Facebook

Latest

Kirti Kogar

11:24AM | Friday, 8 November

Business: Little Boosh Age: 25 State: Victoria   When Kirti Kogar hurt her back and suffered a disc protrusion, leaving her unable to work in her office sales job, she had to figure out something else to do.   The behavioural science and marketing graduate had always wanted to work with children and had enjoyed success attracting people’s interest in cute baby wear posted on Facebook while at home.   “It was extraordinarily difficult because I had no idea of what I was doing,” she says.   But she stuck at it as mothers commented how much they liked the items she was putting online, such as animal costumes for babies.   Earlier this year she created her own website, Little Boosh, and, with two friends, set out to carve a niche in the crowded online retail space for products for babies and mums.   “We’re a one stop shop,” she says of her site, which offers monthly nappy subscriptions, accessories for babies such as shoes and hats, and bags and dresses for mums.   Kogar says she’s a very determined person and is encouraged to prove people wrong if she’s challenged.   “If I want my business to grow I have to work on it 100%,” she says.   She says she’s determined to stay ahead of the competition by keeping an eye on what they’re doing and then making sure what she’s offering is better.   She adds that there are no secrets to success.   “It’s the result of preparation, hard work and learning from your failure.   “And to remember there’s only one boss, and that’s the customer.”

The top four tips from the Facebook Accelerator program

11:37AM | Tuesday, 5 November

Twelve start-ups and small businesses have graduated from Facebook’s accelerator program last week, armed with in-depth knowledge about how to use the platform to promote their businesses.   Facebook announced their accelerator program for start-ups and small businesses in July, and announced 12 finalists in August.   According to the latest Facebook user metrics for Australia, there are almost 10 million daily active users of Facebook, and 12 million monthly active users.   Nick Bowditch, manager of small business for Australia and New Zealand at Facebook, told StartupSmart the major discussion that rolled over the training period was the need to be authentic.   Be honest about who (and how big) you are   “The very bottom line and most simple thing we pushed was authenticity. You need to represent your real brand as it is,” Bowditch says. “In the end, your fans are going to love you or not, and if you’ve been authentic from the start you won’t have to backtrack.”   Bowditch says this discussion, and how to avoid the major branding errors involved, was especially important for the younger companies.   “Always referring to yourself as ‘we’ when there are only one or two people can be off-putting. People want to support start-ups and small businesses, so don’t make yourself out to be a multi-national business or something bigger than you are,” Bowditch says.   Just ask your followers what they want from you   Bowditch says one of the big learning curves for business in the age of social media is recognising how directly they can engage with their audience.   “Of the 12 companies, none of them were really asking their fan base what they want. So much of Facebook is high tech, but the underlying principles are about common sense and simplicity. If you want to get more engagement from you audience, just ask them what they want,” Bowditch says.   Not only will this provide you with the insights to shape your content sharing strategy around, Bowditch adds it will increase the connection your customers have to your brand.   “Ask them what they want, what their pain-points are and how you can help. This really isn’t traditional marketing anymore, with Facebook it’s a two-way conversation,” Bowditch says. “This makes your followers feel really included in the business as well. And people really love doing that for start-ups.”   Create content your users may not know they want yet   Once you’ve established what kind of content your followers want, Bowditch say the growth opportunity for page managers is to occasionally share relevant and topical content your users might not know they’re interested in yet.   “There are a lot of cat pictures on Facebook, but would that sell more hammers for a hardware store?” Bowditch says, using a hardware store as an example. “You can be a bit salesy but your people want to know about renovations, about The Block, about how to build a sandstone wall, things that are topical and interesting that you can be the expert in.”   Bowditch says while only two out of 2000 followers may have been planning to build a sandstone wall, you might find 20 people click through, creating 18 new customers.   Combine your external communications resources with Facebook customer reaching tactics   The most useful product lesson of the program was around the customer audience features, which enables page admins to match the emails of their database to the login details of their Facebook followers.   Bowditch says one of the companies in the program launched a customer audience campaign during the accelerator and is already booked out until March.   “You can now create ad campaigns that are just seen by those already in that. If they sign into Facebook with the same address, we can match it and give you another way to reach this customer audience, so you can create follow up ad campaigns just for these people,” Bowditch says. “This feature means your costs come down, and the targeting is greater.”

The beginner’s guide to landing pages

11:50AM | Friday, 1 November

If you’re a web marketer, the easiest way to attract subscribers, leads and customers is to set up landing pages on your website.   It’s where people can get a feel for you and it’s the virtual business card swap. So why is it also the most overlooked part of a web marketer’s strategy?   Firstly, what is a landing page?   It’s a purpose built page on your website where people “take action” of some description. Visitors could ‘buy now’ or ‘sign up for a free trial’, but as a marketer, this article is about attracting leads and subscribers.   In short, the way to do this is to offer a premium piece of content, in exchange for the person’s name and email address.   Your online business card swap   You’d always take business cards to a work meeting or function, wouldn’t you? The reason is because if you meet someone interesting or who has the potential to be a customer, you need to swap details to continue chats later. Normally you’ll meet lots of people and a handful of those you’ll swap details with.   Exactly the same happens online   You’ll get a certain amount of visitors to your website and some will be interested in finding out more about you. Not in a pick up the phone kind of way, but in a let me download something so I can get a feel for them way.   The idea is to offer something appealing on your landing page, in exchange for their email address, so that you can continue the conversation later.   Why is this ‘email exchange’ so commonly overlooked?   I think a lot of marketers who are new to the web, feel apprehensive about requesting people’s email address for fear of upsetting them with future contact.   However, this is the wrong way of looking at it. If people are sufficiently interested in your content, your obligation as a marketer is to provide more information that they may find useful.   Keep it easy!   We all have loads of distractions when we’re surfing the web – lots of tabs open, messages popping up, emails coming in, Facebook open, tweets floating past, and of course the work you are meant to be doing!   So if someone makes the ‘click’ to come to the page where they can download your content, for goodness sake make it a smooth, easy and distraction-free experience! Or else, they’ll lose track of you, and you’ll lose your chance to stay in contact with them.   Anatomy of a great landing page   The basics include removing “the leaks” on your landing page. In other words eliminating links, or conflicting calls-to-action that distract your visitor. Yes, this includes getting rid of phone numbers and your main navigation!   Good landing pages also provide social proof that the download is worthwhile. Things like social media shares, testimonials and mentioning how many other people have downloaded it, reassure the visitor that they should download it.   The final ingredients are: a privacy statement saying you’ll keep their email address private, a simple form where you only ask for what you need, and nothing more, and a nice big button to download your offer.   If you’d like to see my best performing landing page, check out the Web Strategy Planning Template – feel free to download the PDF too!

