Online hotel distribution company SiteMinder has received $US30million from Technology Crossover Ventures, a leading Silicon Valley venture capital firm that has also invested in Facebook, Expedia and Netflix. SiteMinder co-founder and chief executive Mike Ford told StartupSmart their experience and this breakthrough was a sign of the considerable increase in attention Australian tech start-ups are now receiving from major US venture capital firms. “There has definitely been an upsurge in interest from the US funds. When we raised our series A round ($5.5million from Bailador) just 18 months ago, the US market didn’t seem as interested. But several funds have reached out since then, which is exciting for the Australian tech company community,” Ford says. Launched in 2006, Ford says SiteMinder was bootstrapped and built on only $2 million of angel investment for the first six years. After their series A round in 2012, they began to grow rapidly. In 2013 they grew by 70% and processed over $5 billion in booking revenue for more than 11,000 clients. With its head office and 105 staff in Sydney, 70 in the United Kingdom and 12 in Bangkok, Ford says their major challenge in global expansion has been overcoming how far away Australia can seem to international hotel power players. “The challenge of going global with our technology was getting people over the idea we’re sitting on an island somewhere. To establish a global brand from Australia took a bit of work. We had to plonk ourselves down right in the middle of those markets, so we could turn up and show face,” Ford says. The funds will be used for product development, as well as consolidating and growing their global presence, entering the US market and setting up an office in Dallas. “Dallas is the last piece in the puzzle of our ‘follow the sun’ strategy,” Ford says. “Our target market is global accounts, so we’ve got all kinds of time zones and language to contend with. Between our three offices and now Dallas, we’ll be available 24/7.” SiteMinder launched its series B fundraising round last year to ensure it could grow quickly in the coming years, despite having surplus capital. “We hadn’t burned all the Bailador cash, but we decided to bring the money on now because the next two years are the critical point in hotels adopting this kind of technology,” Ford says. “Several consumer booking applications are pushing quite aggressively into the US market, and hotels are rapidly adapting to this tech and we want to be front and centre of that movement.” In a statement, TCV general partner David Yuan praised Australia’s entrepreneurial community tackling global business opportunities. “Australia has a wealth of pragmatic entrepreneurs who are attacking global markets with compelling products and SiteMinder is a great example of this,” he says. “We have been following SiteMinder for a number of years and have been impressed with the company’s rapid growth, market-leading product development, and a strong, talented team. As a pioneer, SiteMinder’s culture of innovation is unparalleled. We are excited about this partnership and look forward to working with SiteMinder in continuing its global expansion.” This is TCV’s first investment in an Australian company.
Businesses using Gmail now have access to a whole new contact base, as Google allows Gmail users to directly email any of their Google+ connections. Google lets users opt out of the function, however, the new default setting lets individuals or businesses email “anyone on Google+”. However, it doesn’t provide businesses with endless opportunities to spam consumers. Businesses or individuals can only email strangers once using the new feature, unless the person then replies, or adds them to their circles. This said, Seedling Strategy director Shu Yap told SmartCompany it does provide businesses with new opportunities. “Google+ is basically Google’s version of Facebook, which also really helps businesses with their search engine optimisation… I still see Facebook as being more predominant, but it will have some additional benefits,” she says. “I’m always amazed by how clever email marketing is these days when it’s done well. It can get very annoying… but when done well it’s a really clever form of communication.” Yap says if emails are targeted and displayed well, people like receiving useful information. “People actually want to receive information which is relevant to them, even if it is uncanvassed or from someone who they didn’t opt-in to receive emails from,” she says. “Lots of platforms now exist which help businesses be relevant and helps them integrate information into emails for time poor people.” If businesses can perfect their email marketing strategy, the new Gmail feature could help them expand their customer base, especially as the social network’s user numbers continue to grow. Yap says it can be difficult for small businesses to “get their head around” the number of social media sites now in existence. “In some regards I feel the social media world is getting so saturated …I think it will be the widgets which will be more popular than the actual channels themselves,” she says. “As more platforms come on board it gets more confusing for small business owners, there will be more of a market for tools which can integrate and streamline this information for the time poor.” Yap says social media is challenging for small business owners because many don’t have the resources to employ someone full-time to manage it. “They’re their own IT, marketing and finance departments. Unless they’re very savvy it’s challenging. But the ones which are adopting it in an industry conducive to their product and services have found great results… although it does depend on the business and its audience,” she says. “One consideration is how the legal system and spam legislation is going to change to account for social media. How it’s controlled and policed will be something to consider in the future.” This article first appeared on SmartCompany.
Four-month-old start-up tackling coupons, contests, Lady Gaga and seeing 100% monthly revenue growth1:19PM | Sunday, 12 January
Coupons have been a playground for start-ups for years, with one of Australia’s biggest start-up success stories, RetailMeNot, selling for $90 million in 2010. The team behind Gleam is also tapping into the power of coupons, to help small businesses get the most out of their social media networks. Launched in October 2013, Gleam is a software platform that businesses can use to run contests and share coupons such as discount codes. They recently ran a competition for Lady Gaga’s upcoming Australian tour, and co-founder Stuart McKeown told StartupSmart both their revenue and user engagement is growing by 100% month-on-month. McKeown told StartupSmart their recent growth is due to changes in Facebook’s algorithms, which have lobotomised the marketing plans of many small businesses that had previously been able to reach more of their followers for free. “One of the big problems in marketing and growth hacking at the moment is the drop in organic reach in Facebook. We’re working with businesses that have hundreds of thousands of fans but they’re only reaching 5% now,” McKeown says. The platform enables companies to run competitions on their social media profiles and own site. The competitions are commonly used as traffic or sign up generating tactics, or to convert Facebook page fans to Twitter followers or newsletter subscribers. “As a business, where you really want people is on your newsletter list. By running contests and offering coupons as rewards, we’re helping people to diversify their social portfolio so you don’t have all your eggs in the one social network basket,” McKeown says. The software as a service start-up has 15,000 users and runs on a freemium model with a conversion rate of just above 10%. McKeown’s co-founder John Sherwood is working on the business full time, and McKeown is hoping the business will continue to grow so he’ll be able to do the same later this year. This is their 9th project together. The team’s focus for the next few months will be on growing the business with both new products and partnerships, such as the one they recently signed with online ecommerce checkout company Shopify. “We’re doing a lot of growth hacking and we’re really focused on user acquisition. A key way we’re going to grow is through partnering with third party platforms, such as Shopify. We’re just getting started with leveraging that opportunity,” McKeown says. The Lady Gaga project with MCM Entertainment inspired the Gleam team to start developing a white label version of the software to be used by agencies for larger projects. They’re also developing a range of software plug-ins, and have started exploring referral and social review tools.
