Cloud-storage provider Box has decided to delay its planned initial public offering until 2015. Sources familiar with the matter told Bloomberg that the IPO, which Box filed for in March, won’t occur until next year because of volatile market conditions. Box chief executive officer Aaron Levie gained some financial flexibility in July by raising $150 million at a valuation of $2.4 billion, after delaying the IPO in May. One of the sources says the next logical time for an IPO is during the company’s fourth quarter, which ends in January. Facebook to refine name authentication process Facebook says that it would be building new authentication tools to verify accounts flagged as fake, amid protests by members of the LGBT community regarding the need to be able to use pseudonyms. The protests arose two weeks ago when Facebook cracked down on several hundred drag performers whose accounts had been reported as fake. The site’s only process for verifying accounts involves asking for some form of ID as evidence of a real name. Facebook’s chief product officer Chris Cox says the policy had done a good job up until recently, and that Facebook wants people to use the name they use in real life, rather than their legal name. Houzz raises $165 million Fast-growing US-based home-remodelling site Houzz says it has raised a $US165 million ($189 million) Series D round, led by Sequoia Capital. The funds will be used to accelerate the startups global expansion plans. It’s already opened offices in Berlin and London, and more recently Sydney. Overnight The Dow Jones Industrial Average is down 238.19 to 16,804.71. The Australian dollar is currently trading at US87 cents.
Complaints have never really had a specific home on the internet. They’ve always just been kind of everywhere. Melbourne social network startup Vent wants to change that. It’s providing a platform that is specifically for people to moan, rant or complain about whatever might be upsetting them. Users sign up, choose one of five moods which comes with a corresponding colour, for example red matches up with anger, and then post their complaint. The platform is much like Twitter, users can follow people they know and curate their own feed of Vents, or browse posts from the wider Vent community. It’s the community that Vent is building that co-founder Dean Serroni says is where the startup’s value lies. “We don’t want to become a junky place for people to discuss random things. We want people who have problems or complaints to come to our app, where they’ll be associating with people in similar situations,” he says. Serroni and co-founder Duncan Turner came up with the idea over coffee last year. It was around the time of the Essendon Football Club supplements controversy and the last throes of the Gillard/Rudd Labour government. They didn’t want to launch their complaints into the internet ether on general purpose social networks like Twitter and Facebook, nor did they want to damage their “online personalities” either. So they decided to build Vend. After launching a beta version on the Apple App Store in January the platform grew to 3000 users in July, before more than tripling the two months since to over 10,000 users. To date they’ve raised $100,000 in funding from an investor Serroni is unable to name yet. What Serroni and Turner didn’t expect was the warmth of the community they had created. Serroni says users are supportive of one another and help each other through tough times. “It’s been really comforting to be honest. People are able to share their experiences and come out feeling comforted. A negative experience can become a positive one,” he says. “People understand they’re not alone in their issues. People share in their miseries and feel better for it. Protecting that supportive vibe, and the value that come with it, is one of Vent’s greatest challenges. As it scales it becomes more and more difficult to police the site. Many websites require users to link Facebook accounts in an attempt to encourage civilised debate. Vent asked that of its users initially, but was inundated with requests to remove that requirement. Anonymity is key to venting they said. Now anyone can sign up to an account; all that’s needed is an email address. The startup is rolling out new features in the coming weeks that will give users more control over what they do and don’t see. Serroni says they’re also considering providing individual users with powers that allow them to curate and moderate other users. It’s also adding more emotions and a feature which allows users “hugs” or “WTFs” in a similar manner to Facebook ‘likes’ as a way to endorse and sympathise with posts. As for monetisation, Serroni says the startup is examining a number of options, none of which will be advertising. “As our user base shapes up and we start to understand it better, we’ll start to think about it more he says. We want to understand them to ensure when we do monetise we’re providing value rather than spamming with ads,” Serroni says. “We’ve got some ideas at the moment, one idea being professional counselling services that can be engaged directly through the app. And a few others that I’d prefer not to mention.” Vent comes out of beta later this week and is available on iOS with an Android release slated for December. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Tinybeans, a social network that has amassed 500,000 users in its two years since launch, has raised $2 million. The Sydney-based startup allows parents to share family photos privately and securely while helping track their children’s development. Tinybean users sign up to the platform and can upload pictures via a web or smartphone app, and share those pictures privately with friends and family. Followers can access a user’s Tinybeans Journal, where all those moments are collated, via email, website, or the app. The $2 million investment comes from “a consortium of high network private investors” mostly based in Sydney but also London and Hong Kong. Eddie Geller, who co-founded the startup in 2012 along with Stephen O’Young and Sarah Jane Kurtini, was unable to elaborate on exactly who the investors were. Prior to this raise, its first round of institutional investment, Tinybeans had bootstrapped its way to over 500,000 users. More than 50% of those users are based in the US and the startup plans to set up operations there next year to help support its biggest market. Its project is to double its user base in the next three months, and reach a million users by the end of the year. “We’re ambitious but hopefully realistic,” Geller says. To achieve that target, Tinybeans is relying on its users sharing the platform with friends and family, growing via mutually beneficial partnerships with other companies, and by ramping up a public relations and marketing campaign, an effort made possible by the funding round. That funding will also be used to build out the Tinybeans team and develop new and existing features that help families raise their children. “Unlike other social networks we are so much more than just sharing pictures and updates – we’re a private social network focused around the well-being of a child,” Geller says. “Parents are creating a keepsake/journal rather than a timeline. Our users own their content and we provide value beyond printing services and sharing photos through our focus on helping families raise their children and support their child’s development.” Tinybeans does that by helping parents track not only their children’s general milestones, like their first Christmas, or first tantrum, but also developmental milestones based around things like gross motor skills and fine motor skills. It offers advice to parents by suggesting activities that will help their children develop those skills. “It becomes a tool for parents to help them understand the developmental stages of a child’s life and how they can help them,” Geller says. The idea for that feature came from co-founder O'Young's own experience parenting. He couldn’t find a solution to help his eldest child overcome speech delays. In addition he was reluctant to share photos of his children on Facebook. “As Tinybeans is a private social network you can confidently share your precious moments without risking alienating friends who may not like having their feeds clogged with your baby picture,” Geller says. Geller says the startup had no trouble securing investors and has several revenue models based primarily around brand partnerships. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Brisbane startup Zova is hoping its contextual awareness will carry its female-focused health and fitness app to mainstream popularity. Zova launched for iOS two days ago, and thanks to its Apple Health integration, it is one of 14 apps being featured on Apple Health App Store page. Co-founder Niall McCarthy says while there’s no shortage of health and fitness apps available, none really make the most of a smartphone’s capabilities, nor the communities that want to use those products. The Zova team, in conjunction with its “Zova Ambassadors”, a bunch of exercise and lifestyle professionals, has created a number of exercise programs that combine custom-made music with “exercise science” to achieve better results. The app is also aware of the context. What that means, McCarthy explains, is when its user opens the app, it suggests workouts based on factors like time of day, weather, and location. “Once you’ve downloaded the app, it will recommend based on your time and location. For example, you can click on your workout stream, and follow immediately, visual and vocal cues, along with music and rhythm that will help you,” he says. The music and rhythm aspect of Zova was central to its development. McCarthy and his fellow co-founder James Tonkin originally came up with an idea to use rhythm to help kids exercise, while washing dishes at a pizza shop. They went on to develop a sports product which helped kids get active and rolled out the product to schools around the world. About a year ago they decided to pivot to enter the consumer fitness market with support from the investor and founder of health and fitness company Jetts, Brendon Levenson. “Health and fitness is the next thing to be disrupted, and the time is now with companies like Apple and Google providing wearables to help realise that,” McCarthy says. Users will be able to try the app for a week for free and after that they’ll be asked to pay $25 for a 12 week subscription, or $75 for a yearly subscription. