Australia eyes missing billions with very own ‘Google tax’

12:34AM | Wednesday, 10 December

Joe Hockey has hinted he may introduce a “Google tax” as a new weapon to tackle profit shifting by multinational enterprises. The Treasurer’s suggestion is not only political as a counter to aggressive tax avoidance by multinationals, but also suggests the government may not have full confidence in a successful outcome of the G20/OECD work on base erosion profit shifting (BEPS).   The suggestion of a “Google tax” in Australia appears to be a coordinated action with the UK. Last week, the UK Treasury announced the introduction of a “Diverted Profits Tax” (commonly dubbed the Google tax). The tax will be imposed on profits artificially shifted from the UK at a rate of 25% from 1 April 2015. The tax is expected to generate more than £1 billion over the next five years.   Details of the Australian tax are yet to be delivered, but it’s likely to work as follows, using Apple’s tax structure as an example. Apple has successfully sheltered US$44 billion in Ireland for four years, and that amount has never been taxed anywhere in the world. The US$44 billion represents the profits shifted from Apple’s sales in many countries, including Australia.   If Australia had a Google tax, the ATO would impose 30% tax on a portion of the US$44 billion that represented the profits derived from sales in Australia. Will it work?   The proposal, if properly designed, should be a powerful weapon for two reasons. First, it provides the much-needed legal basis for the ATO to impose tax on profits shifted from Australia to “taxpayer-friendly” countries such as Ireland. At present, even though the ATO is aware of the US$44 billion sitting in Ireland, the existing international tax regime does not empower the ATO to lay its hands on the profits.   Second, a Google tax would be a unilateral action. Its introduction does not require international consensus and Australia does not have to wait for that to happen before taking action on profit shifting by multinationals.   The G20 and OECD have been working very hard in an attempt to achieve consensus on measures to address the issues of BEPS. However, one major player may not support the project wholeheartedly. The US has been knowingly facilitating avoidance by its multinationals of foreign income taxes through its own tax system. To make matters worse, its participation in the G20/OECD BEPS Project has been described by a prominent US tax commentator as “a polite pretence of participation with quiet undermining”.   International consensus is the ideal course of action to comprehensively resolve the issues of BEPS. However, without full support from the US, it is doubtful the project will be able to achieve meaningful measures to curb tax avoidance by multinationals. Therefore, unilateral actions may be the pragmatic response of other countries like Australia to protect their tax bases. Not so fast…   The proposal will face a number of challenges. First, the tax would apply only if a multinational has shifted profits from Australia under a tax avoidance structure. This raises the question: what is a tax avoidance structure?   Apple’s example is clear-cut. As the US$44 billion has never been taxed anywhere in the world, it will be difficult for Apple to argue it is not engaged in a tax avoidance structure.   However, what about profits shifted to a country where the tax rate is 10%? This is one of the technical issues policymakers will have to address.   Second, the ATO will have to find a way to determine the amount of profit shifted from Australia. Going back to the Apple example, how should the ATO estimate how much profit out of the US$44 billion booked in Ireland should be subject to the Google tax? This issue may be difficult and controversial, but should be manageable.   The third and possibly most formidable obstacle to the introduction of a Google tax is that multinationals are likely to offer significant resistance to its introduction. They can be expected to apply intense political pressure, lobbying against this proposal.   A common argument by multinationals is that unilateral action by a country will scare businesses away. This may or may not be a concern, depending on the types of businesses of multinationals.   One important factor that policymakers should remember is that the location of customers is not mobile. Apple can generate A$600 sales income only if it sells an iPad to a customer in Australia. It is highly unlikely, and does not make any commercial sense, that Apple would give up the Australian market because it does not want to pay 30% tax on sales profits.   This article originally appeared on The Conversation.

Three key design lessons from the Australian designer behind Google Wave

12:48PM | Tuesday, 9 December

The Australian designer behind Google's now-defunct Wave service has shared the key lessons learnt from the innovative but ultimately unsuccessful service.   Cameron Adams, now the chief product officer at Canva, has spent 16 years as either a graphics designer or chief designer.   During the Above All Human conference in Melbourne, Adams shared the following three key lessons about design:   1. Design it how it works   "Every time a conference speaker quotes Steve Jobs, an angel investor loses their wings. Nonetheless here's another one: 'Design it how it works'," Adams says.   Back in 2007 Lars Rasmussen, then an engineering manager at Google, contacted Adams about working on a new service called Wave.   Wave was launched at the 2009 Google I/O conference in the first YouTube video to run over 10 minutes. It was conceived of as being a feature-rich 'next-generation' email service and received positively, with the launch clip eventually watched over 80 million times.   "If you ever have a product that has inerrant flaws launch the way we did -- we gave an 80 minute talk and demoed every single feature," he says.   "There was only small problem with Wave, and that was no-one on the team had any idea what Wave should do,"   According to Adams, design maturity within a company is a spectrum.   "At one end, some companies think design is like lipstick. And at the other end, you have companies like Apple that think is design is everything," he says.   Google at the time was the former, according to Adams, with the Wave project having 50 engineers, five product managers and him as the sole designer.   It led to the absurd situation where engineers added a range of features with no coherent vision for how the overall product would work, while Adams spent three days making sure the drop-shadows looked right.   2. Design is not everything   After leaving Google, Adams launched an email design startup called Fluent.   "The product itself was a great design... The problem was we forgot about the business.Following an Article in the Sydney Morning Herald, we got 60,000 people trying to use our service," he says.   "We flew to San Francisco and spoke to VCs. They were like 'awesome product, but what's your business model?'"   It was estimated the service, though solidly designed, would need to raise $5 per user per month to break even. It was a price consumers were unwilling to pay.   "We created an experience that was well designed, but didn't move the bar enough to be a great product."   3. Design is cultural   Compared to his previous two ventures, Adams says the secret of Canva has been that it has created a design culture, in which design decisions have been delegated throughout the organisation.   "The design culture has to be embedded into your company so everyone can make great design decisions. And the best way to do that is to embed it from the top," he says.   "Having a holistic design culture throughout your company has been critical to our experience."

Why ethicists and engineers need to start talking to each other: Waleed Aly

12:34AM | Tuesday, 9 December

Ideally, engineers would work side-by-side with ethicists when developing new technology, according to journalist and academic Waleed Aly.   Take self-driving cars. In the creation of the technology that drives those cars, engineers are required to tell the car what to do when it’s faced with a collision with a pedestrian. Should the car be programmed to swerve, missing the pedestrian, even if it means killing the driver? Or should the driver’s safety be paramount?   If that were a regular car, the decision would be made in a split second by the driver. In the case of self-driving cars, the ethical conundrum is placed on those who build it.   “Who should decide this? Should we leave this to car manufacturers, or software manufacturers, who are going to be creating these cars?” Aly asks.   “Does Google make this decision for us? Is that appropriate? Should it be the government? Should it be the driver? We’re talking about the moral fibre of society really. Is there something ethically different about a split-second decision that can be critiqued afterwards, or one that is made well in advance?   “These are ethical questions that you cannot escape merely by technology.”   Aly was speaking on the topic of ethics in technology at the Above All Human conference in Melbourne on Tuesday. He says it’s important to examine the reasons behind developing new technology, in order to be aware of, and to accept the ethical implications of such decisions.   “I would just ask you to think about it. If you can ask yourself a series of questions about what it is you’re about to unleash, that perhaps you weren’t asking before, and you could perhaps talk to other people,” Aly says.   “Shouldn’t engineers and ethicists be in the same room when they’re designing these (self-driving) cars? If not, that’s when we have a problem.”   A good ethicist won’t tell developers what to think, Aly says, rather they will ensure that engineers understand and are comfortable with the implications of their actions.   “We’re not used to having ethical conversations because we don’t have people that we have access to that are very good at them, and we don’t recognise what they look like when we do have them,” he says.   “If you reach a conclusion, it’s not that your conclusion is incontestable, it’s that it’s considered. It’s that you’ve actually thought about what it is you’re doing.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Boom in business for delivery startup Zoom2U