The ubiquity of technology, the burgeoning uptake of apps and the growing awareness about tech start-up potential and success stories has made learning how to code an increasingly popular New Year’s resolution. Peter Argent can attest to this. After launching his Sydney-based coding school, The Coder Factory, in September 2013, he describes the first few months as slow-growing but they’ve been swamped since the calendar clocked over to 2014. “Every second person these days has an idea for an app, but they don’t necessarily know how to build it themselves,” Argent says. Argent says the stereotypes about coding and coders are beginning to melt, but they’re still holding people back. “There is an underlying idea that it’s for geeks and nerds, that you have to be super smart and like maths. But that’s not true. Yeah, Mark Zuckerberg and Bill Gates are pretty nerdy, but it’s worth giving it a go as it’s an increasingly important skill set for every possible career.” Argent shared his top three tips for learning how to code your way to your first app with StartupSmart. Start with a particular project in mind Beginning to learn how to code with a particular project in mind will make navigating the new language easier, and keep you motivated says Argent. “It’s important to have a project or end goal in mind because that keeps you going. It enables you to actually get it, and move beyond theory,” Argent says. “We recommend people play around with some of the free online courses first to get an inkling it’s not too hard, and then think of an app and start learning how to build it.” Argent says they stay focused on actual apps and products the whole way through the course, exploring platforms such as Facebook and popular apps and showing the students how to build the same functionality. Learn Ruby on Rails as your first coding language While coders often recommend python as a good first language for new coders, Argent says the increasingly popular Ruby on Rails language is the best one to get started with because of the social support factor. “I would always definitely recommend Ruby on Rails. There are a lot of languages that are good for beginners, but the Ruby community is amazing. It’s very friendly and you can ask questions online without people getting narky,” Argent says. As learning how to code can be intimidating, working in a supportive community can be the make-or-break factor for many aspiring coders. He adds the community has also spawned many free open source tools and plug-ins which enable coders to build out their functionality quickly as they learn the basics. The second step is the hardest, so hang in there According to Argent, many students falter and many aspiring coders give up after they’ve learned the basics and feel they’re beginning to understand how to code, and then realise there is another major step to reach understanding. “The fundamentals of coding aren’t too hard, even young kids can pick up the core ideas quickly. It’s the next step that gets people,” Argent says. Argent says the module introducing the model view controller passage is the toughest in the course. The module deals with how code is structured, and how it operates with what’s appearing on the screen. “It’s tough because it’s a completely new way of thinking. Everyone can get there, but it’s a different approach so it takes a bit longer before I see the students’ eyes start to light up as it clicks into place.”
No matter what your opinion of social media, it’s become a ubiquitous feature of our lives. It’s also rapidly evolving, with new platforms and features being developed to capture people’s attention and possibly become the next Facebook. Businesses are also catching on with their own presence on platforms as they need to be where their customers are. There was plenty of news and advice for readers this year on the latest developments and ways to get the most out of tweets and hashtags and posts and pins. Quixomatic consolidates social media pages The story of Sydney-based start-up launching its platform that consolidates a company’s social media pages generated plenty of interest for readers. Co-founder and managing director Brett Poole, who previously worked for Yahoo, told StartupSmart the idea emerged from the trend of start-ups and small businesses being active on social media first to build traction before investing in creating a website. Quixomatic uses the information already on a company’s Facebook page to generate a mobile-friendly website. It also plugs into other social media platforms such as Instagram and YouTube. Who owns what on social media? When you post content on social media, who do you think owns it? Many people will say the person who posts the content. That may be true, but the content maker may not be the only owner. Mentor Vanessa Emilio looked into the issue here and warned readers to be aware of what could happen to their content. Time-saving tools for Twitter A tweet has become more than what a bird does. It’s now a message to the world that can whip up outrage, embarrass or entertain. It’s also a powerful tool for business engaging with their customers through the Twitter platform. But for the busy businessperson, managing their Twitter account can be time consuming. Lauren Ridgway offers here some time-saving tools when using Twitter, including using Tweetdeck and various analytical tools. Facebook accelerator program for small business Many small businesses have a Facebook page. For those who don’t want to create their own websites, it’s a relatively simple option for them. The news that Facebook was offering places in an accelerator program to help small businesses get the most out of Facebook was widely shared. “Many small businesses are doing great things on Facebook and we are committed in helping them continue to unlock the opportunities open to them,” Nick Bowditch, Facebook’s manager of small business in Australia and New Zealand, said. What’s better – advertising a business or using social media? Advertising and social media provide different paths for promoting your business, as mentor Dean Ramler writes. But in today’s business world, it’s no longer a question of one or the other. In this post he outlines how social media can be great for engaging with customers while online and traditional advertising also play a role. “Any good marketing program should combine both advertising and social media for maximum impact,” he says. Some more articles worth reading: How to build social media hype for a crowdfunding campaign; Twitter announces a partnership with a young Sydney start-up; and Why social media is a must when you want to sell your business.
