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Oculus Rift’s sale was a missed opportunity in equity for early backers

4:52PM | Tuesday, 1 April

When Facebook bought virtual reality headset startup Oculus VR for $US2 billion ($A2.15b), it took most people by surprise. It also angered many of the early supporters of the startup, who backed the game on Kickstarter but were not happy with news Facebook had acquired it.   The Oculus CEO said they anticipated a backlash from their core audience, but they were shocked at how extreme some of it went. Founder Palmer Luckey posted a comment in a Reddit stream about the backlash:   “We expected a negative reaction from people in the short term, we did not expect to be getting so many death threats and harassing phone calls that extended to our families. We know we will prove ourselves with actions and not words, but that kind of shit is unwarranted, especially since it is impacting people who have nothing to do with Oculus.”   This Reddit stream details the many of the concerns about the impact the partnership could have on the experience of using Oculus.   The company raised $2.4 million from on the crowdfunding platform before taking $16 million from investors, followed by a further $75 million leading venture capital firm Andreessen Horowitz.   Part of what Kickstarter and crowdfunding campaigns thrive on is the engagement and sense of ownership backers get.   As equity crowdfunding takes off, this sense of ownership is likely to continue to be a source of friction, according to Jeremy Colless, a managing partner of Australian online equity crowdfunding platform VentureCrowd.   “At first glance I think it is easy to dismiss the Kickstarter backers of Oculus Rift as being disingenuous, they paid for a product and received it,” Colless told StartupSmart.   “But their frustration isn’t entirely misplaced, as startups have definitely been exploiting crowdfunding platforms as a cheaper and potentially more accessible alternative to raising equity capital from equity investors.”   Crowdfunding campaigns are increasingly used by emerging businesses to get customer validation, exposure and funds to get started. But the backers have no leverage to demand a better deal.   But as its close cousin crowdfunded equity gathers momentum, customer expectations are likely to change. If early backers received equity in an idea, there is little doubt supporters, such as those who backed Occulus VR, would be disappointed.   “The irony of the situation is that as a crowd, the Kickstarter backers could easily demand a greater return for their combined capital contribution,” Colless says.   Greater return ideas could include more significant discounts to a tiny pool of equity set aside for early backers to reward them for support.

Affordable online services for startups

4:14AM | Tuesday, 1 April

Australian start-ups are turning to cheap online services in growing numbers to run their business. Here are eight popular services that save time and money.   1. Fiverr.com   All the services listed on fiverr.com set you back just $5, and include everything from graphic design, online marketing, video and animation and business card design.   This site is hugely popular among Australian business owners, who are prepared to risk a few bucks to see what they can get done at such a low price.   Digital marketing and self-publishing speaker and author Pam Brossman has used the service for transcribing, editing, formatting, book covers, video editing, voice overs, video intros and more and has been happy with the outcome.   “Many entrepreneurs have acquired their full-time contractors from using fiverr.com services. They test their work, turnaround time and professionalism by giving them a $5 job, and then if they deliver exceptional service, they hire them,” Brossman says.   “I really like this service because it’s like a resume of experts out there showcasing their wares.”   2. Hiring a virtual assistant   Hiring a virtual assistant for jobs like updating Instagram eight times a day has been a really cheap and effective outsourcing technique for the founder of fashion and beauty brand Cherry Blooms, Jellaine Ross.   She’s used oDesk and Elance to track down virtual assistants for times when no one was in the office, enabling the business to virtually trade around the clock. There are also a range of virtual assistant websites to help you track down the best person for the job, including virtualcoworker or virtualassistants.com   “You can’t get rich doing minor tasks, and you need a lot of mental power and energy to have a successful business, so I recommend delegating as much as you can to virtual assistants or interns and to be very precious about your energy. Good enough is better than not done when it comes to small tasks,” Ross says.   3. Salmat MicroSourcing   Renovator Store founder and MD Scott Pendlebury talks constantly to his Manila-based web developer and customer service manager from his Victorian headquarters via Skype.   Outsourcing these jobs to people based overseas has saved Pendlebury about 70 per cent of the cost of employing the equivalent people in Australia, enabling him to commit more cash to sales and promotion. Salmat MicroSourcing helped him find the right talent for the job.   “I think there’s a perception that offshoring is about cutting Australian jobs, but really, it’s a great way for small business to start playing in the same space as the big end of town,” Pendlebury says.   Renovator Store is one of about 80 Australian SMEs using the offshore services of Philippines-based Salmat MicroSourcing.   4. Cloud technology   A cloud solution can make a huge difference to the effectiveness of your business, and most cost next to nothing. In basic terms, the cloud refers to the ability to access your applications, information and data over the internet via a third-party provider, which means you don’t have the store this information yourself.   Business consultant and publisher of The Big Smoke, Alexandra Tselios, researched individual features, capability and simplicity before opting for DropBox.   “This service allows my team to remotely access our files and ensure that all employees work on the most current document at any one time. It also allows us to share resources without the traditional barriers of time zones or convoluted filing systems getting in the way of service delivery and operations,” Tselios says.   5. PicMonkey   The ability to customise images for social media or to use on your website can be a huge plus for business owners.   The founder of My Kitchen Garden, Alice Faeth, has turned to PicMonkey to create branded images for social media and website graphics, which is completely free. Some of these images have been widely shared on her Facebook page.   Creating these images herself saves a lot, particularly given a graphic designers costs around $120 an hour, which was beyond her budget for jobs like this.   “I still use professionals for material I want to get printed, but I really like being self-sufficient for social media images, especially when you want to capture an idea quickly.   “You can also play around with images and designs without wasting valuable time and money trying to get the right look,” Faeth says.   6. 15five.com   This cloud-based weekly team reporting app has revolutionised internal communications for online wine retailer Vinomofo.com, according to CEO and co-founder, Andre Eikmeier.   The app allows him to create questions for his team each week, which each staffer fills in, allowing him to read and respond.   Eikmeier goes through this process every Monday, which takes just 15 minutes.   “We use it partly to see how people are going in their roles, and partly to understand how they’re feeling generally and to see if there are any issues or obstacles.   “It means little things are getting bought to my attention every week, often before they escalate, and I can action them,” Eikmeier says.   7. Freelancer.com and elance.com   This is a staple site used by many small business owners, particularly to track down freelancers for website development, design jobs, content writing, research and lead generation and sales and marketing, with more than 600 job categories.   According to freelancer.com, Australians are awarding their projects to professionals in India, Pakistan, Bangladesh, the US, Vietnam, the Philippines, as well as to fellow Australians.   Another great way to track down appropriately experienced freelancers at reasonable rates is via elance, which Business in Heels CEO Jac Bowie relies on for design and programming.   It also appeals because the site also allows for feedback and escrow payments, she says. It’s also worth checking out 99 Designs and DesignCrowd for logo design.   8. Odesk   Having access to a virtual team able to complete tasks in various time differences was a big bonus for Emilia Rossi, co-founder of fashion jewellery store emiliarossi.com.au and second hand wedding classifieds site, capriess.com.au.   Being able to work with a virtual team of graphic designers, web designers, social media experts has been a huge bonus, Rossi says.   “I’ve trialled and tested these services, and know it works,” she says.   A word of advice   While often very cost effective, avoid wasting money on these sorts of sites by following a few rules.   The founder of management advisory business, BRS, Nicole Williams minimises her risk when outsourcing in a number of ways. Firstly, avoid language issues by only giving jobs that require a good grasp of English to people whose first language is English. “Also, I would never outsource anything of high value or importance. There’s always a risk when you outsource anything, and typically you get what you pay for, so your expectations need to be realistic,” she says.   Williams says some freelancers have been fabulous for the first few jobs, but then over time, become less reliable and take a long time to provide what she needs, or don’t respond.   She also admits that she finds long-term relationships much harder to find on these outsourcing websites.   “Make sure you keep track of what software and technology your freelancers have access to, so that if jobs go pear-shaped, you can easily change passwords, so that your content isn’t compromised.”