12:49PM | Monday, 8 December

The growth of delivery startup Zoom2U has surprised its founder Steve Orenstein after deliveries tripled to 1000 in its third month.   Orenstein told StartupSmart that a combination of traditional marketing methods with new technology was used to promote its services but tripling bookings was an unexpected result.   “You just never know when you start in a new company what the uptake will be like,” he says.   Zoom2U is a same day delivery service where bookings can be made online using any mobile device or computer. It provides real-time tracking of parcels and aims to build a relationship between customers and their couriers.   The high traffic generated to Zoom2U is no accident.   In addition to search engine optimisation and domain acquisition, Orenstein has used traditional cold calling to boost its customer base.   “It is an expensive way of finding customers but we combined that with Google free marketing services,” he says.   Zoom2U cold-called hundreds of potential clients offering to send through an email with information on its services and a link to its site.   Orenstein says this proved to be one of their most effective marketing strategies. Fifty per cent of those who clicked on the email ended up requesting a quote compared with 20% of people who visited the site through other means.   Zoom2U also bought existing domains of older companies that still track well when analysed on Google. Orenstein acquired GoParcel and, a domain that ranked highly for several relevant key words including “same day courier”.   The sites were redeveloped through WordPress with new content added and a more user-friendly interface.   With Zoom2U’s deliveries up about 50% in the first week of December compared to last month, it continues to reap the rewards of Orenstein’s approach to web analytics and marketing.   “We are progressively growing and the hope is to get to 1000 bookings a day,” he says.   Zoom2U currently services Sydney, Melbourne and Brisbane.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Competitor questions Uber’s burn rate after $US1.2 billion capital raise

12:38PM | Sunday, 7 December

Uber has announced it has completed a financing round of $US1.2 billion, valuing the company at a total of $US40 billion, as competitors point out the service continues to face substantial challenges.   In a post on the company blog, Uber founder and chief executive Travis Kalanick says the funds will be directed at expansion in the Asia-Pacific region.   Kalanick’s post claims Uber is now six times larger than it was a year ago – growing from 60 cities and 21 countries to 250 cities in 50 countries. It also alludes to some of the cultural challenges Uber faces, including accusations of spying on customer data and hiring investigators to spy on critical journalists.   “The events of the recent weeks have shown us that we also need to invest in internal growth and change. Acknowledging mistakes and learning from them are the first steps,” Kalanick says.   “It will lead to a smarter and more humble company that sets new standards in data privacy, gives back more to the cities we serve and defines and refines our company culture effectively.”   Recently, the chief executive and co-founder of taxi-booking app goCatch, Ned Moorfield, called for an urgent summit of transport ministers over the UberX ride-sharing service.   Moorfield says that while there is a possibility it will become a near-monopoly, the company’s future prospects are far from clear in a number of markets.   “It’s a clear risk – they want to dominate transport like Google dominates search in every market. But they’re still far from that position and it’s far from clear they’ll get there,” he says.   “[The latest funding round is] pretty eye-catching – they’re now in 250 cities and 50 countries. But the amount of money they’re burning – their burn rate – is substantial.   “When they give away $50 vouchers to existing customers and give 40% off – as they did recently in Israel – they must be burning a lot of cash.   Aside from the burn rate, Moorfield points to a number of other key issues the company faces.   “There’s clearly regulatory questions in the Australian market and questions about whether their strategy will work in a number of countries. Their strategy is to push through regulatory barriers, but regulators are pushing back hard now and becoming more active in punishing UberX drivers,” he says.   “And there are serious customer issues – including spying on journalists – that exist no matter how much money they raise.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

A new way to fix those frustrating websites

12:51AM | Thursday, 4 December

How many times have you been looking for information online, only to find yourself going round and round in circles? Or you’ve spent too long poking around a website trying to find what you need, only to realise you’ve been looking in the wrong place all along?   Whether it is doing your banking, looking up details of a flight or checking out some government services – if a website doesn’t work the way we want it to, it can be a very frustrating experience.   It might seem like a first-world problem but the reality is our expectations around service delivery are changing. More than three quarters of Australians prefer to access services electronically and we expect those services to be faster, adaptable and available whenever and wherever we desire.   This is why, more than ever before, service providers need to understand how people use their digital channels and make sure that their design is efficient, user-friendly and fit for the purpose. Creating digital communities It’s not only businesses that need to have a savvy online presence. Digital service delivery is increasingly relevant for the public sector. The Australian Public Service ICT strategy 2012 – 2015, states that digital technologies will be used to enable the delivery of better government services for the Australian people, communities and business.   Take the Australian Government’s Department of Human Services, which interacts with millions of Australians through services such as Medicare and Centrelink.   Managing payments worth more than a third of the federal government’s overall budget, small improvements to individual transactions can have a huge benefit. Customers being able to use self-service and online tools for some of their needs frees up valuable resources for cases where human interaction can make the most difference.   For the past five years CSIRO worked with the Department – under the Human Services Delivery Research Alliance which concluded in September – to develop a number of tools that are helping to transform service delivery for the digital era. Connecting on social media The Department is using our social media monitoring system, called Vizie, to support their social media management.   Vizie tracks, integrates and visualises information from a range of social media channels including Twitter, Facebook and Youtube, into a single, theme-based dashboard.    Vizie can generate streamgraph visualisations, like this one collected during CeBit. Using language processing and text analysis algorithms, it identifies what topics are being discussed in real time. CSIRO   Vizie can then help the department identify, from social media and in real time, when customers are experiencing problems using online and mobile services. This knowledge provides valuable feedback and supports quicker system responses.   As well as providing immediate insight into the major topics of the day, Vizie can also save organisations a lot of time that would otherwise be spent sifting through huge volumes of social media chatter. More intuitive website experiences The department is also using LATTE, a software platform that analyses the patterns in how people interact with websites.   It compares the sequence and duration of page visits to patterns that denote happy customers or user frustration through an inability to find the information they are looking for.   These patterns detect not only when, but where and why people encounter trouble with finding information, as well as the context of the session. It reveals insights into the organisation of pages and links, and the impact of word choice in search terms.   For example, LATTE might identify a pattern where users load four or five pages in succession before “abandoning ship” and jumping to a Google search instead. This indicates that they were not able to find what they were looking for within the website itself, either because it is hidden away or simply doesn’t exist.   The software can also identify problems with language usage, which can play a huge part in a website’s usability. This can often be the case when an organisation’s internal terminology or jargon doesn’t match up with everyday usage.   Internal search engines can also be a source of frustration if they don’t work effectively. LATTE can be used to identify patterns of user behaviour that show where searches are failing.   For example, users might conduct several searches, one after the other, still unable to find what they need. Or it might show that users have followed a link to a search result, only to then go round and round in circles.   LATTE identifies these mismatches between a user’s expectations of a website and the website itself – whether it be language, structure, the location of content or expected search terms.   By arming organisations with this information, they can make adjustments to the content, metadata and layout of their sites, in order to create a more user friendly and satisfying experience. Protecting privacy and boosting productivity While all this is happening behind the scenes, a user’s privacy is being protected. The software distills this data from standard log files captured on any web server, meaning there is no intrusive monitoring.   It’s the volume of data, not the identity of the user that’s important. LATTE reports data from aggregates of hundreds or thousands of visitors and identifies trends and patterns in behaviour that can inform decision making.   As the public sector seeks further efficiency dividends and people expect more from their digital services, government agencies are becoming more agile and responsive to change than ever before.   UK research shows that an online transaction costs a mere 1/100th of a face-to-face one so there’s clear savings to be made by agencies improving the online experience.   Perhaps one of the greatest impacts of the digital economy is that today almost anything can be measured – in fact we are drowning in data. So the old management adage “what gets measured gets managed” is turning inside out, to become “how do you measure to manage better?”   The challenge is identifying what data will be useful, and how it can be presented and managed itself to help improve a service to better meet customers’ needs without compromising their rights to privacy and informational security, and without overwhelming decision-makers.   Emerging technologies, such as LATTE and Vizie, are providing this evidence. The potential for these tools to be adopted by other organisations - both public and private - are almost limitless and we believe they are key to enabling services to be delivered faster and better in the digital age.   This will not only improve our productivity as a nation, but hopefully it will also eliminate those frustrating online experiences that leave you pounding the keyboard. This article was originally published on The Conversation. Read the original article.