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Australian startup Social Check wants to stop drunken tweets and Facebook rants costing people jobs. The startup allows consumers to audit their social media accounts. For a fee of $89.95, Social Check produces a report that scans an individual’s Facebook, LinkedIn, Twitter and Google+ accounts, including profile data and the last 10,000 posts. It searches for profanity, misspellings, posts with a certain tone, inappropriate content, and incomplete and inconsistent information. It then gives that user a score out of 1000, based on comparison with peers and best practice, and provides recommendations on how to improve their “online personal brand”. It’s common knowledge that one of the first ports of call for employers in the recruitment process is googling a candidate’s name. Founder David Griffiths says it was with this in mind that he launched Social Check. “When I was growing up, I had it drummed into me how much that first impression matters, polished shoes, eye contact,” he says. “Behaviourally, what’s happening now is first impressions aren’t occurring when you meet them face to face, it’s when people are looking at your LinkedIn, Twitter, or Facebook profiles, and it’s at that point when they decide whether we get to meet them or not.” He says opting out of social media is no solution either, as increasingly companies are looking for people who embrace technology, are adaptive to change and can build and maintain relationships. Using social media well is an example candidates can use to meet such criteria. It’s not just job hunters that Social Check is aimed at. Griffiths says Social Check will also give companies a way to get ahead of any social media scandals that might arise from their employees social media habits. “(Social media) has occurred quite quickly, and most businesses only have a stick, an electronic communication policy where they say if you step out of line we’ll whack you over the head,” he says. “There needs to be greater awareness and understanding of how you look online and what it might say about you.” To help with this, Social check offers its customers content which includes recommendations, tips and tricks, to help avoid using social media in a way which damages their personal brand or their employer’s reputation. Social Check launched three months ago and is in the midst of its first capital raise. Griffiths was not willing to say exactly how many people are using the platform, but he says the number has been growing week on week and includes people from all over the world. “This is a universal problem, it’s not unique to Australia and we’re getting about 80% of our traffic and business from elsewhere,” he says. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
There are many more bad people hacking computer systems than good ones helping them not get hacked. Each week it seems that some huge institution reveals that their customer's financial information has been breached or passwords compromised. There was Target earlier this year and Home Depot in the US more recently and hundreds more that never see the light of media attention. So what do companies do to get help? Smooth sounding salespeople from trusted large organisations sell the time of security penetration testing consultants at a rate of $2000 per day. The client doesn't know if they'll be any good and the cost means they can't hire as many of them as they would like. Bugcrowd was setup to change the way this corner of the world works. Casey Ellis and Serg Belokamen had worked together in a small consulting firm selling their services one day at a time before starting Bugcrowd and joining Startmate last year. The premise of Bugcrowd was to pay for results not hours. Companies like Facebook and Google had pioneered the concept of a bug bounty program where good hackers would responsibly disclose vulnerabilities and the companies would reward them, first with t-shirts and now with serious cash. Bugcrowd would let all the companies in the world who weren't the size of Facebook and Google run similar bug bounty programs. The second insight was to help security testers build a reputation. By sitting in the middle of helping security problems get fixed, Bugcrowd could audit and verify if a security consultant was any good or not. The tester could then take that reputation and help win more consulting work, more reliably and not have to work for a big accounting firm. You can see an example here in Pinterest's bug bounty hall of fame, who use Bugcrowd's platform to manage their security testing. What was once a whacky idea is now a common practice, at least in Silicon Valley, and Bugcrowd has grown very quickly. But not without some heartfelt moments. The company decided to relocate to San Francisco to be nearer to its customers and Serg, the original co-founder, had to make the personal decision to stay in Australia and leave the company. Chris Raethke, who was a founder of another company in the same Startmate batch last year that had failed, joined the company as a founder. The company's growth though, meant they were able to raise a large multi-million dollar seed round from some great investors like Icon Ventures, Paladin Capital and Square Peg Capital, as well as a bunch of angels. We filmed an interview with Casey and Chris about their journey so far and the help Startmate gave them in this mini documentary. Applications for Startmate 2015 close next Tuesday and we'd love for you to begin your own story. Apply now. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Has Google finally decided to take total control of its Android destiny with the release of its Android One operating system? Aimed at “emerging markets”, such as India, Google will operate the smartphone device rather than handing over to hardware partners such as Samsung and HTC. Historically, Google has taken a hands-off approach to Android, providing it “free” to manufacturers as an open source product. These manufacturers have a reputation for adding on their own extra features such as the Samsung TouchWiz user interface. The assumed goal was that a better mobile experience for consumers would funnel them towards Google’s other products such as its popular search. In contrast, Android One will not allow that customisation, giving Google full control of the operating system users get. So perhaps the latest move represents a paradigm shift for the company? The life and times of Android The approach taken with the Android operating system has always been more open than that taken by rival Apple with its iOS operating system. In fact, in general Android has always been considered more open than iOS, starting from the very beginning before the company was acquired by Google and the original Android operating system was released open source to the community. That version of the operating system still exists today and is used by companies such as Amazon on its Kindle Fire tablet. This creates what software developers call a “fork”, with the base Android operating system sitting underneath the customisations that Amazon makes. But in recent times Google has begun to demonstrate a desire to take more control of its operating system. Starting with the Nexus phones and devices, which involved Google providing a reference design for both phone and operating system free of the extras added by the hardware manufacturers and the carriers. This has continued with the announcement of Android One, with Google starting to become more involved in the entire process and trying to own the user experience. Products such as Google Glass represent other forays into this vertical integration, an area traditionally embraced by their main competitor, Apple. But Apple is starting to change its approach as well. A more open Apple? Apple has always been a product focused company. Starting with the launch of the Macintosh in 1984 and continuing with the iPhone and other iOS devices, Apple has always strived to control the whole experience of hardware, software and services. Earlier this month in a television interview with Charlie Rose, Apple CEO Tim Cook said that Apple values vertical integration and wants to control their primary product. But looking at Apple, industry insiders can begin to see a shift in the way that the company operates. The most recent hardware and software announced by Apple (announced one week before the first Android One smartphones) provides a lot more control for developers and users than they’ve ever had before. Features such as extensions allow apps to communicate with each other and users to share data among apps through the share pane. Developers can add features to place small apps called widgets in the notification centre or to enable actionable notifications, allowing you to (for instance) respond directly to a Facebook message from within the notification. And, in an unprecedented move, users can replace the Apple provided keyboard with a third party alternative. While all of these sound like small changes, they represent Apple relinquishing control of some parts of their iOS experience back to developers, a major departure from when Steve Jobs launched the iPhone in 2007. In his interview with Charlie Rose, Tim Cook was also asked what companies Apple competed with and, without hesitation he nominated Google as the main competitor, even going so far as to downplay Samsung as a competitor as the Android operating system was created by Google. This is especially interesting given that Apple has slowly moved Google out of its phones, (in)famously replacing Google Maps with Apple Maps a couple of years ago as well as slowly enhancing the voice recognising personal assistant, Siri, to perform many of the functions that Google performs with search. Even though the Apple Maps launch was riddled with problems (with users claiming the experience was sub par compared to the Google offering and prompting Tim Cook to issue an apology), Apple is clearly looking to shed itself of Google and own more of this part of the experience too. A new battle for market (and mind) share So, over the course of September, both Google and Apple have shown a new side to themselves. Both are pushing into new markets, with Android One specifically targeted at the China/India market. Many analysts suggest that the iPhone 6 Plus is an Apple foray into the desire for “bigger phones” in the same market. To conquer this market and maintain a foothold on the market in existing developed countries, it would appear both companies are making some changes - with Google taking control of its destiny while Apple becomes more open. Both are baby steps for now, but perhaps this is the beginning of a new battle, for the market (and mind) of more and more consumers.