Cybersecurity: Time to think like a fox to fend off the hedgehogs

3:26AM | Monday, 31 March

A report into cybercrime and stolen data has highlighted the risks for online companies saying that “the ability to stage cyber-attacks will likely outpace the ability to defend against them”.   The Markets for Cybercrime Tools and Stolen Data report says  “attackers can be hedgehogs (they only need to know one attack method, but do it well) while defenders must be foxes (they need to know everything; not just technical knowledge, but knowledge of networking, software, law enforcement, psychology, etc)”.   It also says big companies will be able to secure themselves and follow new Payment Card Industry Guidelines (e.g. use of chip and PIN systems), "but smaller retailers will be hurt because they may not be able to keep up with these new security requirements imposed on them”.   Drew Sing, platform engineer for Bugcrowd – an Australian startup that offers bounties on behalf of companies to discover website vulnerabilities – says attackers can be beaten by fighting fire with fire – the good guys who think like bad guys.   “By incentivizing security researchers to responsibly disclose vulnerabilities through bug bounty programs, it allows them to utilize their specialized testing skills sets (the "hedgehogs") to help make a company more secure,” Sing says.   “This helps level the playing field against malicious attackers, and has been a successful strategy utilized by companies such as Facebook, Google, and Github.”   The approach has worked for Bugcrowd, which was referenced as a successful example of preventing cyber-attacks at least three times in the cybersecurity report.   Sing acknowledges that smaller companies sometimes don't have the resources to pay bounties, but says that by setting up a responsible disclosure policy, they can still benefit from the knowledge of security researchers without having to provide a sum of money.   “A disclosure policy provides a scope of what can be tested, and gives researchers permission to submit vulnerability information to your company without the fear of legal action,” he says.   It's important to remember security researchers want to help companies, but often aren't offered a simple way to communicate this information.   This necessity was highlighted when 16-year-old Joshua Rogers, a self-described white-hat hacker, found a security hole in the Public Transport Victoria website and reported it to the site.   Rogers hacked the site using an unspecified hacking technique to access a database that held personal data including full names, addresses, home and mobile phone numbers, email addresses, dates of birth, seniors' card ID numbers, and nine-digit credit card extracts of customers of the Metlink public transport online store.   The site didn't respond, so Rogers reported it to the media, who in turn contacted PTV, who in response reported Rogers to the police.   The increased risk to businesses has also seen growth in the cybercrime insurance industry, with Allianz today launching a cybercrime insurance product and saying that cybercrime costs the Australian economy over $1 billion annually.   According to its research, Allianz says cybercrime moved into the top five risks faced by Australian business in 2014.   The new Cyber Protect insurance product will cover up to $50 million to enable businesses to protect themselves against cyber criminals and data loss.   Insurance expert Allan Manning says cybercrime insurance had been around for a while now, but the Allianz announcement was evidence this was an increasing trend with the cybercrime insurance now a billion dollar industry.   “In the future it will be a standard insurance policy that most companies take out,” Manning says. He mentioned that some policies cover bounty payments for people to find vulnerabilities.   Manning says the costs of the cybercrime insurance were not really prohibitive. He took out a policy for his own business which cost around $3000 for coverage between $300,000 and $500,000.   The Australian and New Zealand Institute of Insurance and Finance will release a report comparing the different cyber insurance policies later this year.

Vend’s founder reveals how he scored $22 million from Valar Ventures and Square Peg Capital

3:07AM | Wednesday, 26 March

Point-of-sale software provider Vend today announced an additional $22 million in capital funding led by PayPal co-founder and the first outside investor in Facebook, Peter Thiel of Valar Ventures, and Square Peg Capital.   Vaughan Rowsell, founder and chief executive of Vend, told SmartCompany the software provider will use the new funds to expand its presence in the North American market through new partnerships, resellers, staff and customers across the continent.   “We are in high growth mode and now is the time to really put the foot on the accelerator and continue our growth,” Rowsell says.   “It really enables us to grow our channel, working with point-of-sale retailers in Australia and through channels like Apple, Zero and PayPal.”   Launched in late 2010 in New Zealand, Vend now has offices in Australia and the United States and turned over $5 million last year.   The operating system is used in over 10,000 stores in more than 100 countries but Rowsell has his sights set for further growth using the investment.   “It also allows us to grow our headcount to 20 or so people on the ground in Australia, which allows us to work with much larger accounts,” he says.   Rowsell says Vend was able to secure the funding from Valar Ventures and Square Peg Capital after establishing a relationship with Thiel.   “We’ve been a part of the San Francisco scene for the last three years, we’ve had an office there and I’ve spent a lot of time in the Valley and it is one of the amazing things about that place that everyone is so connected,” he says.   “We’ve been looking for the opportunity to work closely with [Valar Ventures] as they bring a whole lot of expertise in terms of understanding the payments space and helping us unlock the US market.”   Rowsell says the size of Vend’s private capital raising “really validates the big shift in businesses moving to the cloud”.   He claims there is a “resurgence” of independent retailers who have become more competitive against big chain stores by adopting cloud-based point-of-sale software.   “Cloud-based retail in Australia is now going much more mainstream,” Rowsell says.   Vend raised $NZ8 million ($A7.5m) in May 2013, and $NZ3 million between its  first two capital rounds in 2011 and 2012.   This article first appeared on SmartCompany.

Disrupting market research with a crowd gathered from Facebook

3:13AM | Tuesday, 25 March

The idea for Daniel Martin’s second startup emerged from the conversations he kept having with the clients of his first startup.   He watched clients of his social media startup Aston Social struggle to get quality feedback without the investment of cash and time in professional market research companies. And he watched clients coordinate unwieldy social media call outs for feedback.   “I started checking out the market research industry and how it was done,” Martin told StartupSmart. “I realised there was a business opportunity to cut out the research agency and I guess lift the veil.”   After developing his software for 10 months, Martin launched AnswerCrowd in December 2013.   The software-as-a-service platform lets businesses target their questions to particular demographics, locations and numbers. Once the business pays, the questions are sent out to AnswerCrowd’s community of over 7000 Australians.   “We kept it really simple, there are only two clicks to respond and it’s available on every platform so answers come in really fast, and the businesses can see them straight away,” Martin says.   AnswerCrowd will live or die by the quality of the crowd and the feedback its members provide. The critical mass of the first few thousand was recruited via a broad Facebook advertising campaign.   “We thought we’d have to advertise specifically to particular demographics to balance out the crowd, but we haven’t so far,” Martin says. “It’s skewed ever so slightly to women, who make up 53% of the crowd. And the geographical breakdown matches the population spread.”   The crowd is incentivised to answer the questions with each answer being worth a cash value the respondents can claim.   “We thought initially that we would absolutely need the money to keep people engaged, but that’s almost become secondary,” Martin says. “We’ve been impressed by how much people want to be involved in making the products and services they use better.”   The AnswerCrowd team of four are now working with clients from Bunnings to Ganache chocolates.   In late 2013, AnswerCrowd took on $400,000 in capital from an individual investor. Prior to the launch, Martin intended to bootstrap the startup.   “Originally I had no intention of taking funds. I wanted to grow it organically but decided the opportunity was too great to sit on my hands so I decided we should get a fund injection.”   The funds will go towards developing the sales and marketing team to bring on new clients.   They’re also hoping to grow the crowd to 200,000 by the end of the year, but are holding back from growing it immediately to ensure the diversity and comprehensive nature of their current cohort.   “We could double that in four weeks if we needed to but we don’t want to yet as we’ve got a decent cross-section of Australia at the moment so there is little need to grow that at the moment,” Martin says.

