Kat McArthur, winner of this weekend’s Startup Weekend, arrived at the weekend-long hackathon armed with an idea for a walking tour app and plans to recruit team members to make it happen. “Startup Weekends are intense so I pitched a fun idea. It was helping a local schoolies girl find the best route to get cider and burritos,” McArthur told StartupSmart. “The app is about instant satisfaction for the time poor and technologically enabled.” A team of six quickly formed around the app idea. Developer David Baker started building their minimum viable product version of the app, which is now available online and called Ambleabout.co. The app scrapes freely available information and connects it with Google Maps to create short walking tours defined by interests. During the build, marketers Bogdan Borungel, Ricky Baharwal, Chris Wambora and William Chen joined McArthur to start exploring who and how to promote it too. “The great thing about developing apps at hackathons is over the 64 hours of the Startup Weekend, we’ve smashed out eight or ten revenue stream options. The implementation of these will depend on the feedback we get about the app from our beta users, and if we can access investment,” McArthur says. Ambleabout.co has won a range of prizes including $3,000 in legal consulting and a meeting with investors. “As soon as the team has got a bit of sleep, we’re going to meet up and work out who’s in this for the long haul and wants to make it happen,” McArthur says, adding they’ll start seeking investment for the full build next week. The team plans to keep sourcing freely available information to fatten the offering and create better customisation functionality. McArthur says the plan was always to create a global app, and she’s looking forward to working towards that. “I’ve had the idea for six months, but until now I’ve been a one-man band. My biggest drive this weekend was to find people with expertise in building apps, and marketing and communications, and now we’re full steam ahead,” McArthur says.
It’s near impossible to cover everything that’s happening for Australian start-ups, but we’re giving it our best shot. While we’re busy capturing and sharing the Australian start-up community’s news, it’s nothing compared to the long days and sleepless nights that goes into running a start-up. Because you’re busy, we thought we’d start publishing a weekly summary of our daily newsletters so you can see all the news at a glance. Here’s what happened this week. Hot topics: Dynamic equity splits, free apps and crowdfunding We received a lot of emails on our exploration of why Australian start-up founders are exploring dynamic equity splits, and this article on why free apps may be damaging the commercial potential of the $53 billion industry. Crowd funding continues to be a hot topic, with one of our mentors exploring crowd funding firsthand; this start-up founder shares why they turned to Kickstarter rather than searching for an angel investor; and we reveal the top five tips of an ambitious new crowd funding campaign happening right now. We also heard from mentor Greg Ferrett about why the sales spiel is dead, and engagement is the sales strategy that actually works. Three companies announced successful investment rounds Design marketplace DesignCrowd raised $3 million and spoke to us about how their international expansion plans; budgeting app Pocketbook closed a $500,000 seed round and shared who and how they’re planning to hire their first employee; and Loke Digital, a tech company targeting the hospitality industry closed their second seed round, bringing their investment total to $1.1 million. Rapidly growing and now Silicon Valley-based start-up BugCrowd shared their steepest learning curve: getting over their Australian bashfulness and learning how to “speak American” to investors. We also heard from five experts about why Australian investment will continue to grow as Australia learns how to value tech companies better and explored new data that suggests investors are over games and are looking for a different kind of app these days. Founders and leadership So many start-ups fail, but we got advice from a business accelerator about why sheer determination and the ability to think on your feet could save yours; what business owners can do to support their employees with depression and reduce the stigma; and how retailers can ensure their supply chains are ethical. Posse founder Rebekah Campbell shared her tips for creating a start-up culture strong enough to rival Google’s; a project manager at a South Australian University was named Entrepreneurial Educator of the Year and Nina Hendy shared the five experts every sole trader needs to have on speed dial. And, we announced our top 20 entrepreneurs under 25 in our 2013 Future Makers list; found out why this entrepreneur decided to launch her first start-up in her 60s; and discovered why this founder wants more competition. New opportunities, competitions and grants Three major Australian cities will take part in the Global Startup Battle this weekend and Ford Motors has reached out to the Melbourne start-up community to be part of an upcoming hackathon. The chief executive of Bakers Delight shared their top tips for sourcing retail locations; a new franchise is coming to Australia and preparing for our feisty entrepreneurial culture; and new research reveals that only 19% of deals are now done in person. Two governments launched new start-up targeted initiatives with Parramatta City Council is seeking start-ups to re-awaken its CBD by offering $10,000 grants; and the NSW Government has appointed an advisor for creative start-ups. Topics to watch Wikileaks this week revealed Australian copyright may be in trouble, with the Federal Government possibly planning to adopt several problematic parts of the United State’s legislation, and Vanessa Emilio explains what you need to know about the incoming changes to privacy laws. If you’ve passed a major milestone and have news you want to share, please get in touch directly: rpowell at startupsmart dot com dot au You can sign up for our free weekly newsletter here.
Woolworths’ decision to sell Dick Smith Electronics for $20 million to Anchorage Capital Partners has been described as one of the worst in recent history, as the private equity firm files for a $345 million float before Christmas. “The electronics industry is coming out of several years of deflation and coming into some positive tailwinds,” Dick Smith chief Nick Abboud says. “And so if you look at it there is some inflation coming back into the category, you have got the launch of PlayStation 4 in December, the digital changeover for TVs for Victoria and New South Wales, that's happening over the next few months. “We have a very strong housing market, low interest rates, which is good for retail, the Reserve Bank have left open the door for a potential further interest rate cut and actually, from a timing point of view, there are some good things happening in retail.” Google wins landmark book-scanning lawsuit Google has won a major lawsuit in the US upholding its right to scan millions of books, with Circuit Judge Denny Chin in Manhattan upholding its argument the practice constitutes a “fair use” under copyright law. Advocacy group the Authors Guild first sued the tech giant in 2005, claiming that scanning books under copyright constituted a gross violation of the intellectual property rights of authors and publishers. It demanded $US3 billion in damages, or $US750 per book, from the tech giant. "This is a big win for Google, and it blesses other search results that Google displays, such as news or images," says James Grimmelmann, a University of Maryland intellectual property law professor who has followed the case. Bega raises its offer for Warrnambool Bega Cheese has increased its offer for Victorian dairy company Warrnambool Cheese and Butter, with its new offer coming just a day after an increased bid from rival Murray Goulburn. Bega increased its offer from 1.2 to 1.5 of its shares plus $2 for every share of WCB, which works out to be $8.87 at current market prices. The offer is significantly above Canadian food giant Saputo’s $8 per share bid for the company, but still less than the $9 bid from Murray Goulburn. Overnight The Dow Jones Industrial Average is up 0.36% to 15878.72. The Aussie dollar is down to US93.23 cents.
