Dutch authorities have launched a criminal investigation into Uber because the company is providing an illegal taxi service that violates a court order, according to Reuters. The investigation is the latest setback for the ridesharing service in Europe. Last month a German court issued a nationwide ban on unlicensed taxi drivers with fines of up to $300,000 for violating the law. The move saw Uber bowing to pressure and agreeing to pay for transport licences for its UberX drivers. To date Dutch police have fined 23 Uber drivers more than $2000 for operating without a licence. In Australia, unregistered taxi drivers can attract fines of up to $7500. French senate supports law requiring Google to reveal its algorithm The French senate has supported a law that would require search engines to reveal their algorithms in order to ensure fair and non-discriminatory search results, according to TechCrunch. The chamber’s amendments to a draft economy bill could also see search engines forced to include a minimum of three rivals on the first page of search results. Google, which owns an overwhelming chunk of the search engine market, has always kept its search algorithm top secret. The draft legislation comes at a time when Google is coming under tough scrutiny in Europe for allegedly abusing its dominance of the internet to the detriment of competitors. The French upper house will vote on the legislation and its amendments next month before it has the opportunity to be passed into law. WhatsApp reaches 800 million users worldwide Messaging platform WhatsApp has reached 800 million monthly users. The company’s current rate of growth puts it on track to reach one billion users by the end of the year, according to The Wall Street Journal. The messaging app has grown by 100 million active monthly users every four months since August 2014. Facebook purchased WhatsApp last year for just over $28 billion. Overnight The Dow Jones Industrial Average is down 279.47 points, falling 1.54% to 17,826.30. The Aussie dollar is currently trading at around 78 US cents. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
AgFunder, part of 500 Startups’ 12th batch, wants to make it easier for agricultural technology startups to source funding. Australian entrepreneur Michael Dean, the co-founder of agriculture technology investment platform AgFunder, hopes his startup will help speed up the development of technologies that will be necessary to feed the world’s fast-growing population. “Agriculture is by its nature a very fragmented marketplace to invest in as obviously the money is located in the cities and quite often the developers are based in the country where the farmers are,” he says. “Connecting the two has traditionally been a very difficult exercise. By creating an online platform – a precursor for an investment bank – we’re able to offset the fragmented nature of the market.” Dean says most of the technologies tipped to become game-changers in the near future are already being utilised or tested in agriculture. “If you look at agriculture and all of the new technologies that are emerging – whether they be robotics, internet of things or big data – the whole precision agriculture sphere of development is really being reflected in agriculture technologies,” he says. “We’re talking about Google coming up with driverless cars. Well, we’ve had farmers turn to driverless tractors. We need to feed probably more than 9 billion people by 2050 with no more land and no more water – probably less of both. So it’s absolutely important that we are applying these technologies to agriculture.” The best thing about 500 Startups, according to Dean, is the “collegial” nature of the program. “The team make a big thing about talking about their 500 family and you really do feel like a family,” he says. “It’s been very useful to have that exposure to previous batches and just benefit around their experience and knowledge, pitching and people we should be talking to.” When asked what his advice would be for entrepreneurs wanting to try their luck at getting into the 500 Startups program, Dean says having a good team is crucial. “The important thing is to make sure you’ve got the right team,” he says. “A good team is crucial and most investors invest in a team [rather than an individual]. You need to understand your market, you need to understand your product and express that when you’re pitching. You should have a clear vision of where you’re going as well – that’s not to say you might not pivot once you get into the accelerator because that does happen – but the important thing is being clear with your objectives and what you’re doing.” 500 Startups has invested in more than 800 companies from more than 40 countries. Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
Within hours of the pre-order launch, the initial batch of Apple Watches were showing shipping times of two months. Not only had the cheapest Apple Watch Sport at AUD $499 sold out, but so had the Apple Watch Edition with a rose gold case and retailing at AUD $17,000. And all of this for a watch that reviewers have given decidedly mixed reviews. The fact that people are willing to spend that much money on a device that they have no forehand knowledge of is a testament to the power that Apple devices have over their customers. The Apple Watch does nothing that other, far cheaper devices have done for many years. The Pebble watch, available for the past 2 years, covers most of the same functionality as the Apple Watch and retails for just AUD $89. The truth of the matter is that the majority of people don’t actually know the difference. It has been a long standing joke about the number of people asking if the Pebble watch people are wearing is, in fact, an Apple Watch. For those that have worn a Pebble, or Android Wear or other smart watch, the reality of the usefulness, or otherwise, of these devices will have been long apparent. It is a useful thing to get notifications of text messages on your watch, but the novelty of having your wrist buzz every time one of the 200 hundred a day emails arrives, rapidly wears off. Rejecting calls from your watch is also a useful feature, but answering the call and speaking into your watch is as socially acceptable as wearing Google Glass. Switching on the fitness functions on most smart watches like the Samsung Galaxy Gear 2 does a much poorer job of hear rate measurement than a dedicated fitness devices like the Fitbit. The Apple Watch, although aesthetically more attractive perhaps than other devices, is in essence the functional equivalent of an AUD $350 Fitbit Surge. Whether the Apple Watch works as well as the Fitbit in terms of fitness tracking is yet to be seen. According to Finder.com.au, 800,000 Australians, or 4.2% of the adult population, are intending to buy an Apple Watch. This is a similar number to those in the US that are intending to buy a watch, although this number has dropped from the nearly 10% of iPhone users who were intending to buy one back in December 2014. Whilst it is easy to think of people stopping wearing an $89, or even an $300 device, as nearly 40% of wearable owners in the UK have done. It is much more painful to think of someone spending $1,000 doing the same. Once again, we are seeing the enormous power of the psychological and social drivers behind being an Apple fan. Buying one of these watches is not an impulse purchase and it is not necessarily something that those buying these devices can actually afford. In the US in 2013, households were spending 17% of their budget on technology. In Australia, an average family with 2 children spends about $6,000 a year on technology that ranges from telecommunications (mobiles, Internet connection, landlines) to streaming services for music and video. Within this context, it is even harder to justify spending the amount of money Apple is asking people to spend, on a watch that for the most part will simply be used to tell the time. What may determine the success of the Apple Watch is its social acceptance by people who are not Apple Watch owners. Google Glass suffered from a view that a socially unaccepted technology was at the same time made exclusive, and therefore exclusionary, through its price. Although smart watches are less of a social imposition than a pair of glasses with a camera, looking at a watch in the company of others may be considered rude or signifying that the wearer is looking to be somewhere else. These social cues will need to be adapted for the case when people are looking at their wrist to see who is calling or texting and whether it is worth breaking a conversation to respond. Although society may adapt to this behaviour, it will take some time. Whether the sales of the Apple Watch extends beyond the initial wave of early adopters is yet to be seen. It is hard to see how this will be sustained and the more conservative users will wait until at least next year, along with the possibility of price drops in the technology. Until then, the success of the watch will be easy to gauge by the number of people who are compulsively and continually staring at their wrists. This article was originally published on The Conversation. Read the original article.
