the Sunday morning business news program ending its run on December 1. Overnight The Dow Jones Industrial Average is down 0.84% to 15129.67. The Aussie dollar is up to US93.26 cents.
While Labor has attempted to bump its business credentials on the campaign trail by promising the Northern Territory a business tax cut of 10 percentage points, local employers aren’t so enthusiastic. Greg Bicknell, chief executive of business group Chamber NT, told SmartCompany this morning the organisation is “slightly cynical” about the plan. The other states are, too – business groups in Victoria and around the rest of the country have already complained the government is playing favourites. He says the announcement was just the latest in a long string of political promises. “We’ve heard talk of plans for the Northern Territory coming since 1937, and we’ve yet to see any long-term strategic thinking and action. Prime Minister Kevin Rudd announced the plan yesterday, saying the territory would receive a 10 percentage point cut in the company tax rate within five years. The Northern Territory would also be incorporated as part of a special economic zone – a plan which has also been endorsed by billionaire Gina Rinehart. ''I believe in the Territory, I love the Territory,'' Rudd said. However, the tax cut has not yet been costed, and as Bicknell says, there is no current plan for how the cuts will be targeted. “There’s just not enough detail,” he says. “Obviously, if it applies to everyone across the board, business would welcome that. But if it’s only for newcomers and putting existing companies at a disadvantage, we wouldn’t welcome it.” In theory, Bicknell says, the cut is a good idea, and he welcomes the fact both sides of Parliament are paying more attention to the north. But for now, he says, “we’re slightly sceptical”. “There is a lot of talk about the Northern Territory…but the delivery of the promises seems to get lost.” Meanwhile, however, other business groups and politicians have expressed frustration with the announcement. The Victorian Employers’ Chamber of Commerce and Industry said if the announcement is good enough for the Northern Territory, it should be good enough for the rest of the country. “Making the Northern Territory more attractive due to its company tax rate will be at the expense of Victoria and other states,” chief executive Mark Stone said in a statement. The WA Chamber of Commerce and Industry has a made a similar statement, with chief executive James Pearson telling the ABC that any plan to boost the attractiveness of northern Australia “has to include Western Australia”. This story first appeared on SmartCompany.
The federal government is set to consult with Australian industry over the tax treatment of employee share option schemes, which start-ups say needs to be overhauled to promote growth. The government is aware the current tax situation around employee shares creates difficulties for some sectors of the economy, especially start-ups, and will consult with industry on the impact of tax and administration requirements for the schemes, StartupSmart has been told. Revamping the tax treatment of employee share option programs is fundamental to growing the start-up sector in Australia, says Malcolm Thornton, investment director at venture capital fund Starfish Ventures. “It’s a key currency that people employ to keep highly talented people on board while conserving cash,” says Thornton. The start-up sector can expect consultations with the relevant federal government departments in the future, with sources telling StartupSmart the government is aware the current tax situation around employee shares creates difficulties for some sectors of the economy, especially start-ups. Employee share option programs enable start-ups to attract and retain leading talent to their company by offering staff a proportion of the future company on top of the (often low) wages they are able to pay. The complexity of the current system has held Australian start-ups back from embracing the system. A key drawback is that employees can become liable for significant amounts of tax based on the asset’s value, even if it’s not currently earning any capital. Thornton says an update of taxation rules around the program is “imperative” for the start-up sector. “It’s completely complicated and convoluted in Australia, compared to when our companies are US-based, and we can just take a program off the shelf and every lawyer in San Francisco knows how to manage the process.” Thornton says the current system fails to grasp the variety of companies that would benefit from the implementation of such schemes. “Start-ups and high growth companies have very different characteristics to large, mature multi-decade companies,” he says. “One of the key elements to appreciate is that there is little to no value in the options until the company has grown and either lists or is acquired.” Alan Downie, chief executive and co-founder of BugHerd, a visual bug tracker for web developers, has recently implemented an employee share scheme for one of his six staff and is working on setting the scheme up for another employee. “It’s a critical issue for start-ups,” says Downie. “As a start-up you don’t have a lot of cash so it’s the way to keep talent. If you have to compete with guys like Telstra and Atlassian for developers, all you’ve really got is the growing company equity.” Downie and his co-founder Matt Milosavljevic spent 12 months working out how to implement the scheme for their first hire, a developer. “It was a very long and tedious and expensive process,” he says. “There is no standard way to do it and that’s the problem.” “When our developer started with us, he was on a third of what he could make as a developer. But he was so engaged and he got we didn’t have the money, so it was really important to him to get a piece of the company.” Downie says he spoke to four accountants, a few lawyers and several entrepreneurs about how to implement an employee share scheme, and they all had different answers. “It’s still not ideal for the employee, as they still have a bit of uncertainty. From the employer’s point of view, you want to have solid understanding of what the government wants, rather than jumping through hurdles.” He says the Australian Tax Office hasn’t spoken to any of the parties involved, so it’s still untested. According to a report by the ABC, the employee share options scheme will be explored in the next update to the National Digital Economy Strategy.