Tiger Pistol raises $1 million in funding for expansion and promotion

10:36PM | Thursday, 24 October

Australian start-up Tiger Pistol, a social media marketing platform for small and medium businesses, has raised $1 million from Australian venture capital fund Rampersand and existing shareholders to establish an office in Silicon Valley and promote its services.   Co-founder and chief executive Steve Hibberd told StartupSmart the business tapped a desire by small and medium businesses to market themselves online through social media channels such as Facebook.   “There are about 75 million small businesses in available markets globally for what we’re doing,” he says.   Hibberd says attracting investment comes down to the quality of the business’s vision and the quality of its plan and people.   Founders should “be very honest with themselves” and ask whether they’ve done enough work to validate their idea, whether their plan stacks up and do they have the right people around them, Hibberd says.   “All of these things come out in the fundraising process,” he says.   Tiger Pistol provides a pre-scheduled social marketing plan for individual businesses using big data to achieve the best outcomes.   The company is currently focused on marketing plans using social network giant Facebook but aims to add other channels, such as Google AdWords, in the future.   “We remove a headache and provide confidence to small business operators, helping them to be successful in just a few minutes a day,” Hibberd says in a statement.   “Most small businesses know they need to be on social, but have neither the time nor the head space to take advantage of it.”   Tiger Pistol’s first platform was launched in May last year, providing custom Facebook pages and promotions for several thousand small businesses in more than 100 countries. Revenue has doubled each quarter.   The company raised $1.15 million in funding last year.   Rampersand co-founder and managing partner Paul Naphtali says social media marketing has “come of age”.   “It’s time small businesses had a tool as powerful as those built for enterprises, but with clear simplicity,” he says in a statement.   “Tiger Pistol has not only built a great product, they have created a new category in marketing platforms and we look forward to supporting company through its rapid growth.”

Facebook start-ups: Five things you should know

10:31AM | Friday, 11 October

Some start-up businesses grow first via social media before they ever consider setting up a website. And truth be told, many businesses have been given a start-up via the social media network and have profited by it without ever setting up a website!   A Facebook start-up usually means having your business placed in the social media world and letting all your friends and acquaintances see it first to test the waters. You may think this is enough to launch your business formally and is all you need to do or worry about, but there are a few important business items you may not know.   Despite Facebook businesses cropping up everywhere, there are certain requirements that you (and they) still need to follow. You may believe you are exempt from your legal requirements by launching on Facebook, but you are not!   There are a few aspects you should consider before embarking on your Facebook business:   Initially, you should consider registering your business. This consists of having a registered name, an ABN, and possibly GST registration. Check for government regulations regarding the products or services you wish to sell because some states have restrictions on things such as food products and importation.   As for the legal side of things, you need to comply with all Australian standards with regard to selling to the public. Terms and conditions have to be inserted in your business profile to protect your business and limit your liability in respect to claims, warranties and indemnities and also to notify your customers of your terms.   Australian Consumer Law has to be adhered to. It governs all products and services that are purchased by the public (this has only recently been amended). Obviously, all claims you make about your products and services have to be true and correct, and not false or misleading. Also, you will have to ensure you have this inserted in your terms and conditions as well as having relevant licences for the products and services that require them. Be aware of all the state and territory jurisdictions on these matters before offering your goods and services.   One very important factor in your Facebook business start-up is that you are responsible for everything people post on your social media business site. In turn, you need to monitor your site carefully and regularly. If it breaches someone’s copyright, is defamatory, offensive, false or misleading in any way, you may find yourself in a litigious situation that you were not aware of.   Privacy laws must also be complied with wherever you sell your goods or services. All personal information, including email addresses and credit card details need to be securely stored and you are responsible, even if you are using a third-party service. As such, you are required to have a privacy policy on your sales site. Facebook and other social media sites have their own privacy policies and legal terms covering themselves, not you or your customers.   Finally, you are not above the law when it comes to having your business on Facebook or other social media. Endeavour to make sure you know all there is to know about selling your goods and services to the public. Do a business plan, taking in all aspects of the legal and regulatory requirements to ensure you are aware of all the requirements to sell your goods or services around Australia.   Regulators are looking into businesses started up online and through social networks, so – be aware!

How to build the right board for your start-up

10:48AM | Thursday, 24 October

At a board meeting this morning, I couldn't help reflecting on our awesome group. A good start-up board helps in many ways but can hinder in others. I've probably experienced the best and worst of what they can do. Creating a board is serious and should be approached with caution.   When I started Posse I didn't know much about company boards. A family lawyer helped establish our companies. He suggested I set up a board and try to find some impressive-sounding people to join it. His objective was to make the 'team' list in my fundraising presentation look more appealing to prospective investors. So off I went on a mission to meet big name folks who'd look good on my deck. It didn't seem to matter how many, the more the better.   Within a month I'd assembled a board of eight, including myself, and we called a meeting. A friend lent me his board room, a big office in the city. I expected a casual, friendly affair where we'd chat about business and strategy and they'd agree to introduce me to some potential investors.   I was in for a surprise. First of all they wanted to know everything. How much money did we have in the bank? What were the liabilities, the budget, how many people had visited the site last week, last month, how long did they stay for, how much money had we made? And so on. I wasn't prepared and it was overwhelming.   After a couple of hours of grilling, I gained a sense of what a board expects from a founder. I'd run my own business for eight years and didn't report to anyone. In time I came to appreciate the rigour of reporting. For the next meeting, I made sure I sent out the cash-flow report, budget, metrics, and a presentation outlining what I wanted to talk about – all in advance of the meeting.   Six months in, our group hit its first challenge. The business had started well; we'd raised some money and gained traction. Everyone became excited; then, out of the blue, one director presented us with a proposal involving a full-time job and a lot of equity.   The group wasn't sure how to react. He left the room while we discussed his proposal, and when we rejected it he was hurt and embarrassed. He quit the board and sent us a huge invoice for his time, which we spent a year fighting and eventually settled.   Some members of our original board were excellent and are still active in various capacities today. Others drifted off: they had an expectation that we'd be a huge hit within months and when hard work set in they disappeared. Some stuck around and were destructive when things didn't go their way.   I learnt the hard way how bad things become when you have the wrong board. I've also learnt how powerful it can be to have the right board behind you. Here are five tips for start-up founders looking to build and run an effective board of directors.   1. Set expectations up front   It's easy to procrastinate about finalising deals with advisors and directors. Everyone is there to be helpful, and at the start it doesn't seem worth negotiating to pay them a share of nothing. The problems kick in after few months when things start going well, and you realise you and they have different expectations about payment. Most start-up directors will expect to receive equity rather than cash, and in my experience the standard rate is 0.5% to 2% vesting over two years.   You must determine what you expect of the director. How will they help with fundraising, strategy, introductions and the like? If appropriate, you might want to agree on how much time they'll commit to your business – although when you have the right people on-board it's likely they'll be bugging you with ideas and suggestions for how they can help.   2. Be transparent and organised   Your board should be the one group of people with whom you can be completely transparent. It's their job to help you work through challenges; so they must understand those challenges if they're going to add value.   I remember at one of the first meetings of our new board, I announced that the product we'd created wouldn't scale. We had to go back to the drawing board and try something else before we ran out of money. No one flinched. We put a process in place that would devise a better strategy. I've also found that board meetings are much more effective when I've put time into thinking through the agenda and have written a presentation to talk through.   3. Make sure your directors have the right experience   My original board sounded impressive, but many were impressive in the wrong industries. They had no experience of the challenges of a start-up like ours. So I received bad advice which led us to hire the wrong team and spend too much too quickly. A couple of our early directors had never used Facebook or Twitter and wouldn't even join Posse.   Everyone on our current board has incredible expertise in different areas of early stage companies in our space. They know what other businesses are doing to grow, engage users, monetize, save costs and much more. Almost every day, one emails me with an idea or opportunity that I wouldn't have thought of. And through them, we can access almost anyone we'd need to help our business anywhere in the world.   4. Keep the numbers small   We have four directors on our current board, including me, and one regular observer who acts like a director except he doesn't vote. It's a tight group: everyone knows the others' strengths; everyone is committed to making Posse a hit.   I've heard that the reason to keep boards small is to ensure that as a founder you won't be outvoted. I suggest that if you even think this, you either have the wrong board or you're the wrong founder. For me, the benefit of having a small board is that I can spend time with each person regularly. Everyone is in touch with what's happening and can contribute.   5. Make sure you like and trust people before inviting them to join   Directors have much more influence than I originally thought. They decide who leads the company, what deals to do and when to exit, so you must make sure you all share the same vision upfront. You must know they'll do the right thing, and that they'll stick around and support you when you hit tough times. I've heard many stories from founders whose advisors and directors vanished when it looked like the company might fail. We've had hard times and I can honestly say that our group pulls together and digs in, no matter what the circumstances.   At my first board meeting I learned what directors expect from a founder. It took me quite a while to work out what founders should expect from their directors. Our board helps me refine our strategy and operation plans; they're constantly suggesting new ideas and making introductions; they've been involved in fundraising; they hold me to account and oversee the governance of the company.   The names on our board are impressive but that's not why they're there. I've learned that a top notch board of great people with relevant experience and a shared vision is a wonderful advantage and has made my founder's journey easier and more fun.