Twitter is urging celebrities to stop using rival live-streaming app Meerkat in favour of their recent acquisition Periscope, according to TechCrunch. Periscope launched in March as Twitter’s answer to Meerkat, after acquiring the startup in January last year. At the time of the launch, Periscope said it wanted to “build the closest thing to teleportation”. “While there are many ways to discover events and places, we realized there is no better way to experience a place right now than through live video,” the company said. Hillary Clinton confirms she is entering the 2016 US presidential race Hillary Clinton has confirmed she is running for US president, announcing the presidential bid over Twitter after an email explaining the campaign to supporters was leaked online. The former US secretary of state is tipped to run a tech-heavy campaign after she snapped up a former Google executive last week to be her chief technology officer. Stephanie Hannon – Google’s former director of product management, civic innovation and social impact – will now oversee a team of software engineers who will manage websites and apps for Clinton’s campaign. Winter comes early for Game of Thrones fans The first four episodes of Game of Thrones season five have been leaked online, with thousands of people downloading the files from popular torrent sites within hours of the leaks appearing online. The leaked episodes appear to have originated from review or translation copies, according to Fairfax. Game of Thrones is the most-pirated television series in the world, with Australians among the top offenders. Overnight The Dow Jones Industrial Average is up 98.92 points, rising 0.55% % to 18,057.65. The Aussie dollar is currently trading at around 76.7 US cents. Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
Taxation experts have warned against unilateral action on corporate tax avoidance, telling a Senate Economics Committee Australia should be proactive and show leadership in the OECD and G20 tax processes already underway. The inquiry, initiated by Greens leader Christine Milne, is exploring tax avoidance and aggressive minimisation by corporations registered in Australia and multinational corporations operating in Australia. Treasurer Joe Hockey has hinted that a diverted profits or “Google tax”, similar to that introduced in the UK is being considered by the Australian government. However Richard Vann, Challis Professor of Law at Sydney University told the committee he was somewhat cynical about such a tax, suggesting it would collect very little revenue in the UK. “They don’t even know how they’re going to try to calculate the revenue that they’re going to collect from Google,” Professor Vann said. Professor Vann said the government was sending a “mixed message” to the multinationals that presented the biggest tax avoidance problem to Australia, by suggesting in the tax discussion paper that we needed to cut our corporate tax rate, and at the same time highlighting the problem of tax avoidance by multinationals. “There are no simple single-country solutions, it does require coordinated action, he said. “I’m not saying the diverted profits tax or something like it is a bad idea, but if everyone introduced one that would be a problem. They would all be different, they wouldn’t be harmonised and then we would have breakout.” QUT taxation Professor Kerrie Sadiq agreed, and said Australia must collaborate internationally and not act “hastily or unilaterally”. “Personally, I believe we should strive to fix the current system, particularly the transfer pricing regime.” Transfer pricing sees multinationals make intra-company transactions, such as billing a subsidiary company, for the purposes of avoiding tax in higher taxing jurisdictions. However Antony Ting, Associate Professor at University of Sydney, said while the ideal solution was international consensus, the US appeared to be undermining the OECD BEPS (Base Erosion and Profit Shifting) project. “I think Australia should continue to support the OECD project, we will get something out of it, but we should also think about plan B.” Advice from the Parliamentary Budget Office has suggested if Australia was to introduce a diverted profits tax it risked breaking international tax treaties. But Professor Ting said it was possible for Australia to design a version of a diverted profits tax, different to that applied in the UK, that would not override international tax treaties. Professor Vann disagreed that the US was undermining the BEPS project. “The BEPS outputs are being designed very carefully to inoculate it against US inaction.” He said for a country like Australia “staying within the pack” was a good strategy, with the caveat that we should consider the national interest of doing so. Professor Vann said Australia should be pushing for the OECD and G20 to “keep the political census”, and give the ATO more resources to help it implement reforms agreed on at a multilateral level. Professor Ting said the ATO was fighting an “unfair battle” with multinationals given it did not have the same amount of information about tax structures as the multinationals it investigates. Professor Vann said even if Australia was successful at implementing the BEPS reforms it would be “doing very well” to get a billion dollars a year in additional tax revenue. “The reason we collect so much corporate tax is because we have a lot of iron and coal and our corporate tax revenue is going to be dependent on the prices we get for our natural resources. That’s going to have a much better impact than anything that comes out of BEPS.” Professor Sadiq said while the current tax regime had no basis for addressing morally wrong behaviour, it was clear appropriate taxes were not being paid in the location of the economic activity, and that current laws were inadequate and out of date. “There is a lack of confidence in the corporate tax system and the public is calling for corporate social responsibility in relation to tax not just compliance with tax obligations. Unfortunately, very few corporations view tax as an economic contribution to public finances.” This article was originally published on The Conversation. Read the original article.