The story of Chinese e-commerce company Alibaba has become almost as magical as the original Arabian story that gave it its name. It has become compelling because of the dazzling success of its public listing on the New York Stock Exchange last Friday. Alibaba’s shares opened at $92.70, already some 27% above their listing price of $68 and ended up raising US $21.8 billion for the company, making it the world’s largest technology IPO. Alibaba is now valued at $231 billion, making it bigger than Facebook ($200 billion), Amazon ($150 billion) and eBay ($65 billion). The curious aspect of this phenomenal success is that immediately prior to the IPO, the general US public were largely unaware of the company, what it actually did, and why it would be worth that much money. A poll held on the 18th September in the US showed that only 12% of those surveyed had ever heard of the company or the IPO. In the case of Alibaba’s IPO, what was important was not its visibility with the US general public, but with the institutional investors involved in the initial allocation of shares. The emotional drivers of the stock market It is easy to assume that when it comes to buying and selling shares that the large investment banks, fund managers and brokers are all acting on the basis of objective calculations and financial models. Behind the rhetoric however, are decisions based on emotions. Not only is there good evidence that emotions drive a great deal of the day-to-day trading, even in the professional and seasoned trader, but that key events such as IPOs are driven in much the same way. This is perhaps stating the obvious. The price of shares will ultimately be decided by what buyers in the market are willing to pay for them and so if there is a collective view that a company is worth a particular valuation, then it doesn’t really matter what the company fundamentals are actually saying. In the case of Alibaba, sentiment is being driven by a rich and gripping story that could well have come from the “Arabian Nights”. Jack the hero The hero of the piece is of course Alibaba’s founder Jack Ma who started his working career reputedly as a street seller and english teacher and last week became a multi-billionaire worth $18.5 billion. Ma is a true maverick who professes no technical knowledge and is prone to spontaneous decisions about how his money is spent. He bought half of the Chinese Guangzhou Evergrande Football Club after discussing the deal over drinks. But he has built a company that is growing faster than Amazon and is making a consistent profit, which Amazon has been unable to do. Setting the scene The backdrop to the story is China, where e-commerce is set to overtake the US this year, heading towards being double its value by 2016. Even before that happens, China’s online commerce is already breaking records. Single’s Day, a special online shopping day held each 11th November, saw Alibaba process $5.75 billion in sales last year. This was 2.5 times more than the total sales on Cyber Monday in the US, a special day of sales held by companies like Amazon and eBay. Trials and ordeals in the hero’s journey Of course, no story of the hero’s journey would be complete without the tests and ordeals. Academics have already warned that the corporate structure of Alibaba, with a few people wielding enormous power, represents an enormous governance risk. The corporate structure is partly a reflection of how the company has had to structure to get around regulations in China, but also in part to deals that Ma did with early investor companies like Yahoo and Softbank. Yahoo was forced to sell 121.7 million shares at the offering price of $68, potentially losing nearly $3 billion if they had been able to sell them on the open market later that day. Other challenges range from normal concerns of competition through to ongoing issues with the quality of traders and fake products on Alibaba’s sites. The Alibaba story was captivating enough to make investors clammer after their shares on the opening day. Of course, investors could also have simply been displaying the irrational exuberance that accompanies an Internet stock bubble. In any event, it is still a story that has a long way to play out and it is guaranteed to be a page turner. David Glance does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article.
For years, the overnight success story he was craving eluded Nic Blair. The digital entrepreneur has 10 startups to his name, and has personally lost $43,000 along the way. “Failure is how you learn, though. It’s all part of the journey,” he says. Blair began turning his ideas into business ventures in 2007, and spent the next year juggling his time between six startups with a couple of business partners. These included a Facebook app, a directory for a martial arts business, online marketing agency NSM Digital and online content network Luscious Media, which included Knockout Bids and Play Free Online Games. But none of the ideas worked, and the trio walked away from all the businesses and returned to the traditional workforce. The 28-year-old Brisbane man had lost $25,000 all up, though landed a job in online marketing for Flight Centre and wanted to repay his debts. “I had to accept that I needed a job to pay the bills. It was hard, because I had so many ideas.” He started his seventh startup, SEO and SEM agency Search Factory, on his own in 2011 after quitting Flight Centre, and it has been successful. Search Factory has grown to employ a team of 27 people and a further 25 contractors (all based in Australia). It has almost quadrupled turnover from around $560,000 in their first year to $2.2 million in their third year. “We’re constantly cleaning up digital messes for clients, getting penalties removed so they’re ranking again, that sort of thing. We focus on high quality search, so we don’t outsource to overseas, which is a model that has worked well for us.” At the same time, he launched number eight – a network of 25 travel websites called the All Site Network – which he hoped to turn into a lead generation business, though this ultimately failed. “The whole concept was good, but I wasn’t practising what I was preaching about lead generation, so it fell over. Google changed its algorithms, which hurt the business, too. I sold it cheaply and walked away with an $18,000 loss.” In September 2012 he launched yet another startup, mobile apps business Brus Media, which has also been a success. This was his ninth startup. Brus Media is an affiliate network focused on performance-based advertising for mobile apps. It helps clients monetise and grow their iPhone, iPad and Android apps. In a nutshell, Brus Media offers promotional opportunities for advertisers and game developers. Blair and his co-founders have helped grow some of the largest gaming apps, including Candy Crush Saga, Castle Clash, Clash of Clans and Slotomania. Back on the very first day of business, Brus Media generated just $1 in revenue. Fast forward, and its generating $1 in revenue every 7.6 seconds, which equates to almost $4000 per day, based on an eight-hour work day. In March this year, Brus Media had over 19,000,000 clicks for mobile apps, over 550,000 installs and made over $225,000 in revenue. Both Brus Media and Search Factory were launched with no capital and present huge overseas growth opportunities, which Blair is focused on now. He was recently named in the 2014 Australian Anthill 30 Under 30 list. A recent opportunity to purchase FreeRiderMX magazine (print circulation of around 8000) also presented itself, which Blair seized upon. He’s trying to revive it by focusing on a stronger digital strategy to grow print sales, which marks his tenth business, which he’s rebuilding from the ground up. The biggest lesson he’s learned has been the importance of focusing on one startup at a time. “The gap between closing down and opening a new business hasn’t really existed for us. Sometimes if the idea strikes, we’ve just gone out there and launched a new startup. I probably wouldn’t do that again. It’s far better to focus on one thing at a time,” Blair says. “I’ve also learnt that you don’t need a bunch of money to start a business. The marketing side of business is definitely a skill learnt, because that’s going to make the startup, or not.” Don’t put barriers between yourself if you’re thinking of starting a business, he says. “Most people I speak to are thinking about starting a business, but tell me all the reasons why they can’t do it now. Don’t wait until everything is perfect to get started. Particularly in the tech world.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Speaking in front of a healthy crowd of entrepreneurs at a Startup Grind Melbourne event at the NAB Atrium on Tuesday, Carsales.com.au founder and managing director Greg Roebuck gave his top three tips for startup founders to consider when pitching to investors. 