Social media is a must when selling a business

10:03AM | Tuesday, 8 October

About 58% of people that have internet access have a social media account that they are actively using.   Out of ages 18-24, a common marketing target group, 98% of people claimed to have a social media account. There are a total of 1.4 billion Facebook users across the globe, spending a total of about 700 million minutes on their social networking accounts.   With this amount of popularity all targeted towards one area, it's impossible to ignore it when trying to sell your business.   How can you sell your business on social media?   It all depends on the social media network, but seeing as is currently the most popular, it's good to start there. Facebook allows businesses to create a page for either a product they sell or for the business itself. A page allows you to display information about your business, offer promotions to users, and directly link to your business's website.   In order to create a page, you need to have a personal account that the business page will be attached to. You can then set up moderators that have permission to post on the page and ban people who abuse the content of the page. There are different levels of admin privileges that you can set, from editor to mod.   Showcase your business   Think of your social media page as an area where you can display all of the pieces of your business in one convenient area that is available to anyone. Social media pages will allow you to:   Post images Directly communicate with potential buyers Show the potential profit of the business Connect with people   Showing works a lot better than telling. Use images and albums to show your possible clients what the business they may be purchasing has to offer.   Try to pique their interest with graphs, charts, and other tools to show them how the business can earn them a profit. You can show images of employees working with customers and much more. By organising it into albums, you make it easy for clients to go through the images in the areas of the business that they are curious about.   Connect to your website   You can use the Facebook or other social media page to try and connect your potential clients to a website that may share more information about the business, including a way to talk to you more personally. In this way, the social media page acts more like a gateway that directs traffic for you.   Locals   One of the biggest advantages to using social media to sell your business is the fact that it allows you to see and communicate with local people in the area. You have a much higher chance of selling your business to someone who lives in the area than an outsider. You can directly target a community when trying to get the word out and pull in some interest.   Next to each person's name is a location that they reside. This gives you information as to who is sharing your business. You may even be able to push them into doing a little advertising by sharing your page onto their own wall so that others in the area can see it, and hopefully grow your popularity and increase your chances of finding a potential buyer.   Always respond   You should never ignore people, or at least take your time to respond. If you really want to get your business sold, check your messages at least twice a day so that you can keep in touch. Facebook likes to place messages from sources that you haven't communicated with in the past into a separate "other" or spam folder. Make sure you check this area as well, as it may hold messages that you would otherwise miss.   Conclusion   Social media is very important to marketing a business properly. It serves a variety of purposes and can help you make the sale. It can also direct people to a business website that can offer deeper information about the website as well as personal contact info. Social media websites can be very efficient and shouldn't be ignored when trying sell a business.   Peter Watson is the chief executive of BizListings.com.au.

New app heralds the next generation of radio: socially attuned and completely customisable

10:23PM | Monday, 7 October

Omny, an app allowing users to combine news clips, emails, social media updates and articles via voice-to-text software, launches today after over 20 months in development.   Created by 121Cast, the app allows people to create their own customised audio channel. The app also includes a recommendation algorithm to suggest content.   121Cast co-founder and chief operations officer Ed Hooper told StartupSmart they were excited to see it finally launch.   “Seeing how it can change people and their behaviour is really exciting, as is the opportunity make that commute period really productive all over the world,” Hooper says. “We’ve all been doing this for so long and everyone knows about it, so how this goes is tied to our personal brands, what we stand for, and our credibility.”   Co-founders Long Zheng and Hooper began exploring the idea for the app in 2011. They had previously worked on an international award winning start-up involving farm irrigation automation software.   “But it was the GFC and we were still students, so for a whole lot of factors it didn’t work out but it was an amazing journey,” Hooper says, who gave up studying at Stanford to return to Australia to work in the Groupon team just as coupon sales were taking off.   He was working at Groupon when Zheng got in touch to talk about how to turn the issue of commute productivity into a business opportunity.   “I was constantly looking for a good opportunity, but I didn’t want to jump on something unless it was awesome, because you want to put everything into it. When Long called me up and we started talking about an audio solution that read you your emails and updates, I realised this was it. I literally could not stop thinking about it,” Hooper says.   Omny sources content from over 30 providers, from music apps such as Spotify, to news groups such as the ABC and BBC, to Facebook, Google and Microsoft. Hooper says all the early conversations were focused on the difficulties of developing such an app, rather than building a business around it.   “Whenever we’ve spoken to potential partners or investors, the assumption is always if we can make the app work, the money stuff will be fine,” Hooper says. “The feedback we got was the idea was there and it could definitely be a business, but also that it was going to be really hard to build and we’d need significant expertise.”   They brought on third co-founder and chief technology officer Andrew Armstrong in February 2012. They’ve gone on to hire a front-end developer and a data scientist as well.   To guide the development, the 121Cast team launched a test app, SoundGecko, in mid-2012.   “We realised we didn’t have a clear idea of what we were creating and needed some real data. We tried surveys and interviews, but it didn’t really get us there. So we took a small fraction of this app, and bundled it as a standalone,” Hooper says.   SoundGecko, an app which read websites and PDF documents for users, has almost 50,000 active monthly users. It allowed 121Cast the opportunity to test the reception of voice-to-text, and also the data requirements for sending audio to thousands of users across the world.   Over 210,000 people have downloaded SoundGecko on iOS, Android and Microsoft phones.   “We found that managing all three platforms was quite hard. As soon as we’d launch a version, we’d see things we needed to change and there were always things we should have done on the first one,” Hooper says. “For the resources we have, it just isn’t feasible to be updating the app on all three platforms. So we’re fine tuning the iOS one while we do the core Android development.”   Omny is currently a free app. 121Cast will introduce ads and affiliate marketing in the coming months, and are exploring a premium subscription for launch later next year.   “SoundGecko definitely validated that people would pay for the premium features, such as more voices, and the Omny premium subscription will probably not include ads,” Hooper says.   Hooper adds financial opportunities will emerge from the user data over time.   In order to fund the development, the 121Cast team used their own capital and raised a series of seed investments.   “We burnt our own savings and lived off them for quite a while. We decided we were going to do this regardless, and between us we could go for about a year without raising funds. Let’s just build this because we have to do it,” Hooper says.   They went on to raise $250,000 from Adventure Capital and the SingTel Optus Innov8 program in November 2012; $20,000 from the University of Melbourne Accelerator program in late 2012, and just over $250,000 from Commercialisation Australia in July 2013.   “With the investment, if we knew we need to do something in the future, we started building the relationship as early as possible and find out what’s important to our potential partners and match them on multiple data points,” Hooper says.   Hooper says they’re focused on Australia at this stage, but will be looking to expand to the US, United Kingdom and other English speaking markets in the next few years.