Online retailer Shoes of Prey turns to bricks and mortar after scoring $6.5 million in funding

12:30AM | Wednesday, 3 December

Online retailer Shoes of Prey secured $US5.5 million ($6.5 million) in venture capital this morning to fund its bricks-and-mortar expansion.   The retailer, which enables customers to design their own shoes, started off as a pure play online offering.   But Shoes of Prey’s founders, Jodie Fox, Michael Fox and Mike Knapp, have realised the value of having a physical store presence after the success of Shoes of Prey’s David Jones concession stores.   The funding round was led by US-based Khosla Ventures after the Shoes of Prey team got in touch with Ben Ling, the investment partner at Khosla, through a former Google colleague.   Michael Fox told SmartCompany the deal came together fairly quickly after first reaching out to Ling in July this year.   “That seems to be how venture capital in the US works, warm introductions always seem to help,” Fox says.   New investors alongside Khosla Ventures include Bonobos co-founder Andy Dunn, and ThirdLove co-founders David Spector and Heidi Zak.   Existing investors also took part, including Blackbird Ventures, Atlassian co-founder Mike Cannon-Brookes and Bill Tai from Southern Cross Ventures Partners.   The deal leaves the co-founders with “just under” 50% in equity while Shoes Of Prey’s employees retain 15% equity in total.   In order to “get the deal done” Shoes of Prey’s co-founders had to agree for one founder, at this stage Jodie Fox, to step down from the board.   “US venture firms generally have much smaller boards so we reduced the board to three, so only two of Mike, Jodie and me could be on the board,” Fox says.   “We might set up a rotating structure”.   Fox says “it’s not ideal” but the business should be able to work around the limitation.   Shoes of Prey will use the funding to open more bricks and mortar stores, including in the United States, hire some more key staff and increase its manufacturing facilities.   “We have signed a deal with Nordstrom to open six stores in the US. The first one opened two weeks ago in Seattle and we are opening a store in Westfield Bondi Junction and funding will help with all those stores rolling out,” he says.   Shoes of Prey will roll out another seven stores over the next few months.   “We still sell most of our shoes online but we have realised that there is life left in physical retail,” Fox says.   “It offers a great opportunity for customers to come in and interact with the brand.”   Expanding Shoes of Prey’s manufacturing in China will also reap rewards for the business.   “We have maxed out the size of the space of our factory in China, so we have leased a new three storey 4000 square metre factory and that will give us a lot of room to expand,” Fox says.   “The key thing is that it will bring our delivery time down to deliver shoes within two weeks of the consumer ordering”.   Shoes of Prey previously raised $3 million in Australia in 2012 with further fundraising in 2013.   This article originally appeared on SmartCompany.

Will Google’s nightmares never end?

12:53AM | Tuesday, 2 December

Last week, Google was hit with the commencement of a new legal battle in the UK which proposed to extend its liability for enabling defamation and not doing enough to remove the offending material.   Google’s headaches don’t stop there. This past week, the European Parliament passed a non-binding resolution to split Google up. What does this mean? The EU Parliament wants to separate Google’s search engine from its other activities. This would weaken its dominance across the region as it now controls approximately 90% of all web searches in Europe. Can the EU Parliament do this? The EU Parliament does not have the direct power to break up companies. However, this does start putting pressure on the anti-trust regulators, who do have the power to take action.   This also is seen as a recommendation for the European Commission to take notice and review the decision. Where is the push coming from against Google? European regulators announced in 2010 they were reviewing Google’s business practices.   They are increasingly worried at the stronghold Google has taken in Europe. Their biggest concern is the increasing number of complaints involving squeezing out competitors in Europe, which breaches anti-competition legislation.   In order to prove that a company has been engaging in anti-competitive behavior, European regulators have to first establish that a company has a dominant market position and that it has abused its dominant position.   The dominant position is not in question: the question is now proving the company abused the dominance. EU regulators are looking at two specific aspects to do this:   Google’s search results: whether they are deliberately down ranking competitor sites; and Google’s business practices on advertising: whether they are imposing exclusivity obligations on advertising partners to the exclusion or hindrance of smaller advertising networks. Dominating the market is not illegal. Using the dominance to control pricing, squeeze competitors or harm consumers – this is all considered illegal activities. 3. Strong reasons for monopoly breakup There are number of reasons the European politicians are concerned about the monopoly power of Google, but the three main concerns are around allegations that: Google promotes their own goods and services over competitors; Google controls the online search results; and Search engines are increasingly ‘commercialising secondary exploitation of obtained information’ 4. What do they want from Google? They want a promise of “all internet traffic...‘treated equally, without discrimination, restriction or interference”.   They were also discussing more certainty with respect to net neutrality as well as a focus on consumer protection, but these are secondary to the main issue. What would this mean for the rest of the world? If this action proceeds and Google is forced to redefine its operations, it would mean that Google’s search business in Europe would be split from the rest of its commercial operations. It also means it is likely the rest of the world would follow suit in this push for more internet ‘equality’.   Whether this will go further remains to be seen. All I can say is that their lawyers will be gainfully employed for the next few years.

THE NEWS WRAP: Microsoft splashes $US200 million on email startup

12:24PM | Monday, 1 December

Microsoft is believed to have spent over $US20 million to a startup called Acompli, which makes an email app for Android smartphones and iPhones.   The news was reported by Re/Code, with Microsoft later confirming the deal in an official blog post from the company’s corporate vice president for Outlook and Office 365, Rajesh Jha.   The email client was developed by veterans from Zimbra and VMWare, and supports both Microsoft and Google email services.   US retailers concerned about Chinese online marketplace Alibaba   A number of leading US retailers have called on Congress to end special tax treatment for online retailers, citing fears Chinese marketplace Alibaba could “decimate” their businesses.   According to Reuters, claims were made in a series of TV and radio ads by a lobby group called Alliance for Main Street Fairness, which includes major US retail chains such as Best Buy, Target and JC Penney.   While Alibaba has not yet launched in the US market, the retailers are concerned the company could use some of the money raised through its recent IPO on a US expansion.   Google Fiber signups in Texas   Google Fiber has opened up signups in the US city of Austin, Texas, according to The Verge.   The fibre-to-the-premises internet service costs $US70 per month for data only, with 1 terabyte of cloud storage and TV setting consumers back $US130 per month, and a slower 5Mbps download and 1Mbps upload service available for a once-off $US300 fee.   Overnight   The Dow Jones Industrial Average is down 43.45 points to 17784.8. The Aussie dollar is down to US85.04 cents.