Despite many corporates slowing down and packing up this week as we roll towards Christmas, the Australian start-up community has been powering along launching a car made entirely of Lego that runs on air and announcing new partnerships. The big one this week was Tiger Pistol, which is now one of two companies listed as Facebook’s preferred marketing partners. Co-founder and chief executive Steve Hibberd spoke to us about what this means for his company, and how they got in touch with Facebook after 18 months of perseverance. Investment announcements haven’t slowed yet, with an education app start-up announcing a Commercialisation Australia grant of $50,000 and an emergency response system start-up that planned to raise $500,000 but ended up raising $1.2 million after tweaking its pitching material. Also in investment news, an angel investor expert has warned the Australian angel networks to develop slowly, and the director of new ventures at NICTA, Andrew Stead, crunched the numbers of 71 investment deals made in 2012 and shared his findings about what Australian investors look for with us here. For every start-up that receives funding, there are plenty that don’t. This start-up decided to pursue their dream to go global with no extra capital, and all of their friends telling them it was a bad idea. They made it work after working through the overwhelming stress. The government announced it was abandoning two tax reforms that would have boosted the start-up scene, but it’s been a rougher week for workers at car maker Holden. The local start-up community in Adelaide has thrown open their doors to welcome any aspiring entrepreneurs among their number. Many local entrepreneurs are exploring ventures in the outsourcing and freelancing market, so the merger of international outsourcing giants Elance and oDesk is sure to change the playing field a bit. In other international news, an Australian start-up has returned from the 10X accelerator based in Ohio and another entrepreneur shared his insights after attending the Lean Startup conference in San Francisco. Closer to home, we shared tips to get the best work-life balance you can over the summer holidays, how much the average freelancer is charging, and three tips for creative entrepreneurs who can struggle to sell their work without selling their soul. Finally, we heard from a start-up tapping into the power of the crowd to compete with roadside assistance heavyweights, an award-winning education platform enabling anyone run an online course, and shared an infographic on how to master your fears as you move forwards as an entrepreneur.
The chairman of National Australia Bank, Michael Chaney, has painted a lukewarm outlook for the Australian economy, saying the country is faced with “at best” modest economic growth and rising unemployment. “Business conditions are subdued and, unless economic reform and restructuring continue, are likely to remain so,” he told shareholders at the company’s annual general meeting. “That is the challenge facing governments and all participants in the economy.” Zuckerberg to sell shares in Facebook Facebook chief executive Mark Zuckerberg is to sell a part of his stake in the company as part of a new share offering by the social media giant. The company said in a regulatory filing it would sell 70 million shares in a follow-on offering to the huge initial public offering in May 2012. Of that, Zuckerberg will sell around 41 million shares, mainly to satisfy his tax obligations, it said. The sale will have little impact on his control of the company, however. The 27 million new shares at Facebook's latest closing price of $US55.57 would raise some $US1.5 billion for the company "for working capital and other general corporate purposes," the statement said. Ksubi jeans placed in receivership Australian jeans fashion label Ksubi has been placed in receivership, the ABC reports. It says receivers have been appointed to find a buyer for the denim and street wear brand that’s been operating for 13 years. The action follows other Australian fashion labels that have faced financial difficulty this year, including Lisa Ho and Collette Dinnigan. Markets The Dow Jones Industrial Average is up 0.1% at 16,177.47 points while the Australian dollars is up at 88.6 US cents.
Online classroom platform OpenLearning was selected winner by both the judges and crowd at last week’s education technology start-up pitching competition co-hosted by SydEduTech meetup and the Optus-Innov8 Seed accelerator and investment program. Launched in October 2012, over 30,000 students have used the OpenLearning platform. The platform is able to be used by large, open access groups, universities or small businesses and corporate partners. SydEduTech meetup coordinator Atul Pandey told StartupSmart OpenLearning was the stand-out start-up of the night. “They’re trying to be Facebook for education: a platform that is more interactive and social. They’re opening up the platform and targeting universities in Australia and Malaysia,” Pandey says. The judging panel included investor Kim Heras, education investor Terry Hilsberg, educator and community coordinator Matt Easterman and Alfred Lo, principal at the Optus Innov8 Seed Fund. OpenLearning co-founder and chief executive Adam Brimo told StartupSmart there were a lot of massive online opening learning start-ups but OpenLearning’s focus on community was their main differentiator. “The key differentiators for us are ease of set up and the community. Small businesses often think online courses are too complicated or expensive,” Brimo says. “But anyone can use the platform to teach courses.” Brimo says 2014 is already shaping up well, with a host of new clients locked in and even more scoping out the offering. They recently launched an institution product, similar to a white label service, which offers customer branding. He adds the biggest challenge of getting OpenLearning up and running has been learning to work with different kinds of billing cycles. “When dealing with universities and larger organisations it can take a really long time to get to a decision. As a start-up you’re trying to move as fast as possible, and that can be hard when the customers take a bit longer,” Brimo says. Five other start-ups made it through to the final round, which will be judged on January 29: Literatu, ClassCover, MomentumCloud, ReadableEnglish and MyEdOnline. The winner of the January round will be off to leading Asian tech conference Echelon.