Leading accelerator program Startmate opens applications for fourth intake

10:26PM | Monday, 7 October

Designed to turn Australian technical founders into successful global entrepreneurs, one of Australia’s first start-up accelerators Startmate is now open for applications.   The program will run next year from January to May. Companies will spend three months in Sydney and two in San Francisco.   Startmate is seeking around eight companies, which will receive $50,000 in seed capital, in exchange for 7.5% equity.   Startmate co-founder Niki Scevak told StartupSmart they’re seeking founders with big dreams and plans.   “Beyond the very product centric technical team, we’re looking for people with large ambitions, the crazier the idea the better. We really want to work with teams who want to make a big difference in the world, so the scale of the ambition is what we’ll be selecting,” Scevak says.   He says they’re committed to approaching each pitched idea with an open mind, adding that being the hundredth start-up to tackle an idea didn’t hurt Google, Facebook or Atlassian.   “Anyone doing anything in an incredibly crowded area will be taken as seriously as brand new ideas. The ideas may sound incremental, but it really does matter why the founders have chosen to pursue this idea, and if they have a unique insight into it,” Scevak says.   “It’s about why they care about their customers and if they have an authentic connection to the market. We look for what in their lives have driven them to this idea.”   The program includes an impressive line-up of mentors including Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar; Tjoos co-founder Bart Jellema; and Spreets co-founder Dean McEvoy, as well as several partners from Square Peg Capital and Blackbird Ventures.   This will be the fourth intake for the program. Previous participants include BugCrowd and NinjaBlocks.   Start-ups can apply via Angel List.

The pros and cons of using employees to promote your business on social media

10:46AM | Friday, 4 October

More and more businesses rely on social media to advertise their products and services. Many now use their employees to promote their businesses through their blogs, Twitter accounts, LinkedIn and on Facebook.   The pluses to this are great as it is essentially free advertising, having employees engage on another level with clients and to have employees more actively and directly involved in the promotion of the business. But beware: there are risks that go with the benefits.   1. Plus: Social Media can be inexpensive effective advertising   Employees are good ambassadors for promoting your business. They can give your business both personality and a human face.   Businesses have been using employees more and more as a means of promoting and advertising their products. They primarily do this through their personal social media accounts such as Facebook and LinkedIn. It has proven to have some great success and the benefits can be enormous. But you need to be aware of the potential problems with this.   2. Minus: Impact of social media personal accounts   For the benefits that businesses are seeing with their employees promoting the company through their social media accounts and interacting with clients, there are also potential negatives:   Time wasted on social media for non-work, non-productive activity Inappropriate use of social media for personal negative comments such as defamation, harassment, etc causing reputational impact as well as other legal implications for the company.   Management of social media risks is becoming an increasingly critical area to maintain control over the numerous consequences that arise from the unrestricted and undefined use of social media by employees. But this is not the only major consideration that businesses have to deal with. It can get worse.   3. Problem: What happens when the employee leaves?   What do you do if your employee who is leaving your company has LinkedIn, Twitter and other personal social media accounts which they use to communicate with clients?   Who actually owns the account and the correspondence on the employee’s personal social media account?   These social media accounts often contain business information and client contacts. This is an increasing area of litigation with it being more difficult as the regulations have not yet caught up.   In addition, there has been very little to no judicial commentary in Australia regarding the ownership of social media accounts. There has always been clear law that client lists belong to employers when their employees leave the company but there is no clear direction of precedent cases either in Australia or other countries to follow.   It is now clearly under the microscope, with companies attempting to terminate employees for inappropriate comments about the company on social media but there has been no clear direction as yet and each has been determined on a case-by-case basis involving other external factors which sets no clear guidelines. So how can businesses minimize their risk?   Here is what businesses can do:   Ensure you have a social media policy for work. Otherwise it’s difficult to show its use at work/during work hours (even excessive) as grounds for dismissal. The social media policy should define the scope of “acceptable use” and ownership of content. This means employers specify that any social media used during hours of or in the course of employment is owned by the employer and indicate that social media accounts are given up or terminated when the employee leaves the business. Ensure all your employees are aware of company policy in relation to social media and that they are enforced within the company.   And keep up with the latest developments - they, like social media, are a moving feast!

THE NEWS WRAP: Twitter files papers for $US1billion IPO

10:25PM | Thursday, 3 October

Social networking giant Twitter has filed papers with the US Securities and Exchanges Commission ahead of an IPO in which it seeks to raise $US1 billion.   The company revealed that it had 218 million users as of June 30, compared to around 1.2 billion for Facebook and 240 million for LinkedIn.   Twitter also revealed it lost $US69.3 million during the first half of 2013, compared to a $US49.1 million loss for the same time last year, but revenues grew to $US254 million from $US122 million.   Turnbull names Switkowski as new NBN chairman   Communications Minister Malcolm Turnbull has named former Telstra and Optus chief executive Ziggy Switkowski as the chairman of NBN Co.   The German-born nuclear physicist replaces current NBN chairwoman Siobhan McKenna, while also temporarily replacing Mike Quigley as chief executive until a full-time replacement is appointed.   “In appointing Dr Switkowski to the board as chairman, we're appointing one of the most experienced telecom executives in Australia ... someone who's been the CEO of not just Telstra but Optus as well, a very distinguished company director and chairman," Turnbull says.   Retailers renew calls for GST threshold cut as online shopping figures are released   The Australian Bureau of Statistics has released figures showing consumers spent more than $7.6 billion on online retailers on purchases below the $1000 GST threshold, prompting calls to remove the low-value threshold.   Australian Retailers Association executive director Russell Zimmerman says the higher than expected sales point to an uneven playing field in the sector between local retailers and overseas-based online retailers.   “The concern isn't that people are spending money online – either locally or overseas. The concern is that it's not a level-playing field,” Zimmerman says.   “We believe that the firm of online [shopping] generally will grow, and as that figure grows, there will be a bigger loss of income to the states and territories if they don't do something about the low-value threshold.”   Overnight   The Dow Jones Industrial Average is down .9% to 14996.48. The Aussie dollar is at US93.96 cents.