Putting a startup on the map: Simon Hackett joins investors pouring $5 million into Spookfish

12:05AM | Monday, 1 December

Internode founder and BlueChilli investor Simon Hackett has joined a group of investors who are injecting $5 million in capital into geospatial mapping firm Spookfish.   Spookfish is undertaking final testing on its aeroplane-mounted geospatial mapping system, which integrates camera systems, data storage, processing and flight operations. It is planning a commercial release next year.   The deal is the latest in a string of investments from Hackett, which include BlueChilli, graphite miner Oakdale, battery storage firm RedFlow, electric vehicle venture EV Race Systems, cloud-based ecommerce firm UltraServe and aviation software developer AvSoft.   Spookfish executive director Jason Marinko told Private Media Hackett is joining Hoperidge Capital, along with investors Brent Stewart and Tony Grist, as a cornerstone investor.   “The vast majority of the fully committed raising has been taken up by these four cornerstone investors. We were also encouraged to received strong demand from existing Spookfish shareholders who include industry users of geospatial imagery,” Marinko says.   The investors are making the investment by purchasing the ASX-listed small-cap mining firm White Star Resources, which in turn has an option to acquire the geospatial mapping firm.   “White Star is acquiring Spookfish via the exercising of its option and as a result undertaking a recompliance listing and capital raising via prospectus to change its activities from a resource company to a technology company,” Marinko says.   The plane-mounted imaging technology operates at a high altitude, allowing it to capture images at a high resolution and with high accuracy at a relatively low cost per capture.   “Three pioneers in the geospatial and aerospace engineering sectors with complementary skills saw a massive opportunity to make a significant step change in geospatial imagery,” Marinko says.   “This was by controlling the whole end-to-end process, with the aim of providing the highest quality aerial imagery at significantly improved levels of resolution, accuracy, cost effectiveness and consistency compared to current industry offerings.”   When asked about Google Maps or drone (UAV) aircraft-based mapping systems, Marinko says the technologies are not direct competitors to Spookfish.   “Google and the like are mostly acquirers of geospatial data such as ours so we don’t view them as a competitor. UAV’s are currently uneconomic, highly regulated and impractical for large area captures. If a suitable UAV platform ever emerges then we could simply use it ourselves,” he says.   At the moment, the company is working on a tech demonstrator that will test the technologies the company will use in its commercial offering.   “The Spookfish Technology Demonstrator will test all aspects of the camera system, data storage, processing and flight operations which will be scaled up and deployed in our commercial offering,” Marinko says.   “Next year will involve low altitude commercialisation with a pilot program using the tech demonstrator, then testing for scaled up productivity and the preparation for large area capture with full commercial launch of our large area offering in early 2016.   “Our target market is government and large corporate clients, who are the major customers of geospatial data but ultimately our images will be processed quickly and available via a simple customer portal so anyone in the market for high quality imagery with frequent updates will be able to subscribe to our service.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Atlassian on the hunt for best tech talent

12:17AM | Monday, 1 December

Atlassian is searching Australia for the nation’s best tech talent, as it looks to fill 150 Sydney-based mainly tech vacancies over the next six months.   Over the past week the company has held pop-up networking events for interested applicants, in Sydney, Canberra and Melbourne. The tour is in Brisbane on Monday, December 1 and finishes up in Adelaide on Tuesday, December 2.   Roughly 40 potential employees gathered at Friends of Mine in Richmond last week, many of whom worked for startups in Melbourne. It was an exclusive event, not all those that registered interest were invited to attend.   Head of APAC recruiting at Atlassian, Caitriona Staunton, says there’s world class talent in Australia, but not enough of it. The company finds about a third of its employees via traditional job applications, the rest come from other avenues, like referrals and headhunting. About 1000 people registered their interest in meeting Atlassian in one of the five cities it was holding recruiting events.     “We know that great people are often very happy at their jobs. A lot of the people we hire at Atlassian were very happy in their jobs until we call them and tell them about a new opportunity and they’re open to hearing from us,” Staunton says.   “Just look at the startup scene in Sydney, where we’re based these days, it’s just crazy the amount of amazing talent that has come through, from Google Maps, to Canva, Atlassian, Shoes of Prey.   “Unfortunately, there’s just not enough graduates. That means we need to have a dual strategy, both domestic and international. But still most of our employees are in Australia when we hire them.”   Friends of Mine had been decorated to look like an Atlassian office. Posters emblazoned with Atlassian’s values like “Open company, no bullshit”, adorned the walls, along with t-shirts “Coders Gonna Code” and “Powered by you”.   “We brought some of the magic of the office. The games, the t-shirts, and definitely the beers, are very reminiscent of our office in Sydney,” Staunton says.   It’s the first time the company has held a hiring tour that didn’t focus on graduates in Australia. Providing a taste of the company’s culture to these experienced candidates is valuable, Staunton says, as it helps ensure it’s a fit for both parties.   “Our own employees are fantastic at referring people they just know would be a great fit for Atlassian, that would work really well in our environment. Because the environment’s not for everyone,” she says.   “Work hard, play hard.”   While tech companies Twitter, LinkedIn, Google, and Melbourne-based Envato publicly release diversity figures, Atlassian has yet to take that step, but Staunton says diversity in the tech industry is an issue the company is acutely aware of and is taking steps to address.   “Diversity is extremely important, and again the challenge is the labor market,” she says.   “Just like finding local talent, local female talent is again harder. I think something like 10% of grads are female.   “We hire the best person for the job no matter what, but we do invest a lot in the earlier stages, encouraging girls to study computer science is a really big piece for us.   “All our hiring is done with a diversity lens, when we think about our office, we always try to be as inclusive as possible, so everybody can feel like they can bring their whole selves to work.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