As crowdfunding continues to develop, so too does the information about how to run a successful campaign. With another platform, Indiegogo, launching in Australia this week, StartupSmart spoke to its Australian community consultant, Tony Been, who shared his top four tips for getting support beyond your immediate network. “The most important thing is to be smart about what you’re raising for. Don’t try to fund the whole project, break it into tangible pieces so you can hit the goal, and then keep re-engaging the same audience for each later goal,” Been says. Over 150,000 campaigns have been run on the platform since it launched in 2008. The site currently receives over nine million unique browsers a month. Been says the majority of projects take home cash, as people increasingly opt for more flexible campaigns compared to the traditional, all-or-nothing style crowdfunding range. He adds 70% of money donated in a campaign is “stranger money” from people outside the entrepreneur’s network, but it’s never the first 30%, so fundraisers need to plan campaigns carefully. Being proactive and updating regularly will boost your chances by over 200% Been says those embarking on a crowdfunding campaign need to give it their all, and not be too shy about encouraging momentum. “You need to be really proactive. Tell people about it constantly. We know people who update their campaign one to five times a week will raise 218% more than people who just let the campaign tick over. It’s about constantly engaging with the audience.” Being proactive can also catapult your campaign from your own networks to the Indiegogo home page, blog or social media channel. “We have an internal algorithm that kind of works like Google page rank. It’s about how active the campaign is, so every tweet, share, link in or out counts towards your chance to leap onto our front page,” Been says. Focus on the three levers to attract new donors People who get involved in campaigns run by people they don’t know do so for three reasons: perks, passion and participation. Been says campaigns that combine the three effectively are more likely to go viral. “If you can pair a perk or bonus to one of the more interesting elements of the project, you’re set,” Been says. “The key is to have a strong pitch, and the strongest is your own personal story and passion.” According to Been, the key to writing a compelling pitch is passion, but also about tapping the visionary potential within. “We often talk about engaging the ‘artist within’ with the people you’re trying to raise from. It’s about remembering how when we were all younger, we had huge unstoppable dreams. If you position your passion as part of that, you’ll wake up that part of your reader, and that’s really powerful,” Been says.
A debate about the role and size of the early stage venture capital community was sparked last week by David Gonski’s comments that Australian entrepreneurs are being driven overseas due to a lack of available funds. Speaking at an Australia-Israel Chamber of Commerce event, the Australian Future Fund and Coca-Cola Amatil chairman declared the diaspora of Australian entrepreneurs heading overseas to find investment a “tragedy”. “We need an industry that is involved in early-stage investment and I don’t think we can get that when the major pools of money are being judged on 30, 60, 90 or 180 days because these things take much longer,” Gonski said. However, Venture Advisory executive director, Sydney Angels member, and investor Adrian Bunter told StartupSmart Gonski was incorrect in his assumption there is no adequate pool of funds. “In some respects he said there were no early stage funds and the only option was to leave Australia in the early stage. But the reality is start-ups don’t need to leave to raise funds and there is a lot of investment activity going on here,” Bunter says. According to a PwC and Google report on the start-up ecosystem released earlier this year, there are over 500 angel investors, 10 angel groups and one sidecar fund, and almost $600 million in management by 20 venture capital groups. “But there is always more money that can go into the system and he is right that a lot more needs to be done, especially from an institutional investor perspective. Most super funds don’t look at early stage start-ups and are more guided by those shorter couple of month return windows.” Bunter says encouraging super funds to back start-ups will not be an easy task. “It is very difficult for institutional groups to invest in start-ups because they’re so large. They’d need to allocate a significant proportion funds to see the returns their shareholders expect. “Venture capital here really started to grow during the dot.com phase, and towards the peak of it, so venture capital doesn’t have a great track record over the last ten years or so. Therefore the super funds aren’t allocating much money to venture yet.” Bunter adds the amount of early stage investing in Australia is probably considerably higher than the Google statistics imply, as much of the early stage investment comes from personal networks of family and friends rather than through networks and funds. “There is a huge amount of investors who are comfortable with that level of risk, so concerns about high-risk investments are not exactly the problem,” Bunter says. Concerns around the lack of funding at the series A-round level have largely been met, according to Kar-Mei Tang, head of research at national venture capital industry association AVCAL who addressed an event for venture capital investors in Sydney late last month. “The start-up sector has been an emerging force over the last three years and we’re starting to see more founder investors and super angel activity which will filter through to venture capital,” Tang said. Alan Jones is an investor and advisor for a range of start-ups including BugHerd, ScriptRock and through the Startmate accelerator program and Blackbird Venture Capital portfolio. He told StartupSmart investing in start-ups would become increasingly popular as people seek investment options not shackled to commodity prices but instead driven by smart people tapping into new trends. “People who are considering investing in start-ups often say it’s risky. But for those of us who are already doing it, we know we’re investing in people, technology and innovation. To me, that seems like a much safer investment than some of the other sectors where Australians invest such as mining, agriculture and aquaculture,” Jones says. Jones says the tendency of Australian investors to pour money into industries vulnerable to fluctuating commodity prices needs to evolve. “As no one in Australia has any influence on the future of commodity prices, it’s all speculation,” Jones says. “Sure, we have different challenges about gaining capital and getting permission to shoot for the moon, but usually when you start-up here, you’re servicing a global market and there are lots of options.” While there is significant risk involved in investing in early stage companies, Jones says the early stage start-up investment community in Australia is growing as investors gravitate towards more personal connections with their investee companies. “I’d rather back someone with a great technological idea, because the risks there are much more about picking the sentiment of customers correctly. The biggest thing about the tech start-up industry is there is no such as thing as a unique idea, so you need to find and back the team that will be the best at executing on their plans,” Jones says.