Belinda Jennings, co-founder and chief executive of pre-loved classified site Baby Bargains Australia, has launched Mum Central, a new site to broaden the brand and entice a whole new realm of advertisers to her business. Jennings told StartupSmart the content-driven site was a natural spin-off from Baby Bargains Australia, as the community has always been core to their value. “When we started, I just wanted to allow parents to buy and sell pre-loved products, but we morphed into a community and really tapped into the powerful nature of peer to peer advice,” Jennings says. “I have always been collecting the conversations knowing that one day they would be so powerful if all put in one place because there is just so much demand.” After registering the domain Mum Central last year, Jennings says she was spurred into acting on these inklings after conversations with several advertisers she was liaising with for Baby Bargains. “We got a lot of pushback from brands who didn’t want to put their brand on something just for babies or about bargains, because it might be cheapening or limiting the brand. I was aware of this and thinking ahead to the next step,” Jennings says. Part of preparation for the next step was preparing a network of social media pages so Baby Bargains and Mum Central can offer targeted solutions for advertisers. “Mums are the most highly sought after demographic for advertisers and it is competitive,” Jennings says. “We have 10 different Facebook pages and page managers across the country. We’re working with a more powerful mum-to-mum dynamic than expert-to-mum dynamic, and that’s how we’re different.” The new site has become the core of the business for Jennings, who adds she’s keen to get out there and connect with advertisers as she’s found sharing her own story, both as a mum and an entrepreneur to be one of the most powerful tools she has. “A lot of people see me as a mum who is running a community, but I’m also an entrepreneur who is hungry to develop the opportunity to be innovative in this very competitive space,” Jennings says. “There are massive opportunities and they fit perfectly for the way we’ve built Mum Central. We’ve got a lot of big ideas to develop the company to drive revenue while keeping our freemium model working.” Jennings, who graduated from two intakes of the ANZ Innovyz Start program and raised $250,000 in seed funding shortly afterwards, has begun raising a Series A round of $1 million. Jennings says the funds will go towards scaling their offering across the country in preparation for an exit in three years. “We have a pretty clear exit strategy in the next three to four years. We’re planning on an acquisition exit, probably by selling the sites to one of the key media companies,” Jennings says. “We’re doing everything a bit differently, and we believe that the growth and engagement will make us very appealing. Also the three and a half years of data we’re sitting on and developing will be quite valuable as well.”
With new figures from Sensis revealing 67% of businesses expect to see an increase in sales in 2014, 99designs chief executive Patrick Llewellyn saysrefreshing your business’s image could be the key to boosting sales. Just as you need streamlined back-end technology in business, a company’s image is also fundamental to its success and longevity. Llewellyn told SmartCompany if a business is underperforming, or if it wants to address a new market, it needs to consider changing its image. “If things are going great, I wouldn’t be changing up your look for the sake of it. You need to have a purpose for why you’re doing something and have a clear reason,” he says. “But if your brand feels and visually looks dated, you should clean up and use flattering design principles. It’s an element of taking stock and having a good look at all of your materials and asking yourself hard questions about how your design represents your brand and reflects you.” For businesses in need of a facelift, Llewellyn has the following advice: 1. How does your design translate? Llewellyn says businesses need to consider how their design works on the different mediums. “Think about how it looks on social media, on mobile devices, on websites and whether or not your site needs to be more responsive. All of these things need to be considered,” he says. Llewellyn says when thinking about redesigning, businesses should find out what customers think of the brand. “Think about it as though you’re taking stock of yourself. Survey your customers and ask them what they think of the brand, how they perceive it and what values it represents to them. This process can give you a springboard,” he says. 2. Start with a clear vision Businesses need to start with a good understanding of what they want to achieve through the redesign process. “Spend some time trying to articulate this and engage others in this process,” Llewellyn says. “When coming up with a vision about making these changes, engage with your staff and try and involve as many stakeholders as possible.” Llewellyn says businesses can have fun with the process and use it as a way to bring everyone in the business together. 3. Think about the future When redesigning, businesses need to think about what they want their brand to present going forward. “Think about the future and your audience going forward and combine the best of the old and the new elements of the brand,” Llewellyn says. “Any new brand needs to be able to work on mobiles and also consider how the brand will interplay with the importance of content marketing. We will continue to see the rise of this in 2014 and any new branding effort needs to take this into account.” From here, businesses need to construct a design brief. “Talk about what the industry is, who the customers are, your mission and vision, and what visual styles you’re looking to represent,” Llewellyn says. “Look at brands you inspire to be like and where you want to go and really articulate this.” 4. Refresh all brand interaction points Llewellyn says brands now need to consider how they’re presented on every medium. “You also need to refresh your social and visual representation – so things like Facebook covers, blogs, emails and different interactions points with the brand could benefit from a redesign, rather than just your logo,” he says, “With content marketing a key trend, also think about repurposing existing content and turning it into something else, like an infographic or video.” Llewellyn says the notion of needing to stay relevant and be present on a “myriad of devices” is only just starting to take hold. “The trend is starting to permeate down to smaller and smaller businesses. The old paradigm of small businesses just caring about how their advertising looked in the Yellow Pages is changing. Small businesses now also care about SEO and SEM,” he says. “Every time there is a new device, your design needs to be rethought and redone. We’ll continue to see an evolution of these trends going forward as lots of small businesses still need to go online.” 5. Aspirational businesses Llewellyn says businesses big and small are reinventing in positive ways. “Looking at the big players, Google has done a really great job of enhancing its individual style. There’s been a noticeable change and it’s brought its products together in a more unified way with a good aesthetic and responsive design,” he says. “In terms of smaller sites, The Next Web and TechCrunch are trying to reinvent pretty often. They’ve done an okay job with their latest reiterations and their visual design styles continue to evolve.” This story first appeared on SmartCompany.