1. Don’t expect to be an overnight success “The chances of someone being an Instagram, two or three years of hard work, a billion dollars; sorry, it’s unlikely. You’ve got to have the view you’re going to be doing this for years. I don’t want someone that’s built something that’s enough to get some money and then walk away. In my view, people say why are you still working in the same business all these years later, they ask why haven’t you done something else?” “It was never a let’s build it to a point where we can flick to someone else and move on. I like businesses that the people have a genuine passion for, and have passion for it for a longer period of time. It doesn’t mean a great idea can’t be sold to a Google or a Facebook or a Twitter, but it’s probably not how I think about businesses.” 2. Belief and passion “Nobody will tell you it’s a good idea, otherwise they would have done it themselves. Everyone will tell you a bad idea, and it’s always easy to say no. I like people that are prepared to get a few noes and are prepared to keep giving it a go.” 3. Solve a real-world problem “Car sales were broken. And a lot of things we do in Carsales people take for granted now: like list until sold. We were the first people in the world, certainly in Australia, to offer listing until sold for a classified. I love the old classified model. It was put an ad in The Age on a Saturday it’ll cost you $70 bucks. If it doesn’t sell, well give me another $70 bucks. If it still doesn’t sell give me another $70 bucks. The problem with that model is they made more money if they did a bad job. Then I came along and said give me your money and my job is to get you a sale and you never have to pay me again because you’ve given me the money for the job I have to do. So solving real-world problems that help people.” Startup Grind Melbourne’s next event will feature Envato co-founder and CEO Collis Ta’eed on Wednesday, October 29. For tickets, head over to Startup Grind Melbourne’s Eventbrite page. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Facebook’s news feed is probably the most-used feature of the social network. It organises posts, photos, links and advertisements from your friends and the pages you follow into a single stream of news. But lately we’ve seen the news feed making headlines of its own. In August, users and journalists began to question Facebook’s news feed after noticing a scarcity of links and posts about the death of Michael Brown and the subsequent protests in Ferguson, Missouri. Facebook also announced changes to the news feed to decrease the visibility of clickbait-style headlines. These are headlines that attempt to lure visitors to a webpage with intriguing but uninformative previews, and Facebook made up a typical example. Facebook says it will be tracking the amount of time that users spend on a website after clicking such a link, and penalising the publishers of links that don’t keep reader attention. In June, Facebook faced criticism after the publication of research findings based on an “emotional contagion” experiment that manipulated the news feed of almost 700,000 users. It raised some ethical concern among both Facebook users and observers. Given how little we understand of Facebook’s internal affairs and the machinations of the news feed’s filter algorithms, the growing public concern around Facebook’s operations is understandable. Why do the algorithms matter? As users, our readiness to trust Facebook as a hub for social, professional and familial interactions, as well as a source for following and discussing news, has afforded the company a privileged position as an intermediary in our social and political lives. Twitter CEO Dick Costolo’s announcement that Twitter decided to censor user-uploaded images of American journalist James Foley’s execution is a timely reminder of the many roles of social networking platforms. These platforms and their operators do not simply present data and human interaction in a neutral way — they also make editorial judgements about the kinds of data and interaction they want to facilitate. This should lead us to question the ways in which Facebook’s roles as an intermediary of our information and social connections allows their operators to potentially influence their users. Why does Facebook need algorithms to sort the news? One of the most common responses to criticism of the news feed is the suggestion that Facebook does away with sorting entirely, and simply show everything chronologically — just like Twitter. Showing everything can make the news feed seem a bit more like a news firehose. Facebook engineers estimate that the average user’s news feed would show around 1,500 new posts each day. The “firehose model” is not without its own issues. By showing all posts as they happen, Twitter’s approach can tend to favour the users who post most often, and that can let the noisiest users drown out other worthy voices. This concern may be an influence on Twitter’s recent changes to show tweets favourited by other followers in a user’s timeline, and its apparent readiness to experiment with algorithmic changes to their users' timelines. Algorithmic filtering may well be helpful given the amount of information we deal with on a day-to-day basis but the unexplained “black box” nature of most algorithmic systems can be headache too. Changes to Facebook’s algorithms can dramatically affect the traffic some websites receive, much to the chagrin of their publishers. Publishers who have registered with Facebook receive some basic metrics as to the number of users who have seen their post. Individual users receive even less feedback as to how widely (if at all) their posts have been seen. These algorithms are ostensibly created by the developers of Facebook and Twitter in service of creating a better experience for their users (both individuals and corporate). But social platforms have a vested interest in keeping users engaged with their service. We must recognise that these interests can shape the development of the platform and its functions. A social network’s filtering may be biased against showing content that engineers have deemed controversial or potentially upsetting to help users enjoy the the network. These filters could stop you from seeing a post that would have upset you but they might also limit the visibility of a cry for help from someone in need. Are there antidotes to algorithms? If users are concerned by the choices that a social media platform seems to be making, they can demand a greater degree of transparency. That being said, these systems can be complex. According to Facebook, more than 100,000 different variables are factored into the news feed algorithms. Another option might be to regulate: subject sufficiently large technology companies and their social algorithms to regular independent auditing, similar to the regulations for algorithmic financial trading. Alternatively, users could use the platform in unintended ways or learn to subvert and scam the system to their own advantage. Users could also lessen their usage of Facebook and seek a less-filtered stream of news and information from a variety of other sources to suit their needs. For better or worse, algorithmic filtering will likely become a staple of our data-fuelled, internet-mediated lives, but in time we may also see services that give users more direct control over the algorithms that govern what they get to see. Andrew Quodling does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article.
Social media giant Facebook has been cracking down on click-bait headlines on articles as part of a major update it is rolling out. In a statement, Facebook product specialist Joyce Tang and research scientist Khalid El-Arini explained the technique will involve Facebook measuring how long its users aren’t on its website. “One way is to look at how long people spend reading an article away from Facebook... If they click through to a link and then come straight back to Facebook, it suggests that they didn’t find something that they wanted,” El-Arini and Tang said. “With this update we will start taking into account whether people tend to spend time away from Facebook after clicking a link, or whether they tend to come straight back to News Feed when we rank stories with links in them.” Alongside the click-bait headline crackdown, Facebook said it will prioritise posts shared as links rather than as captions on photos or in status update posts. The social media giant claims the change is designed to encourage users to choose the type of post that best reflects the content they want to share, and that its link format is the best option for sharing links. This article first appeared on SmartCompany.