Five Quora answers every startup founder should read

3:54AM | Monday, 24 March

Quora is a treasure trove of great advice for entrepreneurs. The Q and A site can be a terrific resource for your own questions, but its real value lies in the expertise thousands of existing answers.   Here are some of the top Quora answers every founder should read.   Q: How do you size up opportunity cost when deciding to start a startup?   Drew Houston, Dropbox cofounder/CEO:   There’s a full post, but here’s the highlights:   A: Rhetoric aside, most successful entrepreneurs I'm aware of either explored their idea and market carefully, or have toyed with a side project that happened to show massive and unexpected early promise and only then evolved formally into a company (Facebook, Google and many others fall into this category). Few were truly "leaps of faith – entrepreneurs tend not to seek out risk but are rather comfortable with uncertainty.   Dropbox got started in my spare time while working at another startup (be careful about properly separating intellectual property and such). My excitement grew quickly as I validated the idea with real people; jumping ship before that would have been unnecessarily reckless.   But it is possible to hedge your bets too much. The Facebook Effect (2010 book) amusingly recounts how Sean Parker begged Mark Zuckerberg to stop working on Wirehog (file sharing concept) as Zuck still wasn't sure this Facebook thing (even then one of the fastest growing websites on the planet) was going to pan out.   Q: What is the perfect startup team?   Bill Gross, CEO of Idealab:   A: The perfect startup needs a complementary team:   It needs a passionate and driven visionary who is the product person.   It needs a capable execution skill that can deliver the product or service against that vision.   It needs the people skills to make sure that the best staff are recruited and retained, and so that conflict in the company is resolved.   It needs administrative skill to make sure as the company grows the wheels stay on. (This skill can come a bit later – it’s not needed on day one.)   These skills do not need to be present in four distinct people, but most often it takes at least two, and usually three or four to lead these areas.   Q: What separates the top 10% of startup CEOs from the rest?   Robert Scoble, Rackspace   There’s a full list, but here is the first:   A: Good at hiring and firing. Whenever you find a really great CEO, you find someone who has a knack for hiring. That means selling other people on your dream or your business, especially when it doesn't seem all that important or seems very risky. I used to work for a CEO who was awesome at hiring, but couldn't fire anyone. It doomed the business. Many of the best CEOs get others to follow no matter what.   Q: What are the early symptoms that a startup is going to fail?   William Petri, serial entrepreneur There’s a full list of 10 great reasons, but here’s the first:   A: No demonstrated user need. For example, consider 3D movies and TV. If you ask people why they sometimes prefer stage to screen, nobody ever says, "Oh, movies are only 2D". 3D tech has novelty value, but even a little user testing would show its pushers that most people are perfectly happy to go back to 2D movies after experiencing 3D, and that many actively avoid 3D. That wasn't the case when sound or colour or fancier special effects were added.   Q: What is the proper definition of a startup?   Dave McClue, Tech investor   A 'startup' is a company that is confused about:   1. What its product is.   2. Who its customers are.   3. How to make money.   As soon as it figures out all three things, it ceases being a startup and becomes a real business.   Except most times, that doesn't happen.

“Don’t leave us”: Mark Carnegie launches second pitching comp to keep Australian startups here

3:52PM | Sunday, 23 March

Venture capitalist Mark Carnegie will host a second live pitching event for 10 startups and a host of investors in early May in a bid to connect local startup talent to the capital they need to stay in the country.   After last week’s public conversations about Australia’s startup funding, Carnegie told StartupSmart he was bringing together investors for a pitch evening to try and get bigger cheques going to young companies who may otherwise have to head overseas.   “We know companies hit a funding wall,” Carnegie says. “For a whole lot of companies it’s a not a problem because they get funded in the US, but I reckon it’s a huge issue for Australia because most of our promising companies move offshore to get the funding they need.”   The event will put 10 startups in front of a room of private investors and funds.   Carnegie and Co investment consultant Zachary Midalia told StartupSmart they’re looking for the next “gazelle” company, as defined by a McKinsey Global Institute report.   Defined as a high-growth company increasing its revenue by more than 20% each year for four years, the report found there about 8,000 such companies worldwide with just over 2% (180 companies) in Australia   Carnegie and Co have put no restrictions on the industries startups are operating in.   “The next massive startup idea is going to come out of left field,” Carnegie says. “The fact is eBay started with people selling beanie babies and Facebook started as a rich person’s MySpace. So we are not going to say we’re predisposed to anything.”   Two startups were crowned at the last Carnegie’s Den pitching event, one by the people’s choice and one by the judging panel.   Online cattle trading platform Cloudherd got the judges nod, while farmer to chef connection platform Food Orbit took out the People’s Choice.   Carnegie says the judges picked CloudHerd because it would bring significant efficiencies to a large addressable market that was mired in industry inertia.   Applications for the next Carnegie’s Den close on March 28.

Social media and the law: Starting your business on Facebook does not exempt you from the law

3:57AM | Friday, 21 March

Facebook is a great, inexpensive way to test interest for your startup idea and to informally promote your business. But just because you are starting your business on Facebook does not mean you are exempt from legal or regulatory requirements.   The law still applies   You still need to comply with Australian regulations even if you start your business through social media.   Just because you are starting your business on Facebook, other social media or even setting up a shop via one of the large online shops, does not mean you don’t need to comply with the Australian regulations, including consumer law.   You not only need to ensure you comply with your chosen social media channel’s own terms of use for your ad and promotional campaigns but also all the Australian rules, regulations, industry codes and standards relating to advertising, privacy and all things consumer law related.   Otherwise you may be fined or without a business at all. Last year, Bendon did a promotion encouraging people to upload photos of themselves and their best friends (in Bendon lingerie) to win a prize on Facebook. This was quickly shut down by Facebook and considered a breach of ethical code.   There is no special or specific law yet relating to social media in Australia. Despite this, it is covered by general consumer law, rules, regulations and contained in advertising and industry codes and we are beginning to see cases in court which will form the precedents for new regulations.   Social media terms and conditions protect them not you   Social networking sites like Facebook, LinkedIn and Twitter are increasingly being recognised as legitimate marketing tools. All the social networking sites along with the large shopping e-commerce platforms such as Etsy, Big Commerce and Amazon all have terms and conditions-but they protect them and not you.   And if you read the terms carefully, you will see that you are actually indemnifying them for any claims, litigation or issues that an individual may have with any content associated on your account site. This is true even if you didn’t put it there yourself.   Did you know Facebook owns your customer list?   Facebook is a great way to start a business and access a large customer base. But did you know Facebook owns your customer list? They can close your Facebook page at any time without notice and overnight and your business is gone. They don’t need a reason. This is one reason why you should consider setting up a website ASAP with your goods and services and reading their terms of service.   Minimize your risk   You are responsible for all content on your website and social media accounts.   Don’t make ‘over-statements’ or claims on your Facebook or other social media pages that you wouldn’t make in any other type of advertising. Monitor your social media pages and remove any posts or advertisements that may be false, misleading or deceptive as soon as you become aware of them. This is what the ACCC would expect you to do with any other type of advertisement and they expect it on social media as well.   And don’t allow others to make misleading claims or defamatory comments on your website or social media. You are responsible for posts or public comments others make on your social media pages also.   You should establish clear ‘house rules’ that apply to the actions of your fans, friends and followers when using your social media pages. These rules should be prominent on your social media pages. You then need to block users who breach those rules.   There are no specific or different consumer laws or rules in place for social media. Consumer protection laws which prohibit businesses from making false, misleading or deceptive claims about their products or services have been in place for decades. These laws apply to social media in the same way they apply to any other marketing or sales channel.