Microsoft, the University of Melbourne and the Victorian government have joined forces to open an $8 million research centre for social new interactive technologies that use voice, touch, gesture, gaze and physical movement. The Microsoft Centre for Social Natural User Interface (NUI) Research will have funded positions for researchers exploring the social uses of technology that enables digital products to use physical human engagement more intuitively and naturally. NUIs, such as Wii game consoles and Xbox Kinect, moved away from the desktop and mouse to use direct physical engagement such as capturing voice, gesture, touch and even brain recognition with sensors that interact with technologies. Centre director Professor Frank Vetere, who also heads up the Interaction Design Lab at Melbourne University, told StartupSmart the centre would push the emerging field of NUI design towards reaching its social potential. “The recent explosion of social media shows the extraordinary human desire to use technology for our own personal needs and interaction, so there is definitely a growing role for social NUIs,” Vetere says. “The centre is not just about the fun stuff like Facebook. It’s also the way we’re social in the workplace, in schools, in hospitals, and how we relate in public spaces.” This is Microsoft’s first NUI centre focused on the social uses of the emerging technology. Vetere says there is ample opportunity for Australia to become a leader in this emerging tech industry. “Clearly this is an opportunity to extend the thinking and knowledge happening elsewhere. We’ve got enormous strong support with Microsoft, so we can clearly leverage and contribute to their wider NUI work,” Vetere says. The research centre is intended to explore the emerging field of how technology can encourage positive social and collaborative behaviours. Resources have been allocated for three years. In a statement, Microsoft Research vice president Tony Hey said the three-way partnership was great news for achieving their goals. “This is a world class research centre, located at a world class university in a forward thinking state,” Hey said. “I am confident the centre will open the floodgates to innovative social uses of NUI. The potential for social NUI will only be limited by our imagination.” The 28 supported academics and PhD students will have the opportunity to spend time at other Microsoft research centres such as Cambridge, Beijing, and Redmond in the US.
The tech sector has always been hyper-competitive, and never has this been truer than in 2013. For the likes of Twitter, Samsung and Google, the harvest of 2013 was bountiful. However, from the perspective of Nokia, Microsoft, BlackBerry or the PC industry, it was a year to forget. Here’s a look back at 10 of the big events and trends that shaped the tech sector in 2013. 1. One billion smartphones sold this year – and counting The most important tech story of 2013 didn’t take place with a major product announcement or a Steve Jobs-style keynote speech. Instead, it took place without fanfare at an ordinary mobile phone retailer somewhere deep in suburbia. It was there that a consumer decided to purchase the one billionth smartphone to be sold during 2013. To put that number in perspective, it is projected that 227.3 million tablets shipped worldwide during 2013, 158 million television sets, 180.9 million portable PCs and 134.4 million desktop PCs. Meanwhile, figures from market analysts IDC show smartphones also outsold featurephones worldwide for the first time in history during the first quarter of 2013. What this means is that while smartphones now account for more than half of the 418.6 million mobile phones shipped worldwide each quarter, there are still millions of old-fashioned featurephones being sold each year. Especially in the low-end of the market and in emerging economies, that means there’s plenty of extra room for growth in the future – especially at the low-end of the market. Make no mistake about it. The smartphone industry is big – far bigger than the PC or TV business. And it’s only going to get bigger in 2014. 2. Google Android and Samsung: The juggernaut rolls on The biggest winners from the spectacular, ongoing growth of the smartphone market have been Samsung and Google. Last year, smartphones running Google Android outsold Apple. In 2013, that trend morphed into total industry domination. For example, of the 261.1 million smartphones shipped worldwide during the third quarter of 2013, 211.6 million or over 80% ran Google’s Android operating system. That compares to just 33.8 million iPhones, representing around 12.9% of the market, and a measly 3.6% for Windows Phone. Samsung managed to ship 72.4 million smartphones during the second quarter of 2013 alone, representing around 30.4% of the market – more than double Apple’s sales during the same period. Those device sales also mean increased component orders flowing through the various divisions of the South Korean tech conglomerate, which manufactures everything from semiconductors to batteries and smartphone displays. The growing strength of the South Korean electronics behemoth is demonstrated by its advertising and marketing budget, which has been estimated at around $US14 billion worldwide. To put that figure into perspective, as of 2011, North Korea’s entire national economy was estimated to stand at $US12.385 billion. 3. The PC industry bloodbath While Google and Samsung have had a stellar year in 2013, the same certainly can’t be said for the PC industry. The September quarter was the sixth consecutive quarter of falls, according to Gartner, with shipments falling to 80.2 million units for the quarter from 87.8 million a year earlier. Figures released by IDC forecast PC shipments for the full year to fall 9.7% in 2013. More alarmingly, it appears the emerging middle class in China, India and Brazil aren’t keen on buying computers, with total PC shipments in emerging markets expected to drop from 205.2 million to 185 million this year. Australia and New Zealand led the trend, with a massive 21% year-on-year fall in shipments for first quarter in Australia, along with a more astounding 27% fall in New Zealand. The implosion of the PC market was disastrous for a number of PC makers, including Dell, HP and Acer. In August, HP announced a major shake-up of its senior management team after announcing a large 15% year-on-year drop in net earnings and a 22% drop in revenue from consumer devices during its quarterly results. That same month, Dell reported a massive 72% year-on-year collapse in quarterly earnings, while a consortium including founder Michael Dell, Silver Lake Capital and Microsoft successfully fought off high-profile investor Carl Icahn’s bid for control of the company. And at Acer, founder Stan Shih made a surprise return as interim chairman and president, following the resignation of former chief executive JT Wang and president Jim Wong after the company recorded a record third-quarter loss. The resignations came after Acer announced its consolidated revenues for the third-quarter of 2013 fell 11.8% year-on-year to $US3.11 billion, resulting in an operating loss of $US86.6 million. 