After noticing how hard it was for friends and acquaintances to find the right lawyer to handle their legal issues, corporate lawyer Jeremy Tompkins created a platform to fill the gap. Tompkins has launched Brief It, a website that lets people post the legal work they need done, or “brief”, that lawyers in the network can pitch to work on. The client then chooses which lawyer they want to work for them based on their response on how to tackle the problem. “It’s about matching the problem with the expertise of the lawyer,” Tompkins told StartupSmart. He says the approach is similar to how large corporates deal with their legal issues by sending the problem out to a panel of lawyers who pitch for the work. Tompkins says he was partly inspired to create the site after being approached by friends for help with issues involving family, employment or property law. But because the issues were outside his field he couldn’t offer the advice they needed and while he might be able to refer them to other lawyers he knew in those fields, they may not be the right fit from an experience and cost perspective. He says Google searches for lawyers could also provide a large amount of information that was difficult to “cut through”. He told how he recently met a nurse who needed a property lawyer but could not find one who met her needs through internet searches. Tompkins says the site also carries feedback from past clients on a lawyer’s work, as well as indicators of expertise, value for money, reliability and an overall rating for the quality of service. “This is giving choice to the consumer,” he says. “The site is really aimed at the large number of people who want to research and make an informed decision. It’s providing the information that those consumers are demanding.” And from the lawyers’ perspective, they get to find work they’re interested in, Tompkins says. For people seeking a lawyer it’s free for them to post a brief on the site and free for lawyers to join. Lawyers pay a fee if they’re awarded a brief.
Why the tech revolution could soon be televised: If you develop mobile apps, you must tune in to this10:49AM | Friday, 25 October
Earlier today, your humble correspondent read a really rather interesting news piece. If you’re in the mobile app business or even a software developer in general, this is one article you must read. But first, a little background. If you’re a loyal reader, you might recall back in July your dear Uncle Taskmaster wrote a little article looking at the growing tensions simmering between Google and Samsung. (If you’re a new reader, click here to read it.) To refresh you memory, the two companies have made a small fortune selling Samsung Galaxy smartphones running Google’s Android operating system and apps. However, now Google (through its wholly owned Motorola Mobility subsidiary) builds its own smartphones. Meanwhile, Samsung has started working on its own smartphone platform in competition to Android, known as Tizen. At the time, you’ll recall Old Taskmaster wrote the following: “If you’re already coding mobile apps, and you find yourself with some spare time on your hands, it could be worth playing around with the Tizen development kit. If it flops, you’ll be the coder with the best chess app in a sparsely filled app store. “Meanwhile, if these two giants of the smartphone world file for divorce, you’ll be well positioned to cash in.” Then, at the start of August, Old Taskmaster wrote a column about why YouTube video clips matter for small business. Again, click here if you missed it. Now, dear reader and start-up entrepreneur, here’s where it all starts to get interesting. According to an article your humble correspondent read earlier today, it appears that smart television will be one of the key focuses of the next version of Google’s Android smartphone platform (Android 4.4 KitKat). If this proves to be true, it could make “how my app looks on TV” as big a consideration as “how well it works on a smartphone” or “how well it works on a tablet”. But, loyal reader, here’s something even more interesting: “Google is set to collide with Samsung over the future of smart TV, with the Korean electronics giant set to use its own operating system – Tizen – to power its future smart TV products from next year.” That’s right, the likes of Sony and LG will ship TVs next year running Android, while Samsung will ship them with its own Tizen platform installed instead. Now, my dear app developer, I don’t know about you, but that sounds like a golden opportunity right there. If I were in your shoes right now, here’s what I would do. First, download the Tizen development kit and have a play with it if you haven’t already. Secondly, keep an ear to the ground about any more news that comes out about Android 4.4 KitKat. Someone could potentially make a lot of money selling apps for smart TVs. As a start-up, you need to be nimble and ready enough to grab that first mover advantage. Get it done – on TV!
Australian start-up Tiger Pistol, a social media marketing platform for small and medium businesses, has raised $1 million from Australian venture capital fund Rampersand and existing shareholders to establish an office in Silicon Valley and promote its services. Co-founder and chief executive Steve Hibberd told StartupSmart the business tapped a desire by small and medium businesses to market themselves online through social media channels such as Facebook. “There are about 75 million small businesses in available markets globally for what we’re doing,” he says. Hibberd says attracting investment comes down to the quality of the business’s vision and the quality of its plan and people. Founders should “be very honest with themselves” and ask whether they’ve done enough work to validate their idea, whether their plan stacks up and do they have the right people around them, Hibberd says. “All of these things come out in the fundraising process,” he says. Tiger Pistol provides a pre-scheduled social marketing plan for individual businesses using big data to achieve the best outcomes. The company is currently focused on marketing plans using social network giant Facebook but aims to add other channels, such as Google AdWords, in the future. “We remove a headache and provide confidence to small business operators, helping them to be successful in just a few minutes a day,” Hibberd says in a statement. “Most small businesses know they need to be on social, but have neither the time nor the head space to take advantage of it.” Tiger Pistol’s first platform was launched in May last year, providing custom Facebook pages and promotions for several thousand small businesses in more than 100 countries. Revenue has doubled each quarter. The company raised $1.15 million in funding last year. Rampersand co-founder and managing partner Paul Naphtali says social media marketing has “come of age”. “It’s time small businesses had a tool as powerful as those built for enterprises, but with clear simplicity,” he says in a statement. “Tiger Pistol has not only built a great product, they have created a new category in marketing platforms and we look forward to supporting company through its rapid growth.”