Australia is at an inflection point. The role of innovation and technology in our lives, shaping business, and growing the economy is profound. The pervasiveness is inarguable, be it from a generation of toddlers expectantly swiping books as though they’re tablets, to the increasing urgency of STEM being taught in schools, through the disruption of the world’s largest companies. As the pace of innovation in digital change has increased, it has surpassed businesses and organisations of all sizes – whether they are multi-billion dollar industries or the smallest of start-ups. Large companies are threatened with disruption, with 85% of CEOs globally and in Australia citing digital and innovation as the top opportunities and priorities for their business. At the other end of the spectrum, growing Australia’s start-up economy is a subject of vigorous debate as we look to grow Australia’s economy and role in a global and digital world. Which is why continual innovation is so important. We don’t read so much about SMEs in the focus on innovation. On the start-up side, businesses are so fast-moving and focused on creating a sustainable business they’re able to pivot into a new area relatively quickly. For large organisations, there is a greater ability to fund innovation through an increasing focus on design thinking, R&D, venture funds or acquisition. For SMEs, however, innovation is just as important for the growth of Australia’s economy and the inflection we are at. Though there are challenges for many SMEs in terms of reduced capital to invest, utilisation and risk adversity, the profile of an SME to be the flagship of growth within Australia and offshore is incredibly positive (despite a lack of venture based investment capital). They’re faster to respond to opportunities, generally have reduced bureaucracy, less shareholder pressure and the length of the chain from which to observe customer behaviour and communicate or find levers in assets is considerably shorter. We need SMEs to be more innovative. PwC research suggests that transforming Australia’s SME laggards to leaders in their use of technology specifically could increase GDP by nearly $6 billion (0.4%) in 2012-2013, increase real wages by 0.5% and raise revenue in the economy by $11 billion. Australia is one of the highest and fastest adopters of technology in the world, a great test market for new services, and there is no impediment geographically for where a service originates. How might SMEs think about continual innovation beyond the brainstorm? What's your relevance? List and revisit your relevance to changes in society and the market when making strategic decisions. Is there a way your audience or competence is able to pivot on subjects like health, aged care, tourism, or Asia? Is there relevance in technology trends such as payment, 3D printing, analytics, crowdsourcing or wearables, such as printing parts, sourcing globally or remote monitoring of equipment? Key an eye on the ecosystem Draw out extended relationships around you and see how to move from a b2b or b2c focus, to an extension of relevance or marketplace. How can you provide for your customer and their family? Are there relations to be formed or extended with developers, app stores, governments, retail presence or competitors? Reviewing startups stimulates opportunities to leverage innovative new capabilities early at low risk to SMEs, and high value to putting faith in our startups if there’s a way to team. Reading outside your normal lens generates new ideas. Some food for thought includes ThereIsIt, Gigya, Idomoo or sites like SmartCompany, Nocamels, Business Insider, and Forbes. Lo-fi testing Finally, go lo-fidelity in testing ideas before running major projects; set some innovation metrics to make sure you’re not settling into the comfort zone; seek feedback and customer insights as they may represent an unmet need on a greater scale; know the R&D tax benefits; and finally, ask your team for two options for any major decisions. For example, have one usual or incremental direction and one radical option. Even if you planned to go to Bacchus Marsh, spend an hour packing for Brazil, at best you’ll confirm your decision, or reset on somewhere in between. It’s true, as the world changes, we won’t have much of a choice. It’s also true there will never be at better chance to jump on the springboard of opportunity. Kate Eriksson is the head of innovation at PwC Australia’s Digital Change services. A stalwart of the digital industry, Kate’s experience and network spans across some of the most iconic digital businesses in the world such as Google, Facebook, Skype and Twitter. This article first appeared on SmartCompany.
The recent furore about the Facebook Messenger app has unearthed an interesting question: how far are we willing to allow our privacy to be pushed for our social connections? In the case of the Facebook Messenger app, the answer appears to be: “Not as far as Facebook thinks.” For those who are not yet on Facebook (yes, there are some), the social media giant has been asking all users who want to continue sending messages to their Facebook friends on their mobile devices to download a Facebook Messenger app. Facebook is preparing to stop the chat feature on its main Facebook app. The Messenger app has been available for a while but only recently became compulsory. Messenger was first introduced back in 2011. Uproar over app permissions Beyond the complaints about adding another app to the mix, the real controversy emerged when new downloaders discovered that the app, especially on Android, was asking for a whole raft of permissions. These included the ability to read your SMS messages, read your phone call log and access the photo roll on your device. This seeming intrusion into the privacy of users sent people into an uproar on the internet. An article from the Huffington Post on the dangers of Facebook app permissions went viral this month. There were plenty of follow-up articles on the situation from the Wall Street Journal, Washington Post, famous rumour-debunking site Snopes.com and, ironically, statuses and rants shared ad infinitum on Facebook itself. Even now, the fallout continues, with many one-star reviews of the app appearing on the Apple app store. Articles continue to appear on many tech sites reassuring users that downloading the app does not give any more permission than many other apps (including the main Facebook app itself). Facebook tries to ease concerns For the record, Facebook maintains that it hasn’t done anything wrong and that the permissions that have been requested are standard practice for many apps, both theirs and those of others. Believe what you will, but of course this then raises the more interesting question: how far are we willing for our privacy to be pushed in this digital age? Remember that many of these complaints about the Messenger app are coming from the same cohort of people who regularly share details of their lives, such as photos and event invitations, on Facebook. Even as the social media platform changes and people get frustrated with how Facebook is controlling our lives, people continue to use the site as a social tool. Who reads privacy policies anyway? It’s clear that we want to have our cake and eat it too. A study from Carnegie Mellon University in the US suggested that if we were to read the privacy policies of every web service we use just once in a year, it would take a full month of our work time. Instead, we rely on blind trust and obscurity (“surely they don’t care about me”) to get through these situations. Perhaps this is why people are so upset with the Messenger app; it exposes terms that we all agreed to but would prefer to remain blissfully unaware of. Of course, some recent stories have come to light that suggest our fears aren’t totally unfounded. For instance, the revelation that Facebook conducted an experiment on the news feed of thousands of its users shows the company has no qualms about using our data. Or the more recent story by Wired of the journalist who committed to “Like” everything on Facebook for two days, only to find his friends slowly pushed out of his news feed and replaced with corporate sponsorship and left/right-wing political opinion. The true cost of connecting online These articles are beginning to show the dark side of social networking. A new movie by director Jason Reitman promises to do even more, showing how people are connected but also conflicted about their social life. The movie, Men, Women & Children, follows the digital life of several different participants as they navigate the digital world of the 21st century. Trailer So, what to do? The internet and social networking allow us to remain connected, but it comes at a price to our privacy, which some are apparently not willing to pay, or at least not willing to acknowledge. Perhaps the problem will solve itself, as digital native children replace their digital immigrant parents in the world of the 21st century, and our expected level of privacy changes. Or perhaps we will all tire of Facebook and social networking, move away form such platforms and no longer have this issue. But more likely one day somebody will realise that just as the industrial age needed regulation on roads and manufacturing, so too does the information age need regulation on the use of information. And when that day comes, perhaps we all need to stop relying on blind trust and take the time out of our year to read the new privacy legislation. Michael Cowling does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
China could have a new homegrown operating system by October, to take on imports Microsoft, Google and Apple. The US and China have had a number of disputes regarding cyber security in recent months. The operating system would first appear on desktop devices, before being extended to smartphone and other mobile devices, the head of an official OS development alliance, Ni Guangnan, says. Ni says he hopes the Chinese-made software would be able to replace desktop operating systems within one to two years and mobile operating systems within three to five years. Coin apologises to customers Connected credit card startup Coin issued an apology to customers on the weekend after mishandling the announcement of a product delay. The San-Francisco based startup was criticised last week after revealing, after months of ambiguity, it would be delaying the launch of its connected credit card and replacing it with a beta program in which its 10,000 pre-order customers could opt in to receive a prototype. They would be required to pay $30 to upgrade to the finished product when it launched. Coin reversed its stance and the beta program will now be free. It apologised to its users for a “lack of transparency and clarity” in its communications. Facebook most popular app in US In comScore’s latest mobile app report, which tracks the 25 most popular smartphone apps in the US, Facebook leads the way by a considerable margin. The Facebook app had 115.4 million US unique visitors over the age of eighteen in June 2014, with YouTube finishing in second with 83.4 million. The top subscription app is Netflix with 28 million unique visitors. Overnight The Dow Jones Industrial Average is down 38.27 to 17,001.22. The Australian dollar is currently trading at US93 cents.