What to do when your biggest friend is also a foe – a lesson from Mozilla

11:31AM | Thursday, 27 November

This past week Mozilla, the developer of the popular Firefox web browser amongst a number of other products, announced that Yahoo!, rather than Google, will become the company’s default search index in the US. In China, the default search engine will be Baidu, it will be Yandex in Russia, and it will remain as Google in all other markets. Hiding within this announcement, however, is a valuable case study for any business on what to do when your biggest paying customer turns into a competitor.   As I discussed in this column back in February, around 90% of Mozilla’s revenues come from Google, which pays a commission for searches originating from the search field in the Firefox tool bar.   As incredible as it might sound, that little search field in the top-right hand corner of Firefox on a PC or a Mac is worth around $US280 million ($327.5 million) per year in revenue.   To find out why that deal initially came about, we need to go back in time nearly a decade to when an engineer named Mitchell Baker – one of the most overlooked female leaders in Silicon Valley – launched Mozilla from the ashes of a company called Netscape.   Back when Firefox launched in September 2012, such an arrangement between Mozilla and Google was ideal for both sides. Microsoft’s Internet Explorer dominated the web, shipping by default on every PC and every Mac, and used MSN Search (now Microsoft Bing) as a default search engine.   As Firefox’s user base grew, so did the number of users it directed to Google. For Google, that growth in terms of users meant its lucrative search ad revenue grew, making the deal lucrative for both sides.   But a decade is a long time in the tech world. In that time Google released its own web browser, known as Chrome, and Google became the default on more than 1 billion devices using its Android or Chromebook platforms. Not only does Google now no longer need Firefox, but Firefox is now its chrome-covered competitor.   This put Mozilla in an incredibly awkward position: Its main source of income was now also its biggest rival. What Mozilla did next is rather counter-intuitive.   First it released Firefox OS, a slimmed down operating system based on the Firefox web browser primarily aimed at low-cost smartphones in emerging markets. At this year’s Mobile World Congress, it announced a smartphone that runs Firefox OS that sells for just $US25 outright. It was now competing head-to-head with Android devices at the very moment low-cost smartphones became a key growth market for Google.   Then it launched its own app store – known as the Mozilla Marketplace – that sells apps for any PC, Mac or smartphone that runs either Firefox or Firefox OS.   It followed this with the announcement of a string of devices running the platform, including tablets, smart TVs in partnership with Panasonic, low-cost computers and – most recently – a Chromecast-like HDMI stick called the Matchstick.   The new products and the app store will potentially create a new source of revenue for Mozilla, but also saw Firefox jump right in the path of Google’s mobile computing juggernaut, Android. That same Google – keep in mind –was also still Mozilla’s main source of income.   To paraphrase Sir Humphrey from Yes Minister, it was potentially a very “courageous” move. However, there was one strategic masterstroke by Baker and her team that hadn’t been revealed yet.   Google is not the only company on the internet that’s willing to pay to have a large number of web searches sent in its general direction. This is where the deal with Yahoo! comes in.   Better still, Yahoo! has no ambitions as far as making smart TVs, web browsers, HDMI sticks or app stores. In fact, if it leads to more people searching with Yahoo!, the online media giant has a good reason to promote those efforts.   As I said near the start of this article, there’s an important lesson hidden in this for any business or organisation whose biggest customer is also a competitor. In fact, it’s almost a case study on what to do (or try to do) in a very tricky commercial predicament, as Mozilla was.   That is to make sure you leave the door open for another customer or backer (in this example, Yahoo!) to potentially step in, while at the same time developing new sources of revenue over the longer term. Also, so long as your business has a Yahoo! waiting in the wings, it potentially matters less if those new revenue sources put you in direct conflict with your biggest customer (Google).   Because sometimes in business, your best friend can quickly turn into your biggest enemy.   This story originally appeared on SmartCompany.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Blocking piracy websites is bad for Australia’s digital future

11:07AM | Tuesday, 25 November

  Rumours are flying that the government will introduce legislation before Christmas aimed at blocking certain websites, such as The Pirate Bay and Kickass Torrents, as part of a range of efforts to reduce copyright infringement in Australia.   Although the details are unclear at this stage, it looks like the law will allow copyright owners such as movie distributors and record labels to seek a court order to block sites that facilitate peer-to-peer file sharing, providing access to copied content.   This looks like a good idea, and it’s certainly a less intrusive approach than “extended authorisation liability”, the last copyright reform which the government proposed in July and then hurriedly dropped in the face of almost universal condemnation.   The problem is that website blocking always fails.   The technical problems with website blocking are the most obvious. Basically, you can block at the domain name level, or at the level of the internet address.   Blocking domain names means that the content owner convinces a court to tell internet service providers (ISPs) to drop problematic domain names from their name servers. This means that when a copyright scofflaw like, well, me, tries to get access to The Pirate Bay nothing happens. The domain name doesn’t resolve correctly, and so it’s like the site doesn’t exist.   There are some good policy reasons to be troubled about this type of action — essentially it breaks the guarantee of internet connectivity — but even if the government ignores that principle, the bigger problem is that it just doesn’t work.   The Pirate Bay will just change its domain name, forcing a constant game of Whack-A-Mole for the content companies and the courts. In any event, I can still get access to The Pirate Bay by getting a virtual private network (VPN) or change my domain name system (DNS) lookup server. (It sounds complicated, but trust me, every 15-year old will know how to do this if the government introduces domain name blocking.) Blocking is a technical nightmare Blocking websites at the internet address level is trickier. This involves stopping all traffic from a given IP (internet protocol) number or a given block.   The problem with this type of action is that it inevitably catches and stops some innocent content. For networking reasons numerous websites can share the same IP number or address block, and so shutting down one IP address can wipe out other sites that are completely fine.   Back in 2013, the Australian Securities and Investment Commission (ASIC) applied a little-used section of the Telecommunications Act to block three websites that were hosting investment scams. ASIC ended up with egg on its face when the block also wiped out Australian access to around 250,000 innocent websites that happened to be hosted on the same address.   The other really serious technical problem is that you actually can’t block many of the places where infringing content is hosted. When I download a movie using BitTorrent (a peer-to-peer file transfer protocol), a huge swarm of computers from all over the internet is responsible for sending me bits and pieces of the movie file.   Although a court could order ISPs to block sites like The Pirate Bay that aggregate the initial seed for the torrent files, there is no way to block all the computers that eventually provide me with the movie.   So all in all, blocking is a technical nightmare. However, these problems pale compared with the policy problem of how you write a law that catches only the “bad guys”.   The law can’t just block sites that host infringing content, because sites such as The Pirate Bay actually don’t host infringing content. But if you draft the law to catch sites like this which help me find movie torrents, then you’re going to shut down Google.   Beyond Google – who will never let a law like this get through – a poorly drafted law will inevitably be used to threaten Australia’s nascent cloud computing industry, because cloud storage is where a large number of infringing files are found these days.   So, once again, we’ll have laws that favour US content industries at the expense of Australia’s digital future.   At best, blocking laws might be slightly effective to reduce the access to overseas movie streaming sites. Maybe. This should make Foxtel and Australian market newcomer Netflix happy because a small number of people will buy a subscription because they can no longer get programs like Game of Thrones free on the internet.   But after a while you have to ask whether it’s worth spending the amount of time, money, and effort that the government keeps expending to keep the copyright lobby happy.   Dan Hunter does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.   This article was originally published on The Conversation. Read the original article.