A strong and growing start-up sector and the international rise of crowd-sourced equity are set to shake up the Australian venture capital ecosystem for the better in coming years. Over 60 venture capital and private equity investors gathered in Sydney today to explore the future of the Australian venture capital at the first of three national events coordinated by accounting and research group PricewaterhouseCoopers. Kar-Mei Tang, head of research at national venture capital industry association AVCAL, told the room the sector was set for signficant changes in the coming years as the start-up ecosystem developed. “The start-up sector has been an emerging force over the last three years and we’re starting to see more founder investors and super angel activity which will filter through to venture capital,” Tang said. According to a PwC and Google report on the start-up ecosystem released earlier this year, there are over 500 angel investors, 10 angel groups and one sidecar fund, and almost $600 million in management by 20 venture capital groups. According to Tang, the emergence of new funds has mostly alleviated AVCAL’s concerns about a Series A funding crunch, but the concern is now for the later rounds. “It’s very important not to leave this gap unplugged,” Tang said. “It matters because we know venture capital works to drive innovation, and we know it works in Australia with venture capital backed companies having far higher job creation rates than standard companies.” She added 10 new smaller funds have launched in the last few years, and the sector was on track to see a 20% increase in venture capital activity. The venture capital funds are gathered around the eastern seaboard, and different cities have different strengths. “Sydney is still the place to be for start-ups in the technology space,” Tang said. “Victoria is leading in life science and environmental investment, probably due to supportive strategies and policies of the state government there.” Tang added AVCAL would continue to encourage the federal government to create a workable employee share schemes system, to be supportive of innovation and continue policies such as the Innovation Investment Fund and to increase wider awareness about the critical role of venture capital in moving Australia forward by enabling innovation. Director of legal services at PwC, Steve Maarbani, said the future was bright for start-ups and local venture capital investors, but they needed to increasingly focus on Asia, specifically Indonesia as vast new markets to tap into for fundraising. “It’s fair to say the federal government policies around start-ups and venture capital are strong,” Maarbani says, citing the early stage venture capital limited partnership tax treatments, research and development grants, innovation grants, national broadband network as effective policies. Maarbani said the concerns around the future of the Innovation Investment Fund, sparked by GBS Investments returning their funding this year, had been resolved. “There was concern that it would be reconsidered, and it was. But they’ve come out with the largest commitment of funds ever, with $350 million on the table next year,” Maarbani says. The Innovation Investment Fund allocates several million to venture capital firms, who then raise funds to match the amount. Maarbani added the growth of the tech start-up ecosystem has caused a significant change in the investment landscape. “We’re looking at a significantly different venture capital ecosystem compared to even 12 months ago. I use the term ‘groundswell’ very intentionally,” Maarbani said. “Early stage financing deals are being done much earlier now, with angel deals are becoming more important. This means start-ups can prove they have traction before a venture capital investor even sees them.” Angel investment has grown significantly in the last few years. In 2011, $4 million worth of deals were made. This increased to $8 million in 2012 and $21 million in 2013 so far. Describing the environment for investors and entrepreneurs as very positive, Maarbani noted the challenges of working with risk-shy institutional investors, but said fund managers needed to look to Asia to raise their funds. “Instead of endlessly lamenting capital markets moving their cheese, you can work on a better value proposition, or find new cheese,” Maarbani said. According to PwC research, over 50% of the world’s financial assets will be based in Asia by 2050. “As the balance of global financial power shifts to Asia, and it is, as the Asian universities start outperforming the rest of the world, and they will, it’s becoming absolutely imperative for fund managers to have an Asian strategy,” Maarbani says.
Internet retail sales conducted by smartphones, tablets and other mobile devices have increased by as much as 400% and it’s critical that merchants refocus their efforts accordingly. Australia's online retail spending totalled $14.2 billion for the 12 months ending August 2013. This level is equivalent to around 6.3% of Australia's traditional bricks-and-mortar retail sector. What’s more, because of the increased use of social media on smartphones and social media’s involvement in retail sales, “social selling” has become red hot. Anyone hoping to improve their online sales success must take advantage of emerging trends like data-driven selling, personalised marketing efforts and specific product recommendations based on a buyer’s past shopping history. Here are seven quick tips for Internet sales success: 1. Make sure your store is ready for the mobile revolution Mobile usage accounts for more than 50% of your visitors. A recent report by marketing website optimisation company Monetate found the average order value purchased via iPhone was $97.49 and the average order via Android was $97.16. Your store has to be prepared for that type of mobile transactional traffic, so creating a mobile-friendly version of your site is a no-brainer. 2. Optimise your mobile site for SEO It’s now just as important to optimise your mobile store for SEO as it is your normal online store as half of your traffic is coming from mobile devices. Be sure to add unique titles, tags and descriptions. 3. Offer local pick-up Research by CBRE shows when given the option, 41% of Aussie shoppers would prefer to pick up their products locally. What’s more, 27% of in-store pickup shoppers make additional purchases. If you don’t have a physical storefront, offer pick-up at farmers’ markets, craft fairs and other similar locations. 4. Enable “geo-focused” SEO Another way to cash in on consumers’ need for instant gratification and their desire to shop locally is by adding terms and tags to show up in geo-based search results. You should also get listed in location-based price comparison apps like Milo, RedLaser, Shopkick and others. 5. Add real-time product reviews Customer reviews translate to an 18% increase in sales. It’s important, though, to tell both sides of the story. Shoppers who read bad reviews convert 67% more than those who use sites with only positive reviews. Start proactively gathering reviews and set up an email campaign asking buyers to review products. 6. Add product videos By some reports, a video makes a front-page Google result 53 times more likely. Consumers are 64-85% more likely to make a purchase after watching a video. Use pre-produced videos or make your own and add them right to your product pages. 7. Improve your checkout process You can attract more customers and close more sales by simplifying checkout and adding payment. Offering a single-page checkout can boost conversion by up to 21% according to ABtests.com. Provide as many payment options as you can and gateways for credit cards like Google Checkout and PayPal. Finally, increase your average cart value by showing complementary or similar products as an add-on option at checkout. Take a snapshot of your store’s basic analytics today: sales, traffic, etc. Implement the changes I’ve suggested, then compare your snapshot to your numbers three months from now to measure your improvement to determine which suggestions really work for your business and which you may have to tweak for better results. Eddie Machaalani is the co-founder and co-CEO of Bigcommerce, the world's fastest-growing software as a service e-commerce platform that helps power over 30,000 small businesses to sell online.