For 20 years, consulting firm Gartner have been calling the future of technology using its now iconic “Hype Cycle”. The Hype Cycle: from hype to reality The Hype Cycle breaks the introduction of new technologies into five phases starting with the “Technology Trigger”, the first point at which a technology comes to the attention of the press and businesses. Technologies then rapidly become oversold or hyped. This is the point at which expansive claims are made about how technology X is going to radically transform and disrupt and the early innovators push to be amongst the first to ride the wave of excitement that technology generates. The initial hype eventually leads to a “Peak of Inflated Expectations” which is subsequently followed by the crash as it is realised that the technology isn’t going to be adopted in quite the way everyone predicted, nor is it generally as useful. This part leads to a “Trough of Disillusionment” which is accompanied by an increasing number of negative articles, project failures and lessening of interest in the technology generally. For some technologies however, the disillusionment is followed by a gradual increase in a more realistic adoption of the technology which eventually results in a “Plateau of Productivity”. Technologies for the next 10 years For Gartner’s 2014 Hype Cycle, the notable technologies are speech recognition which they are claiming to be well into the productive phase. Certainly mobile phones and increasingly, wearables, have driven the adoption of voice control and interaction and it is definitely usable on a day-to-day basis. Having said that however, Gartner also puts wearable user interfaces as having passed the peak of inlfated expectations and rapidly heading to the trough of disillusionment. Given that Google has based their interface for wearables very heavily on the use of voice, it seems odd that these two technologies would be so far apart according to Gartner. The position of the Internet of Things at the peak of inflated expectations will also come as a disappointment to all of the companies like Cisco that are claiming that we are already well and truly in the era of billions of interconnected and independently communicating devices. The future is lumpy Although the Hype Cycle is a convenient way of visualising the progress of technology from invention to universal use, it over-simplifies the way progress is made in innovation. As science fiction writer William Gibson once said: “The future is already here — it’s just not very evenly distributed” Technology innovation is never smooth and never takes a single path. There can be businesses and individuals that are using technologies to radically improve productivity at the same time as almost everyone else is failing to do the same. A good example of this is the hype around “Big Data”. Whilst everyone acknowledges that we are creating enormous amounts of data that ultimately must hold valuable information and knowledge, very few organisations are attempting, let along succeeding, in finding it. Those that are experts in Big Data are the companies that have made digitally massive infrastructure their entire existence, companies like Google, Facebook and Twitter. Whilst Gartner has predicted that Big Data will reach the plateau of productivity within five to 10 years, it is also possible that it will never get there and that very few companies will have the skills to be able to take advantage of their amassed data. The other issue with Gartner’s representation of the technologies that it surveys is that it doesn’t distinguish between the different categories of technologies. Those that are aimed at consumers as opposed to the business sector. Here again, we are likely to see very different paths to adoption and acceptance of those technologies with very different time frames. What we are increasingly seeing is how technology is increasingly being used to enable a concentration of a very small number of very large companies. In turn, these companies are able to focus their resources on introducing new technologies for the public, rapidly iterating on designs until they work. Wearables from Apple, Google and companies like Samsung is a good example of this. As always with predictions around technology, it is very hard to tell what will be the key technologies next year, let alone in five to10 years time. Given that the Hype Cycle has been with us for 20 years however, my prediction is that it will still be here for the next 20. David Glance does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article.
Facebook today unveiled the latest weapon in its digital arsenal: cross-device tracking capability. This enables advertisers to track individuals' usage behaviours between devices. This means that your Facebook (and related) usage patterns are being tracked and matched across devices whether you are using an old-world PC, your latest feature-packed smartphone or possibly even your internet-capable wearable technology. The common thread is your Facebook login. This, in turn, will allow Facebook to offer its paid advertisers the added accuracy to track precisely who had been presented which specific advert, and when, where, how (such as which device you’ve used) and whether they accessed (or clicked) the advert. They will also be able to track your individual site or app usage patterns and behaviours. In other words, your every move is constantly in the crosshairs of the online marketers and our globally dominant digital landlords. Ignore the hype – it’s old news Cross-device or cross-platform reporting is nothing new. Google announced last October a similar cross-device capability for its AdWords paying customers, so the marketing hype around Facebook’s offering has more to do with attracting and keeping its paying advertisers, with you being the product. Your online identity is the key that unlocks the doors to the online advertiser’s kingdom. By being able to attribute your purported Facebook identity such as user name, gender, age and so on to every online interaction through Facebook and related sites, irrespective of which device you are using, this will allow interested parties to stitch together and link these patterns to you and not just the device. For the most part, and without being aware of it, the rules of the marketing jungle are continually being reshaped by the evolution of the underlying technologies, all tied together with our online identity. Face(book) the facts The fact that privacy and internet should not be used in the same sentence is nothing new. What is new, though, is the increasing intensity of the arms race by marketers and commercial organisations in grabbing their share in the monetisation of your every step in cyberspace. As the capabilities of our technologies evolve, your every move on the internet is being increasingly scrutinised with finer and finer granularity. The accelerating uptake of mobile computing devices such as tablets and smartphones together with the relentless push by organisations to have you preferably interact with them online, is further fuelling the global monetisation of our individual use of the internet. The increase in people accessing the internet or using apps from their mobile devices means that there are more “views”, “hits” and “clicks”. These numbers are the fuel for the global digital marketing and advertising engine. The adage that “if you’re not paying, then you’re the product” applies more now than ever before. Rob Livingstone has no financial interests in, or affiliations with any organisation mentioned in this article. Other than his role at UTS, he is also the owner and principal of an independent Sydney based IT advisory and mentoring practice. This article was originally published on The Conversation. Read the original article.
