Above: Chris Raethke, Damien Brzoska and Saxon Fletcher from Supportie (Image: Zach Kitschke). Startmate may have evolved from a trailblazer in the start-up accelerator scene to one of several incubators offering broadly similar things, but it is still regarded as the gold standard by many aspiring tech entrepreneurs. The Sydney-based program, now in its third year, hothouses web and mobile ventures by throwing an army of top-notch mentors and $50,000 at them, as well as providing them with a handy trip to Silicon Valley. The participants for the 2013 iteration of Startmate were picked back in December, with Niki Scevak, co-founder of the scheme, declaring “we have been looking for those unique ‘two shit’ teams – those which get shit done, and also give a shit about the customer and their problems”. So which of the class of 2013 are set for riches in Australia and beyond? We spoke to this year’s participants to get their insights and will be profiling them in two parts on StartupSmart: Supportie (formerly GetStall) What? Technical help for your small business. There are experts online waiting to help. · Founders? Chris Raethke, Damien Brzoska, Saxon Fletcher Website: http://www.supportie.com/ Why did you apply to Startmate? We remember seeing BugHerd being accepted into the first intake and saying, “Wow, that’s a really cool product. This Startmate thing sounds exciting.” Before applying we were running our own web company, building out MVPs for other people’s start-ups, and we really wanted to pursue an idea of our own. So late last year we had saved up some money and felt we had a good product (GetStall) to apply with. So we did. What was the application process like? As a tech team this was the hardest part for us. The application had a lot of tough questions around sales, marketing, finances, etc. Getting answers for these meant a lot of whiteboard sessions, reading and learning for us. It really helped us to grow as a team, and thankfully we have a really strong tech team so we were able to get through (even though our business skills were a bit light on). How are you finding the program so far? The program is great – there are a lot of really smart people here and some really interesting problems that people are solving. It is definitely an emotional roller-coaster, as any start-up could relate with. Some days are up, some days are down. The big thing we have learnt is that this doesn’t end mid-April when we go to the States. This is something which will continue on for at least the next four to five years. Why did you pivot? We were four weeks into pushing GetStall out to the masses and, while we were getting quite a few shops signing up, we weren’t getting many sales. We spent a few days going over what we had achieved and learnt so far, and the numbers didn’t show us anything which we could get too excited about so we chose to move onto something new. In hindsight, we put too much pressure on ourselves to be performing quickly. Things take time and unfortunately we learnt that the hard way. A day off, and a chance to breath and get some sleep, would have been a good idea. How do you make money? Like many marketplace-type businesses, the plan has always been to clip the ticket. We are actually only three weeks into this business, so the actual pricing will need to be refined once we have more data. What is your vision for Supportie? Supportie is still very much in the early stages and we are still doing a lot of discovery. We have been focusing on a small segment of the market at the moment, so we can’t say too much more just yet. How do you plan to achieve your vision? We’ve already spent two weeks assessing two markets within the Supportie space. The current plan is to spend a bit more time looking at possibilities in this space and then decide where we want to specifically focus. So the current plan is to learn more and then make a plan. Kinderloop What? A simple and secure way for child carers to communicate with parents. Founders? Dan Day and Daniel Walker Website: http://www.kinderloop.com/ What was the inspiration for Kinderloop? Dan Day: After having my two children in daycare for three years, I was frustrated by the lack of communication. Collecting them at the end of the day, it was impossible to find out what they learnt, ate or did. The carers were always so time-poor as well. Why is this needed? Kinderloop solves this problem by allowing carers to record events as they happen during the day. This saves them valuable time reporting, saves money in consumables and keeps them fully engaged with parents. What is your revenue model? Each carer pays a monthly fee and the parents pay for premium add-ons. Story continues on page 2. Please click below. Why apply for Startmate? We liked the idea of an accelerated program, the mentor list was attractive and it fitted nicely