Get started on a new business with this one day action plan

3:11AM | Tuesday, 25 March

This is an action plan to get a new business started. As long as it stays is in your mind and not in the world, your business will stay a dream. You will never know if it could have been real. So let’s begin.   Starting a new business is huge and the fear of this can be a common block to getting started. I hope that this post provides some practical steps you can perform and smash through.   Breaking it down into stages makes this process less painful. Your only commitment is to get through this stage. As time goes by, the stages get more complex and take longer to complete, but this first stage can be done fast. We’ll give ourselves one day for this stage. Our goal is validate the core idea. We want to check that you are not the only person that that loves this opportunity. Will other people love it too and pay you for it?   While a business is just an idea in your head it is in the riskiest state it will ever be in. Nothing is proven and every detail could be a reason it will fail. In this single day, we will remove some of those risks. Every small proof of value will help you (and others) take bigger and bigger steps towards making the business real.   Things not to do when you have an idea Keep it a secret. Write a patent application Trademark your logo Do a three-year financial projection Do market sizing   These are all a waste of time until you have tried your idea against a real customer.   You don’t need external capital yet, you don’t need a cofounder. You don’t even need to quit your job. But you must start. Today.   Pick a day   Put a day in your calendar and call it “start business”. Make sure you have no distractions and no excuses. When the day comes, commit to getting everything in this post done. Tell you friends that you are going to do it and that you may be calling on them for feedback. It’s like giving up smoking: A bit of peer pressure will go a long way.   When the day begins, here’s what you’re going to do:   Understand: Create a one page business plan using a lean canvas Experiment: Ship something and put it in front of at least one customer Dream: Know where you are heading with a news story from the future   These tasks set the tone for how you will continue.   Startups become successful by learning faster than their competition. We are learning how to make something that customers will value. We do this by:   Building something Measuring what people do with it Learning from what we see Repeat   We are going to do all of these things in just one day.   Ready? Let the day begin.   Understand: Create a one page business plan using a lean canvas   We use a lean canvas to describe our business plan. Everything is on a single page. Use our online version here or print off this one and scribble. Quickly complete a first draft. Complete every cell. A business that can’t complete every cell has a weakness. Don’t over think. Execute!   Problem: what is the problem your business will solve? e.g. tourism can be generic and boring Customer: who has this problem the most? e.g. students in a gap year Unique Value Proposition: how will you describe the business so that it stands out to customers? e.g. unique travel plans just for you so that you can see the world through new eyes and support a developing market Solution: clear explanation of product functionality e.g. personality survey > local commissioned to build itinerary >  mobile application with daily suggestions custom for you Channels: where will you reach the customers? e.g. Facebook campaigns targeting people at university with viral travel personality quiz Revenue: what do you want to charge each sale? e.g. $50 per itinerary Costs: What will each sale cost you? e.g. $30 to local itinerary builder Metrics: what will you measure to show a sustainable business emerging? e.g. Conversion % from quiz to sale Unfair Advantage: what can you manufacture today that will give you an unfair advantage against competition? e.g. partnership with freelancer.com to reach the local itinerary builders at scale. Review. Does it make sense? Does the relationship between what you have written in each cell make sense?   Now go and share the business plan with somebody. Anybody you like. Walk them through your lean canvas in order. Ask them if they understand it and if it feels valuable. Note, this is a fairly weak validation, but saying it out loud helps make sense of it in your own mind.   This is your first version of the product. You have your hypothesis. Feel free to make a few lean canvases until you find something your are happy with but don’t over think it. There is practically nothing that you know (i.e. you need to prove for it to be known) about this business so you just need this good enough to go to the next task.   Now, we start validating.   Experiment: Ship something and put it in front of at least one customer   The temptation is to delay this stage but it is vital that you don’t. Most people do. Don’t be one of them. Take the plunge. Build something that customers can interact with to start validating your assumptions. Right now we are just going to validate the unique value proposition off your lean canvas.   Here’s my design.   The experiment begins with the simple hypothesis that the value proposition is something that customers would agree is valuable. I am going to build an experience online as quickly as I can that will get a potential customer to engage with the value prop. Note that I am not asking them an opinion in a survey. I am trying to motivate them to do something. I am going to use the 'Wizard of Oz' technique and off-the-shelf tools to build something that we can watch customers use and learn from.   Remember. Build > Measure > Learn.   In The Wizard of Oz, we discover that the great and powerful Oz is, in fact, an old man behind a curtain controlling a puppet. A ‘humbug’, as Dorothy would say. But this did not stop the citizens of Oz thinking he was a wizard with magical powers. The illusion was enough.   Inspired by this, I am going to make a puppet version of your product idea. Most business ideas can be tested in this way, they just need lots of manual work behind the scenes to give the illusion of the amazing product you are imagining. The full business could never work this way because it wouldn’t scale. But why build all that stuff if no one wants it?   For this startup, I am going to use three tools so I don’t need to do any coding.   Strikingly for content and main website. Strikingly makes it very simple to make a gorgeous website in minutes that works on mobile and big screen. All I need to do is figure out what I want to say and what the call to action is. I describe the value proposition and ask the user to take the free travel personality quiz.   Typeform for my forms. The link in the page goes to a form I made on Typeform. This site allows me to create lovely web forms that feel like a full-on web application. I use it to create my travel personality quiz. When forms are submitted, Typeform sends an email thanking the user for taking the quiz and inform them that they will get a suggestion of something to try in the next 24 hours. This I will do manually. The manual email that comes then upsells them to a full package for $50.   Facebook for my marketing. I then start the ball rolling by posting onto Facebook that I have just taken a travel personality quiz with a photo of something unique and extra-ordinary of something I am going to try. This links through to the Strikingly site so that others can validate the idea.   I can modify my experiment easily and use the analytics baked into Typeform and Strikingly to see how people are converting through the experience.   Not every business is the same and yours may not be able to use these tools as simply as I did. There are a bunch of other tools you can use for your startup. Here’s some we collected. Mix and match what you need to create the illusion that you want.   Build. Measure. Learn. I have built my experiment and now I leave it in the field to measure what potential customers do. It is possible to get sales on the same day you build something like this. Push yourself to do it. It’s quite a thrill and gets you focussed on building a BUSINESS on the first day.   If you don’t believe your idea can be validated this way, leave me a comment and I will try to help.   The experiment above is inspired by a real business in the Pollenizer incubator right now called GlobeHop. Go and check out what they are doing and help them to validate their business.   Dream: Know where you are heading with a news story from the future   While your experiment is out there, let’s make sure it is worth all the pain and hard work through clarity on the dream. When this business is really kicking, what will it look like? I like to create a story by imagining a news story that the world will read in the New York Times in 3 years from now.   I like to do this because it strikes the balance between running experiments that keep it real and keep the business moving forward in small steps while also heading towards a vision that can create a big impact. We’r enot trying to make a small family business here. We’re trying to build something huge.   If you have a great idea but you are blocked, I hope you will give this a try.   Phil is the CEO of Pollenizer. He works with startups and corporates all over the world to bring Pollenizer's startup science to their practice. He has co-founded a great many companies. In former lives, Phil has been the CTO of Kazaa and a theatre director.   This article first appeared on Pollenizer.

THE NEWS WRAP: Chinese online retail giant prepares for massive US float

3:25PM | Monday, 17 March

Chinese online retail giant Alibaba is set to file for an IPO in the US as soon as April, after the company ruled out a listing in either Hong Kong or London, with the company set to raise $US10 billion in the industry’s largest listing since Facebook.   Despite a loss of market share, the company’s Taobao platform is estimated to account for a massive 90% of all consumer-to-consumer transactions in China.   “This will make us a more global company and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals,” the company states.   Newspapers, magazines and radio lose advertising share   Australian newspapers, radio stations and magazines all saw their share of the advertising market fall during February, according to the latest Standard Media Index figures.   Overall, $521.3 million of ads were booked across all advertising forms during February, down $7.9 million from a year earlier, although the total figure is expected to be revised upwards once online display and search ad revenues are confirmed.   While television advertising rose 4% year-on-year to $257 million, there was a 3.5% year-on-year fall in radio advertising, a 15.2% drop in magazine ads and newspaper advertising collapsed by 22.4%.   New car sales up in January   Australians purchased a seasonally adjusted total of 93,000 motor vehicles during February, with the figure down 3.5% year-on-year but up 0.1% from a month earlier, according to new figures from the Bureau of Statistics.   Sales of sports utility vehicles (SUVs) fell 0.3% month-on-month to 27,261, while sales of ‘other’ vehicles fell by 1% to 18,890.   Meanwhile, passenger vehicle sales, including sedans, hatchbacks and wagons grew by 0.8% to 46,648 cars.   Overnight   The Dow Jones Industrial Average is up to 16247.2. The Aussie dollar is up to US90.93 cents.