In my last article I responded to an interview in Vox with Marc Andreessen. Andreessen lamented that, in spite of a historic gold rush in technology companies, the IPO is dying in the United States due to zealous over regulation in the form of Sarbanes–Oxley, for example. As a result, the general public is missing out on the incredible gains that were experienced in the listed US technology companies of yesteryear. Yes, the regulators have gone too far and it is creating serious friction in the IPO pipeline. However I argued that perhaps the real reason that technology companies appear to Marc to be listing later and later is because, not surprisingly, the top venture capitalists are keeping these returns all for themselves. It's been a relatively recent phenomenon that US technology companies have been waiting longer and longer to go public. In the US, technology IPOs of yesteryear companies went public much earlier, with market capitalisations in the hundreds of millions of dollars instead of the tens of billions. As a result, the general public had the ability to share in the spectacular returns that technology companies can generate over time as software eats the world and industry after industry is being wholesale remapped and reshaped, with revenue growth at a speed unprecedented in history. Even though eBay's share price went up a spectacular 163% on opening day, if you bought shares on market after this rise and held on until today you'd have made over 3500%. If you bought Amazon the day after it listed, you'd be up over 27,000%. If you'd bought Microsoft at IPO in 1986, you'd be up 66,500% today and 3000% in the first eight years alone. Unfortunately for investors in the US, the general public is missing out. You only have to look at Facebook listing at $104 billion and Twitter listing at $24 billion to get a feeling for just how late these companies are going to market. So who is making all the money as the stocks go from the tens of millions of dollars in market capitalisation to the tens of billions? The answer, not surprisingly, are the venture capitalists. You can't blame them for doing so, because of course their business model is to make as much money as possible for their limited partners. There is another stock market, however, outside the US that is not subject to Sarbanes–Oxley and where technology listings are about to boom. This market is already quite a large market for equity capital issuances. In fact, as much money was raised there in the last five years as NASDAQ. The only problem from a technology company perspective is that most of the money raised there has been for resources companies. I am, of course, talking about the Australian Securities Exchange. Now let me tell you how this has all come about, and why now. There is a disaster in venture capital in Australia with only around $30 million per annum for the whole of seed stage investments, $40 million in early stage and $20m in late stage. AVCAL reports there were 16 "investments" done with this grand sum of $20 million in late stage venture capital in 2013. I am quite perplexed about how they defined "late stage" here, because the very definition of a late stage round size is usually greater than $20 million in one single investment, let alone 16. The only conclusion I can make is that these investments were triaged into bleeding zombie companies – hardly a sign of a successful late stage industry. Either that, or AVCAL has now taken up reporting of late stage investments to include lemonade stands. Atlassian, one of Australia's most successful technology companies, just raised $US150 million in a late stage round. The entire Australian venture capital industry simply isn't big enough to fund that single round. In addition to the lack of venture financing, a major terraforming of the economy is needed. Although we have $1.5 trillion dollars in the fourth largest pool of retirement funds (superannuation) in the world, these funds don't invest very much in Australian venture capital because none of the VCs to date have demonstrated that they can generate a return. It's hard to claim that venture capital is even an asset class in this country, as it's missed every single major technology success story this country has produced all the way back from Radiata: Atlassian, Kogan, Big Commerce, RetailMeNot, Campaign Monitor, OzForex. The list goes on and on. For the life of me, I can't think of one they actually invested in. The funds being invested into Australian VC come roughly equally from corporates, government and high net worth individuals. Corporate investment in VC in Australia is in decline, and with the government recently turning its tap off with the cancellation of the IIF program, I don't see a path to resurrecting a domestic venture capital industry any time within the next decade or two without a serious change in philosophy, which is not going to come from either of the two major political parties. The incumbent Liberal party is currently implementing a program of austerity, and the previous Labor government was, at best, only interested in trying to win union votes from bailing out the inefficient and dying local manufacturing sectors. The biggest impact Labor had on the sector during their tenure was to change the laws on the taxation of option schemes, which wiped out the primary incentivisation mechanism for the technology industry (and, ironically, the primary means by which wealth is redistributed from owners to workers). While I personally was not sorry to see the IIF go, I was hopeful that the axing of the program would be replaced with something more effective for financing technology companies down under. A better way would be through taxation reform for investors in qualifying risky technology ventures –front-end relief in the form of tax credits or a reduced rate of tax and back-end relief in the form of capital gains tax reductions or exemptions like the UK's Enterprise and Seed Enterprise Investment Schemes. At the end of the day, the Australian government only provided $25 million a year into the IIF program, which is paltry when you consider Singapore, with a population of 5.4 million, has committed $SG16 billion ($US12.8 billion) into scientific research and development over a four year period from 2011 to 2015. So how are Australian companies getting financed? Whilst the big US VC brands like Accel, Sequoia, Spectrum and Insight are actively prospecting down here, they are mostly just looking for cheap deals by value investing in late stage companies outside the hot money Silicon Valley market. The investments that they have made to date, and which have been trumpeted in the media, have for the most part been majority buyouts or exits (Campaign Monitor, 99designs, RetailMeNot, etc). A notable exception to this has been Accel's investment in Atlassian. However, the lack of funding has not deterred Australia's entrepreneurs from building world class technology companies. Instead, they have focused on raising funds from the best source possible: selling something valuable to their customers. This story continues on page 2. Please click below. Almost all of Australia's best technology companies have bootstrapped all the way through. Those that did take outside funding, for the most part, didn't take it until they reached quite a late stage. As a result, we have some very well run technology companies, and some world class companies in the making. Although I am pretty active in the startup community, every second week I am shocked to discover yet another Australian technology company that I have never heard of generating $10 million, $20 million, $50 million or more in revenue per annum. Until recently, I had never heard of companies like RedBubble, Nitro, and Pepperstone. The latter of which has, in just three years, become the 11th biggest forex broker in the world, turning over $70 billion a month through their online platform). Because the Australian technology industry is mostly bootstrapped, it took longer to get here, but coming down the pipeline are an incredible number of great technology companies. So if the Australian VC industry is dead, then how are these great companies going to raise funds when they need them? Well, I believe the answer is staring them right in the face. It's called the Australian Securities Exchange (ASX). After all, what better way to fund a company than by crowdsourcing it? This is what the resources industry already does today, via the ASX. If you have an early stage speculative mining company, you don't go begging down Coal Hill Road pitching to mining VCs and spending six months negotiating a telephone directory thick preferred stock structure. No, you write a prospectus detailing what you're going to do with the money and list it on the ASX. Likewise if you're BHP or Rio Tinto, you can go to the ASX and the market is deep enough to raise billions. Crowd sourcing equity from the public has been done successfully for decades in resources. The ASX is in the top five globally for the total amount of money raised for equity issuances from 2009-13. There is no Sarbanes–Oxley in Australia, and listing costs are quite low. (In Freelancer's IPO, the underwriting fees were $450,000, legal fees were around $100,000, and investigating accountants cost about $50,000.) Why go to a venture capital middleman unless they are a rockstar with solid operating experience that can add demonstrable value in some way? I believe that Malcolm Turnbull will bring