Finn Peacock didn’t realise his straightforward approach to brand creation would get him into legal hassles, but he’s learned a lot since defending his solar industry quote comparison brand against local and international copycats. Launched in 2009, Solar Quotes, a quote comparison website for the solar industry, seemed like a great brand to Peacock. “My philosophy when naming a business is to call it was it is. I’m not one for made up, fancy names, and didn’t want some wacky title that’s not in the dictionary. So our name is what we do,” Peacock says. “But the problem with that is it’s a descriptive name, and as I now know, these are very hard to trademark.” Peacock was able to trademark solarquotes.com.au, but says he should have been prepared for the influx of competitors and a couple of copycats given the industry he was operating in. “Quotes are important in the solar industry as it has a history of very generous rebates, so it attracts a lot of fly-by-night companies that consumers want to avoid. So our brand, and therefore copycat brands, really matter,” Peacock says. Peacock recommends start-ups invest the couple of thousand dollars required to hire a good trademark lawyer to protect whatever they can. “Quite rightly, IP Australia has a very high bar to show you’re worthy of owning the trademark. We got the domain name because we had spent a lot on advertising, and get a lot of visits to the website so we could prove traction,” Peacock says. He adds he probably should have bought all possible domains, but as a cash-strapped start-up he decided not to at the time. “Spend the $60 or so it takes to register every version as soon as you get going. Five years ago when I was starting out that 60 bucks seemed like a lot of money, but man I wish I spent it then,” Peacock says. In 2010, a previous client of Peacock’s launched a very similar website with a slightly different domain suffix. Peacock says the founder copied large amounts of his website, and even occasionally sent out correspondence with solarquotes.com.au as part of the signature. “That was a bit awkward, but made it really obvious he was cutting and pasting from my work,” Peacock says. “The real issue is about branding. I got so many furious emails from people about bad experience with solar quotes, which they found via Google AdWords. No one really checks the dot whatever after the brand.” Peacock finally got the competitor to stop using the similar website address after taking the issue to the Au Domain Administration and the World Intellectual Property Organisation. “These were an alternative to going to court, which I was trying to avoid because it was so expensive,” Peacock says, adding he had to gather testimonies from clients who had been confused, of copied sections of his site and correspondence where his writing was used. He’s now grappling with a group based in Hong Kong which has added a number to the domain name he has trademarked, also via the World Intellectual Property Organisation (WIPO). “A lot of start-ups don’t even register a business name, but you need to do that. It’s not the first thing you should do, but once you’re not under the radar anymore it’s worth doing,” Peacock says. “It’s interesting when the company is offshore. There is next to nothing you can do get hold of them, so it’s worth knowing about groups like WIPO.”
Yesterday, your humble correspondent looked at four key trends in the smartphone industry that every mobile app developer should be aware of. While the figures can be dry, the information is critical, whether you’re planning your start-up or looking for big numbers when you are strategising your future direction. Likewise, coming up with a few hard numbers can be useful if you’re pitching for capital. So, without further ado, here are four more essential trends emerging from the mobile sector: 1. Android dominates over Apple in most other major markets – except Japan Okay, so Android is strong in the US and Australia, but what about the rest of the world? In terms of market share the most competitive major market against Android is Japan. In Japan, Apple claims 47.4% of the market, compared to Android only a notch higher at 48.6%. Across Europe, the story is very different, with Apple claiming 27.5% market share in the UK, compared to Android’s 56.3%. The situation is worse elsewhere in Europe, with Apple trailing 17.5% to 63.3% in France, 14.4% to 71.6% in Italy, 9.5% to 78.7% in Germany and claiming just 2.2% to 90.8% in Spain. As for China, Android’s market share is now at 72.4%, compared to a respectable 20.8% for Apple. And there are a few very good reasons why you should pay attention to China when it comes to mobiles. 2. The world’s biggest smartphone market is China – and it’s huge! Australia’s population stands somewhere around 23 million. The total population of the US is around 310 million. This year, IDC anticipates China’s smartphone market will hit 360 million people. And that’s not including all the people still using older feature phones. Next year, it is projected to hit around 450 million, including around 120 million users on 4G. Now here’s an astounding statistic. The worldwide smartphone market reached 216.2 million units during the first quarter of 2013 according to IDC figures, while China’s shipments stood at 75.28 million. That means China accounted for around one-third (34.8%) of the worldwide market for smartphones. And there’s still a lot more room for growth. The largest carrier in China – China Mobile – is estimated to have around 700 million mobile phone subscribers, including both smartphones and older phones. Kinda makes Australia and New Zealand’s 2.6 million mobile phones per quarter look pathetic in comparison, doesn’t it? 3. Mobile apps are now a multi-billion dollar industry – and growing If you thought China’s mobile market had some big numbers, take a look at the size of the worldwide app industry. According to Gartner, last year there were 63 billion apps downloaded worldwide, including 57.3 billion free apps and 6.6 billion paid apps. Total revenue from apps hit a massive $US18 billion. If you keep in mind that the total population of the Earth is estimated as being somewhere between 6 billion and 7 billion, a number like 6.6 billion paid app downloads starts sounding quite astounding – let alone 63 billion total downloads. This year is on track to be even bigger. Worldwide, we’re on track for a total of 102 billion app downloads, with 92.8 billion free apps downloaded and 9.9 billion paid apps. Gartner predicts those numbers are only going to get bigger. In the year 2017, they anticipate a total of 268 billion apps will be downloaded. That’s right, two hundred and sixty-eight billion apps. Of those, 253 billion will be free and 14 billion will be paid. 4. Most Android users now use a recent version One of the issues when it comes to developing for Android is how much you support legacy versions. Well, the answer is increasingly clear: Don’t bother! According to Google, 48.6% of all devices running Android are now powered by JellyBean (that’s Android 4.1/4.2/4.3). A further 20.6% run the previous version, 4.0 Ice Cream Sandwich, with 69.2% in total running a recent version of Android. Meanwhile 0.1% of the Android user base is hanging on to 1.6 Donut, 2.1 Eclair or 3.0 Honeycomb. The only old versions to have significant user bases anymore are 2.2 Froyo with 2.2%, and 2.3 Gingerbread on 28.5%. So sure, as far as Android fragmentation exists, much of it is over obsolete versions no-one uses anymore. Time to cash in! The global appetite for apps is huge – and growing. And contrary to popular myth, most of it isn’t in countries where English is the first language. Now, are you going to let this opportunity pass you by? Or are you going to cash in? Get it done – on mobile! Click here to read part one.