Former US secretary of state Hilary Clinton, who is tipped to announce her presidential candidacy in coming weeks, has snapped up a Google executive to be her chief technology officer. Clinton has hired Stephanie Hannon – Google’s director of product management, civic innovation and social impact – in order to develop new ways to engage voters through technology, according to The Washington Post. Hannon will oversee a team of software engineers and developers who will build websites and apps for the campaign. The move comes after a string of technology hires in US politics. Last month the Obama administration brought on Silicon Valley veteran Jason Goldman as the White House’s first chief digital officer. YouTube confirms plans to launch an ad-free subscription service YouTube has today confirmed it will be launching an ad-free subscription service for users in exchange for a monthly fee, according to TechCrunch. In an email to YouTube partners, the company said it would be creating “a new paid offering” following the success of its Music Key service and YouTube Kids app. “We’re excited to build on this momentum by taking another big step in favour of choice: offering fans an ads-free version of YouTube for a monthly fee,” the email reads. “By creating a new paid offering, we’ll generate a new source of revenue that will supplement your fast-growing advertising revenue.” Twitter drops discover stream in favour of trends Twitter is dropping its “Discover” stream in favour of a “Trend” section in order to give users a better understanding of what people are talking about on the social media platform. The new stream will have brief descriptions of trending hashtags, along with other details such as how many tweets have been sent about a particular topic. The updates are being rolled out on Twitter for iOS and Android. Overnight The Dow Jones Industrial Average is down 5.43 points, falling 0.03% to 17,875.42. The Aussie dollar is currently trading at around 76.4 US cents.
Have you ever texted somebody saying how “ducking annoyed” you are at something? Or asked Siri on your iPhone to call your wife, but somehow managed to be connected to your mother-in-law? If you have, you may have been a victim of a new challenge in computing: that fine line where we trust a computer to make predictions for us despite the fact that it sometimes gets them wrong. For one hapless administrator with the Australian Immigration department, this level of trust has almost certainly led to major embarrassment (or worse), with it being revealed that during November last year they accidentally sent the personal details of the G20 leaders to the organisers of the Asian Cup Football tournament due to an autofilled e-mail address that went horribly wrong. We trust the machines, but sometimes the machines let us down. So, what’s happening? Are the machines too dumb to get what we mean? Or are they just getting too smart for their own good? The uncanny valley of computing prediction It feels like we’re entering an uncanny valley of computer prediction. This is where computers seem almost human, make us start to trust them, but then suddenly make a mistake so galling that we get uneasy that we’ve trusted a machine so completely. The problem is that it’s all just so convenient. My typing speed has increased immeasurably since I started to trust my iPhone to autocorrect the vague words I type into it and just went with the flow. And services like Google Now that predict the information you want before you even ask for it are even more useful. But the trade-off is that sometimes it gets it wrong. And sometimes I find that I’ve inadvertently sent the wrong message to my wife, or had the phone make ridiculous suggestions like suggesting that my office is “home” (that went down well with the aforementioned wife!). So, why is it so hard for a computer to be human? Fool me once, computer … The challenge of making a computer seem human has been with us for quite a while. Ever since Alan Turing invented his computation machine to break the Enigma code during the second world war, we’ve striven to make a computer that can think like a human and act like a human. So much so, that we have even derived a test, called the Turing Test, to determine whether a computer can successfully fool somebody into thinking they are human. In his paper that proposes the Turing Test, Turing suggested that we don’t need to make a computer that can genuinely think – whatever that means – but rather just build a computer simulation for which we can positively answer the question: “can machines do what we (as thinking entities) can do?”, as cognitive scientist Stevan Harnad puts it. Through a test he called the “imitation game”, a human judge engages in natural language conversations with a human and a machine using a text-only channel. If the judge cannot tell the machine from the human, the machine is said to have passed the test. Since Turing’s original paper, many variations on the test have been proposed, adding perceptual capabilities like vision and audio, as well as extending the test with robotics. But so far, no computer has definitively passed the original Turing Test. Every time we come close, they stumble into that uncanny valley, fall short in some way that makes us start to feel uneasy, and then the whole tower of cards falls. This is not surprising. We are trying to make a machine deal with all the complexity of human processing and it’s bound to make mistakes. A classic example of this is the tank parable by Elieler Yudkowsky. Tanks, but no tanks To demonstrate the problem of teaching a computer to be human, Yudkowsky describes a situation where US Army researchers train a computer to recognise whether or not a scene has a tank in it. To teach the computer this, the researchers show it many images, some with tanks in them, some without, and tell the computer whether or not each image contains a tank. Through their testing, they determine that the computer has learnt to identify each scene correctly so they hand the system to the Pentagon, which then says it’s people couldn’t get it to work. After some head scratching, the researchers discover that the photos of tanks had been taken on cloudy days and the photos without tanks had been taken on sunny days. So rather than learning to see tanks, the system had learnt to spot cloudy or sunny days! Such are the hazards of teaching a computer a skill when it doesn’t have sufficient context to understand what you want it to do. Teaching a computer to know what we mean, not what we say So, after my mobile phone helpfully informed me that my workplace was “home” and I adjusted the address accordingly, I noticed my wife was quite quiet on the way home. I looked over at her and asked what was up and she said “nothing, I’m fine”, at which point I knew I was in trouble! But of course, that’s not what she said. She said she was “fine”, and a computer, without context, would take her at her word. Context is everything, whether it’s dealing with tanks or especially when dealing with a grumpy spouse. Sometimes context is easy, such as the system Google implemented a couple of years ago that checks if you say the word “attached” in an email and then whether you’ve actually added an attachment, and warns you if you haven’t done both. But sometimes context is harder, like when you type “Ian” and let it autocomplete, but end up with the wrong “Ian”. After all, how is Gmail supposed to know which Ian you wanted without a host of other knowledge based on the content of your email and what you know about who you’re emailing? Nonetheless, computers are getting better at it. The iPhone autocomplete now adds “well” without an apostrophe until it detects a few words later that you meant “we’ll” with an apostrophe, at which point it changes it. So it might not be long before it can tell you that you’re e-mailing the wrong “Ian” too. But for now we still need to be careful, because until computers can understand all the context of what we mean and what we do as humans – and there is no guarantee they ever will – we are still in that uncanny valley of presumptive computing. This article was originally published at The Conversation.