in legislation to allow the general public to crowdfund early stage ventures without a registered offering document, as is starting to happen elsewhere around the world. This will generate further interest and appetite in investing in technology companies from the general public which already actively takes a punt on speculative, early-stage mining companies (not to mention the Melbourne Cup). At the moment, to invest in companies without a registered offering document you need to be a "sophisticated investor", which is curiously defined as a person having income of $250,000 per annum in each of the last two years, or net assets of $2.5 million. I don't know why being rich makes you automatically sophisticated, and being poor means you’re incompetent with your money, but I'm sure that something sensible will happen here. If, by miracle, we see some taxation relief for technology investments, then this will be accelerated. But I'm not holding my breath, even though the Australian government used to provide some form of taxation relief for investors in the mining industry. When we were considering listing Freelancer on the ASX, many people gave us the usual regurgitated responses as to why it wouldn't work; investors here don't understand technology and that we would trade at a discount compared to US markets. Professor George Foster from Stanford Graduate School of Business showed some time ago that country specific factors were a lot less important than company-specific financial statement-based information in explaining valuation multiples in an international setting. Markets are increasingly globalised. It's almost as easy for a US investor to buy Australian shares as US ones. Money flows to where it gets the greatest return for a given risk profile; basically if arbitrage exists, someone will take it. Our stock going to $2.50 from a 50 cent issue price in the biggest opening in the last 14 years and third biggest opening ever on the ASX for an issuance larger than seed size is testament to the amount of pent up interest amongst the general public to invest in technology. We took a calculated risk – nobody wants to be the first to try something new. But so far it has paid off. It’s great to see the sector now heating up with recent listings from companies like Ozforex, iSelect, iBuy and MigMe (up 95% yesterday on their IPO, and like I did, broke the bell), and with WiseTech Global, Vista Group, 1-page, Covata, BPS Technology, Grays Australia imminently coming down the pipeline. I suspect Ruslan Kogan will also be considering his options given the tremendous effort he has done bootstrapping Kogan to date. What surprised me is that the process was significantly easier, quicker and resulted in a more equitable and transparent capital structure than what I have experienced in any of the dozen venture capital financings I have been involved with in the past. Projecting forward, I think that the ASX will be the primary way in which technology companies raise equity in this country in the future. The ASX realises this as well, and is moving to position itself as a regional hub for the Asian technology sector. If it is successful—and I think there is a good chance it will be—it will cover a massive market. There are significantly more people in Asia (with dramatically rising incomes), significantly more micro, small, and medium enterprises (MSMEs). It’s a much bigger market for many industries, and there are a lot more mobile phones than the US, to draw comparison to just a few metrics. The ASX is in a fantastic position to capture this opportunity. In the second half of 2013 a total of 14 technology companies listed on the ASX. Since January 2014 there has been 55. In the entirety of 2013, a total of 59 companies were financed by Australian venture capital. This is the future for financing technology companies in Australia. Matt Barrie is chief executive at Freelancer.com
Melbourne-based social marketing startup Tiger Pistol, which existed primarily as a DIY platform for small businesses, has launched a Do It For You package, making it the first platform in the world to help small businesses with a full social marketing suite that includes organic, advertising and reputation management. Tiger Pistol, which is global preferred marketing developer for Facebook, will use its recommendation platform to power the service, identifying not just what to post and when to post it, but how to build campaigns that deliver results. The service is still marketed at small businesses, with Do It For You packages starting from $249 a month. The change came about after it became evident a much larger number of its customers wanted more help than a DIY option. Through the Do It For You packages, a Tiger Pistol social expert will manage a customer’s reputation across Facebook, Google+, Twitter, Instagram, Yelp, Trip Advisor, LinkedIn, Urbanspoon, Pinterest, Foursquare and Yellow Pages. The new service is an extension of the Tiger Pistol Do It Yourself packages that launched late last year. Cofounder and CEO Steve Hibberd says that Tiger Pistol is still technology-driven. “We provide this level of service at such low pricing due to the efficiency we get from our technology, especially our patent pending recommendation engine that drives what we do for customers across content and advertising,” Hibberd says. “Our social experts don't have to spend hours on strategy or reinventing the wheel, the activity is guided by a deep understanding of our customers coupled with real time data.” Hibberd says that “this semi-automation is the key to success in the small business space” by using both a super simple software and an efficient service layer. “We can still have infinite opportunity to scale while our customers receive great results.” Hibberd says no other product on the market gave small businesses the power to conduct sophisticated advertising campaigns. “Others focus on content posts whose organic reach is rapidly declining or, at best, promote posts using real cash to generate a few more likes and comments which are generally wireless,” he says. “Social ad platforms are great for experienced marketers but very few small businesses have the time or experience to do that, so they need help. “Reputation management is the other key pain for small business...90% aren't aware of the online reviews around their business, yet 79% of consumers trust online reviews as much as a personal recommendation. “People are talking about their buying experiences across a variety of social channels every day, small business operators simply don't have enough time to be across this, so Tiger Pistol wraps this up in a single, simple package.” Tiger Pistol, announced in October last year that it had closed a $1 million round of funding from the $6m local venture fund Rampersand.
Go Girl Go for IT, a free upcoming event for high school girls from years 8 to 11 organised by the Victorian ICT for Women Network, aims to encourage girls to consider a career in the tech industry. This year’s event, to be held at Deakin University’s Burwood campus, is set to attract 1500 girls from 54 schools across the state, including some from as far away as the regional city of Wodonga. Go Girl Go for IT communications team lead Sara Ogston told StartupSmart the 2014 theme is about changing perceptions about a career in IT. “The big theme for the event is ‘IT is it’, it’s about talking through the opportunities in the sector,” Ogston says. “It’s about getting away from the stigma around IT and making sure girls understand IT is no longer just about sitting at a computer all day or plugging in cables in a server room – it can be a really creative career. “IT and ICT can be intimidating. The big thing is we want to open up these girls’ eyes to how there’s also a lot of opportunities in it.” Go Girl Go for IT co-director and the head of cloud practice service optimisation at Telstra, Irene Evgeniadis, told StartupSmart the event is about showcasing the variety and diverse opportunities available to women who want to study or work in IT. “We do this by having industry speakers and sponsors (corporate, educational and government) who give the girls with a glimpse into the excitement, opportunities and career satisfaction that IT can provide,” Evgeniadis says. “Our past surveys have clearly shown us a rise in the number of girls wanting to consider a career in IT, after attending our Go Girl, Go for IT event.” The event begins at 9.30am with a keynote speech by 2014 patron and Twitter Australia managing director Karen Stocks. The students will then break up into five streams, where they will hear from a range of leading women from the tech industry. Speakers include NAB senior digital strategist Tammy Barlow, York Butter Factory’s Richenda Vermeulen, Telstra’s Anne Libel, ANZ’s Krish Beresford, and Krishna Nair from Deloitte, among many others. Following the group sessions, a trade fair will allow the students to ask questions. Meanwhile, a Facebook page has also been created allowing the conversations to continue online. Gender inequality has long been an issue for the tech sector, with the number of young women choosing to study tech-related subjects at a tertiary level declining over recent years. It is an issue that has come under increasing scrutiny in recent months, with a string of tech giants including Google and LinkedIn admitting they have serious problems in terms of gender equality. In the case of Google, just 30% of its workforce are women.