Everyone wants a technical cofounder: Here’s what drives them away

3:36AM | Tuesday, 18 March

Finding a technical cofounder is one of the biggest issues in the startup community, where the number of developers can’t match those with the next big idea. But the constant deluge of pitches is fatiguing developers who are more often than not either working on their own thing, or stretched with current projects.   Web Directions founder John Allsop told StartupSmart any technical cofounder worth engaging should be sceptical of an entrepreneur at first.   “Anyone who is technically proficient enough to be a cofounder will have learned a lot of lessons,” he says. “Tech cofounders are not just your own coder, they’re going to need to be involved in hiring and growing teams.”   According to Allsop, the quickest way to make a potential tech cofounder bolt is to approach them claiming to have the next Facebook, which just needs a developer and with no mention of funding.   “It just shows no respect,” Allsop says. “There is a concern expressed generally by technical folk that non-technical folk are looking to get cheap labour. It’s not always true, but it does set off alarm bells. I do think it’s getting worse in the tech start-up bubble environment.”   The recent explosion of tech start-ups has created a developer’s market.   Pat Allen, coordinator of Melbourne’s Ruby on Rails meet-up, told StartupSmart no talented developer is without well-paying options so non-tech cofounders need to compete.   “We want to know what makes you so good we should go with you. It’s hard to communicate credentials across skill sets but you both need to know what you bring to the table.”   Wanting to address the issue, Startup Victoria is coordinating Co-founder Connect, a monthly event to bring aspiring tech and non-tech entrepreneurs together that will launch on Wednesday, April 2 at Melbourne coworking space Inspire9.   Event coordinator Scott Handsaker told StartupSmart the Melbourne startup community had almost doubled the number of non-tech founders to tech founders.   “It’s incredibly hard to find a tech cofounder. I reckon it is a billion dollar problem as it’s almost the biggest pain point in any ecosystem all over the world.”   Handsaker says aspiring startup founders should expect a 12 month timeframe for their hunt to find the perfect partner.   “Make sure you spend a few months on a side project. If you haven’t killed each by the end of that, maybe you’ll make good cofounders.”

Two things I’ve learned working in a rapidly scaling tech start-up in the US

3:10AM | Friday, 14 March

Canberra-born Jack Aldridge has been working with United States-based enterprise uShip since it was a start-up and says he’s learned a lot as the company has taken off.   This week, uShip signed a deal with eBay to be their preferred freight shipping solution.   Dean Xeros, the vice-president who spearheaded the partnership negotiations, told StartupSmart they expect the partnership to have a significant impact on their bottom line.   “The challenge for us was crystallizing the value proposition for eBay,” Xeros says. “Items that aren’t easily shippable make up a very small percentage of units sold through eBay, but the selling price is much higher. Given eBay’s fee structure, once we could show that it became the catalyst to the agreement.”   Aldridge spoke to StartupSmart from the US about the two things he’s learned so far.   Love the vision, not the details   Aldridge says uShip’s goal from day one has been to make transportation more efficient and transparent. It’s taught him to hold tightly to the vision but loosely on how you get there.   “That premise holds true, but the dirty details of getting there have literally been all over the map. In other words, what you think you know as a strategy you’ll inevitably discover is wrong,” Aldridge says. “The vision and path toward efficiency hasn’t changed in 10 years but the details have.”   Constantly try putting yourself out of business   Facebook may have pioneered the public understanding of “move fast and break things” as a company mantra, but Aldridge says it works for most start-ups.   “If it’s not broken, break it – because someone else will or is trying.  We are constantly testing and innovating, attempting to improve what we’ve built, even testing our most basic assumptions about product details, usage and metrics,” says Aldridge, adding one of their core values was never stand still.

Stanford start-up tutors share the top five myths about scaling tech start-ups

3:35PM | Tuesday, 11 March

By definition, every start-up plans to get global sooner or later. But scaling a business poorly is one of the fastest ways to kill it, according to two Stanford lecturers.   Robert Sutton and Huggy Rao have recently released Scaling up Excellence, which explores how companies from tech superstars to fast food chains have grown and gotten stronger.   “Start-ups need to start thinking about scaling a lot earlier than they do,” Sutton says, who adds you don’t need to a perfect organisation to scale well.   “A lot of times when people think of scaling up, they think they’re going to focus on the great stuff and spread it. But when you look at organisations that have nailed scaling, they’ve gone from bad to great.”   Sutton spoke to StartupSmart from San Francisco about the five biggest myths about scaling and how to overcome them.   Myth 1: Scaling is all rapid growth through fast decisions   While the scaling story of tech superstars Twitter, Google and Facebook can make it sound like every decision was instant and the implementation took only a tiny bit lower, Sutton says all scaling companies slow down to take the time they need to make the decisions where it matters.   “In every case we’ve looked at, including those three, this notion they rushed all the time is just not true. From Google to even Starbucks, all successful global companies go slow sometimes.”   A key time to focus on results rather than execution time is hiring staff.   “From the very beginning, Google was always very picky about hiring. They only hired very technically skilled who also had the leadership skills to grow with the company no matter how badly they needed a warm body in that chair,” Sutton says.   He adds founders shouldn’t shy away from the arrogance these decisions and the corresponding belief the company could become massive requires.   Myth 2: Conflict will kill a company   As companies grow, arguments are inevitable as teams choose what to focus on. Sutton says learning how to argue well is a critical skill for a scaling company.   “To make the best decisions, you need to be clear on how you argue and when you stop arguing. Good teams can have blazing arguments and then move on.”   Sutton says part of the success of many tech superpowers has come down to having founders, and later managers and executives, who are willing to model vigorous arguments followed by a resolution all commit too.   “Firefox’s John Lilly (chief executive 2008 to 2010) oversaw the company’s growth from 12 to 500,” Sutton says. “He told me he started realising at about 80 people that people had begun to act as though they were afraid of their boss. So he just started having arguments with his immediate team whenever he could. He’d be right or wrong but would always end respectfully and move on.”   Sutton says making sure everyone shares an understanding of what medium-term success looks like makes it easier to resolve disagreements and unites a team.   Myth 3: Scaling means building the team as quickly as possible   According to Sutton, one of the most dangerous myths about start-ups is the belief bigger is better when it comes to teams.   “The notion that scaling mandates adding more people is a myth. There is lots of evidence that when you bring on board the wrong people too quickly, it’s deadly.”   The pressure to build the team often comes from investors who are keen to see their money put to work.   “I can’t tell you how many times I’ve seen a start-up still in the product development stage kill itself by hiring sales staff before they’re ready. These guys need to sell, so they sell a product that’s not ready and it’s over,” he says.   Sutton says actions such as Israeli start-up Waze’s hiring freeze after raising $20 million should remind start-ups about the virtues of staying lean, as the company went on to be acquired by Google.   Myth 4: Our culture will suffer and we need to stay small   While cultural death by growth was the fate of Yahoo! and eBay (who later turned it around), Sutton says rapid growth won’t kill a start-up if they’re smart about it.   The key to a culture thriving, as well as smarter working, is to keep teams small.   “One of the mantras at Amazon is you shouldn’t have a team that can’t be fed by two pizzas,” Sutton says. “The difference between a five person team and say an 11 person team is huge. From battlefields to big corporates, all the evidence shows the maximum is seven before it dissolves into interpersonal contests and missed communications.”   Small teams organised in pods is an emerging trend in start-ups. Australian start-up 99designs has used a pod approach for over a year. Sutton adds that scaling can make deeper cultural issues more significant as the organisation widens and effective communications requires more effort.   “When you’re trying to scale an organisation and you have destructive behaviour or people, the first order of business is to nip that in the bud because otherwise it’s impossible to grow well.”   Myth 5: Bureaucracy and hierarchies should be shunned as they stifle innovation and productivity   One of the joys of start-ups is team flexibility. But start-ups need to implement some structure and processes if they want to become global companies.   “Staying entrepreneurial and easy to get things done is admirable, but there is a lot of evidence that shows companies need managers, hierarchy and processes,” Sutton says.   “There is a fine art of adding just enough process or bureaucracy so you can actually get all the work done. I think it’s admirable that entrepreneurs resist adding that stuff, but if you don’t it’ll turn into an unruly, out of control organisation.”   For early stage ventures, Sutton adds it’s essential to work out the leadership structure early or risk confused strategy direction and in-fighting.