with where we were at in Kinderloop’s lifecycle. What was the application process like? We found it relatively straightforward. The one-minute video pitch was great practice and the demo interviews were fun – it really made us refine our spiel. How are you finding the program so far? We are enjoying it – you work as hard as you desire (which is hard, let me tell you!) It’s great sharing the highs and lows with the other teams, and there is so much learning each day. Are you hoping to raise additional funds for Kinderloop, either here or overseas? Yes we are. We will raise a round of $850k from both here and overseas to help build the team. Where do you see yourselves in a year from now? We aim to be the go-to communication tool for anyone who cares for children, from preschool to sports clubs, worldwide. Bugcrowd What? Crowdsourced security testing. We run managed bug bounty programs for business. Founders? Casey Ellis and Sergei Belokamen Website: http://bugcrowd.com/ What was the inspiration for Bugcrowd? Ellis: Bugcrowd was the result of a series of conversations with customers of my previous business, a security testing consultancy, where the bug bounties run by Google, Mozilla, Facebook and others kept coming up in conversation. I started asking the question, if you think these are such are good idea, why aren’t you running one? Off the back of that, I had the idea to create a business that handles those objections and runs bug bounties as a fully outsourced service. You’ve described yourself as “Kaggle for security vulnerabilities”. How so? One of the mentors at Startmate called us that. We are similar to Kaggle or 99designs in that we crowdsourced, meaning our customers pay for the results they want, not the effort that went into the results. The way Bugcrowd works: The client sets a reward pool, a duration for the bounty, and tells us what they’d like the crowd to test. The crowd is notified and starts testing. The first person to find each security flaw wins a reward, and there are higher rewards for the most creative or severe flaws. At the end we take the findings and validate them, then produce a developer-friendly report of things to fix. We then manage the payouts to the crowd. What’s your revenue model? We take a percentage of the reward pool offered in each bounty. We also have premium paid features, such as our Crowdcontrol system (which controls testing traffic) and private bounties (where only the top-ranked researchers are invited). Why apply for Startmate? Bugcrowd is a great idea but, despite our experience in running businesses, we knew we’d need help taking it from being a great idea to being a great business. The Startmate mentor network is built for this purpose. What was the application process like? Hectic! I left applying a little bit late (like the day before) so I had a lot to do to get something sensible submitted in time. How are you finding the program so far? Excellent. The focus it brings is fantastic. The mentor network is invaluable and the money we got from them is letting us work full-time on making Bugcrowd awesome. Niki (the founder of Startmate) is a very focused guy who knows what it takes, and you can tell that he’s gone to great lengths to impart his experience into the program. You’ll be heading to San Francisco a bit later. What are you hoping to achieve there? The main purpose of the trip will be to pitch for seed capital to take the business to its next stage. Apart from that, I'll be doing a bunch of business development and meeting up with a bunch of industry friends who I’ve only known through Twitter for years, which I am really looking forward to. What’s your overall goal? Our overall goal is to connect the global white-hat security research community with companies of all shapes and sizes through the Bugcrowd platform. Our aim is to become synonymous with the concept of crowdsourcing your security testing. Another goal is to continue and expand our charity bounty program, where we do bounties for charities for free, and make that the first port of call for charities wishing to have their security tested.
It's been a while since the tech industry has seen a massive takeover deal, but this weekend delivered: cloud-storage group Dropbox agreed to acquire the popular new email app Mailbox for a price rumoured to be as high as $US100 million. The price is a huge premium for the app, which has only been available for a few weeks. But it also shows businesses in Silicon Valley are still willing to shell out massive amounts of money for very early, or even premature, ideas. Mailbox has become popular for its mail system, which allows users to delay receiving messages until certain times to help clear inboxes as quickly as possible. Mick Liubinskas, the co-founder of Australian start-up incubator Pollenizer, says email has become "one of the