THE NEWS WRAP: 800,000 US workers take unpaid leave as Affordable Care Act reforms roll out

10:26PM | Tuesday, 1 October

The US government shutdown has come into effect with more than 800,000 government employees forced to take unpaid leave, as Affordable Care Act reforms roll out.   “This Republican shutdown did not have to happen – I want every American to understand why it did happen,” US President Barack Obama says.   “[The Tea Party Republicans] shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans.   “One faction of one party in one house of Congress in one branch of government shut down major parts of the government because they didn't like the law.”   Facebook introduces new mobile app ad capabilities   Facebook has introduced new capabilities to its mobile app ads, claiming the features will boost the amount of time users spend in third-party mobile apps.   Instead of ads simply prompting users to install additional apps, the ads can now also be used to promote in-app purchases.   The new feature allows, for example, an ad in a travel app to promote a discounted airfare.   Melbourne and Sydney boost average house prices to a record high   The average value of houses in Australia’s major capital cities has been boosted to a record high, fuelled by rises in Melbourne and Sydney, according to new RP Data-Rismark figures.   The average capital city house price rose by 1.6% during September, boosted by a 2.5% rise in Sydney, a 2.4% increase in Melbourne and 1.1% in Adelaide.   The increases offset falls in Darwin, Perth, Canberra, Brisbane and Hobart.   “Over the past 10 years, values have only risen by an annual rate of about 2.5%. So in many ways Sydney's playing catch up at the moment,” RP Data analyst Tim Lawless says.   Overnight   The Dow Jones Industrial Average is up 0.41% to 15191.7. The Aussie dollar is down to US94.01 cents.

How to catch the eye of an international VC: Bill Tai dissects his Australian investment decisions

9:16PM | Tuesday, 24 September

Australian start-ups are increasingly attractive to international investors as the technology and start-up sector evolves, especially if they’re leveraging their geographical location and have solid plans to go global, says internationally renowned venture capital investor Bill Tai.   Tai is in Australia as part of the OzAPP roadshow, giving a series of talks about big data and entrepreneurialism around the country.   He told StartupSmart it mattered less and less where tech start-ups were based.   “In the past, it wasn’t really viable to have start-ups that were competitive with those in the USA because the kind of start-ups that are happening generally speaking today are different,” Tai says.   The first few overlapping waves of start-ups (from the late 70s to the early 90s, and the late 80s the late 90s) usually required more than $50 million in start-up funding and required larger teams of specialised skills.   “These waves laid the foundation for the kind of start-ups that are possible now, because now everything start-up is essentially a user interface (UI) for data from the cloud. So LinkedIn, Facebook, Twitter, they’re just UIs. And you can start UI companies anywhere,” Tai says. “So now the big question is can you scale it into a big company or not.”   Two of Tai’s Australian investments have been design software Canva and customisable online fashion site Shoes of Prey. Tai says both jumped out as unique, well-timed ideas with global potential.   “Because the market here is small, the start-up companies that succeed will have to be players in the broader English language markets,” he says.   “Shoes of Prey was amazing because the people were fantastic and had a good heritage as they had been very successful at what they had done in the past and had a very unique business model at the time and proof that they could execute because they had already developed revenue without any venture money,” Tai says, adding Shoes of Prey had a competitive advantage over US-based start-ups with similar ideas given Australia’s proximity to China.   “Shoes of Prey is in a geographic position to leverage heavy manufacturing assets in China on the same timezone. If you tried to execute the same business in the USA, and had your team having to work in the middle of night, it’s just not workable so they had a natural competitive advantage,” Tai says.   Tai says his questions for Shoes of Prey before signing the cheque were about how much venture capital they would need to scale to a point where they would become self-sufficient.   Tai says both Shoes of Prey and Canva stood out because both founder teams had business experience.   “I’ve funded many, many extraordinarily smart entrepreneurs in the United States with basically valuable outcomes that have never made a penny before, but these two had built a business and knew what it meant,” Tai says.   He adds the educational system, well developed gross domestic product, a high standard of living, and mobile phone penetration means Australia is a good test market for software and tech start-ups.   “There is proof you can scale companies from Australia, such as Atlassian, which is a world-class leader in its space but started here,” Tai says. “Now we’re in a world where if the cloud infrastructure really becomes commoditised, then it really is possible for Australian start-ups.”   Given the need for Australian start-ups to go global from day one, Tai says aspiring founders should stop wasting their time not going for big markets.   “It takes the same amount of time to build an app for five family members as it does to build one that will serve a billion people,” Tai says. “Because if it works you’ll have a shot at a really big outcome rather than a huge success in a small market, so I’d encourage Australian start-ups to think big.”