On risk and competition: Why I’m launching a business in a crowded marketplace

3:31PM | Monday, 10 March

The issues of Qantas and Virgin might be hogging headlines at the top end of town, but Australian start-up Skybid is looking to shake things up further down the travel industry food chain.   The new platform, which allows consumers to bid for seats on flights, is set for take-off and Skybid founder Karis Confos says even though it is a crowded market, the platform would manage to differentiate itself from competitors.   She told StartupSmart the market for Australians seeking the best price on flights was already large enough for a new contender, and growing.   “The ability to bid for flights is so new, and I can see huge potential from both a growth and profit perspective,” Confos says.   Being first doesn’t guarantee a start-up’s success: Google wasn’t the first search engine and Facebook wasn’t the first social network.   Confos says she checked out her future competition closely and was encouraged by what she discovered.   “I looked at what was out there and thought I could do it better. We’re yet to find out if we’re right, but I feel like there are so many more opportunities that the businesses already in this space aren’t taking advantage of.”   While Confos says the social media potential for travel-focused companies is a largely untapped commercial advantage they’ll explore, her focus is on customer retention.   “Pay-to-bid models can be wearying for customers and there is a lot of scope to reward customers on these services more. It’s significantly easier to keep a customer than get a new one. They’re the core of your business, so it’s a small tragedy when one walks away,” she says.   The idea for Skybid has developed considerably for Confos, who says collaborating with others and discussing the idea with as many people as possible helped her shape an offering she’s confident in.   “At first I was more concerned about accessing flight data and supply, but realised through conversations that I should be focused on traffic and reach. Marketing is my main concern and challenge right now,” she says.   She adds critical feedback made her realise which answers she needed to know, and which weren’t critical at this stage.   Skybid is set to launch within the next month or two. Even if it fails, Confos says she’s never been more excited about a project.   “Even if it does fail completely, the experience will be so worth it. Don’t let something stop you if you’re gung-ho and committed to making it work.”

THE NEWS WRAP: ACCC blocks Macquarie Generation sale

3:26PM | Tuesday, 4 March

The Australian Competition and Consumer Commission has blocked a $1.5 billion takeover of New South Wales government-owned power generator Macquarie Generation by AGL, citing market concentration concerns.   “The proposed acquisition would result in the largest source of generation capacity in NSW being owned by one of the three largest retailers in NSW,” ACCC chairman Rod Sims says.   “With this acquisition the three largest retailers in NSW would own a combined share of up to 80% of electricity generation capacity.   “This is likely to raise barriers to entry and expansion for other electricity retailers in NSW and therefore reduce competition.”   Building approvals jump nearly 7% in January   Building approvals have jumped by nearly 7% seasonally adjusted during January, a faster rate than many economists had expected, according to new figures from the Australian Bureau of Statistics.   Approvals for detached houses were up by 8.3%, while apartments and other dwellings were up 4.6%.   In another piece of good news, the ABS figures also show Australia’s current account deficit shrank by 19% to $10.1 billion during the December quarter, with increasing exports and declining imports.   Facebook looks to purchase drone aircraft maker   Facebook is gearing up for another major takeover, with TechCrunch reporting the company is planning to launch a $60 million takeover of Titan Aerospace.   Titan manufactures solar-powered near-orbital drones that can fly for up to five years continuously, with the social media giant reportedly interested in the aircraft in a bid to bring affordable internet access to 5 billion people worldwide who still lack connectivity.   The project is set to compete against Google’s Project Loon R&D program, which aims to use hot air balloons to provide connectivity to remote areas.   Overnight   The Dow Jones Industrial Average is up to 16416.8. The Aussie dollar is up to US89.52 cents.

Tech Girl Movement launches to boost the number of women in tech

3:15AM | Tuesday, 4 March

An IT academic is calling for a coordinated strategy to boost the number of women in the technology industries, starting with girls in primary school.   Dr Jenine Beekhuyzen lectures in IT and is an Adjunct Research Fellow at Griffith University. In her current class, there are 13 men for every one woman.   “We all know it’s a problem. Tech now touches every aspect of our lives but we don’t have the diverse workforce we need to move it forward. There is no doubt we need more women,” Beekhuyzen told StartupSmart.   The lack of women in start-up accelerator programs has been noted for some years now. But there are a growing number of events targeted at women in tech.   “A lot of people are doing things but we need to launch a coordinated effort. We need to go big and bold and loud and make it clear it needs to be changed and we’re ready for it,” she says.   Two of the most frequently cited issues holding women back from tech careers are a lack of role models and confusion about what a tech career actually entails.     According to Beekhuyzen, the rise Yahoo! chief executive Marissa Meyer and Facebook chief of operations Sheryl Sandberg have been great for encouraging women, but Australia needs to do more to encourage girls of school age to explore tech.   The Tech Girl Movement will target girls aged between 10 and 16 with a series of in-school programs, workshops and resources.   It will also include a series of short chapter books to be launched this weekend. The Tech Girl Superheroes series was written to introduce technology and what it looks like to young female readers.   “I wanted to create archetypes about tech girls, such as the explorer, the daredevil, the sophisticate. It’s a bit like the Spice Girls of IT. Not everyone liked the Spice Girls but it works because you can relate to one,” Beekhuyzen says.   Beekhuyzen was today invited to meet with the Federal Minister for Education Christopher Pyne to discuss these issues and says she’s in this campaign for the long haul, even if it takes 20 years.   The government is aware of the lack of women in IT degrees and the broader IT skills shortage.   An ICT Workforce Study published in July 2013 by the Australian Workforce Productivity Agency noted the low numbers of women in ICT and recommended target support programs including a code of best practice and mentoring support.   While these strategies are targeted at retaining tech women, the report also notes programs such as these send the right message to prospective female employees.

How can I get traffic to my website cheaply?