4. Surface falls flat On top of falling PC sales and 3.6% Windows Phone market share, the news was dire for Microsoft on another front in 2013. Late last year, Microsoft launched its Surface series of tablets as a first step towards making devices, with the company believed to have manufactured around six million units. The release of the Surface instantly made Microsoft a direct competitor to many of its already struggling PC partners, straining relations in the process. Fast forward to July of this year when Microsoft announced a massive $US900 million writedown on its inventory of unsold tablets. The writedown came less than a week after Microsoft announced a large price cut of $US150 for the struggling product line. Adding insult to injury, Microsoft also revealed it has spent $US898 million advertising the tablets, while only generating $US853 million in sales. According to many leading analysts, the company was believed to have sold just 1.7 million of the six million tablets it had built. To put those numbers in perspective, Apple sells around 14.6 million iPads each quarter, while Samsung sells around 8.8 million. 5. Steve Ballmer resigns During the 1990s, Microsoft was undeniably the 800-pound gorilla of the tech industry. Then, in January 2000, founder Bill Gates stood aside as chief executive, in favour of Steve Ballmer, in order to focus on his philanthropic efforts. Since then, the company has lost much of its former dynamism, and has failed to become the dominant player in a range of new technologies that have emerged since then, including search, tablets, smartphones or social media. In August last year, Vanity Fair magazine journalist Kurt Eichenwald ran a feature exploring why Microsoft fell behind its rivals. A management technique called stack ranking was almost universally blamed. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” a former software developer told Eichenwald. “It leads to employees focusing on competing with each other rather than competing with other companies.” Add the low market share for Windows Phone, poor sales of the Surface and the PC industry bloodbath, and it became clear something had to give at Microsoft. In July, the company announced a major management restructure, with the company’s strategy shifting to focus on “devices and services”. Then, just one month later, Ballmer resigned as chief executive, with stack ranking dumped as a management technique soon after. The Redmond, Washington-based tech giant is currently searching for his replacement. Story continues on page 2. Please click below. 6. Nokia sold for a song Soon after Ballmer’s resignation, the news was overshadowed by an even bigger story. In September, Microsoft announced it was buying Nokia’s smartphone and devices businesses for $US7.2 billion, with the Finnish telecommunications company retaining its Nokia-Siemens services network equipment business and the Nokia brand name. The deal came after Nokia announced its smartphone sales had slumped 27% year-on-year during the second quarter of 2013, with an overall loss of €115 million ($A190 million) for the quarter. The sales plunge was led by the company’s Windows Phone-based Lumia smartphone unit, where shipments fell 27% from 10.2 million units during the second quarter of 2012 to just 7.4 million for the same quarter in 2013. To put that number into perspective, it was a little over one-tenth the number of smartphones sold by Samsung during the same quarter. It was an inglorious end to a company that absolutely dominated the mobile industry through the 1990s and 2000s. As recently as 2010, when Apple sold 47 million smartphones, Nokia managed to sell 104 million. According to prominent industry analysts, such as former Nokia executive Tomi Ahonen, the fateful moment came in February 2011, when then chief executive Stephen Elop made the decision to switch its smartphones to the Windows Phone operating system. Soon after, a leaked internal letter from Elop known as the “burning platform” memo likened the company’s situation in the mobile phone market to a person standing on a burning oil platform. After the takeover was announced, Elop was named as one of the top contenders for the position of Microsoft chief executive. 7. BlackBerry’s failed comeback and takeover attempt It wasn’t just Nokia that had a tough time in the smartphone market at the hands of Samsung and Google. In January, BlackBerry launched its new, all-touch BlackBerry 10 smartphone operating system. The platform, originally scheduled for late 2011, had been delayed by a year, preventing the company launching a flagship phone in 2012. The Australian launch for the first smartphone to run the new platform, the Z10, came in March at a gala event in Sydney hosted by Adam Spencer. A second device using a traditional BlackBerry keyboard, called the Q10, came soon after. While the reviews were generally positive, the new devices failed to be the big comeback success the company’s then-chief executive, Thorsten Heins, had hoped for. By August, the company formed a special five-member panel to examine takeover options after director and Canadian investment guru Prem Watsa quit the board. In its September quarter results, the full carnage was laid bare. The Canadian smartphone maker reported just $US1.6 billion in revenues for the quarter, down 45% year-on-year and 49% quarter-on-quarter. The company also revealed it sold just 3.7 million smartphones for the quarter – and less than half of those ran BlackBerry 10. Total losses came in at $US965 million, including a massive $US934 million inventory writedown against unsold stock of the company’s Z10 smartphone. The company announced more than 4500 staff layoffs, representing nearly 40% of its global workforce, while Heins bought a new private jet. Meanwhile, the company’s rollout of its Messenger app for Android and iOS was frozen due to technical issues with its release. In early November, with banks uncertain of the company’s long-term future, Watsa failed to raise the requisite $4.7 billion for a buyout, instead lending the company $US1 billion. As part of the deal, Heins stood aside as chief executive, replaced by former Sybase chief executive John Chen, with Watsa rejoining the board. Heins received a $US22 million golden parachute for his efforts, significantly less than the $US55.6 million he would have received had the sale gone through. 