Government report identifies six disruptive tech trends to watch

11:07PM | Sunday, 23 November

Mobile messaging apps such as Whatsapp are killing traditional text messages while multi-screening is going mainstream, according to an Australian Communications and Media Authority.   The ACMA paper, titled Six emerging trends in media and communications, attempts to identify disruptive media and communications trends that “strain the effectiveness and efficiency of existing regulatory settings”.   Here are the six media and communications trends identified in the report:   1. Communications go over the top   Consumers are increasingly rejecting carrier-based phone calls and text messages in favour of apps and online services such as Apple iMessage, Facebook Messenger, Google Hangouts, Snapchat and Microsoft’s Skype.   According to the report, revenues from fixed line phone services have collapsed by 34% in five years, from $18.296 billion in 2008 to just $12.045 billion in 2013.   Over the same time frame, the number of voice over internet protocol (VOIP) users has surged from 2.1 million to 4.6 million.   However, this extra data users has been good news to mobile phone carriers, which have seen their revenues surge from $15.967 billion to $20.014 billion.   2. Consumers build their own links It’s not just the number of communications apps that is booming. Australian consumers are using them with a wider variety of devices, which are connected over a growing number of network technologies.   Consumers now regularly switch between fixed-line internet connections, Wi-Fi, mobile broadband and – especially in remote areas – satellite connections, depending on the time of day.   The number of devices they use is also increasing, with the number of Australians owning a tablet, laptop and smartphone increasing from 28% in 2013 to 53% in 2014.   3. Wearables are set to boom   On top of smartphones, tablets and laptops, the report predicts wearables (including Google Glass, smartwatches and fitness trackers) are set to become increasingly common over the coming years.   The report suggests the number of wearables worldwide will grow from 22 million in 2013 to 177 million in 2018.   It also predicts that an increase in the number of devices running Google’s Android Wear platform, along with the release of the Apple Watch early next year, will lead this trend to accelerate.   4. Online content is going mainstream   The internet is not just disrupting the way we communicate.   According to the report, consumers are increasingly viewing a greater number of TV services (including pay TV, broadcast TV, streaming TV and catch-up TV) delivered to a growing number of devices, over a growing number of network technologies.   In a typical week, 97% of Australians watch a free-to-air or pay TV service. By contrast, one-in-two Australians have watched online TV over the past six months. This includes professionally produced catch-up or streaming TV services, pirated movies and content from video sites such as YouTube.   Meanwhile, people aged between 16 and 24 now watch more TV over the internet than they do from broadcast television services.   5. Multistreaming is now mainstream   In many cases, new forms are television are complementing, rather than replacing older ones.   The report shows 74% of Australians with internet access regularly watched TV and used the internet at the same time, up 25 percentage points from 2009. It is as high as 89% for people aged 25 to 34.   Overall, 71% of people still prefer to watch TV shows and movies on television, compared to on mobile phones (5%), tablets (4%) and computers (29%).   Meanwhile, user-generated content is mostly watched on computers (71%) or mobile phones (41%), rather than tablets (17%) and televisions (10%).   6. TV is still the one for news   Finally, when it comes to getting the news, the more things change, the more they stay the same.   The report shows that 92% of free-to-air or subscription television viewers watched a news or current affairs programs on television in 2014.   While newspaper circulation has dived 18% between 2009 and 2013, the drop has been a drop of just 10% from TV over the same time.   Image credit: Flickr/alvy   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

How Martin Hosking built Redbubble into a $59 million design marketplace

11:29AM | Thursday, 20 November

Martin Hosking first saw the internet 19 years ago. A year later the now 54-year-old Melburnian became involved in his first online venture, search provider and one of the darlings of the dot com era, LookSmart. After serving as chairman of soon-to-be-listed software construction company Aconex, Hosking teamed up with two friends in 2006 to launch Redbubble, an online design marketplace dedicated to connecting shoppers with thousands of artists who produce one-off designs for everything from t-shirts to tote bags and doona covers. Last year Redbubble grew by 77% and turned over $59 million. More than five million people visit the website each month.   I’ve been working with the internet since 1996, really since the start. When I got involved in 1996, Netscape hadn’t even launched.   I first saw the internet in 1995. I realised it could change the world and I wanted to be part of that. I was looking for different ways to become a part of the internet when I got involved in LookSmart.   When we started Redbubble in 2006 I was chairman of Aconex, which has been in the news lately as it is getting ready to IPO in the next few weeks.   We originally thought about Redbubble as a service to provide personalisation for people who wanted a product with an image or words they had created. But we soon realised that was quite a bad idea.   With my friends Paul Vanzella and Peter Styles, what we realised was that we could serve the needs of the artists instead. So the technology was the same but the artists became our primary customers.   I provided a lot of the early funding for Redbubble but we all had a share in the business. Paul has his own design company now but he still does some work for us. Peter has left the company.   We were among the first to think about how the internet can serve creative artists on a global basis. It is extremely difficult to make something on a bespoke basis for individual customers but it is possible using new technology, especially print on demand. Each product on Redbubble is for a single customer and the distribution model could not be any leaner or smarter. Our artists are designing everything from artworks about extremely obscure evolution to physics or mermaids.   People talk a lot in Silicon Valley about companies pivoting but you only need to pivot when something isn’t working. We haven’t pivoted around our values of serving artists; we’ve just gotten better at doing that.   We have a much wider range of products now – we’ve just launched mugs and duvet covers and the products are becoming more and more diverse. But our core idea of high quality content from artists hasn’t changed.   My background in the internet was incredibly useful when launching Redbubble. It helped me realise the skills I needed in the business and we had a high quality designer from the start. We built a very scalable solution from the start, we didn’t just hack it together.   I think often it is your naivety that is incredibly helpful when starting a business. If you come from a retail background, you would always be thinking ‘how can I sell this product to as many people as possible?’ But I didn’t have that. I had a naïve mindset of providing customers with what they want.   My university studies also helped. A general arts degree, while not necessarily popular these days, does give you a long-term view of historical problems and a perspective about what’s going on. I can talk to people about where Redbubble sits in the history of the arts movement or how it relates to what Picasso did because I have that broad background.   All businesses experience different phases of growth and I don’t think any startup has not had a period when they are looking out into the abyss. During the global financial crisis we had one of those periods. It was one of the most difficult periods because it became clear that money from investors just wasn’t there. We had to create a traditional company where revenue is higher than expenses and that forced discipline on us as a company.   Story continues on page 2. Please click below. We had a period of very strong growth coming out of the GFC as e-commerce started to take off. We had also re-written our programs.   Now we are focused on achieving growth through user loyalty and repeat customers. Our engagement with users is now about more than just the transaction; we want people to have a great experience.   We first tried to expand into the US in 2008 but that was a bad idea as the whole world was collapsing. We made another run at it in 2010 and we now have offices in San Francisco.   We are actively looking at expanding to Europe, with the UK as a starting point. Some of our production partners are in Europe and it is a big and important market for us.   Continually diversifying our product range is also important for growth, as is continuing to improve the customer experience on Redbubble so it is genuinely engaging and people have a reason to come back.   We want to encourage genuine word-of-mouth marketing. As an online marketing place you have to embrace diversity. A lot of people are coming to the website and those people in and of themselves should be what drives the growth. When an artist joins Redbubble, they bring people with them and when a buyer engages with the site, they will bring people too.   We encourage our artists and buyers to share their experience with Redbubble and this means there are thousands of people talking about what we do on Twitter and Facebook. We do paid media on Google and Facebook, as well as events such as the upcoming Art+Mel, but these are supplementary.   A business plan is useful in terms of setting the direction in which you’re going but the internet has learnt that a plan doesn’t last a lot longer after it is written. Instead, I’m keen on setting an operating rhythm in my business. At Redbubble we work to a six week cycle. It gives us the capacity to revisit plans on a very iterative basis and you learn things as you go along. It also prevents you from doing things that are expensive or difficult and allows you to devote resources to new opportunities.   My business does not keep me awake at night. You need to have enough perspective on your business so it doesn’t ruin your life. Many business owners lose that perspective but that’s not good for them or for the company. Eating well, meditating and keeping perspective make me a better person as well as a better businessman.   The culture at Redbubble is based on some core principles inspired by the work of Daniel Pink, which we use with a great deal of flexibility. We employ over 100 people.   Autonomy is important; people have to have some control over their work life. Mastery is important; team members need to feel that they are getting better at something, that they have learnt something. Purpose is important; they feel like they are contributing to a higher goal. And finally accountability, they report back and are not a lone operator.   Ultimately you want to get to a stage where if someone is spending eight hours a day working at Redbubble, those hours should be well spent. There is nothing more depressing to me than the idea that people might work here and don’t think it is worthwhile.   I continue to invest in other companies, including Aconex and other private investments, but I don’t see Redbubble as simply a deal or a transaction. I am engaged with this business for the long term.   But you have to be open to new opportunities. There will always come a time when someone else may be able to lead Redbubble better than me and I’m not interested in setting up a Rupert Murdoch-generational type of thing. This story originally appeared on SmartCompany.