Eight key tips to selling online – without being slimy

9:54AM | Monday, 23 September

When push comes to shove, as an entrepreneur you’re going to be selling something online eventually. The good news is you don’t need to become a jerk.   1. Firstly, forget social media!   For selling, social media is going to disappoint you. Social media is ‘social’ – it allows you to humanise your business and chat amongst your friends and prospective customers.  It’s great for nurturing relationships, building trust and growing your audience, which are definitely important.   But it won’t drive sales.  It’s not the right place.  It’s like trying to close a business deal at a birthday party – it’s nearly always inappropriate.  You want to close deals in a business setting.  Email.   2. Email marketing is where the action is   No joke, when it comes to making sales, email is at least 20 times more effective than Twitter, Facebook and LinkedIn combined.  You’re building your permission email list aren’t you?   But the big question that remains is how do you sell online, without being an obnoxious jerk? Here’s how.   3. Keep your same voice   Your tribe of followers will be familiar with your tone of voice and personality. If you suddenly go from Mr Friendly Trusted Advisor to Obnoxious Slimy Salesman, you’ll lose your audience in droves.   Unfortunately, too many people suffer from a personality transplant when they decide to sell.  They start pressuring you with hard-sell techniques. Lots of CAPITALS, exclamation marks, hype-filled headlines, yellow highlighter and red font.  The transformation is frightening!   4. Remember you’ll be back tomorrow   I understand why some people become sleazy and pushy. Historically marketers have only had one chance to close (think infomercials, advertorials and long copy sales websites) so they crank up the pressure to buy and make you feel guilty or ashamed if you don’t.  They’ll never see you again, so they don’t care.   But you’re in a different boat. You have a relationship with your audience, and you’ll be back.   5. Be yourself   Scarcity, urgency, a value proposition and honest promises are still critical ingredients to a successful online sale, but you don’t need to be slimy.   Follow the same principles, but just be yourself and ease up on the pressure, okay?   Definitely explain the value, tell us how long your offer lasts, the reasons why we should buy it, share your testimonials and your guarantee, but do it like you are telling your best friend, not a stranger you’ll never see again. Honestly.   6. Serve first, sell next   To succeed online, you need to genuinely put the interests of your audience ahead of your own agenda.  The key is relentless generosity.   If you haven’t built up trust by serving your tribe with loads of great value, you cannot expect to extract any value for yourself.   Not only is it greedy to expect it, but it is a damaging exercise.  People who feel that their trust has been violated won’t be back. Ever.   7. Give freely nine times out of 10 and sell once   Remember when you’re selling, it’s really not much different to usual, except your customer is giving you money as well as their attention.  The only real difference is you need to deliver significantly more value when you want people to type in their credit card number!   8. Selling online shouldn’t strike fear into your soul   What I find is that we often underestimate people’s willingness to pay a fair price for something of value from someone we trust. And your tribe should trust you, so give it a go!   To explore these ideas further, feel free to download the free Content Marketing Promotion Template to help you share the love with your tribe.

From 350 to 10,000+ and beyond: bellabox embarks on new growth strategy

9:21AM | Wednesday, 18 September

Bellabox, a mailed monthly beauty samples box, is embarking on an aggressive customer acquisition strategy after receiving $1.3 million in expansion capital from a range of investors including Square Peg Capital, Apex Capital, Monash Private Capital and a range of angel investors at the beginning of this year.   The beauty box industry is a new and fiercely competitive one. Co-founder and chief executive Sarah Hamilton told StartupSmart they’d seen 11 competitors launch and leave the industry since they began in 2011.   “You often don’t really start growing until you’re quite established and prove you need to be taken seriously. We’re at that point now,” Hamilton says, adding they started with 350 boxes in 2011, and now mail out over 10,000 each month.   Hamilton says they’re ready for growth because they never approached bellabox as a glamorous way to play with pretty products all day, but as a marketing and sales channel from day one.   “We tell the brands we’re a marketing and sales service, and the channel we use is our subscription boxes and our online store. We’re not a glamorous beauty company. We’re logistics, we’re marketing and we’re all the other facets,” Hamilton says, adding the business was modelled on industry leading US beauty box Birchbox.   Prior to launching the business, Sarah Hamilton was the chief financial officer for Spin Magazine in New York and Emily Hamilton was running her own digital product marketing business.   “Neither of us had any background in beauty, so we were very formulaic in how we approached it. We were into beauty, but we’d never read any beauty magazines. But we saw that we could love this product without being beauty enthusiasts, so we realised just how big this could grow if we broke through the beauty enthusiast ceiling most beauty boxes are up against,” Hamilton says.   Given their backgrounds, the Hamilton sisters focused on tight financial management, content marketing and getting the most out of their primary asset, their database.   “I knew that content could really drive sales. Emily knew how to market to people, and recognised this was a really broad reaching product,” Hamilton says. “When you’ve got a broad business idea like that, you don’t need to feel intimidated with it, you just need to be smart about it.”   The bellabox boxes can be very specifically targeted, from age and location to skin colour and income bracket. Hamilton says they’re currently developing a new backend product to streamline the allocation system, which is currently organised via several spread sheets.   “We’ve got two big stakeholders, the members and the brands. And for our members, we’re only as good as our last box,” Hamilton says. “We’re sorting and filtering through all the beauty profiles. It’s not too hard but because of the number of members it becomes huge.”   Bellabox is increasingly working with non-beauty brands such as accessories groups, but says they’re focused on developing their core business around beauty samples and building out their online store, which brings in 20%-40% of their revenue.   Hamilton says working out and implementing their growth strategy has been their biggest challenge.   “We were self-funded for the first year-and-a-bit, and got funding at the start of this year and we definitely needed it then, for the website and logistics,” Hamilton says. “Everything was getting to be a Band-Aid solution.”   Hamilton says they took several months to work out where to invest the funds for growth, after learning about the importance of appropriate infrastructure the hard way.   “We did a morning television spot, and while the traffic was great, the website crashed. So we wanted to make sure everything we were ready to grow. We’ve planned for a couple of months and laid the foundations. It was always about making this into a mass market product,” Hamilton says.   Bellabox’s growth strategy has been driven by their online magazine and a range of evolving advertising campaigns.   Hamilton says they started with Facebook ads, and now they’re testing a range of partnerships and advertising with online and print publications including Body & Soul, Mama Mia, Yahoo 7 and Women’s Agenda, which is owned by StartupSmart’s publisher Private Media.   “We’re at a point now where we really watch where they come from at the lifetime value of those customers. We really test and invest, and invest in the areas that are the best customer for us,” Hamilton says. “We make sure we’re hitting different audiences with each investment of marketing spend.”   Hamilton shares how they prepared for their growth and are running their test-and-invest strategy in the short video below:  

Making the leap from corporate world to sole trader: Why one woman did it

9:26AM | Tuesday, 10 September

Making the leap from the corporate world to writing her own recipe book and launching a food website was “terrifying”, Tanya Bartolini tells SmartSolo.   “I have always been such a corporate person,” she says.   “I never imagined myself to have the courage to do this in the past.”   But after the birth of her son Mitchell, now 20 months old, working with a career coach and mulling the idea of writing a book, the former business development manager in the finance sector decided she had had enough.   Bartolini, 32, had worked in finance since leaving school, and steadily rose through its ranks as she focused on her career.   Based in Brisbane, she worked with a career coach to investigate how she might be able to stay in her home town, but still advance to an executive position without the need to move to Sydney.   From those discussions, she came the realisation that maybe she wasn’t meant to be in the finance industry.   She says she and her coach started investigating a path that would combine her loves of food, Italy and family and formed the idea of writing a book, which she started when she went on maternity leave.   When she returned to work, she found it wasn’t what she wanted, especially after starting her book and thinking how she might be able to turn it into a business.   “I’ve had to take a big risk and leap of faith that what I believe in is something that people will believe in as well,” Bartolini says.   Her book, Blending the Cultures, is being self-published and is due to be released in November. It tells the story of Bartolini’s family who left Italy after World War II to come to Australia and weaves together family recipes.   She says that with the birth of her son, she realised there was a generation of children who could grow up without knowing the stories of their families and the recipes that sustained them, which helped spur her to get writing.   She’s having 1500 copies printed in the first print run and the book will also be available through Amazon as an iBook and for Kindle.   Bartolini also launched a popular food website for everyday home cooks, The Kitchen Bench, which aims to be a place where cooks can share recipes and offer useful advice to each other. She also has a Facebook page that currently has over 3000 likes.   The website was originally called The Everyday Cook Network, but an email from a reader alerting her to a similar-sounding site prompted her to change it to The Kitchen Bench.   “My lesson learned is don’t fight something that’s not worth fighting for,” she says.   She says she was only three months into starting the website, so the switch was not too stressful.   “In the end I think I’ve got a much better name,” she says, adding that she’s got a trademark process underway.   She plans to monetise the site through advertising and hosting a monthly “In the Spotlight” section where she showcases a business that can provide a recipe or kitchen tip or trick that provides value for users.   Bartolini aims to continue growing the number of followers of her blog and become a “go to” site for advice for home cooks. And another book may be on the cards in the future.