8. The Twitter IPO Last year, Facebook’s disastrous IPO ended in tears – followed by lawsuits. Thankfully, the outcome was not repeated when its social media rival, Twitter, listed on the New York Stock Exchange in November. After opening at $US26 per share, the company’s share price surged 72.69% in its first trading session. It closed at $US44.90 per share, before dropping slightly to $US44.44 in after-hours trading. Making the result even more amazing was the state of its balance sheet. While the tech giant has revenues of $US534.46 million and around 230 million users worldwide, it has never posted a profit. Despite this, the company now has a market capitalisation north of $US20 billion, with chief executive Dick Costolo claiming the company’s long-term investment strategy has prevented it from chasing profits in the short term. 9. iOS7, iPhones and iPads For Apple, 2013 was a solid if somewhat unspectacular year. In June, the company released a redesigned version of its smartphone and mobile operating system, iOS7, alongside a new version of its Mac OS X desktop operating system, known as Mavericks. It was the year that Apple finally unveiled a low-cost version of its iPhone, known as the iPhone 5c, alongside a new 64-bit flagship smartphone called the iPhone 5s, complete with a 64-bit processor and a fingerprint sensor. Then, in October, the company unveiled a lighter version of its iPad, known as the iPad Air. None of the products had the industry-shaking impact of the unveiling of the Macintosh, iPod, iPhone or iPad. That said, with billions in profits each quarter, a solid second place in the smartphone market and the world’s biggest selling tablet, solid and unspectacular for Apple is better than most companies could dream of. 10. Xbox One and PlayStation 4 launch Last, but certainly not least for gamers, 2013 marked the introduction of next generation games consoles from both Sony and Microsoft. Coming a year after Nintendo launched its Wii U system, Sony announced one million first-day sales of its PlayStation 4 system, but the launch was marred by a number of angry consumers taking to social media to complain about non-functional systems. Sony’s first-day sales were soon matched by the first-day sales of Microsoft’s new Xbox One system. So how will the two new devices perform over the long term? We’ll have to wait until next year to find out! This story first appeared on SmartCompany.
As Taskmaster readers will know, earlier this week your humble correspondent went for a sales meeting at a busy suburban shopping centre. After visiting one customer, Old Taskmaster trundled through the now narrow corridors to a second store. Slowly. The once wide corridors have been narrowed down by a series of mobile phone store kiosks, meaning a single elderly gentleman with a walking stick and five-year-old granddaughter in tow can now single-handedly slow a whole row of shoppers to a crawl. Seriously, centre management, it might boost revenue per square metre, but it’s a practice that really annoys your shoppers! Anyway, the second sales call was a franchisee of a national chain. During a discussion about the newest widget models from Taskmaster Enterprises, they revealed their biggest business regret. Apparently, part of their franchise agreement states that they have an exclusive ‘territory’ in terms of the location of physical stores. Unfortunately for them, any revenues from sales through the chain’s website or its mobile app go to the franchisor, even if the customer is within the same suburb as an existing store. So if a customer visits their local store on Sunday, looks at an item, and then goes home before ordering it online a couple of days later, the value of that sale goes entirely to the franchisor. As you might imagine, this creates all manner of perverse incentives. For example, the franchisee views the website as a competitor with the same merchandise rather than an asset for their business. Why encourage your loyal customers to purchase their goods from a competitor? As a result, since the company’s Twitter and Facebook accounts are geared to get people to buy online rather than in store, what incentive is there for the sales staff to promote them? As a result, Old Taskmaster was amused to note the sales staff consistently “forget” to ask the customers to follow the chain on Twitter and Facebook – even when the owner or manager is within earshot. The franchisee’s big regret with all of this is to fail to ask the question of how online sales revenues (or profits) are distributed. After all, who wants a franchisor who feels like a rival rather than a partner? Well, Old Taskmaster says this: If you’re looking to become a franchisee, make sure you ask about how online revenues are distributed. It’s always better to ask ahead of time than to find yourself in a business dispute. As for franchisors, be aware that the way you treat your online sales and web presence can create perverse incentives for your franchisees. If a sale can be traced to near a physical franchisee’s store, consider some sort of profit sharing agreement with your franchisees. Get it done – today.
When investment tool SelfWealth went looking to raise around $3 million to bring its information technology in-house, it considered but then rejected accessing venture capital sources. While it may be the dream of many start-ups to progress from early stage investment from angels to larger funding from the venture capital sector, for SelfWealth managing director Andrew Ward it wasn’t the right fit. “The valuation they put on the business was a lot lower than we thought,” he told StartupSmart. “And their position on being strict on exits and potentially taking on debt made my board nervous.” So instead of going down the venture capital path, SelfWealth “turned on our heels” and went back to its early backers, including carsales.com chief executive Greg Roebuck, and other high net worth individuals. The strategy is paying off for the company, which allows users to build and compare investment portfolios with others and has been described as the “Facebook of investing”. It’s added 10 new investors, raised $2 million with another $1 million expected in the near future. Ward advises other start-ups that don’t want to take on venture capital funding to go back to their original investors. Also, when pitching for series A funding, let new potential investors know who’s already invested. “When we went back to our strategic investors it all happened quite quickly,” he says, adding that previous investors were happy to talk to others about why they invested in the company. Among the 10 new investors to come on board is Australasian Wealth Investments, an ASX-listed investment fund. Last year, SelfWealth raised $1.6 million through the Australian Small Scale Offerings Board, with 21 investors taking part in the raising. Ward also suggests that other start-ups seeking investment not take money “for money’s sake – although you can get desperate”. “You don’t want to take cheap money, you want smart money,” he says, urging founders to ask how potential investors can add value to the company. “I know every one of our shareholders,” he says.
