Communications Minister Malcolm Turnbull is set to claim up to 300,000 premises outside the NBN’s fixed line footprint will miss out on broadband without changes, in a speech to be delivered today. In a speech to be delivered at the CommsDay conference in Sydney, leaked to Fairfax Media’s Matthew Knott, Turnbull will say that the number of properties requiring a satellite or fixed wireless connection has been dramatically underestimated. “The problems mean that without policy changes, the project as planned would not be able to service an estimated 200,000 to 300,000 premises outside of the fixed line footprint,” Turnbull will say. “If the NBN were to take steps to eliminate the 'coverage gap', the company faces a deterioration of operating cash flows of its satellite and fixed wireless networks of up to $1.2 billion by 2021.” Twitter unveils user profile redesign Twitter has unveiled a redesign of its user profile pages, with the changes coming in response to new user growth hitting an all-time low during the last quarter. The features, currently available to a select number of users, include the ability to pin posts to the top of a users’ feed, as well as the introduction of Facebook-style banners and larger profile pictures. Business confidence falls as conditions improve Business confidence fell to its lowest level since the federal election during March, despite an improvement in business conditions, according to the latest NAB Monthly Business Survey. The survey shows that while conditions improved from zero points to one, confidence fell to a score of four, down from seven in February and nine in January. “It appears as though firms are responding to the ongoing sluggishness in business activity, which has not quite reflected the exuberance of firms in past months," NAB chief economist Alan Oster says. “The stubbornly high Australian dollar, uncertainty over the global economy and the potential for significant 'belt tightening' in the upcoming budget, could all have contributed as well.” Overnight The Dow Jones Industrial Average is up to 16256.1. The Aussie dollar is down to US93.61 cents.
Man’s best friend may also be one of man’s best business opportunities, with another startup targeting the pet industry re-launching this week. With rapidly growing startups in the space like award-winning Paws for Life disrupting the industry, it was only a matter of time before a startup entered the market to enable consumers to make the most of the price competition that’s heating up. 99PetShops is designed to do exactly that. The free web app allows pet owners to compare prices from over 60 online stores. Cofounder Edward Chan told StartupSmart prices differ significantly, with a popular tick and flea treatment ranging from $79.95 to $144.95. The idea emerged when his pet pug developed skin problems. He needed lots of different foods and products, and high prices drove Edward online, where he could always find a better deal. “I could always find a cheaper price online, but there wasn’t a good comparison tool that was comprehensive enough,” Chan says. A year of building the app in the evenings after clocking off from his full-time job saw him launch the app late last year. He and cofounder Daniel Ng are planning to charge an affiliate link on each sale, but want to build up their traffic before approaching the stores to discuss the opportunity. “We’ve got about 20 people using it a day, so it’s a bit of waste at the moment,” Chan says. They’ve been experimenting with Facebook advertising and want to explore Google AdWords campaigns in the future, but are saving up the budget for it first. The pet industry is a big one. Market research group IBISWorld says the Australian pet products and services industry earned about $6 billion in revenue last year and has grown by 0.9% each year since 2008. The industry report also details that over 60% of households own a pet, with over 50% owning either a dog or a cat.
What makes a good accountant for a start-up? A lot of them seem to be very focused on the corporate end of town.
The average smartphone user now uses apps for an average of nearly 11 minutes for each minute they spend looking at a mobile website, according to recent figures from mobile analytics firm Flurry. The figures show consumers spend an average of two hours and 42 minutes per day on either apps or mobile websites during the quarter to March, up four minutes year-on-year. Of that time, 86% or two hours and 19 minutes is spent each day on apps, with just 22 minutes spent on mobile websites, down from 20% for the same quarter a year earlier. The figures suggest consumers are increasingly choosing to interact with online services through apps than through mobile websites. According to Flurry, consumers are increasingly viewing their mobile web browsers as just another app, rather than as their primary means of accessing online content on their mobiles. Mobile game apps accounted for 32% of all app or mobile web usage, followed by Facebook (17%), mobile browsers (14%), mobile messaging apps (9.5%), utility apps (8%), entertainment apps (4%) and YouTube (4%). The Flurry figures echo projections, made in a Gartner report late last year, forecasting the total number of apps download each year would reach 268 billion by 2017, including 253 billion free apps and 14 billion paid apps. This is a significant increase from the 102 billion apps estimated to have been downloaded in 2013 and 63 billion in 2012. Gartner’s figures also show total revenue from apps hit $US26 billion ($28.187 billion) worldwide in 2013, up from $US18 billion ($19.5 billion)a year earlier. Dennis Benjamin from app development firm Appswiz told StartupSmart apps allow for faster and more convenient to access to content than the mobile web. “Mobile apps allow for ready access to the information you want, at your fingertips 24/7. Combine this with the fact that a range of app features will still operate on your phone without an internet connection (unlike mobile web) and the advantages become clearer,“ Benjamin says. “Having a mobile app can allow for a choice of alerts to be received, a feature not available from a mobile website. These alerts, for example special offers, time critical messages or updates all build customer engagement. “Mobile websites in general provide one way communication to the user whereas mobile apps facilitate two way dialogue and engagement.” Benjamin advises businesses to develop versions of their apps for smartphones running Google Android as well as for Apple iPhones. “In the third quarter of 2013, Android made up some 81% of devices shipped and now far exceeds the downloads of the Google Play Store compared to the iTunes App Store,” he says.” Today, just because an executive thinking about an app for their company has an iPhone doesn't mean that most of their customers do – they don't.”