A portion of transportation network startup Lyft’s recent $500 million Series E capital raise will be allocated to an Australian launch, according to an executive of Moovit, a startup that has partnered with the Uber rival. Alex Torres, head of global product marketing at local transport app startup Moovit, which has partnered with Lyft, says the capital from its latest Series E round will be used to launch the startup around the world, including Australia. “They’re going to arrive. They’ve got funding of $500 million and they’re going to allocate that money to get here,” Torres says. While Rakuten, the lead investor in Lyft’s latest Series E round said the capital would be spent on international expansion, there’s been little indication from the startup where or when that might occur. Recently Lyft founder Logan Green said an international expansion could be happening soon, hinting that China and Japan are among its first destinations, but a spokesperson for the startup says it’s not planning to expand to Australia at this time. The Moovit app uses crowdsourced and publicly available information about public transportation networks to provide users with detailed information as to how to best get where they want to go. The Israeli startup is currently available in over 500 cities and 45 countries. It began operating in Australia in beta mode six months ago, but launched officially on Tuesday. The startup announced it had raised $50 million in a Series C funding round in January that valued the company at $450 million. The Moovit app is free to download and while it crowdsources information like congestion data, cancellations and services changes in order to make its directions more accurate, Torres says it will never sell its users’ data. Instead, monetisation will come via a number of integrations with private transportation networks like taxi companies. One such integration is Lyft. In the United States, Moovit has partnered with Lyft so its users can book a Lyft ride through the Moovit app. That partnership means that when Lyft does arrive in Australia, and there’s no indication when that might be, thanks to Moovit, the startup will have 200,000 potential customers, before any Australian has downloaded the Lyft app. “We have a lot of similarities because they believe in a community-based product too,” Torres says of Lyft and Moovit’s partnership. Torres, who joined Moovit six months ago after nine years working for Google on products like Google Maps, is pleased with Moovit’s entry into Australia. “We’re extremely happy with our initial results in Australia. We decided to a beta version of our product here. Have the product available, not properly launching it, nothing influencing it just to ensure that the data quality was going to be good. And also to get initial feedback from users,” he says. “That was, I would say, mission accomplished. It’s a very big number, if we compare (Australian adoption) to France, we’ve been there for two years. In France in two years we currently have 300,000 users; 200,000 or something, all in Paris. We’ve got 200,000 users in Australia. Without even saying anything about it, haven’t engaged with press or anyone. It’s very quick adoption.” Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
Over the course of the next two weeks, we’ll be taking a look at the finalists in each of the categories in the 2015 StartupSmart Awards. Today, we examine the Fastest Growing category. Online marketplaces need to think about search engine optimisation from day one, according to the founder of a startup shortlisted in the Fastest Growing category at this year’s StartupSmart Awards. Karl Wyzenbeek, founder and managing director of LabFriend, says since launching in late 2013 he has learnt what it takes to run a successful e-commerce site. “We cut out the middle man to save Australian research organisations a huge amount of money to buy critical equipment,” he says. “Typically they [the customers] have to apply for government grants and are very restricted with their expenses. By doing all of our business online we’re able to give them high quality equipment at a much lower price. We look after customer service, they still get the warranty… but they were previously trying to buy those products overseas to save money.” A sister site has since sprung up called IndustryFriend, thanks to demand from businesses beyond the science and research sector. Wyzenbeek says it was much easier to set up the second e-commerce platform because of LabFriend’s existing backend infrastructure. “What I would say, especially to anyone who is looking to launch an e-commerce or online business, is from day one when you’re developing your website to keep the SEO front of mind,” he says. “We went and built this fantastic product and you fill this amazing store, but then no one finds you because the SEO isn’t there. When we launched IndustryFriend we designed it from day one to be friendly for Google, whereas when we started LabFriend we were still learning and trying to piece together that information.” Joining LabFriend as a finalist for the Fastest Growing Startup category in the 2015 StartupSmart Awards are Melbourne-based grocery deliver startup YourGrocer and workplace drug testing service Safe Work Laboratories. The winner of the Fastest Growing category will be announced at an event in Melbourne on April 16. You can buy tickets here. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Fishburners will transform its garage into an “idea space” in order to siphon people with a great business idea into Sydney’s startup ecosystem. Fishburners is Australia’s largest co-working space, with 126 startups working together in Ultimo. The new ‘Idea Space’, which is sponsored by Google, means all four levels of the building are now used by entrepreneurs. Murray Hurps, the general manager of Fishburners, told StartupSmart technology is the future and it is critical that the startup ecosystem grows in order to create jobs. “It’s one thing to have a lot of desks in a building but it’s another to have a space you can invite people to have meetings and presentations that can inspire people so that they don’t have to sit in a cubicle their whole life,” he says. “It’s easier than ever to start a company and it’s getting even easier. It’s just a question of whether you’re willing to see what you can do.” Hurps says having to renovate the garage goes to show how desperate co-working spaces and startups more generally are to find space in inner-city Sydney. This was an issue highlighted during the recent NSW state election by independent MP Alex Greenwich, who was returned to the inner-city seat of Sydney with a swing of more than 8%. “The fact that we had to invest and convert a garage into useable space is a little bit of a reflection of how hard it is to get space in this area,” Hurps says. “We can fill 1000 square metres every nine month at the current rate. It’s a shame because we have the critical mass here and desperately finding other ways to continue our expansion because we don’t have any more garages to use.” Fishburners added 41 members in January and sees 400 visitors each week due to its popular startup events. Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