The father of Swisse chief executive Radek Sali has launched a defamation action following claims on ABC’s consumer affairs program The Checkout, claiming a recent episode ‘‘severely injured his reputation and standing’’. Presenters Craig Reucassel and Julian Morrow along with executive producer Nick Murray and the ABC are all named as defendants in the lawsuit. Avni Sali’s lawsuit centres around claims made during the episode broadcast March 21, which alleged the National Institute of Integrative Medicine he founded was not independent in conducting clinical tests of Swisse products. “The program was meant and was understood to mean that the plaintiff performed clinical tests... and then manipulated the published results for the commercial benefit of Swisse,’’ Sali says. Packer lieutenant John Alexander appointed to Seven West Media board Seven West Media has announced it is appointing John Alexander, the former executive deputy chairman of James Packer's Crown Casino empire, to its board of directors. "We are delighted John has accepted the invitation to join the board of Seven West Media," Seven West chairman Kerry Stokes states. “His success in media and business speaks for itself. His appointment adds further depth to the board of our company as it continues to develop its businesses.” Treasury looks at closing tax loopholes for digital services The Treasury has released an issues paper examining the ways in which international online giants, including Google, Apple and Microsoft, minimise their tax bills by shifting profits from online services into low-tax jurisdictions. “The global reach of multinational enterprises, along with the developments in information and communication technology…provides them with a high degree of flexibility in how to structure their affairs,” the paper states. “These developments raise serious concerns about the efficiency, equity and sustainability of the income tax system.” The paper also calls for submissions suggesting possible solutions to the erosion of tax revenues by international tech companies, along with further data that could assist the Australian Tax Office. Overnight The Dow Jones Industrial Average is up 0.9% to 14831.6. The Aussie dollar is up to US102.48 cents.
Small business advocates have delivered a mixed response to Prime Minister Julia Gillard’s announcement yesterday of a $12 billion budget shortfall, saying now is a good time to introduce some much-needed tax changes. However, some advocates and economists have warned the announcement may have a detrimental impact, with Gillard warning that new taxes may be imposed in order to pay for new spending on disability insurance and education. Finance Minister Penny Wong told the ABC this morning the government is considering a wide range of options, and did not deny the possibility of a levy to fund the National Disability Insurance Scheme. While economists say the deficit is not an economic problem, as Australia’s credit rating is secure, the impact on confidence could impact businesses. “The impact here is more on confidence and uncertainty,” CommSec economist Savanth Sebastian told SmartCompany this morning. “Until we get confirmation about what measures are put in play, that will be a concern. We’ve seen some improvement in confidence, and further cuts to tax concessions could have a detrimental impact.” Gillard said yesterday the budget will be affected by a drastic fall in revenue of about $12 billion. The Australian Financial Review has reported this will translate into a deficit of between $16 billion and $17 billion. Gillard also said yesterday the shortfall would mean putting “every reasonable option on the table” in order to plug the gap, “even options previously off the table”. The Prime Minister said the government would spend “less in some areas than we had hoped, to raise more in revenue in some areas than we had planned”. While the government has not targeted any specific areas, previous speculation had pinpointed self-managed superannuation and high-income earners as potential sources of revenue. Peter Strong, the chief executive of the Council of Small Businesses of Australia, told SmartCompany this morning the government should consider financing SMEs in order to boost medium-term growth. “We need to have better targeted funds for businesses that are identified as growing quickly,” he says, also adding the government should consider taxing purchases made overseas in order to raise GST revenue. However, Strong says the size of the deficit isn’t necessarily an issue for small businesses, per se. “At the micro-level, we look for solutions. What this suggests to me is that we need to get our micro-economics right.” Savanth Sebastian agrees the size of the deficit isn’t necessarily a large problem, especially as it has shrunk since last year, but points out the impact on confidence such a big budget gap could have. “We’ve seen some improvement in confidence, and that translates to business confidence,” he says. “Further cuts to tax concessions and revenue can have a detrimental impact on that early boost to confidence.” Sebastian also says the deficit means the Reserve Bank is in a position to ease interest rates even further. However, not every business group is so pleased. The Australian Chamber of Commerce and Industry released a harsh response to yesterday’s announcement. Head of economics and workplace relations Greg Evans said the latest writedown “puts the onus on the government to properly deal with spending”. “Business is indicating that a major cause of uncertainty is the inability for the government to get its fiscal house in order and to set out a pathway back to surplus.” “This has become our number one economic priority as without a sustainable budget there is no scope for the major economic reforms required such as delivering a tax system that promotes incentive and enables productivity improvements.” This story first appeared on SmartCompany.
Prime Minister Julia Gillard is fighting to keep proposed media reforms alive, following an interview on the ABC’s Lateline program where independent Tony Windsor expressed concerns about the package. "I don't think the numbers are there for a great portion of this to get through," Windsor said. Meanwhile, Fairfax media reports that the Minister for Mental Health and Ageing, Mark Butler, and Foreign Affairs Minister Bob Carr have shifted their support away from Prime Minister Julia Gillard towards leadership rival Kevin Rudd. Cyprus crisis shakes Australian markets The government of Cyprus has postponed a vote on a controversial tax on savings, which forms part of its austerity package, leading to more than 2% being wiped off the value of Australian shares. The vote would have ratified a deal struck between Cyprus, the IMF, the European Central Bank and other lenders to levy a once-off tax on all bank deposits of 6.75% for amounts up to €100,000 ($A124,000) and 9.9% for deposits above €100,000 as part of a bailout package. ASIC report says high speed trading risk is overstated The Australian Securities and Investments Commission has released its report into computerised high speed trading. While the report from the corporate regulator recommends some reforms, it also finds that the impact of the practice in Australia has largely been overstated. “There is a belief by some that high-frequency trading is manipulative in a legal sense, or at least predatory in nature, and there is a perception that high-frequency traders uniformly have less regard for market integrity. That perception is not supported by our study,” the report states. Overnight In New York, the S&P500 is down 0.64% to 1550.65. The Aussie dollar is up to US1.0391 cents.