Omny, an app allowing users to combine news clips, emails, social media updates and articles via voice-to-text software, launches today after over 20 months in development. Created by 121Cast, the app allows people to create their own customised audio channel. The app also includes a recommendation algorithm to suggest content. 121Cast co-founder and chief operations officer Ed Hooper told StartupSmart they were excited to see it finally launch. “Seeing how it can change people and their behaviour is really exciting, as is the opportunity make that commute period really productive all over the world,” Hooper says. “We’ve all been doing this for so long and everyone knows about it, so how this goes is tied to our personal brands, what we stand for, and our credibility.” Co-founders Long Zheng and Hooper began exploring the idea for the app in 2011. They had previously worked on an international award winning start-up involving farm irrigation automation software. “But it was the GFC and we were still students, so for a whole lot of factors it didn’t work out but it was an amazing journey,” Hooper says, who gave up studying at Stanford to return to Australia to work in the Groupon team just as coupon sales were taking off. He was working at Groupon when Zheng got in touch to talk about how to turn the issue of commute productivity into a business opportunity. “I was constantly looking for a good opportunity, but I didn’t want to jump on something unless it was awesome, because you want to put everything into it. When Long called me up and we started talking about an audio solution that read you your emails and updates, I realised this was it. I literally could not stop thinking about it,” Hooper says. Omny sources content from over 30 providers, from music apps such as Spotify, to news groups such as the ABC and BBC, to Facebook, Google and Microsoft. Hooper says all the early conversations were focused on the difficulties of developing such an app, rather than building a business around it. “Whenever we’ve spoken to potential partners or investors, the assumption is always if we can make the app work, the money stuff will be fine,” Hooper says. “The feedback we got was the idea was there and it could definitely be a business, but also that it was going to be really hard to build and we’d need significant expertise.” They brought on third co-founder and chief technology officer Andrew Armstrong in February 2012. They’ve gone on to hire a front-end developer and a data scientist as well. To guide the development, the 121Cast team launched a test app, SoundGecko, in mid-2012. “We realised we didn’t have a clear idea of what we were creating and needed some real data. We tried surveys and interviews, but it didn’t really get us there. So we took a small fraction of this app, and bundled it as a standalone,” Hooper says. SoundGecko, an app which read websites and PDF documents for users, has almost 50,000 active monthly users. It allowed 121Cast the opportunity to test the reception of voice-to-text, and also the data requirements for sending audio to thousands of users across the world. Over 210,000 people have downloaded SoundGecko on iOS, Android and Microsoft phones. “We found that managing all three platforms was quite hard. As soon as we’d launch a version, we’d see things we needed to change and there were always things we should have done on the first one,” Hooper says. “For the resources we have, it just isn’t feasible to be updating the app on all three platforms. So we’re fine tuning the iOS one while we do the core Android development.” Omny is currently a free app. 121Cast will introduce ads and affiliate marketing in the coming months, and are exploring a premium subscription for launch later next year. “SoundGecko definitely validated that people would pay for the premium features, such as more voices, and the Omny premium subscription will probably not include ads,” Hooper says. Hooper adds financial opportunities will emerge from the user data over time. In order to fund the development, the 121Cast team used their own capital and raised a series of seed investments. “We burnt our own savings and lived off them for quite a while. We decided we were going to do this regardless, and between us we could go for about a year without raising funds. Let’s just build this because we have to do it,” Hooper says. They went on to raise $250,000 from Adventure Capital and the SingTel Optus Innov8 program in November 2012; $20,000 from the University of Melbourne Accelerator program in late 2012, and just over $250,000 from Commercialisation Australia in July 2013. “With the investment, if we knew we need to do something in the future, we started building the relationship as early as possible and find out what’s important to our potential partners and match them on multiple data points,” Hooper says. Hooper says they’re focused on Australia at this stage, but will be looking to expand to the US, United Kingdom and other English speaking markets in the next few years.
Designed to turn Australian technical founders into successful global entrepreneurs, one of Australia’s first start-up accelerators Startmate is now open for applications. The program will run next year from January to May. Companies will spend three months in Sydney and two in San Francisco. Startmate is seeking around eight companies, which will receive $50,000 in seed capital, in exchange for 7.5% equity. Startmate co-founder Niki Scevak told StartupSmart they’re seeking founders with big dreams and plans. “Beyond the very product centric technical team, we’re looking for people with large ambitions, the crazier the idea the better. We really want to work with teams who want to make a big difference in the world, so the scale of the ambition is what we’ll be selecting,” Scevak says. He says they’re committed to approaching each pitched idea with an open mind, adding that being the hundredth start-up to tackle an idea didn’t hurt Google, Facebook or Atlassian. “Anyone doing anything in an incredibly crowded area will be taken as seriously as brand new ideas. The ideas may sound incremental, but it really does matter why the founders have chosen to pursue this idea, and if they have a unique insight into it,” Scevak says. “It’s about why they care about their customers and if they have an authentic connection to the market. We look for what in their lives have driven them to this idea.” The program includes an impressive line-up of mentors including Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar; Tjoos co-founder Bart Jellema; and Spreets co-founder Dean McEvoy, as well as several partners from Square Peg Capital and Blackbird Ventures. This will be the fourth intake for the program. Previous participants include BugCrowd and NinjaBlocks. Start-ups can apply via Angel List.