The digital economy contributed $79 billion to the Australian economy in 2013/14, representing 5.1% of Australia’s gross domestic product, while 22% of employees now work intensively with ICT, according to a new Deloitte Access Economics report. The report, titled The Connected Continent II: How digital technology is transforming the Australian economy, was commissioned by Google and follows up from a similar report in 2011. The $79 billion contribution is up from $50 billion or 3.6% of GDP in 2011, representing a 50% increase in real terms. It is forecast to grow further to $139 billion, or 7.3% of GDP, by 2020. To put that into perspective, mining currently represents 8.3% of the Australian economy, manufacturing is 6.4%, and construction is 8%. However, the digital economy is already a larger slice of the Australian economy than transport (4.7%), real estate services (2.7%), education (4.6%) and retail. A number of sectors that are larger, such as finance (8.3%) and health tech (6.4%) are in the process of being disrupted by tech startups or absorbed into the tech sector. Around 4% of Australia’s workforce is directly employed in specialist information and communication technology (ICT) roles, but this figure sells short how important the sector is in terms of the workforce. Less than 3% of all ICT workers are directly employed by the tech and media sectors. Meanwhile 2.5 million employees, or 22% of the workforce, are in positions that involve regularly dealing with ICT. These knowledge workers include accountants, accounting clerks, advertising, public relations and sales managers. According to the report, aside from direct economic activity involving ICT and tech workers, the sector plays an important role in accelerating the rest of the national economy. “We estimate that the economy was about $45 billion bigger in 2013 than it otherwise would have been because of the productivity impacts of digital technologies, approximately 3% of the Australian economy. Higher productivity means Australia has greater output for its inputs to production,” the report states. The full report can be downloaded here. Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
Social media has entered what is likely to be a wildly popular new phase with the advent of live video streaming apps Periscope and Meerkat. Both apps allow people to broadcast live video and sound from their phones to other people on Twitter. Periscope allows viewers to interact with the broadcaster in the form of text messages and sending “hearts”, the equivalent of Facebook likes, by tapping on the video. On the surface, making everyone a “broadcaster” is a grand idea. As the announcement for Periscope proclaimed What if you could see through the eyes of a protester in Ukraine? Or watch the sunrise from a hot air balloon in Cappadocia? And it is true, live stream video from anyone around the world, has the capacity to bring the experience of ordinary people around the world, in raw and undiluted form, to anyone on Twitter. The idea is not necessarily new. Ustream for example has been providing a live streaming service for the past 8 years. The Occupy Wall Street movement showed the potential of live stream video to great effect by broadcasting demonstrations, live action, and interactions with the police. As immersive an experience it was, the problem with Ustream was that it wasn’t integrated with social media platforms and so discovering what was going on and reaching a large audience was difficult. Twitter recognised this problem and solved it by buying Periscope for a reported $100 million. Twitter and Facebook have both recognised that video is is the next area of growth in social media. Although YouTube has long been held up as the service to beat, it is far less of a social platform than what Periscope is likely to be. From that perspective, Twitter has taken the lead in this space over Google and Facebook. The problems facing these services however, are substantial. Already, the technical issues are surfacing with difficulty in viewing the livestreams because of the demand. Very few of the livestreams currently play, and simply say Loading before changing to Ended. Periscope, at least, offers the option of watching the recorded version. The cost of providing this service will be substantial and it is certainly not clear how Twitter will be able to monetise the service. From the user’s perspective, broadcasting using the phone’s cellular data is likely to limit the length of the streams and certainly have the mobile network providers seeing a surge in demand. More challenging however, will be the social problems that a world of live streams. Encouraging millions of people with phones to broadcast what is going on around them to the rest of the world is going to raise enormous privacy issues. Already, videos with titles like “My Girlfriend Taking a Shower” suggest the potential direction this service could take as people race to the bottom in search of viewers. As in many other cases, social media has Admittedly, these are early days for Periscope and it is possible that they were forced to release the service early because of the launch of rival service Meerkat. Although Meerkat has been reported to have raised another $12 million in funding, it is clear that as a service it is effectively dead when compared to Twitter’s offering. Twitter has already moved to block Meerkat from having access to information from Twitter vital to its social networking service. Meerkat’s only chance of survival is for Facebook to buy it in competition to Twitter. Despite the problems, video is going to be the future of social networks. Mainstream media have yet another challenge to face with this new service and it is unlikely that they will deal with this any better than they have dealt with the rising challenge of Vine and YouTube celebrities. As academic Clay Shirky predicted in his book “Cognitive Surplus”, everyone is capable of becoming their own version of a mainstream media producer. As Shirky said however, for every serious project that is created by the world’s cognitive surplus, there will be the cat videos. On Periscope, cat videos abound along with curiously a preoccupation with fridges. This article was originally published on The Conversation. Read the original article.
Nitro’s Sam Chandler explains why it no longer makes sense for Australian startups to move to Silicon Valley3:41AM | Friday, 27 March
Sam Chandler says there are two key reasons why it no longer necessarily makes sense for early-stage Australian startups to relocate their headquarters to Silicon Valley, as it did after he launched Nitro a decade ago. Last week, in the first of a two part interview with StartupSmart, Chandler discussed what it was like to launch Nitro in 2005, during the early days of the Australian startup ecosystem. A couple of years after the launch, at the height of the global financial crisis, he decided to move the company’s headquarters to San Franchisco. “We opened the office in January of ’09 with five of us, and it’s now around 105 people, so it’s been pretty amazing to see that growth. It was a talent issue and a capital market issue. We couldn’t find the talent we wanted in this market at the time. There was a real lack of experienced software sales professionals or certain kinds of web development professionals. We know the talent pool in the Valley was very rich and we knew if we ever wanted to raise we could,” Chandler says. But Chandler says despite Nitro’s success, his advice to current generation entrepreneurs is that the reasons do not hold true today, for two key reasons. “The first is the rest of the world has grown up. So if it was it was like the difference between civilisation and the dark ages between the Bay Area and Australia in 2005, it is not the case today,” he says. “The relative difference between those locations and Bay Area locations are much, much less. There is such a wealth of content online and if you want to be an entrepreneur, you can teach yourself to be an entrepreneur. If you had to go to Silicon Valley to get that stuff in the old days, you don’t anymore. “The second thing that has changed is that the Bay Area is now so expensive and so competitive that it probably doesn’t make sense for a lot of early stage startups to move there. If you’re already there, sure, start a company in Silicon Valley. “But it is so expensive today that unless you have cash flow already, lots of investment, or some really specific reason or need to be in San Francisco as a base, you’re much better off using it as a strategic base for business development, partnerships or sales – something that leverages the unique place that Silicon Valley is. Because it is a very expensive place relative to every other location on Earth now – and it’s not going to slow down. “There