Top US investor Jonathan Teo to visit Melbourne

9:15AM | Monday, 9 September

Leading US investor Jonathan Teo will visit Melbourne next month to meet local start-ups and entrepreneurs and speak at an event hosted by investor group Investors’ Org.   Adrian Stone, chairman of Investors’ Org, which organised Teo’s visit, said in a statement the group was “super excited” that Teo was visiting and checking out Melbourne’s start-up sector.   “In recent years Melbourne has been home to a number of very successful start-ups, including 99designs, Kaggle and Catch of the Day, and RetailMeNot,” Stone says. RetailMeNot recently listed on the Nasdaq stock exchange in the US.   Teo is the managing director of venture capital firm General Catalyst Partners and was involved with Twitter, which is estimated to be worth around $11 billion, Instagram, which was sold to Facebook for $1 billion and Snapchat, a photo-sharing platform valued at $800 million.   While in Melbourne, Teo is also due to meet government innovation officials.   Teo has a Bachelor of Science in electrical engineering from Sydney University, a Masters from Stanford University in the US and managed several engineering teams at Google.   His profile on the General Catalyst Partners website says his areas of investment interest are consumer internet services and infrastructure.   In a recent interview with Forbes, Teo said while he didn’t know what the next big thing in consumer applications would be, he has been focusing his efforts “on culture and its enablement in the digital realm”.   “My job is not to read the future, but to see the needs of people all around the world (thus all the international interest) and find the common threads of need and desire that can be expressed through product,” he told Forbes.

How to master brand and online reviews to boost your business: Tips from an insider

9:17AM | Tuesday, 10 September

Start-ups who work closely with their first 100 customers, encourage online reviews and manage bad online reviews can significantly increase their business, according to Fiona Adler, founder of womo.com.au, one of Australia’s leading business review sites.   Adler told StartupSmart that ongoing research by her team identified start-ups and small businesses need a relatively small critical mass of 10 positive reviews before they start receiving significantly more enquiries.   “Online reviews are really important. As more and more purchases are made through or after an online search, online reviews are key to your business’s reputation,” Adler says.   She says the key to getting more reviews was connecting with your customers and asking them for feedback, and encouraging them to review your business.   “Especially when you’re in start-up mode, make sure you look after each customer and work to get as much positive word-of-mouth marketing happening as possible,” Adler says. “Bring online reviews into the conversation on your website and let the customer know there is a lot of good feedback out there.”   She adds that while businesses can be nervous about encouraging and displaying reviews in case they receive a bad one, but says getting a bad review isn’t as important as how you deal with it.   “Take the focus of whether the customer is right or wrong, and appreciate that the customer is not happy. It doesn’t matter if their expectations are out of line, you’ve got an unhappy customer and need to address that by apologising,” Adler says. “You can explain your side of the story, but if you do, do it in a really humble way.”   She says reaching out privately and asking them back, and offering some form of compensation such as a free service, can go a long way too.   According to Adler, too many small businesses assume brand is something they can worry about when they’re big, but the start-up phase of a business has the richest opportunities for brand building and getting positive word-of-mouth marketing.   “Start-ups have the biggest opportunity to build their brand. The first 100 customers you have are the most important for a business because you’ve got the best chance to learn from them and what they really like about, and what they don’t like and you need to change.”   She says start-ups can hone in on the positive feedback and build their brand around their early strengths.   She adds the key to customer feedback for brand differentiation is to remember your offering doesn’t exist in a vacuum.   “It’s really important to find out what made them choose you over all the other choices. Ask them what service they were using before and why they switched. If it was a conversation referral, ask them what was actually said,” Adler says. “Sometimes you’ll get contradictory feedback, but over the course the year you can get a great understanding of the minds of your best types of customers.”   As a business grows, founders should celebrate their positive feedback and reviews with their team to instil their brand in their team.   “When you think of the most famous brands, their founders have really shaped the brand, like Apple or Facebook or Zappos. They used their own philosophies to business and customer service and build on that,” Adler says.

Pollenizer CEO on the top five myths of lean start-ups

9:14AM | Friday, 6 September

Pollenizer, an incubator program based in Sydney, has long loved and taught the lean start-up method to founders.   But as the approach continues to flourish in the start-up sector, entrepreneurs need to recognise fact from fiction when it comes to how the process works.   Lean start-up methodology focuses iteration in order to discover what customers genuinely want so start-ups can be sure they’re solving a real problem, in order to get maximum traction.   The team are coming to Melbourne for a two-day lean start-up workshop in the coming weeks. Co-founder and chief executive Phil Morle told StartupSmart lean has been key to Pollenizer’s success.   “It de-risks the process, and I find that really powerful. It means we can spend our capital wisely. Lean spirals the whole way through, it’s about learning, holding yourself accountable and really testing what you believe, and having a shared language as a team,” Morle says.   Pollenizer invests $100,000 in each new company in the program.   “We found organically over the last five years, that the lean methodology helps us be in control of the discovery process as a start-up emerges. It means we can measure as we go along, and know where we are in comparison to where we should be,”Morle says.   Myth one: Lean equals cheap or bootstrapping   Morle says many people mistake the iterative, experimental process of lean for a cheap way to create companies.   “Lean is a management discipline for maximising resources to discover and build value quickly and efficiently. Start-ups have limited resources and we have to do everything we can to get there fast,” Morle says.   Lean involves launching early versions of the product to test hypotheses and ensure it’s developing in line with customer needs.   “Using lean methodology means we can make sure the product we’re making is reflecting what customers actually want, and make it stronger and more profitable.”   Myth two: Lean is only applicable to small ideas   Morle says many people can mistake the process as being focused on small ideas, but lean works in organisations of all sizes.   “It’s an iterative sequence to release something soon so you can start learning from your customers. It can start small if you need to, but over time, it can become enormous. Facebook is one of the best known lean start-up major companies, who still release early and release often,” Morle says.   Myth three: Lean is inherently risky   Because of the requirement to launch early versions of the product quickly, some entrepreneurs may be scared off lean because it feels riskier to launch less-honed products.   “There is the fear that this will turn off your customers, never to be seen again. But the point of lean is to release early to make sure you have a series of tiny manageable failures that you can learn from,” Morle says, adding this myth is the opposite of the heart of lean methodology: experimentation and de-risking.   “The most risky thing you can do as a start-up is to not try and get the customer to do something. The longer you go without seeing people use the product, the more risk we create as company.”   Myth four: It’s only for technology start-ups   While lean methodology was first created by Toyota after the Second World War to make the most of their limited resources and still compete with major American car companies, the lean methodology has expanded to the tech start-up ecosystem.   Morle says many people mistakenly think it only works for software or tech development, but the core of the process works for any company.   “Lean is about collecting data to make your offering more valuable,” Morle says. “It can be used in advertising, in medicine and in all manner of different industries when you realise it’s about doing something with a real customer as soon as possible.”   Myth five: Lean is too scientific and prioritises analytics over intuition   According to Morle, because lean is focused on experimenting and gathering data, people can assume the method is too scientific and leaves no place for intuition.   Morle says lean is a good way to make sure you don’t believe your own hype.   “What lean introduces is the yin to intuition’s yang because the two things work together. Overlaying lean and metrics with what people actually do, and then learning from that and comparing it to our intuition is the perfect combination for a successful start-up,” he says.