In part one of my series on social media and the law, I looked at the legal implications of launching a startup on social media, and in part two I examined the employment law implications of social media. In this installment, I’ll discuss how to manage your social media. Do we have specific social media laws in place in Australia? There is no specific or rules in place for social media. There are some general laws that apply to capture things like false and misleading advertising on social media under Consumer law. But some Australian laws cannot protect thanks to overseas laws protecting them. For example, the Privacy Act does not cover you for things others may reveal about you in public on social media unless the social media organisation is based in Australia. However, even then, it does not protect individuals acting “in a personal capacity” so people posting on social media sites in a personal capacity would likely be exempt from the coverage of the privacy legislation. So what do you need to know and why: If you have a business, you need to know: What can you do about individuals writing damaging things on social media? If it’s about your business, it could damage your reputation. In a recent case, (Madden v Seafolly Pty Ltd  FCAFC 30), swimwear company Seafolly sued a woman who claimed on social media that Seafolly copied her designs. They sued for false and misleading advertising, trade libel and copyright infringement. Know about your rights as a business regarding incorrect or damaging posts about you and your products or services on social media so you can protect your reputation. What if individuals post damaging comments on your own business social media channels? A company/business may be liable if they knew or should have known that a statement posted on their social media site is defamatory and if it is not removed. You and your business may be sued for something you didn’t post or write if you don’t have a process in place to monitor and remove offensive or damaging posts. Can I say what I want on Social Media? The argument ‘freedom of speech’ or ‘I am entitled to my own opinion’ doesn’t work anymore. This March, Australia’s first Twitter and Facebook defamation case was awarded $105K to the victim. The former student tried to argue it was his belief that the comments were true and that it was his opinion which he had a right to post. It didn’t work. Now individuals need to be careful and consider before posting what they think. How to manage your social media Recognize that you are responsible for what goes up on social media and your own platform. Review your own Terms and Conditions to ensure you can take down and regulate what users post. Get your own copyright ‘house’ in order-ensure you have clear rules and regulations for your employees about sharing, posting and using images and text in your own advertisements and on all social media outlets so you don’t get caught out. Also make sure you register all valued intellectual property with IP Australia. With the growth of the internet, its more important than ever before. With Bullying, defamation, commercial disputes, copyright infringement, social media challenges will continue to grow and the law will need to keep up. So will we,,,
Augmented reality (AR) is often understood in terms of wearable technology and device-driven capabilities, but an Australian technology company, buildAR, has built technology to enable it in your browser. Often thought of as a futuristic play, the augmented reality and virtual reality (VR) markets are expected to grow 15.18% from 2013 to 2018, reaching $US1.06 Billion in 2018, and that’s excluding mobile based AR and non-immersive VR. It puts some perspective into Facebook’s recent $US2 billion acquisition of Oculus Rift – a VR play in that it creates a virtual world, where AR lets you see the world with more information overlaid on what you’re looking at. According to TechCrunch, Microsoft is also reported to have bought the augmented reality-related intellectual property of wearable tech company Osterhout Design Group for between $US100 and $US150 million. What makes buildAR unique is that they are “augmenting the web” and bringing the experience into your browser. BuildAR founder Alex Young says there was a lot of fragmentation in the app world when it comes to augmented reality, but using it in a browser got around this problem and democratised the technology for everyone. It has recently launched a Kickstarter campaign that makes it possible for anyone to deliver AR using standard Web browsers, but their focus is on utility based applications, particularly in education. The Kickstarter campaign will allow anyone to “create a project and embed it directly in their webpage as easily as you do with a YouTube video.” The campaign highlights some of the uses of the technology: “If you back us as an educator, we'll give you the tools to create experiences such as an AR treasure hunt or historical exploration that'll have your students running around your school or campus having fun while they learn. “If you back us as a curator, we'll give you the tools to enable your visitors to point their phone at items in your exhibition to unlock extra information that extends your collection beyond what's physically on show.” The buildAR platform enables anyone to create digital content into the physical world around you by linking it to images, locations and more. When it comes to education this could mean using the technology to bring learning objectives to life. The technology will work on smartphones and tablets, as well as wearable devices such as Google Glass and Oculus Rift. There are limitations in the use of the technology on Apple devices though, something the buildAR team wants to draw attention to, claiming that “commercial decisions made by Apple have put the [iTunes] App Store ahead of their customers”. As Young points out, Apple have consciously decided not to support the latest open web standards. buildAR have created a demo for their technology to show that how you can run augmented reality within your standard web browser, presenting the "Projects We Love" newsletter as AR images, floating in the real world. If you open this on a modern Android device using the latest version of Chrome, Firefox or Opera you'll see a rich combination of augmented reality and the web, which is called the augmented web. However, if you open the exact same page using an iPhone or iPad, you'll find that it works but that you can only see a very limited user experience. Young says the company has a much higher profile overseas, than locally, but were committed to staying in Australia if it can. They have also launched some local meetups for those interested in Wearable tech, in both Sydney and Canberra.
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.
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.”
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.
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.
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.
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.
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.
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.
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.
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.”
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.
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.
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.”