are a few companies in Silicon Valley that can afford to buy whatever talent they want. But the problem with any startup is that you are competing against those guys for talent. Sure, they guys who work for a startup that’s just three people in a room aren’t the same guys that work for Google, but once you get a little bit bigger, you are competing against the best funded companies on Earth.” Chandler says the high price of Adobe’s editing software created an opening in the market. “Nobody wakes up in the morning and says they want to start a PDF company. We didn’t – we launched Nitro Pro because we recognised that businesses were working really inefficiently. “Whether it’s research we’ve commissioned, or it’s IDC or Gartner, all these reports say the same thing, and that’s most organisations waste around a day a week on document productivity challenges. Those bad habits have been in place as long as we’ve had the PC.” Now with over half a million customers under its belt, Chandler says the company is shifting its focus from selling desktop computer software to the booming cloud-based document collaboration segment. “We feel like we’ve had our first chapter and now this is our second chapter. Our first decade and first chapter we’re really proud of, but we’re even more excited about chapter two. And over the next decade, you’ll see us transition from what we were known for – desktop productivity tools – to a business solution that is really a platform that users trust to share their documents on.” Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
Mpire Media, the online marketing business founded by Western Australia-based technology entrepreneur Zhenya Tsvetnenko, will spring on to the Australian Securities Exchange by June through a backdoor listing with shell company Fortunis Resources. Tsvetnenko, who debuted on the BRW Rich List with wealth of $107 million in 2009, first announced plans to take Mpire public in mid-2014. The deal with Fortunis is worth approximately $10 million. The software engineer listed his bitcoin company Digital CC Limited via a reverse takeover of energy investment firm Macro Energy in early 2014 and was revealed as an investor in now-collapsed tech startup Alphatise. But his first business success came in the early 2000s when he worked from home to pioneer SMS gateway technology and Google AdWords. Speaking to SmartCompany this morning, Tsvetnenko says the deal will give Mpire Media “immediate access” to the cash reserves of Fortunis and he expects to raise between $2 million and $4 million from the market. But Tsvetnenko says another key reason for floating the company is an ASX listing “gives us the credibility of a listed company, which goes a long way in this industry”. Mpire Media is a performance-based marketing firm. The company acts as an intermediary between advertisers and clients and only receive payments once a sale is achieved. It has worked with clients including Amazon-owned Audible and Samsung. Tsvetnenko says he originally founded Mpire Media as a “vehicle” for his previous mobile content business but re-focused the company at the start of last year to better capitalise on Mpire’s proprietary software. In July last year Mpire recorded monthly revenue of $55,000. By February this year, the company’s monthly revenue had hit $1.1 million, with a gross profit margin of between 16-20%. Tsvetnenko says total revenue since July last year is approximately $5.3 million. Mpire has 12 employees in Toronto and another 10 in Perth. Tsvetnenko says the company will need to expand its team later this year as it ramps up plans to commercialise its software and offer it as a service to other firms. “That’s the blue sky plan that we work on every day,” he says. “We’re putting the plans in motion and I think it will be the next phase for the company.” But Tsvetnenko’s focus also remains on continuing to grow Mpire’s revenue base, admitting the Mpireteam has already revised its budget this year having “blown away” its initial revenue targets. “We want to keep hitting and exceeding our targets, increasing revenue and gross profit,” he says. But while Tsvetnenko has chosen to pursue backdoor listings on the ASX for his companies, his advice to other entrepreneurs considering taking their company public is to first look at the market you operate in. “It really all depends on the market, you have got to get it right,” he says. “If you are generating revenue, it is a good consideration if you just need a little bit more money. But if you are making a profit and are cash flow positive, you might also consider taking on private equity.” “Money is often easier to raise in a public market because it is liquid, but there is a trade-off because if you do an IPO, you are giving a lot of your company away.” This story originally appeared on SmartCompany.
Early stage tech startups are the focus of changes to the employee share scheme legislation introduced into Parliament on Wednesday. Small Business Minister Bruce Billson tabled the bill on Wednesday morning, saying the reforms will “restore and rebuild” startup incentives, which were taken away by the previous Labor government. Speaking to StartupSmart after the second reading, Billson said an effective employee share scheme framework is an important ingredient to any healthy economy. “There has been a consistent and loud chorus calling for change,” he said. “The incoming government recognised that and we’ve set out not only to correct the harm of those 2009 changes, but stepping forward with new concessions to bolster support and engagement for employee share schemes.” The changes Companies and employees who are issued with options will generally be able to defer tax until they exercise the options (convert the options to shares), rather than having to pay tax when those options vest. Eligible startups will be able to issue options or shares to their employees at a small discount, and have that discount exempt (for shares) or further deferred (for options) from income tax. The maximum time for tax deferral will be extended from seven to 15 years. The maximum individual ownership limit for accessing employee share scheme tax concessions will be increased from 5% to 10%. Eligible startups need to have an annual turnover of less than $50 million. In the event a startup raises venture capital, that will not affect the eligibility threshold. If a startup is acquired before it has operated for three years, its original shareholders will still get their 15% tax deduction on the sale of the shares. Billson says the changes are on track to come into effect in the new financial year. “I’ve had encouraging early responses with opposition members and I’m optimistic that will all be implemented as per a tight and demanding timetable which is exactly what the startup industry were calling for,” he said. StartupSmart understands there is support from within the Labor party to overhaul the current rules governing employee share schemes. The legislation tabled in parliament today not only allows employees at eligible startups to receive tax concessions, but also ensures the regulatory burden faced by young tech companies is significantly reduced. Billson says there will be “good-to-go template tools and documents” from the ATO available to help businesses wanting to set up an employee share scheme. Reuben Bramanathan, senior lawyer at Adroit Lawyers, told StartupSmart there were some “key issues” with the draft bill that have carried over to its current form. “If an employee resigns from a company on good terms, and they keep their vested shares, they still have to pay income tax at that time,” he said. “This taxing point applies even if they are unable to sell the shares at that point, for example, due to lockup restrictions in the shareholders’ agreement.” Billson says this was identified as an issue during the consultation process. “This was an issue that came up and we consulted quite widely on that as we knew it was an issue of some interest,” he said. “We extended the tax refund provision to cover situations where an employee is forced to pay when those options lapse or cancel. That’s what we’ve sought to do to alleviate that concern.” Another part of the legislation that has been criticised is the exemption for startups turning over more than $50 million, as well as companies listed on the ASX. That means companies like Atlassian and Freelancer will not be able to access the scheme. However Billson defended this, saying issues around employee share schemes “most visibly” affect smaller players. “It’s unashamedly focused on startups and smaller enterprises,” he said. “We’ve got to work within a frugal budget climate, therefore we’ve had to target these measures where they can best make a difference.” Atlassian co-founder Mike Cannon-Brookes has criticised that position, telling SmartCompany last month it’s a bit like saying Facebook and Google don’t need to give employee share options “which I think they would disagree with”. The new employee share scheme rules are due to come into effect on July 1 should they pass both houses of parliament. Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