Liquorun, a start-up that delivers alcohol to metropolitan Melbourne homes within two hours, has emerged victorious from their beta testing phase and just passed their first weekend of trading. Launched in July by Melbourne Football Club players Joel Macdonald, James Strauss and Rohan Bail, the Blue Chilli-backed company will be focusing on growing their customer network and online community in Melbourne with a view to launch in Sydney and Brisbane in early 2014. Macdonald told StartupSmart their fundamental partnerships are functioning well and they’re learning a lot. “We got probably more orders than we expected. The bottle shops are really happy, and that partnership is crucial to our growth as they’re pumping our brand in store and we’re leveraging each other’s databases, so the long term prospects are looking good,” Macdonald says. He adds the most challenging part of their launch so far has been making sure the agreements with the bottle shops were up to scratch. “Most challenging has been making sure that the agreement is tight with the bottle shop and our own licensing documents, because they’re putting huge faith in us,” Macdonald says. The first weekend involved 300 customers and three drivers. The Liquorun team are focusing on tightening the processes and systems they rely on. “The learning has been great, and we’re trying to implement everything we hear that makes sense straight away,” Macdonald says. “Now we’re in the validation through growth phase. We need to tighten up the model and boost our distribution and delivery reach.” They’ll be focusing on customer acquisition and developing their online communities in the coming months with Facebook advertising, Google AdWords campaigns and editorials in hyper-local news sites. Macdonald adds one of the best bits of the business so far is how delighted people are when the delivery team turns up. “We’re working on protocols for our drivers as we grow, because everyone wants you to come in and have a beer with them when you rock up,” Macdonald says. “But we’re going to keep it really professional and hopefully soon the drivers will have too many orders to hang around at any spot.”
After suffering a life-threatening brain aneurysm three years ago, Leola Foon understands the importance of a healthy lifestyle and doing something you love. The 31-year-old Sydneysider has combined the two and launched More For Me, her own business preparing and delivering healthy meals for people too busy to cook meals for themselves. She tells Smart Solo the idea for the business was born after a friend who was running her own health food business asked her to prepare some meals because she was too busy to cook for herself. “The more I thought about the idea and that people didn’t have many healthy food options at a good price point, it made sense,” Foon says. She says she launched the business within 72 hours of thinking of it through a Facebook page in October. Within 48 hours, despite not having any branding or logo, she had six orders and has since attracted a number of regular customers. More For Me now has its own website and Foon’s ambition is to grow the business. “I love cooking. Cooking is something that comes very natural to me. I’ve always loved to make healthy foods and making them delicious, which is a challenge to many people,” she says. Two weeks after starting More For Me, Foon quit her full-time job with a not-for-profit to focus 100% on the business, a leap she says was one of the riskiest things she’s ever done. “I’ve always been financially secure and to make this leap has been right out of my comfort zone,” she says, adding that she’s got a strong support network around her. “I just think life is too short to not do something you don’t enjoy.” She says being a sole trader is trying and tiring but she’s happy doing what she wants to do. “I just have to remind myself this is where I want to take my life and this is where I want to be.” Foon says while she feels she’s still learning as she develops her business, the best advice she can give to others thinking of starting their own business is to “just keep on going and just remind yourself why you’re doing this”. “If it’s something you truly love, then don’t let anything stop you doing it. It’s not going to be easy but there are bigger things in life … health is more important. “By being happy you are contributing to your health. Your health should always come first.” Foon says it’s a shame that it takes a life threatening illness for many people to change their lives and realise their health is important. She says she aims to remind people through More For Me the importance of healthy eating and living a healthy lifestyle. Foon operates out of a commercial kitchen she rents and offers menus that change weekly.
What kind of offers work on social media? Giveaways on Twitter? Competitions on Facebook? I'm not quite sure how to approach this.
Happy Global Entrepreneurship Week! Here’s the wrap of the stories we covered this week, so you can catch up on your reading over the weekend. Apple Inc has hit a roadblock in their bid to trademark “startup” in Australia, and Kogan got into a fight with Click Frenzy. We spoke to the local co-ordinator for Global Entrepreneurship Week about the 230+ local activities, new research revealed Australia is the third most entrepreneurial country in the world, and some of Australia’s leading entrepreneurs were celebrated at an awards night on Thursday. Meanwhile, Ireland is making a play to attract our best and brightest, announcing a start-up ambassador for Australia, a campaign director told us how to get more sales via Facebook, and Nina Hendy shared seven tips to make your business look bigger. Don’t give up The big theme of our stories this week is a perennial mantra for start-ups: don’t give up. Niki Scevak, serial entrepreneur, investor and advisor, shared why ideas don’t fail, teams that give up do. It was also a recurring theme in the Start-ups are Scary series we launched this week. We heard from the co-founders of 99designs, Canva, Thank You Water, Vinomofo and Seek about their toughest and most terrifying moments, and how they made it through. Investment and accelerator news We spoke to an investor and advisor who’s worked with some of the world’s leading start-ups about his top five tips for seeking investment, heard from a start-up that raised $2 million and got the inside scoop on what the plan is for the new Telstra-backed accelerator. The ANZ Innovyz Start program, one of Australia’s leading accelerators, announced they’ll be opening an intake in Sydney early next year. We spoke to managing director Dr Jana Matthews about why they chose Sydney, and how the program has evolved in the past few years. Entrepreneurs shared their plans Start-ups may be hard work, but they’re also rewarding and a lot of fun, especially according to this MBA student who’s chucked in her plans to get a corporate gig to work for a start-up instead. We heard the business plans, passion and growth strategy behind a nursery furniture company, a museum mapping tech company, a Melbourne beer company, and a start-up turning one-week-old this weekend. Also this week, find out how to boost your profits as we head into the traditionally quiet period of Christmas, why getting a handle on hyperbolic language will revolutionise how you do business, and how to find the perfect business partner.
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.”
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.”