biggest areas of opportunity". "There are a lot of people attacking this in many different ways and it's a very good one to crack as well," he says. "But it's also a problem, because how do you disrupt something that's so embedded?" Reports, first from The Wall Street Journal, started emerging over the weekend that Dropbox had acquired Mailbox, where the company confirmed Mailbox would remain a separate app. Dropbox chief Drew Houston said he believed the acquisition would help the app grow "much faster". Houston also said he believed the deal would help Mailbox add new features quickly, such as handling attachments. In a blog post, he said the app's simplicity caught the company's attention. "Dropbox doesn't replace your folders or your hard drive: it makes them better. The same is true with Mailbox. It doesn't replace your email: it makes it better. Whether it's your Dropbox or your Mailbox, we want to find ways to simplify your life." With both Dropbox and Mailbox working so closely with cloud-based services, an acquisition makes sense. Mailbox is created by Orchestra, which was founded by Gentry Underwood. The app caused a splash during its release by creating a digital queue, with users having to wait days or even weeks to access the app – the company wanted to avoid any downtime caused by a rush of users. It was a smart move, bringing attention to the app's main feature – the ability to not only archive email quickly, but also tell email messages when they should be sent. For instance, users can decide to read an email later that day, or even in a few days. The Mailbox servers handle the message in the meantime, and then send the message back as per the user's instructions. Orchestra had already raised $5 million in funding from Charles River Ventures, SV Angel, Kapor Capital and Crunch Fund. The app already has 1.3 million users. The amazing part of the deal is the price, with TechCrunch claiming the deal was done for "well over" $50 million, to as high as $100 million, although All Things Digital says the structure of the deal makes an actual valuation difficult. The deal is in many ways a throwback to the past few years when small, relatively unproven businesses won millions in funding, such as the $1 billion Facebook-Instagram deal. More recently, however, those deals have become rarer. Telsyte analyst Rodney Gedda says the acquisition is a smart one, as email has been ripe for innovation – it's essentially the same product as it was 20 years ago. "It was designed for simple messages that weren't time-critical. It was never designed for collaboration and sorting in the sense that a structured data application would be." Some have tried to advance the email process, such as Google with Google Wave, although the tech giant eventually shut that project down due to poor usage. The biggest change, Gedda says, is the move to cloud-based services. "The challenge now is to build upon that base line of email to make it more functional, collaborative and user-friendly, and then extend it to any device." This story first appeared on SmartCompany.
You might have seen the news this week Google will be shutting down its popular RSS aggregation service, Google Reader.
Three Business Enterprise Centres in regional areas have each received $200,000 government grants to provide coaching and mentoring to small businesses, but it’s unknown whether other BECs will receive similar support.
The other day, Old Taskmaster met an entrepreneur whose view of the cloud was somewhat up in the clouds, to say the least.
Adam Giles has been appointed the new Northern Territory chief minister, following a party room coup against Terry Mills.
Google is rolling out a major update to Street View in Australia today, with the search giant now displaying photos inside shopping centres and other buildings, giving local businesses a chance to boost their rankings.
Time is money when you're a business owner. The more efficient you are with your time, the more profitable your work and the more time you have to bring in new income.
Earlier today, an entrepreneur attempted to explain to the Taskmaster what “cloud computing” is.
A ride-sharing service that uses oversized pink moustaches to distinguish itself has spoken of its success at South by Southwest 2013, having raised $7 million from a number of investors.
A glove that lets people write in mid-air could spell the end of the keyboard and pen. Its creator claims it could even be woven into clothing so people can type anywhere.
The latest updates to Facebook’s News Feed are not only crucial progress from the company as it faces more competitors, but a call to action for SMEs, experts warn.
Queensland businesswoman Yvette Adams will take part in a study tour in Silicon Valley along with nine other women, two years after appearing in the 2011 StartupSmart Awards Top 50.