We are living in a “magical time” for entrepreneurs according to Matt Barrie, founder of Freelancer.com, and SmartCompany advisory board member. Speaking at yesterday’s Creative Innovation Conference in Melbourne, Barrie said we are living in a period of “unprecedented growth” powered by the internet. He outlined four global macro trends that he says have led to “a remarkable period of disruption”. 1. Software is eating the world Marc Andreessen, co-founder of Netscape, famously said software is eating the world. “Every business is waking up to realise it’s a software business,” Barrie said. He says the world’s biggest book company, Amazon, is a software company, the world’s biggest video service, Netflix, is a software company. 2. Most of the world’s population are yet to use the internet Barrie says there are tremendous opportunities for growth as more and more of the world’s population gets online. “There are 4 billion people not yet online,” Barrie said. “There as twice as many people on the internet in China as the entire population of the United States.” Facebook and Google are working hard to enable more and more people to access the internet while simultaneously, Barrie says, every industry is now being digitised. For digital businesses like Freelancer, this means increasing numbers of clients. “We are in the early stages of replicating a country in software,” he said. “We have a population the size of Belgium”. 3. Distribution is unprecedented Technology adoption speed is increasing as distribution gets faster and faster, according to Barrie. Facebook went from zero to a billion users in eight years, the Apple iPhone got to 40 million units in two years, and the iPad ramped even faster. “Consumers are adopting faster and faster but distribution is also occurring faster and faster,” Barrie said. Technology enables “distribution fire hoses” to reach the potential clients more and more quickly. 4. Stuff is free, stuff is cheap Barrie says it’s cheaper than ever to build a business. “The great thing about this is everything you need to build a business is free … if it’s not free it’s virtually free,” Barrie said. He cites tools such as Google docs, MailChimp and Canva as all providing free or close-to-free business services. “You can start a business off the back of a credit card,” Barrie said. For example, RetailMeNot was built with $30 in one weekend, bootstrapped to $30 million in revenue and then sold to WhaleShark for $90 million five years later. Now, RetailMeNot is listed in the United States and has a market capitalisation of several billion dollars. The original founders were clever enough to retain shares. All these factors mean that businesses can succeed at a quicker pace than ever before, Barrie says. “It took Apple eight years to reach $1 billion in revenue, Google five years, companies are doing this faster and faster,” he says. This article originally appeared at SmartCompany.
Cyanogen, a startup that distributes software based on Google’s Android mobile operating system, has raised $US80 million in series C funding in order to hire talent and accelerate software development. The round was led by PremjiInvest and included participation from other investors such as Twitter. "We’re committed to creating an open computing platform that fundamentally empowers the entire mobile ecosystem from developers to hardware makers, and most importantly, consumers around the world,” Cyanogen’s chief executive Kirt McMaster said in a statement. “We’re excited to have the backing of an amazingly diverse group of strategic investors who are supporting us in building a truly open Android.” The startup has received a total of $110 million in funding to date. The company reportedly rejected a buyout offer from Google last year. Instagram launches standalone photo-editing app Instagram has launched a standalone photo-editing app in order to give users the ability to make collages or mirror effects before uploading them to the photo-sharing app or other sites, such as Facebook. “From imagining mirrored landscapes to sharing multiple moments from an entire adventure, we’ve seen these kinds of visual storytelling happening on Instagram and we’re inspired by it,” the company said. “With Layout, it’s easier than ever to unlock your creativity — and we can’t wait to see what you’ll make next.” Layout is currently available on iOS and will be available on Android devices in the next few months. Twitter testing autoplay videos on iPhone and iPad apps Twitter has started testing a new feature in the US that will mean videos in a user’s timeline play automatically. “We’re running a small test on a few variations on the video playback experience,” a Twitter spokesman told Advertising Age. The autoplay test will apply to video advertisements. Facebook has had autoplay videos since September 2013. Overnight The Dow Jones Industrial Average is down 11.61 points, falling 0.06% overnight to 18,116.04. The Aussie dollar is currently trading at around 78.89 US cents. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Microsoft has unveiled Windows Hello, a Windows 10 feature that uses infrared cameras to automatically identify users based on their face, eyes or fingerprints, without them needing to type in a user name and password. Windows Hello was unveiled as part of Microsoft’s Convergence 2015 business computing conference in Atlanta, Georgia. Once authenticated on a device, users will be able to access apps, websites and networks secured through the company’s Passport service without needing to key in a password each time. The new system will be opt-in only, with a user’s “biometric signature” to be stored locally on a device and will not be sent over a network. It will only work with devices that incorporate a fingerprint reader, illuminated IR sensor or other biometric sensors. It comes after Microsoft unveiled a number of identity authentication systems as part of its Azure cloud computing platform in March last year, including Azure Active Directory and Azure Access Rights Management that are interoperable with Windows Hello. At the conference, Microsoft also announced Lync replacement Skype for Business is rolling out next month. On the Internet of Things front, it has expanded Azure Intelligent Systems Service into a commercial product called Azure IoT Suite that allows businesses to manage and capture machine-generated data from sensors and devices. Also, the company’s Salesforce competitor, Dynamics CRM, is receiving a major update. For businesses using Office 365 or Yammer, there’s a preview available of Office 2016, and an Admin app for Office 365 that allows IT staff to remotely manage the service from Apple, Android or Windows Phones. Also, a new Office 365 dashboard feature called Delve uses machine learning to show users with Google Now-style cards with relevant work information. This article was originally published at SmartCompany.