3:31AM | Tuesday, 4 March

How can I traffic to my website cheaply? Is it all about advertising banners and buttons?   So you don’t have much money to spend, but you want to get some traffic to your website.   Sure, you are going to reinvest in your website after you rollout the first stage and make some money, but you need that first bump of cash to get you started.   Top three cheap ways to get traffic to your website are:   1. Google Adwords:   Here is where you are going to need to search for a $100 voucher for Adwords in Google. Find one, sign up and start paying for some traffic. This is going to give you traffic in one hour. It’s going to cost you but you will get traffic.  Cost benefit – This tactic is a sure way to get qualified traffic but if your niche is competitive it can cost you more money than a new customer is worth. Test it – What you want to do with this one is test it. Spend only a small amount of money and then find out what works. You will probably need to tweak your website or form a little and then you want to load up another $100 or so from your credit card and try again. You have to treat this business expense as part research and part marketing. The end outcome you want to achieve is a channel of traffic that is coming in and making you money day in day out. That way you can spend more time trying each of the cocktails on the drinks menu as your website keeps making you money.   2. Search Engine Optimisation:   SEO is a time consuming and slow build process in your business that can bring in serious traffic once you crack some big keyword rankings. Here are four quick wins:  Keywords – Ensure your website has the keywords you want to rank for in the content of your homepage and unique title tags for each page of your website. There are loads of other things you can do but if you just start with these two things it will help get you to that first 100 visits.  Get some listings – You need a few early win links to your site, some directories, a link from a friend and any other links you can scrounge up. List your business in an Australian directory as opposed to an American one. It gives you a better chance to get actual relevant traffic and will help you more with your rankings.  Add some new content – Add some new content to your website that is about topics in your niche. Spend $35 on some new articles with a writer from oDesk or Elance and build out your website.   3. Email:   Sending emails to people inviting them to your website for a high valuable reason is a great way to start. For example: All the daily deals websites at present work by sending people emails of the latest deal. The only way you can become one of those deals is by offering an insane price and offer that will cause you to lose money, otherwise the deals website will burn their list as it wasn’t a deal. You could try a daily deal site but its best to do some maths first to see if you can handle the volume. Here are some other ways to get email traffic:  Send an email to your peers – Collect up all your business cards and put them in a list, send an email announcing your new site and ask your colleagues for feedback on what they think of it. The sheer process of researching your site will imprint it in their minds and they might refer your site to someone else in need!  Write an article – Add a helpful article to a friend’s business eNewsletter and you will get a few residual visits from their site. Make sure you make your article 100% dedicated to their customers and just educate and inform. The keen visitors will come through.  Forward an email – If you find an email or some article that is helpful, forward it to someone who might use it. Ensure you have a call to action in your email signature and you might get some residual traffic if it’s forwarded on again.  Build a database – You will also want to be getting email subscribers from your website, so ensure you have a form on there. Offer a free guide or eBook if they sign up and you will probably get a better response.   Here are some of the other ways you can get traffic but you might want to consider them after you have around 100,000+ visitors.   Banner ads   – Banners are pricey and their click-through rates are low; around 0.1% yes that is 0.001! People do click on them. But you have to buy a lot of them. Top tips to try when starting with this:  Use cost per click – Buy your banners so you pay each time someone clicks, not by the number of impressions.  Pay per sale – If you can get a deal set up like this through the performance media channels of the different networks, try it!   Facebook ads   Everyone is on Facebook but they aren’t on it for the same reason as Google. On Google you are searching to find something and take action. On Facebook you are there to hang out with your friends. Use Facebook ads when you have a competition or timely campaign that is relevant and catchy. For example: If you are a charity and you are having a toga party to raise money, you might want to try Facebook ads and target young single males.  Test it – You can burn money FAST on Facebook but it’s again worth testing.  Basic metrics – Facebook’s advertising reports aren’t quite as sophisticated as Adwords, although you can still set up conversion metrics with it. It’s messy, but worthwhile.   Twitter, Viral, Facebook and that social stuff:   Social media and getting traffic from it is again a slow build. You need to build your profile and interact. Think of it like going into a new town, you want to meet people and become friends with them before you ask them over to your house for a BBQ. The best ways to do this are:  Help people – Be helpful. Helping others makes you a go-to person. The more helpful you are the more people like you and the more influential you will become.  Regular – Keep plugging away. Keep helping people. Short no talk stints are ways to get your tweets and status updates ignored. Be interesting – Boring tweets and links get ignored and you unfollowed.   Offline:   Don’t forget that people aren’t online all the time. People who come from offline media to your website needed to remember your URL and have made the effort to turn their computer on and go to your site. Market to offline media like: PR and magazines – A good story and bring in a solid amount of qualified traffic.   Leaflet drops – If you want local customers, just canvass everyone house in your local area. Eventually they will see your leaflet!   Signboards – If it’s cheap or free to put a sign somewhere, put up an ad, it’ll just tick away! Business cards – Put your domain name on there and a reason to go to your site. Get a free phone, free eBook or free video.   Events – Speaking at an event makes you authoritive, some people in the audience will really resonate with you and you need to put your website up so they can get more of you! What specifically you give them when they arrive needs to connect to what you were talking about otherwise you will lose them.

Opportunities abound in start-ups partnering with corporates, but beware the risks

3:54AM | Monday, 3 March

Partnering with a large corporate may appear attractive for start-ups, but a co-founder of Facebook marketing platform Tiger Pistol says there are important issues to consider.   Tiger Pistol recently partnered with National Australia Bank to help small businesses expand their brand online and establish online stores.   “There’s a number of them (large corporates) that are looking for opportunities to partner with more nimble partners,” Tiger Pistol co-founder and chief executive Steve Hibberd told StartupSmart.   “In our case it was the right timing and we were a natural fit for NAB’s strategy.”   But Hibberd warns there are risks for start-ups when partnering with corporates, such as trying to change direction and diverting staff’s core work to suit a large corporate’s needs.   He says the best way to attract the attention of a large company to partner is to have a clear plan.   “The thing that allows you to get the attention is when you’ve got a clear vision and plan for what you’re doing that the large corporate can understand.”   Hibberd says Tiger Pistol pitched what it was doing to NAB after the bank’s head of social media came across them. He says the bank decided the company fit their own strategy around small businesses.   “Our business is focused on helping micro and small businesses be successful,” he says, adding that Tiger Pistol was impressed with NAB’s strategy of stepping out of traditional banking and adding value for their customers.   Tiger Pistol creates Facebook marketing plans for small businesses by analysing what’s been successful in the past for other similar businesses and applying the results.

