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Startup Grind, about friends not contacts

8:51AM | Thursday, 28 August

The growth of Startup Grind events in Sydney, Melbourne and Adelaide has mirrored the growth of the Australian startup ecosystem, says Startup Grind general manager Australia and New Zealand, Chris Joannou.   The fireside chat style events which give entrepreneurs the chance to listen and learn from some of Australia and the globe’s best startup minds has proved a success with local startups.   It’s currently seeking expressions of interest in a Brisbane based Startup Grind event, and so far there’s been a good response, with between 70 and 80 people signing up.   “The event themselves are about more than just inspiration and education,” Joannou says.   “The whole mission for startup grind is to connect, inspire and educate.”   Joannou was the Melbourne Director of startup Grind when it began roughly two years ago. He estimates 30-40 people attended the first event, but now they draw as many as 250-300, as they did for a recent event with Eventbrite co-founders Kevin and Julia Hartz.   “The focus for startup grind’s local chapters is primarily to highlight the successful startups in (their regions),” he says.   “So we talk about the Seeks and the 99 Designs, all the big ones, and help promote them to the world.   “While we focus on local entrepreneurs, if we get a big name out here of course we’re going to take them, because they’re beneficial to the community anyway.”   The value of Startup Grind’s network is obvious, Joannou says, and points to a recent example of a Startmate startup Foogi, whose founder attended Startup Grind regularly in Sydney. During his time in San Francisco as part of the Startmate program he attended a Startup Grind event where Julia Hartz was speaking.   “He went and talked to her afterwards, told her about his startup, and says they’re trialling (the startup) as an add-on to Eventbrite,” Joannou says.   “That’s crazy stuff. So a big part of its networking, and we’re trying to facilitate the networking a little better.”   Soon, through a new partnership with the ASX, Startup Grind is going to be hosting roundtable events, which will give startups advice on listing on the stock exchange.   But it’s Startup Grind’s ideals that drew Joannou to the company in the first place; he says Startup Grind tries to instil a selfless attitude in all those that attend.   “We’re trying to make friends not contacts,” he says.   “How can we help you, rather than how can you help me.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

General Assembly heads for Brisbane, as Australia’s startup ecosystem gets stronger

8:23AM | Thursday, 28 August

Brisbane is the likely candidate for General Assembly’s next Australian expansion, according to Riley Batchelor, regional director for the company’s Australian arm.   General Assembly, which runs a variety workshops and courses teaching digital skills, launched in Melbourne four months ago, and has a had Sydney presence for roughly two years.   “The model of taking it to another city within Australia has worked pretty well,” he says.   “The content has been just as popular in Melbourne as it has been in Sydney.   “When we go into a new market the things we look for are a strong startup community, a healthy number of job vacancies, a good strong employment market.   “So we’re thinking Brisbane might be the next potential city we have a crack at.”   The company’s Melbourne expansion has been so successful that Batchelor says it wouldn’t surprise him if Melbourne were to overtake Sydney as General Assembly’s strongest Australian city.   “There’s a really strong well connected cohesive startup community here,” he says of Melbourne.   “In Sydney there’s probably more startups, and maybe more early stage startups, but it’s a little fragmented and there’s lots of people doing lots of things.   “I was quite surprised how everyone works quite closely together down here and everyone knows each other, it’s a good vibe.”   Batchelor says comparisons between cities aside, he only sees the Australian startup ecosystem getting stronger in the coming years.   “I think we’re very much in the early days of the Australian startup community,” he says.   “There’s a lot more people coming into it. We see a lot of people coming from a wide range of backgrounds, they might be lawyers or finance people, or some other sort of corporate job that they’re not particularly and they’ve got an idea for an app or a business.”   While Batchelor says those older individuals are typical of General Assembly students, he says they’re getting younger, a trend he thinks will continue.   “We’ve graduated a class of web developers and some of them want to go on to be entrepreneurs and some want to go on to get jobs as web developers, but it’s probably one of the younger classes that we’ve had, and that’s really encouraging to see,” he says.   “I’ve been involved in startups all my life so I’d love to see more people leave school and become and entrepreneur rather than doing other stuff, but it’s all part of the journey as well. I wouldn’t say it’s a problem, or lacking or anything but I think it’s something that will continue to grow over time.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Sydney startup to quench Australia’s thirst for craft beer