Assessing a start-up’s potential in 12 minutes and 56 questions

9:57AM | Wednesday, 4 September

I was asked to look at a business opportunity the other day on behalf of a mate and fellow member of the Entrepreneur’s Organisation in Melbourne.   He is currently sailing around the world with his family for three years, after successfully selling his business. It made me realise how I was able to use all of my experience to gauge a complete position on a start-up in a phone call, which lasted 12 minutes with the founder along with probably 15 minutes of prior research.   As a result, I thought it would be useful to share my screening process, which helps me form an opinion quickly as to whether to continue the conversation.   I’ve seen a lot of pitches and get approached by a number of entrepreneurs who want and need help. Unfortunately, ‘time’ is the scarcest resource, so it’s critical to get it right before committing to anyone.   I’ve also got enough of my own opportunities to work on, but generally happy to hear someone out as it’s great to connect with smart, motivated entrepreneurs and stay in touch with them for the future in the event that we can’t work together today.   Some entrepreneurs want money, others want guidance, but before I can work out what I think they really need, there’s a bunch of things I need to assess before actually looking at the business itself. Here’s my approach: Before I start, I warn them that I’m about to bombard them with questions to gain a quick picture, and likely to cut them off to avoid rambling, so now I’m less likely to offend and at least very clear about the next 10 or so minutes!   The person   It’s imperative to understand their background, experience, skills and motivation as it’s initially the founder driving the business forward:   What’s your background? Which high school did you attend? What did you study at uni? What grades did you get at school and uni? Did you work while you were at high school or at uni? What subjects did you love? What do your parents do? What do your brothers and sisters do? Where do you live? Have you had to pay rent? Who pays your credit card bill? What are your monthly living expenses? What are you passionate about in life? What are you really good at? What do you suck at? Why do you want to be an entrepreneur? What hours do you work on your start-up? What time did you get out of bed today? Who have you worked for? What skills did you learn? Have you been in business before? (If not – I stop there. I’d rather someone who has tried and failed but not someone too green.) Who funded it, how did it go? Have you failed in a business before? If so, what were your biggest lessons? What are the last three business books you’ve read and when did you read them?   I’m looking for someone smart, motivated, ambitious and with a strong work ethic who has no option but to succeed. I like to understand their ‘breed’ and potential culture fit. It’s often the family background that helps establish some pattern for work ethic, motivation and values set.   Would you rather back a maiden horse who has never won a race or likely to come close, or back a maiden who’s got great potential and willing to do what it takes?   If the person is not suitable, it would only be out of curiosity sake to hear about the actual business opportunity.   Story continues on page 2. Please click below. The opportunity   Here’s the exciting bit. What’s the business and opportunity all about and what stage is it really at:   Tell me about your business (assuming I’ve already had a look at the website or some other information as I like to be prepared before wasting my time) What problem are you solving? How big is the problem? What’s the value for a customer? What’s compelling about your offering? How easy would it be to replicate what you are doing? Who are your current competitors or similar players? What are the barriers to entry? Have you any experience in this industry sector? What role do you play in this business? How much money have you personally invested? Who plays the other roles – who are they and what are their backgrounds? What’s the current shareholding if you currently have partners? What value do they add? (this could kill the deal as often the equity is already split too many ways for not much added value unless a complete restructure) What are the macro factors going on in the industry right now? Is the industry growing or declining and do you know why? How much have you invested to date in this business in terms of hours and money? What metrics have you achieved so far i.e. number of users, current customers, growth rates? How much has it cost to acquire a new customer (does this person even know their own metrics? Most don’t!) What feedback have you had from current customers who’ve bought your product/service? How do you plan to grow this business?   It’s amazing to see how some entrepreneurs go along way down the track without knowing a whole lot about their industry, the market, other players and generally what’s happening.   They don’t know where their opportunity lies in the scheme of things, nor know who has come and gone before them and why.   It’s a huge risk to have a founder who has no intimate knowledge of their industry or sector with limited experience. A lack of experience is fine if the energy, motivation and willingness to learn is there; assuming they’re a great operator with a great market opportunity.   Often, the opportunity lies in being able to help fill many voids as an experienced entrepreneur is less likely to need help and more likely to want more for less.   The ability to fast track growth cleanly and smoothly and add genuine value based on my experience, knowledge and networks is what I am looking for.   Assessing the deal   Does the founder have realistic expectations given that they need help, and most likely a lot of help, where their business would otherwise fail?   What are you looking for specifically now to grow – cash, resources, contacts, expertise? What are you willing to give up? Could I replicate what has currently been done in a short amount of time for a fraction of what the current owner has spent? Is there anything that’s compellingly unique that provides some protection against new entrants? Do I like these guys – could I hang out with them day to day? Are they future leaders? Do they listen and want to learn? Can I add genuine value to this business? Do I understand the associated risks with this business and industry and can they be managed? Am I passionate about this industry, product or service offering? Is it worthwhile my time, energy, resources and commitment?   In a nutshell, there is no shortage of opportunities, but there is definitely a shortage of good people with good opportunities that meet your criteria at a deal that is worth your while! It’s a long-term investment with any new business, particularly if you are willing to be ‘hands on’ rather than a pure cash investor.   My hit rate and likelihood of success has significantly improved as my experience grows and my screening process gets better, although there is no secret formula. Ask any successful venture capitalist in Silicon Valley who overlooked Facebook, Google or Groupon in their early stages!   Some entrepreneurs can really surprise you and perform wildly above your expectations, and others can severely disappoint and go missing in the wilderness (literally).   When times are tough, it’s easy to spot those that choose to survive and those that choose to fail. Although this is half the fun of start-up land, which is ultimately where the risk and reward is the highest!   If you want help assessing a start-up opportunity on your behalf – feel free to contact me via www.jonathanweinstock.com.au.

loading...
loading...
loading...
loading...