The eight biggest announcements from the 2014 Mobile World Congress

2:47AM | Friday, 28 February

This week in Barcelona, the GSMA – the peak global standards body for the mobile phone industry – is hosting its annual industry trade event, the Mobile World Congress.   The MWC is arguably the largest annual event in the telecommunications industry. It brings together carriers with mobile phone makers, equipment makers and app developers.   It’s where handset manufacturers make the big pitch to mobile carriers for the year ahead. A strong presentation can bring your products to the attention of mobile carriers the world over.   Perhaps more than the Consumer Electronics Show in January, the MWC is the big event where mobile phone makers unveil their new smartphones and other products for the year ahead.   This year’s event certainly hasn’t underwhelmed, with major announcements from some of the industry’s biggest players.   It’s time to take a look at eight of the biggest announcements from this year’s show:   1. Samsung Galaxy S5   Samsung is now easily the biggest handset maker in the industry. According to IDC, for the full year of 2013, it shipped a massive 313.9 million smartphones worldwide – that’s three out of every 10 smartphones shipped anywhere in the world.   Forget about Apple versus Samsung, it’s not even a race anymore at this point. Apple shipped 153.4 million units in 2013, meaning that for every handset Apple shipped, Samsung shipped more than two.   In fact, with the exception of the US and Japan, Apple is not even really competitive with Samsung anymore. That race was lost two years ago.   In addition to manufacturing smartphones, it also supplies itself with almost every component, from batteries and processors to cameras, memory chips and displays.   It is both the world’s second biggest chip builder, and the world’s second biggest ship builder.   So when Samsung unveils its main, flagship smartphone for the year, you better believe that everyone in the industry – from carriers to competitors – is watching very closely.   This year’s flagship, the Galaxy S5, was largely an incremental improvement on its predecessor, with the South Korean tech giant confirming speculation the new device is both dust-proof and waterproof.   Needless to say, both Telstra and Optus have already announced they’re carrying the new smartphone.   Aside from the Galaxy S5, Samsung shocked the industry when it snubbed Google for the latest version of its Galaxy Gear smartwatches. Instead of Android, the new devices will be powered by its own operating system, known as Tizen.   2. Microsoft’s Nokia X smartphones – powered by Android   For nearly two decades, Microsoft’s Windows operating system had battled an open source rival, known as Linux. While Linux has struggled to make inroads in the desktop PC market, it has emerged as the dominant operating system for servers.   Linux also forms the basis of Google Android, which competes head-to-head with Microsoft Windows Phone.   Meanwhile, in September last year, Microsoft bought the mobile assets of Nokia, along with a licence to use its patents, for $US7.2 billion.   In light of this, there was some scepticism when rumours first surfaced that Nokia was gearing up to release a series of smartphones powered by Android.   At MWC, Nokia confirmed the rumours by unveiling a new smartphone product line powered by Android called the Nokia X series. The new devices will come with Microsoft’s cloud-based apps and services pre-installed and won’t come with the Google Play app store.   Nonetheless, when Microsoft takes control of Nokia in April, it will be selling a consumer product based on Linux. Who would have thought it? 3. Facebook buys WhatsApp for $US16 billion   A week before the MWC, Facebook announced it is taking over mobile messaging service WhatsApp for an incredible sum – $US16 billion.   With both WhatsApp co-founder and chief executive Jan Koum and Facebook founder and chief executive Mark Zuckerberg delivering keynote speeches at MWC, the tech world was certainly going to pay attention.   During the keynote, Koum did not disappoint, announcing WhatsApp was launching free voice calls through its app during the second quarter, once the takeover by Facebook has been completed.   No doubt some of the mobile carriers were a little edgy about the prospect of Facebook launching an all-out assault on their lucrative voice call and text message businesses.   4. Mozilla unveils a $25 smartphone   This year’s Mobile World Congress marked the one year anniversary of the debut of Mozilla’s smartphone platform, Firefox OS.   For those unfamiliar with the platform, Mozilla is best known for its Firefox web browser. Last year, it announced it was creating a mobile operating system based on Firefox that would compete head-to-head with Google Android, Apple iOS, Windows Phone 8 and BlackBerry 10.   In Firefox OS, all apps basically work like interactive websites and are coded in web standards, including HTML5 and CSS. Since this is less demanding than running a “full” operating system with apps, the theory went that Firefox OS would perform well on low-end devices aimed for emerging markets.   In practice, some of the first Firefox OS smartphones, including the ZTE Open, have left a lot to be desired.   As I explained in Control Shift last week, Mozilla’s expansion drive has left it in a precarious position in the marketplace:   As if the situation weren’t already urgent enough already, Mozilla’s lucrative deal with Google expires in November of this year. In a sense, it’s fitting that [Mozilla founder Mitchell] Baker has taken up trapeze as a hobby, because Mozilla’s in the middle of a high-wire act. It might be that, over the coming months, one of Mozilla’s growing number of Firefox OS-driven side-projects gains traction in the market place. However, it could also backfire spectacularly, endangering its main source of revenue in the process.   Aside from the seven new smartphones on display, Mozilla also announced that a smartphone costing just $25 would hit the market this year.   Given that, up until the fourth quarter of last year, more than half of all mobile phones sold worldwide were still featurephones, mostly in emerging markets, the $25 phone might just be the big hit Mozilla’s looking for.   Story continues on page 2. Please click below. 5. Major updates for BlackBerry enterprise customers   BlackBerry chief executive John Chen’s bid to turn around the fortunes of the smartphone pioneer were filled out in a series of major product announcements at MWC.   Up until now, enterprises using BlackBerry Secure Work Spaces on BYOD (bring your own device) smartphones needed to use different versions of BlackBerry Enterprise Service (BES) depending on whether staff used newer BlackBerry 10/Android/iOS devices, or older BlackBerrys.   That has been cleared away with the release of BES 12, in the process clearing away many headaches for IT administrators. As an added bonus, it supports Windows Phone devices too.   The company also unveiled a new flagship phone with a full keyboard called the Q20 and an enterprise version of its BlackBerry Messenger service called eBBM Suite.   6. At least Sony’s new products are water-tight   Earlier this month, Sony announced it is selling its VAIO PC business to investment firm Japan Industrial Partners, spinning off its Bravia TV business into a separate subsidiary and slashing its global headcount by 5000 as part of a major restructure.   At the time, the Japanese tech giant announced it’s setting its sights on the smartphone, tablet and wearables markets for its future growth. Suffice to say, the company is hoping it delivered a hit with the products it unveiled at MWC.   The company unveiled a new flagship smartphone called the Xperia Z2, a 4G Android 4.4 KitKat smartphone powered by a 2.3 GHz quad-core Qualcomm processor. The company is proclaiming its 20.7-megapixel camera capable is the most ever used in a waterproof smartphone.   Which I’m sure is fantastic news for scuba-diving photographers.   The company also unveiled a 10.1-inch tablet called, imaginatively enough, the Z2 Tablet. The tablet is being marketed as the lightest ever used in a waterproof tablet.   Finally, the company unveiled a smart wristband called the SmartBand.   7. Opportunity knocks for LG?   The highlight for LG was an update of the KnockON security system called “Knock Code”, which uses a series of knocks rather than a password to secure a device. The new feature will appear on the LG G Pro 2 phablet, a new six-inch phablet set to go head-to-head with Samsung’s popular Galaxy Note devices.   The company also unveiled its “L Series 3” range of low- to mid-range smartphones at the show.   That said, most of LG’s big announcements came at the 2014 Consumer Electronics Show in Las Vegas in January, including its LG Lifeband Touch activity tracking bracelet, LG Heart Rate headphones, and webOS-powered smart TVs.   8. Tickets please!   With the rapid growth of mobile ticketing, it’s no surprise the world’s largest telecommunications show would embrace NFC tickets.   Telstra was one of a range of carriers to trial NFC badge technology for tickets to this year’s event.   The badges use information stored by a mobile carrier, including name and telephone number, to help verify an attendee’s identity. The validation process also includes a photo ID check.   This year’s show also features an NFC Experience demonstrating NFC-based mobile commerce systems for payment, retail, transport, mobile identity and ticketing/access.   In addition, there are 61 NFC-enabled Tap-n-Go Points providing event news, schedules, documents, presentations, videos and other information.   According to figures published by ABI research, in the next five years, 34 billion tickets to be sent to mobile devices,. In terms of technology used to authenticate tickets, the figures show 48% will rely on QR codes, near-field communications (NFC) will be used on 30%, while SMS or other technologies will be used on 22%.   If the forecast is accurate, it suggests using our smartphones to touch on for events, public transport or entry into secure areas could soon be a part of everyday life.

Finding cash for a business by re-mortgaging your home: Start-ups are Scary

2:43PM | Thursday, 27 February

Belinda Jennings is building a business empire around the challenges of being a mum, but had to run her fair share of risk to launch the business, including re-mortgaging her home and quitting her job with two kids aged under three.   “Entrepreneurs talk about skin in the game a lot. I had everything on the line, my career, my home and my family to make Australian Baby Bargains and Mum Central happen,” Jennings told StartupSmart. After receiving a monthly eBay bill for selling second hand baby goods that included over $200 worth of fees, new mum Jennings created a Facebook page for parents who wanted to sell their second-hand baby wares without fees in late 2010.   It turned out to be a popular idea. More than 2000 mums joined the page in the first month and 47,000 by the end of the year.   With the page facilitating connections creating thousands of dollars in transactions and conversations flowing, Jennings returned to work as an executive assistant.   But once online momentum begins, it can quickly escalate and take over. She realised if she dared, she could turn the burgeoning community into a business if only she could find the right model.   “Everyone kept telling me a free community would never work from a commercial point of view. But free access for mums was why I started the whole thing, so I had to find another way,” she says.   She began to bring on advertisers in early 2011.   “With a toddler, full time job and evenings full of Baby Bargains, I was getting overwhelmed. We were getting traction and I needed to act on it. Then I discovered I was pregnant with my second son. It was now or never,” Jennings says.   Jennings took maternity leave. But she needed money to grow the business. She and her husband decided to re-mortgage their Adelaide home for a $150,000 line of credit.   “We made a massively scary decision. My husband has always supported me but that was so far outside his comfort zone. Mine too actually. It was an intense conversation. But he got it,” she says.   After a couple of website development hassles that kept her up overnight with churning panic and her family home on the line, she launched the national site in August 2012.   “We had just graduated from the Innovyz Accelerator, we were racking up debt and the available balance was shrinking. And my leave was almost up. It was taking off and I was breathing a bit better every day,” Jennings said.   Late 2012 was a turning point for Jennings, who realised the time had come to give the company her all.   “Mortgaging the house was scary, but quitting my job and cutting away that safety net was terrifying,” she says. “I was again putting myself out on a limb because even though you plan everything, you’re always a bit at the mercy of the universe.”   The make-or-break moment came as Jennings read over the contract her three investors were about to sign.   “I kept putting off quitting, but once I took on investors, I realised I could never go back to my full time job and had to just get it done.”   Two years into her entrepreneurial journey and in July 2012, Jennings cut the cord to employment.   “I felt massive relief, but it’s all or nothing. The pressure is heavy. You’re making a big commitment to your family and to your investors. They all bought into your potential so you had better deliver,” she says.   Being brave but not gung-ho allowed her the time to test her idea and grow a supporter base into the hundreds of thousands, but more importantly, it helped her learn to trust herself.   “A start-up always requires a leap of faith, but you don’t need to go full throttle into it straight away. I’ve changed so much in my belief in myself and confidence. I’m doing all kinds of things now that had you asked me two years ago, I would have freaked out,” Jennings says.   Jennings went on to launch a content-driven advice site in late 2013 called Mum Central. The additional brand opened up swathes of new advertisers who aren’t exclusively focused on babies or bargain products.   With two full-time and seven part-time staff, Australian Baby Bargains and Mum Central are about to become cash-flow positive.

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