Robert Scoble thinks Australia’s WattCost should be Google’s next purchase

11:42AM | Monday, 17 November

Could WattCost be the next Australian startup acquired by Google? Former Microsoft evangelist Robert Scoble believes so.   The startup has developed a device which attaches to a household’s power meter and provides homeowners with real-time power usage data, and uses that data to help them save power, money, and reduce their carbon footprint.   The WattCost team is currently in the United States meeting with Scoble, who is Rackspace’s startup liaison officer, after winning the company’s 2014 Small Teams Big Impact Pitching competition.   WattCost co-founder David Soutar says the trip to Silicon Valley has been fantastic so far, and praised the job Scoble and Austrade have done in introducing the WattCost team to investors, advisers and other successful Australian founders.   “Silicon Valley investors seem to value what we’re doing at a much higher level than back home, but we would really like to work with Australian investors if possible,” he says.   “We believe we’ve developed a world-class product, that will change the way consumers interact with their homes to control their electricity costs, and people over here are opening their doors on short notice to listen to us.”     Scoble described WattCost as the most interesting new startup he’s seen all year. He says Google is leading the race to become the dominant home IoT platform.   “We don’t know who’s going to win, but Google’s in the early lead because they bought Revolv, they bought Dropcam and they bought Nest,” he says.   “And I think this is going to be another one that they’re going to buy, because knowing how much electricity is going through the house, knowing when the rates are changing, that’s really important.”   WattCost works by monitoring fluctuations in power usage and uses machine learning to iron out any ambiguities.   “Every appliance has its own unique digital signature, so we’ve learnt what those signatures are,” Soutar says.   “Some things you can talk about instantaneously because of the load, but when I talk about digital fingerprints, that’s how it is used over time. If you imagine a microwave, say you put it on for a minute, it runs through a certain power signature cycle.”   When something is plugged into the home network that WattCost isn’t familiar with, it prompts the user through its smartphone app to let the system know what it is. That smartphone app is where users can find real-time power consumption information on their home. It can make suggestions like delaying using the dishwasher until off-peak times, or updating a fridge that is consuming more energy than it should be.   “We want to help people save money and lower their carbon footprint,” Soutar says.   “There’s never been a way to do that from a personal point of view, so we’re really passionate about helping people do that.”   That passion, Soutar says, will eventually lead to WattCost releasing its own API.   “The consumers should own the data and they should be able to use it in whichever way they want,” he says.   The WattCost energy monitor is available for pre-order for $149 (the first 1000 can be pre-ordered for $99) and it’s expected to ship in the middle of 2015. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Why this early-stage Aussie startup decided to jump ship and move to Poland

11:13PM | Sunday, 16 November

Ever thought of leaving Australia behind and moving to another country?   That’s exactly what Andre Joachim did with his co-founder and wife, Maya Joachim. The pair sold their house in Sydney in August this year, and moved to Poland, to self-fund FarmerFinder – a startup aimed at connecting people with food and agricultural products while at the same time empowering farmers.   Maya’s brother Mark Santoso joined them and eventually the three co-founders set up shop in Krakow.   Andre Joachim told StartupSmart moving to Europe was a decision that was made with the startup’s best interests at heart.   “We all have EU passports [through ancestry] and Maya and I really liked living in Europe,” he says.   “The original plan was to move to Berlin. But finding an apartment long-term was very difficult. It’s 30% cheaper in Krakow.”   Joachim says reducing the startup’s overheads was always top of mind, particularly because it is self-funded. And while he says the startup scene is a lot stronger in Berlin, the move to Poland has worked out quite well.   “Google have an office here and a lot of international companies have a presence in Krakow. There are events on every week, everybody speaks English – it’s a beautiful city.”   Joachim and his wife were originally going to set up a coffee roasting business in Sydney. However, after meeting farmers overseas to build working relationships and business connections, they realised it was hard to find farmers and buy from them directly.   “All farmers have this problem,” Joachim says.   “The truth is not all things grow in all places. If you want mangoes in Victoria they come from Queensland. And the economics don’t always work unless you can scale it down. Vanilla beans grow in Madagascar or saffron in Iran. These countries always provide unique kinds of produce.”   While many Aussie startups set up shop overseas in order to scale and tap into international talent, convincing himself and family members that it was a good idea wasn’t always easy.   “Most people have great opportunities but they tend to put self-imposed limitations [on themselves]. We had to change our way of thinking to not be scared. A lot of people think we’re crazy – but I didn’t listen to them.”   Joachim says he and his co-founders haven’t committed to staying in a single place overseas – or ruled out returning to Sydney.   “Basically we have a ‘free and flexible’ mindset that means we will do whatever is best for FarmerFinder to succeed.”   He says and his co-founders might also go to India to set up a temporary office, or eventually go to Berlin or San Francisco to seek investment. He says this ties in with the need to “get more done with less” and also complements the startup’s ultimate vision.   “Why just help Australian farmers? They all have the same problem. In every single country farmers are doing it tough. We allow them to bypass the middle man, sell direct – there’s lots of benefits.”   FarmerFinder is in a beta testing phase, with a launch date planned for early 2015.   Follow StartupSmart on Facebook, Twitter, and LinkedIn