Over the coming weeks, StartupSmart will be running a five-part series that covers the legal basics involved in starting a business. This first instalment, by Lachlan McKnight, CEO of LegalVision, looks at the crucial decision of choosing a legal structure for your venture. Launching a new business is all-consuming. Unfortunately, in the rush to develop a viable product and sales strategy, many entrepreneurs forget to complete a crucial task: choosing an appropriate legal structure. As with anything in life, choosing a legal structure requires trade-offs. The simpler structures (sole trader or partnership) are cheaper and easier to set up but less flexible in the long term. Setting up a company, and potentially a family trust to hold your shares in it, is more complicated and expensive, but if your start-up does turn into the next Instagram you will benefit from your foresight. This article will give you a brief rundown on the benefits and drawbacks of the three most popular structures in Australia – sole trader, partnership and company. We will then discuss the benefits of using a family/discretionary trust structure to hold the shares in your company. Small and simple – sole trader A sole trader is an individual who operates a business in their own name. There are very few legal or taxation requirements to setting yourself up as a sole trader. A sole trader controls and manages the business. Any profits made during the operation of the business, as well as on its sale, are counted as the income of the individual who is the sole trader. Setting yourself up as a sole trader can make sense if you’re launching a business that will generate limited revenue, you don’t plan on taking on many liabilities and you are operating in an industry where the risk of being sued is low. A good example would be a PR consultant who works by herself. The key downside to being a sole trader is the fact that you, as an individual, take on all the risk of the business. This means that, for instance, you personally owe suppliers and lenders any unpaid amounts. Additionally, if you have a great year and generate over $180,000 in profit, a portion of your earnings will be taxed at the top marginal rate. If you’re more successful than expected you could end up with a huge tax bill! All together now – partnership A partnership is a group of individuals and/or entities that run a business together as partners. Although a partnership is not a separate legal entity (and as a consequence each partner pays tax on their proportion of the partnership income in a financial year), it must have a TFN and an ABN and it must lodge a tax return. Setting up a business as a partnership is cheap and easy, but only a limited number of businesses should consider this structure. The key downside to a partnership is the fact that each partner is legally responsible for all the liabilities and losses of the business (including taxation obligations and superannuation contributions), even if another partner incurs those liabilities. This means that each partner’s assets are at risk. When launching your business with a partner you will probably think nothing will ever go wrong – but this is rarely the case! If businesses start to fail it is not unusual for entrepreneurs to take on risks, hide these from their partners, and end up saddling the partnership with huge liabilities. Unfortunately, if you’re in a partnership, the debts your partner incurs become yours. Story continues on page 2. Please click below. From SME to behemoth – company A company is a legal entity that is separate from its shareholders or members. The shareholders are therefore not liable for the liabilities and losses of the company. This protects the assets of the shareholders. A company is a more complex, and consequently more expensive, way of structuring your business compared to a sole trader or partnership structure. There are initial establishment costs, regulatory costs (e.g. annual fees payable to ASIC) and compliance costs (e.g. accounting and other expenses relating to tax reporting). Incorporating is, however, the best way to go if you’re building a business that is going to take on liabilities, employees or investors. A company is a flexible structure which allows you to raise capital easily and ensures you are not personally liable for your businesses debts. The additional costs and complexity of setting up and running a company are heavily outweighed by its benefits. Reduce taxes and protect yourself – family/discretionary trust When launching a start-up which you’re aiming to build into a multimillion dollar company, it’s also a great idea to set up a discretionary or family trust. A discretionary trust is a trust in which the trust fund is held by a trustee and administered in accordance with the terms of a trust deed. In each financial year, the trustee determines which beneficiaries (if any) will receive distributions of income and/or capital from the trust, and in what proportions. Using a trust to hold shares in your company is a great option for a few reasons. The first relates to tax. If you end up selling your start-up to Google for $10m you will receive an extremely large windfall over one or two financial years. If you hold shares in your company personally, your tax bill will be immense given the top marginal rate in Australia is 45%. Holding your shares through a trust structure allows your clever accountant to significantly reduce your tax liability. Secondly, using a trust structure will reduce the risks associated with being a director of a company. Although it is unusual for a company director to be sued, it is not unheard of. If you set up a family trust and transfer all of your assets into it (including your shares in your company), suing you becomes a thankless task; you are penniless! Future-proofing Before you get into the details of product and marketing strategies it is crucial that you think about your company structure. Choose the structure that will work for you now, but more importantly, make sure it will work in the years to come. Lachlan McKnight is the chief executive of LegalVision, a start-up that provides SMEs with access to online legal services, including customised legal documents.
The pundits who have been waiting for Apple to come up with a new product category may just get their wish. New reports today suggest Apple is working on a wristwatch that could be released as soon as the end of the year.
Mick Liubinskas has highlighted the trials and tribulations of Pollenizer, including how it turned Spreets into a $40 million company, as the online venture builder celebrates its fifth birthday.
Groupon founder and chief executive Andrew Mason has been fired on the back of the group buying site’s December quarterly loss.
PayPal co-founder Max Levchin is launching a new mobile payments start-up called Affirm, the first project to come out of Levchin’s San Francisco tech incubator.
Technology advisory firm Ovum has highlighted a number of key trends to emerge from Mobile World Congress 2013, based on announcements from Telefonia, Google and MasterCard.
Long after many in the tech industry believed contactless payments in phones would be the norm, a new partnership between technology giant Samsung and payment group Visa may lead to more widespread adoption of using phones as wallets.