Last week, prominent tech site Gigaom ceased operations with the terse note “Gigaom recently became unable to pay its creditors in full at this time”. Started in 2006 by Om Malik, the site had raised about $40 million over that period to create a technology news site, an IT analysis business and another business running IT events. None of them could make enough money to cover the $400,000 a month needed to keep the business going. For a site that covered the future of journalism and media in detail, it turned out that it had little insight into how to succeed in a landscape that is setting legacy media and digital media alike, in a continuous struggle to survive. The shutdown of Gigaom follows on the heels of AOL’s shutting down of two tech sites earlier this year. TUAW (The Unofficial Apple Weblog) and Joystiq were both closed by AOL as part of its process of “simplifying the portfolio of brands”. The problem that digital media sites face is that, unlike traditional print where their markets are protected geographically, websites largely compete on a level playing field, albeit one that is determined in part by Google’s (and others) ranking of sites in its search engine. Every tech story that is released gets rapidly echoed by literally hundreds of sites. Recycled tech news Take a recent article about Microsoft’s decision to release its personal assistant technology Cortana, across multiple platforms. A search in Google News brings up 290 versions of the same story. The ultimate irony is that the originating “exclusive” for this story from Reuters actually comes 15th in the list of news sorted by Google in order of “relevance”. As the majority of these sites make money from advertising, the inclusion of stories on any given site is motivated not by journalism, good or bad, but by the need to fill the site with constantly refreshing content. In fact, the job of journalism becomes solely one of copy editing, adjusting an already published story for style, format and length, for an individual site. The danger with this for those employed in this sector (or perhaps a blessing to finally convince them to do something else more worthwhile), is that computers are getting very much better at being able to generate this type of content. Algorithms will be able to take a press release, newswire story, or simply any other story circulating on the Internet and generate a new one with the right mix of specific language tied to brands, advertising, and possibly reader interest. Recycled news This state of affairs is not simply related to technology news. Taking any random headline from the NY Times; for example a story about CIA funds falling into the hands of Al Qaeda in Afghanistan gives 83 articles all repeating the same story as reported by the NY Times. At least in this case, the NY Times appears top of the list in the Google News search. The Senior Director of News and Social Products at Google, Richard Gingras and Sally Lehrman, a fellow of the Markulla Center for Appled Ethics, have suggested that the current situation has eroded the public’s [trust] of journalism in general. They quote reports from the Pew Research Center showing that “55 percent of Americans said they simply did not expect a fair, full and accurate account of the days’ events and issues. As many as 26 percent said they did not trust the news to get facts right.” The Trust Project Gingras and Lehrman’s solution to this lack of trust in journalism is the aptly titled, “The Trust Project”, a new effort led by the authors and the Markkula Center for Applied Ethics at Santa Clara University. This project proposes that all journalists should disclose their expertise and any conflicts of interest and engage in rigorous citation in their writing. The sites that they write for should also have a published code of ethics. Whilst these aims are highly laudable and should be common practice (The Conversation implements all of these principles), it is not clear that it will solve the ultimate problem that the vast majority of content on media sites on the Internet is derivative. One estimate by journalist Nick Davies claims that only 12% of stories featured in the UK’s quality press were original, the rest were what is often called “churnalism”. On the Internet that number will be higher just by the nature of the sheer volume of content that is produced every day. Journalism academic Jeff Jarvis has suggested additional recommendations to the Trust Project that involve Google News ranking derivative stories below the original sources in their search results. Judging the ultimate quality of articles in this way might prove difficult to do algorithmically. Gigaom’s passing will largely go unnoticed. There is an endless supply of other sites filling the void, although a vanishingly small number of them will be paying journalists or operating as a business making a profit. This article was originally published at The Conversation.
Multinational tech giants Google and Facebook could soon be charged goods and services tax on advertising booked by Australian companies if a proposal flagged by federal Communications Minister Malcolm Turnbull is adopted. While multinational corporations continue to come under fire for minimising their tax bills in Australia, Turnbull has floated the idea of using GST as a way to claw back some of this forgone tax revenue. “The Australian media industry is under enormous pressure from online platforms – notably Google and Facebook,” Turnbull said in a statement issued to SmartCompany. “The modest amounts of company tax both companies pay in Australia has been a matter of great concern, here as well as in other countries, and there is a global discussion going on about how these internet age companies should be taxed in a manner that delivers a fair return to the countries where they make most of their money.” Turnbull said Australia has “a real problem … in the erosion of our tax bases” but said “changes to international tax treaties take time and are contentious”. “Another approach which has been canvassed is to impose the GST on advertising booked on these platforms by Australian residents,” Turnbull said. “At the moment, little or no GST is collected in respect of advertising by Australians on international online platforms like Google and Facebook. This can be done unilaterally and would recover very substantial amounts of revenue.” According to The Australian, local companies are expected to spend more than $2.4 billion on online advertising with the likes of Google and Facebook, with a 10% GST charge therefore raising $240 million for the state governments. “All of these questions are being considered in the tax review that the government is undertaking,” Turnbull said. “We need to have a frank and informed discussion about how to ensure Australia is not short-changed in the internet age and the review will ensure that discussion is very well informed.” Kate Carnell, chief executive of the Australian Chamber of Commerce and Industry, told SmartCompany the proposal is “worth having a close look at”. “[Turnbull] is absolutely right that the international process of addressing base erosion and profit shifting we’re involved in with the OECD and others is a really important process, but getting the G20 plus the broader OECD together to agrees on issues is really hard,” Carnell says. “It’s got to happen but finding other ways to address the issue here in Australia is essential.” Carnell says the Australian economy quite clearly has a “problem with revenue” and it makes sense to consider proposals that can address this. “What’s exciting about it is it’s important to have new ideas,” Carnell says. “There’s got to be a debate about new and fair ways to generate revenue and make sure companies and the community more broadly pay a fair amount of money.” SmartCompany contacted Google and Facebook but did not receive a response prior to publication.