How these six new technology predictions fared in 2014: Control Shift

11:03AM | Thursday, 13 November

Futurologists are a common feature at business conferences.   Unfortunately, many aren’t held accountable to how their predictions pan out. We’re all still waiting for our flying cars, clean reliable fusion power plants and 3D holograms.   In November last year, I picked six new technologies that were likely to make an impact in 2014. So how did they fare?   Here’s what happened:   1. Curved and flexible displays   This first pick came with a caveat:   “Unfortunately, getting devices with a curved or flexible screen produced on a production line designed for flat screen devices has turned out to have been far more difficult than it initially seemed… As a result, you’re unlikely to see these devices outside South Korea in the immediate future.”   Sure enough, at the International CES in Las Vegas, Samsung demonstrated curved-screen TVs as the centrepiece of its display. In January, LG launched the G Flex curved-screen smartphone in Australia.   Meanwhile more recently, at its Unpacked 2014 Episode 2 event alongside the IFA trade show, Samsung unveiled a new curved-edge smartphone called the Galaxy Note Edge.   As predicted, there have been issues putting flexible and curved glass into mass production. However, LG Display appears to have come up with a solution: Using plastic instead of glass in a new display technology called P-OLED (Plastic-Organic Light Emitting Diode).   The thin, flexible display technology helped it to create a round-screen Android Gear smartwatch called the G Watch R, along with a smartphone that has a display that runs right to the edge screen.   The company expects smartphones and tablets that are designed to bend (and fold flat after being bent) to begin appearing next year, with rollable tablets, foldable-screen laptops and flexible TVs coming sometime in 2017.   2. Smart TVs   Whether it’s smart TVs that run apps out of the box, set-top boxes or HDMI thumb sticks (such as Google ChromeCast), 2014 was a massive year on the smart TV front.   The year kicked off at CES with LG reviving the Palm Pilot operating system (webOS) for its smart TVs and Panasonic partnering with Mozilla to put Firefox OS on its TVs.   Not to be outdone, in June Google announced Android TV, a new platform for smart TV apps and content. Last month, it announced the first set-top box to use the platform, known as the Nexus Player. Also from Google, a little device known as the ChromeCast finally reached Australia in May.   Amazon saw the action and said “me too”, releasing its version of the ChromeCast in October and a set-top box called Fire TV in April.   So what will people watch on all these smart devices? The best news is that streaming video service Netflix is set to launch in Australia.   It seems the humble “idiot box” has never been smarter than it was in 2014.   3. Smartwatches   Apple Watch was announced this year. Need I say any more?   Even putting Apple Watch aside, 2014 was a huge year for smartwatches. Google also announced its smartwatch platform, known as Android Wear, which in turn powers devices from a range of companies including Sony, LG, Samsung, Motorola and others.   These devices are all packed with a range of apps and features – and they’ll even tell you what the time is.   4. Augmented reality glasses   Google Glass got a limited public release this year with a range of fashionable frames and prescription lenses. Sony released the software development kit for its Google Glass clone.   But the real big mover was a related technology called virtual reality. Jaws dropped when Facebook paid $2 billion for virtual reality device maker Oculus. Last month, Samsung announced the first consumer device based on the technology, known as Gear VR.   You could say 2014 was the year augmented reality and virtual reality became a reality for consumers.   5. Home automation   Google kicked off the year by launching its home automation push with the $3.2 billion takeover of smart thermostat maker Nest. The tech giant encouraged other businesses, including Australian smart-light maker LiFX, to build new devices that connected to Nest.   Apple responded in June by launching HomeKit as part of iOS 8. The technology makes it easy for third-party device makers to allow their devices to be controlled with iPhones and iPads.   6. Low-end smartphones   This is a topic I’ve touched on over the past couple of weeks. The short version is we’re reaching a saturation point in the smartphone market, while low-cost vendors such as Xiaomi are booming in China.   The great news for consumers is, even with the Australia tax, buying an affordable smartphone has never been more affordable.   Throughout the year, a range of devices (including the Moto E and Moto G, the Kogan Agora 4G and the Microsoft Lumia 635 and 530) hit the local market. Each boasted features once the preserve of high-end devices and – best of all – prices well under $300 outright.   Conclusion   Forget about waiting for that flying car.   From smartwatches to smart TVs and low-end smartphones to home automation, the six technologies on the future gadget form guide ran a strong race in 2014.   When some of this technology will make it into the average person’s home is another question.   This story originally appeared on SmartCompany.

Melbourne semiconductor startup closes $US6 million Series A

11:39PM | Thursday, 13 November

Melbourne-founded Indice Semiconductor has closed a $US6 million ($A6.9 million) Series A funding round that will help accelerate the distribution of its power-saving technology.   Its Continuous Sigma encoding method has the potential to reduce power consumption while increasing performance in everything from wearables, to headphones, computers and smartphones, co-founder James Hamond explains.   “Digital-to-analog and analog-to-digital encoding methods are found in just about all modern electronic devices, from wearables, audio equipment, space probes, phones and so on,” he says.   “Indice’s patent-pending Continuous Sigma encoding method has the potential to reduce the device’s power consumption while increasing performance. For the end user this could mean headphones with more effective noise cancelling and crisper audio than ever before.   “Our advanced algorithms are game changers in other areas as well, including enabling the world’s smallest solar inverter – which is why we’ve entered Google’s Little Box Challenge.   “Eventually Indice hopes this will lead to more powerful and efficient electric motor control and car chargers, helping boost performance and consumer uptake of electronic vehicles.”   The Series A round was led by Allen Alley, founder of semiconductor company Pixelworks, who will join the startup, and Australian venture capital firm Rampersand. Hamond says a number of private individuals who make up the “old silicon guard” also invested. He declined to name those investors.   Founded in Melbourne in 2008, Indice Semiconductor has since relocated to Oregon in the United States. It’s sold one million of its Continuous Sigma powered chips to date, and plans to use the investment to scale up, targeting the Asian market.   So how was a startup that had received just $2.5 million in funding before this round able to create a solution that other big semiconductor makers couldn’t? Co-founder Aaron Brown says it has a lot to do with the fact the startup was bootstrapped.   “It’s quite amazing, but the large companies and other semiconductor manufacturers were using mathematics algorithms that are incredibly old, from the ‘30s, ‘40s and ‘60s, and their refining process relied on sheer brute force,” Brown says.   “We didn’t have the luxury of a large silicon foundry or design foundry, so we had to forge ahead to find a really elegant solution that could be applied to almost any semiconductor.”   But it was not an easy path, Hammond adds.   “Aaron and I like to joke if we knew how hard it was going to be we probably wouldn’t have started,” he says with a laugh.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

The future of e-commerce is about one-touch buying

11:21AM | Wednesday, 12 November

If you’re an e-commerce startup and you’re not building for one-touch buying, you’re already behind, according to Braintree’s general manager of mobile, Aunkur Arya.   “What we’re seeing now, in terms of disruptive forces in mobile is one-touch buying is becoming the standard,” Arya says.   “If you’re not doing that, you’re behind.”   Braintree recently conducted a survey of 224 business owners from across Australia and found that just 54% have a website, and only 24% have a mobile-optimised site or mobile app. Arya says that is evidence of how much room there is for growth in the online payments sector, and particularly on mobile.   “We believe the future of commerce is online, and more specifically, on mobile,” he says.   “The growth of e-commerce, the advances in mobile and the impact that the smartphone has had on daily human behaviour and consumption of goods and services all support this.   “One of that statistics I think about is if you take all the commerce that happens in the world, 10% of that commerce is online, and 10% of that commerce is on mobile. So 1% of the world’s entire commerce is on mobile.   “Yet it’s the most ubiquitous device, it’s the primary computing device for a lot of people now, in some markets people are leapfrogging the PC wholesale and going directly to mobile.”   That gap represents a huge opportunity for startups that think mobile first.   “If you take the US as one data point, all the really, really big valuations in the tech space are companies that are focusing on mobile. Uber is an $18 billion company now – it’s mobile only. Airbnb is mobile and desktop, but is very heavily invested in mobile.   “It’s not a choice anymore. If you’re a startup and you’re building something, you need to be focusing on mobile.”   Arya says payments will begin to fade into the background as startups increasingly focus on providing consumers with the best possible mobile experience. One-touch payments are part of that, so is giving consumers as much control as possible, by allowing them to pay in whatever way they choose.   Before arriving at Braintree, Arya worked at a number of startups, most notably as an early director at AdMob, which was acquired by Google in 2010. He says the successful founders he’s been around have all aimed big and stayed true to their convictions.   “The thing I’ve learnt most is don’t be encumbered by facts, especially if you’re a founder,” he says.   “When you’re a founder you need a certain sense of just being able to cut through things that seem impossible to overcome. That’s one of the qualities that I’ve seen. I’ve worked for many startups that have failed, and fortunately in the last several years I’ve worked for startups that have been tremendously successful.   “The difference in the entrepreneurs I’ve seen is the ones that have been successful are the ones that really cut through everything and had conviction about their ideas and their business.   “They weren’t deterred by some of the facts on the ground, they just went straight through it and said either this is going to be really big or it’s going to fail miserably.   “Those are the ideas that people should be working on.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.