Here’s a business proposition for you. I will download all of your work files or emails onto a server sitting in the dungeons under Taskmaster Towers. Your humble correspondent won’t read them or delete them without permission (like Google did to its Google Reader customers) – I promise! You can access your content at any time for a low monthly fee. Or perhaps for ‘free’ by putting up with my completely innocuous banner ads – you’ll barely notice them! I swear! Then, from here on in, you won’t need to worry about server maintenance, security patches, firewalls or Debian dependencies. All of those hassles will be taken care of for you. You won’t get to check those maintenance chores are done, or that the passwords on the server are secure, but they will be. Trust me! Now, here’s a question for you: would you sign up to such an agreement? Well, if you sign up for cloud-based services, this is exactly what you’re signing up for: your app or your computer files stored on someone else’s server. Would there be questions you wanted to ask first? Would you be more likely to agree to use the services of an ASX or Dow Jones Index-listed multinational than the Taskmaster’s? Are there other things you’d like, for example, a local backup in your office of any really essential files? Of course, once you get these points addressed, it is a computing model with a very long track record. That’s because, despite the hype, doing your computing on someone else’s server isn’t a particularly new business model. In fact, before the home computer revolution of the 1980s, it was quite common for businesses to lease time on a DEC minicomputer or IBM System/360 mainframe. Back then, Sonny Jim, using someone else’s server was known as ‘timesharing’. It was a service offered by a number of companies, including Honeywell and General Electric. If you were lucky, you’d have your own terminal in your office that you would dial in on using a briefcase-sized modem. And by dial-in, I mean you would dial-in directly to their data centre; none of this fancy logging in over the internet mumbo-jumbo. If you were really lucky, you would even have a black-and-green screen, rather than a printer, for a display for your terminal. But I digress. Suffice to say, doing your computing on someone else’s server isn’t exactly a new idea. Sure, like most things in computing, those servers are a lot more powerful than they used to be. But in truth, using someone else’s server with a terminal pre-dates even the Commodore 64 or the original IBM PC. So should you sign up to use a cloud computing service? The answer shouldn’t be an automatic yes or no. Instead, you should absolutely keep in mind that all cloud services involve storing your data on someone else’s server. Now, depending on your business circumstances, that could be a good idea or a bad one. But there are potential risks involved – especially if your supplier isn’t reputable. It’s up to you to weigh up those costs and benefits. Get it done – today.
In a recent Tech Trick, we looked at how to sync your data across the Chrome browser. But there are ways to make that syncing experience even better. For one thing, you can actually choose to use a separate password, aside from your Google, password when syncing your data. To do so, head to the Settings app, and then click on “advanced sync settings”. There, you can choose a new password to use apart from your Google one. That adds an extra layer of protection when it comes to syncing your browsing experience.
Customer discovery and honing start-up ideas were the key topics explored during the first evening of the Next start-up development program, run in co-working space York Butter Factory on Monday. Seven mentors worked with the 27 start-up teams to develop their ideas. One of the mentors, entrepreneur Marc Harrison, told StartupSmart the start-ups are this week focused on identifying their first target market and asking them questions to test their assumptions. “If there was one message that was going to come across consistently, it’s that the number one thing for early-stage start-ups at the idea stage is to get out and speak to potential customers,” Harrison says. “Our advice is before you start building anything, get out and speaking to as many people as possible.” Harrison says the mentors worked with the start-ups to identify a specific customer type who is most likely to be excited about your product. “Most people think they want to go for the biggest market possible. A big market is great but it’s hard to tackle, and it’s really hard to develop a product for a very big market. So narrow it down to a group, and work out exactly who they are,” Harrison says. “Because if you can’t sell your idea to your ideal client, who else would want to buy it? Pick a small enough segment so you can build a brilliant product for a group, rather than a sufficient product for everyone.” Once you’ve identified your first target market, founders need to get in front of them and ask open-ended questions around the problem area rather than their planned product. “Rather than saying: ‘Hey, I’ve got this great photo-sharing app, what do you think?’ ask how they use photos currently, how they share photos with their friends, what their issues are with their current options,” Harrison says. “There are three or four assumptions you’re making to know the product will work, so your first goal needs to be testing those assumptions.” Once you’ve identified a core target market, tested your assumptions (including if there are enough potential customers to support a viable business) and refine your idea based on their feedback, founders should then start building a minimum viable product (MVP) of their offering. “It’s not good building anything until you’ve got people banging down your door to buy it when it’s still got bugs and is half-built. Then you create a MVP and start getting feedback as early as possible on it,” Harrison says. He says it’s highly likely the ideas the 27 start-up teams are working on will evolve over the coming weeks, and ultimately the mentors are committed to teaching a framework to approach start-up ideas through. “The chances are most won’t go ahead with their current product, but they’ll be able to keep applying these ideas in the future,” Harrison says, adding he’s looking forward to supporting more early-stage founders. “The community is getting fairly well developed for those who are building, scaling and going after money from investors, but we can do a better job helping those who are at the idea stage.”
Occasionally, when you read a business news website, you’ll spot something that really makes you shake your head. Earlier this week, Old Taskmaster read such an article in The Wall Street Journal. Now, as a business owner, just imagine yourself in this position. You’ve just had the quarter from hell. And by quarter from hell, I mean your company somehow managed to blow nearly $US1 billion in just one quarter. You also have nearly $US1 billion worth of inventory of your flagship product sitting in a warehouse somewhere gathering dust, potentially destined for landfill. You try to launch another critical product – an app for Android and iOS – but a technical gremlin stops that going ahead the weekend it was supposed to go live. Retailers have abandoned your products. So have executives and enterprise. You were preparing to launch a new version of your product, but that got overshadowed by the dramatic resignation of one of your directors, who is now trying to buy the company off you. You’ve announced that you have to let 40% of your staff go. Google has conveniently opened up a new facility just down the street to try to lure away the other 60%, given how shot your morale is. Oh, and there’s also been reports of an exodus of senior executives. What would you do? That’s the situation that confronted embattled Canadian smartphone maker BlackBerry chief executive Thorsten Heins this quarter. And you know what he decided to do? He bought a new corporate jet. A nice one. A Bombardier Global Express. The company took delivery of it in June, and has since sold it again. Now, as regular readers of this column will know, it’s not too often that Old Taskmaster is lost for words. Well, dear reader, this may be a first. Buying a new BlackBerry corporate jet can’t even be compared to fiddling while Rome burned. After all, back in 64 AD, Nero didn’t have the luxury of a leather seat in an air-conditioned cabin, now did he?! While it’s a fairly extreme example, there’s a general principle at play here. Being ambitious is great. But there’s a big difference between ambition and delusion – along with the skewed, private jet buying-priorities that result from it. So be honest with yourself – and prioritise accordingly. Get it done – today!
Google has unleashed yet another of its algorithm updates on the world, but don’t stress out about preparing for the changes – they’ve already arrived. Yesterday Google announced the latest algorithm update, Hummingbird, at a press conference located in the garage where founders Sergey Brin and Larry Page first started the search engine back in the 1990s. The Hummingbird update will affect 90% of searches, and is designed to better answer specific questions. Google senior vice president Amit Singhal said the algorithm – which powers the entire system of how Google ranks and judges content – has undergone a “fundamental rethinking”. Various reports from those at the event say Google described the update as helping quickly answer full questions, as opposed to the current system of searching for long phrases by individual words. “We’ll keep improving Google Search so it does a little bit more of the hard work for you,” the company said in a blog post. “This means giving you the best possible answers, making it easy to have a conversation and helping out before you even have to ask.” No further details have been given. But Jim Stewart, head of StewArt Media, says the algorithm might go further than just helping answer questions. Lately, he’s noticed his clients have seen improvements in the way their content has been ranked – particularly if it’s of good quality. “Our clients that have sites that were updating regularly with content like blogs and so on were getting rewarded across different keywords,” he says. “We’re not monitoring long phrases or questions, but that content seems to have been rewarded if you have a good strategy.” While Stewart says he can’t say for sure whether these improvements have come as part of the Hummingbird update, it’s not unusual for an upgrade to hit more than one specific feature of search at once. For businesses, this means the solution is the same as it has been for years – create good, fresh and original content, updated on a daily basis. The more it’s shared among users, the more likely your results will appear on the first page. “The top results aren’t as cluttered with backlinks now, so maybe this has something to do with that change. “The algorithm update may have inadvertently been favouring these sorts of sites.” This story first appeared on SmartCompany.
Debbie O’Sullivan, senior industry manager at Google, shared her top tips for start-ups and a range of useful extensions at a Google for Entrepreneurs event this week. Rich Flanagan, head of small and medium business marketing at Google Australia, spoke to StartupSmart about how start-ups with limited budgets can make the most of their AdWords spend. Flanagan cautions users that while AdWords is a popular tool, it’s not a get rich quick marketing solution. “It’s true you can launch the account in a few minutes, but it does take a bit of time to see how users are responding to your ads, Flanagan says. “It does take nurturing over time, you won’t turn one dollar into thousands overnight.” Experimentation is key O’Sullivan said testing is key to making the most of Google AdWords. Flanagan added start-ups should always have at least two different versions of an ad running, so they can see what works and retire the underperforming option. “Test different creative in real time and move towards the one that is performing best,” O’Sullivan said, adding it was essential to link AdWords and analytics accounts otherwise AdWords traffic would appear as part of the much broader “organic traffic”. Flanagan says his top tip is to think of AdWords as something that can be iterated quickly over time. “You can start small, to boost one product or service in one city and start to build your confidence,” Flanagan says. Your ad’s ranking is not just about spend, it’s also about quality Start-ups should create different ad groups or campaigns for each product or service so the content can be targeted and closely match your site, said O’Sullivan. “Make sure your campaign mirrors your site, and have one campaign per product and landing page,” she said, adding that the closer your ad matches your site, the higher your quality score will be. Where ads are displayed on the page is calculated based on quality score and the amount the entrepreneur is willing pay in the algorithm-driven ad options. The quality score is managed by an algorithm which factors in site load time, malware and dangerous softwares, and the similarity of the content in the ad and page. Flanagan says the quality score is important. “Some people believe giving us as much money as you can means we’ll put you at the top, but that’s not true. We believe ads are information, and it needs to be relevant. Once you click through there should be no surprises,” he says. Make the ad as engaging as you can The quality score also assesses how engaging the ad is, and Flanagan says there are several best practice solutions. “You definitely want to have a strong call to action. It could be some sort of special offer. Are you mentioning something around price or is seasonal? You want to not be too far away from your competitors’ offerings, but you want your ad to stand out as there will be 10 to 12 ads on the page,” he says. Having a strong call to action that is timely or a significant saving can be boosted by how you write the content as well, right down to the punctuation and capitalising. “Typically we see, depending on the industry and product, that if the first letter of every word is capitalised, it does grab people’s attention. But you can’t have it all caps as that’s screaming on the internet,” Flanagan says. He adds users need to check how their ad appears on multiple devices as the use of mobile phones and tablets increases. Explore extensions to offer more options to users O’Sullivan talked the crowd through a range of extensions to the core AdWords copy, such as the “click to call” button on ads which enables users to get in touch immediately, and social media extensions so users can follow you without even visiting your site. Flanagan adds that the extensions provide sub-links, so there’s deeper richer information in the ad which gives a better experience for users.