8:18AM | Thursday, 28 August

A Sydney startup wants to expose more Australians to craft beer by making it easy for them to shop for local brews online and have them delivered straight to their door.   Apart from being a “one-stop shop” for summer ales and organic apple ciders, BeerBud hopes to broaden the definition of what it means to be an online marketplace by holding regular events such as tasting sessions and brewery tours.   Co-founder Andy Williamson told StartupSmart the idea for the business came after he and his friends were frustrated with both the price and range of craft beers at their local bottleshops.   The startup, which had a soft launch in April this year, is well positioned to get people to switch from mainstream brands. According to Roy Morgan Research, the number of Australians consuming craft beer on an average four-week period has increased to more than a million for the first time on record. But despite their product’s growing popularity, craft breweries still find it hard to build-up brand awareness. Williamson says this is where he hopes BeerBud can make a difference.   “These craft breweries, they’re small to medium-sized enterprises and they tend to be hyper regionalised,” Williamson says. “Because of their size they’re limited in terms of where they can actually distribute their beers.”   “Yes, we’re a standard online retailer but we see our ability to actually build a large and engaged audience as crucial to our success. We need the whole consumer education aspect to be import for the growth of our business.”   Williamson says the main hurdle for the startup has been getting the logistics right.   “The Australian e-commerce landscape is still very young and emerging,” he says. “We ran a very comprehensive tender process where we went out, met with and compared pretty much every third party logistics warehouse provider in Sydney and to a smaller extent Melbourne.”   Williamson says the majority of warehouses lack the processes required to fulfil e-commerce orders on an ad-hoc but real-time basis. He says the biggest tip he would give someone thinking about launching an online marketplace is to “iron out” all the logistical issues well before going to market and scaling-up.   “At the end of the day you only get one chance to reach and try to acquire a customer,” he says. “And if you acquire that customer but are unable to fulfil their minimum expectations it is going to be extremely difficult to win those customers back ever again.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Pocketbook marks 100,000 users and announces a Series A raise

8:38PM | Thursday, 28 August

Financial services startup Pocketbook has announced it's reached 100,000 users and is seeking $2.5 million in Series A funding.   Pocketbook has attracted 50,000 users in the last seven months, after raising $500,000 in seed funding last November.   Pocketbook’s service helps its users manage their spending by aggregating bank accounts, credit cards and loans, and providing a single view of their spending. Its smartphone app alerts its users when they get charged bank fees or are looking like they might spend more than their budget allows.   The 100,000 figure represents users who have not only downloaded the Pocketbook app, but have signed up and are using Pocketbook’s services.   Pocketbook co-founder and chief executive officer Alvin Singh says the startup actually reached the 100,000 user milestone a few weeks ago, well ahead of schedule. They’d hoped to have reached that number by December.   To put that in context Singh explains that Pocketbook has captured more of the market than Mint.com did in the US when it was acquired by accounting software giant Intuit in 2009 for $170 million, in a third of the time.   “We have outperformed our ambitious business plan with this latest milestone,” he says.   “We set out to prove that Pocketbook had mainstream appeal with our initial funding. The pace of our user growth is evidence that there is a big opportunity for real innovation in the financial services industry.”   Currently Pocketbook has a team of five, but Singh says with the help of this latest round of funding, he’d like to grow the team to between 10 and 15.   The funding will also go towards Pocketbook’s next stage of growth.   “While this is a great achievement, the team and I know we’ve got plenty of growing, in product and users, still left to go,” he says.   “What we have today solves a huge consumer problem. We help our users reduce the amount of work required to start getting on top of their finances. We already provide an incredible amount of value to our users for free. But there is so much potential for even more value by ‘smarts’ and intelligence to the process.   “We have a whole lot of data about our users, and we use that data to alerts about spending, but we want to get deeper into using their data to provide even more value to our users.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Bitcoin ruling still doesn’t answer which country has the right to tax

8:08AM | Thursday, 28 August

It’s been about five years since bitcoin emerged online, claiming to be the world’s first digital cryptocurrency. Bitcoin functions as a form of digital cash; really, it is a technology, using cryptography to ensure the validity of transactions and periodically generate new bitcoins. Bitcoin has grown into an industry now worth more than US$6 billion.   Last week, the ATO published long-awaited guidance on the Australian tax treatment of bitcoin, in the form of draft rulings regarding income tax, Goods and Services Tax and Fringe Benefits Tax.   The ATO’s position is that bitcoin is property. So bitcoin’s tax treatment for income tax, GST, and FBT, follows that of a valuable commodity such as gold or shares. Where bitcoins are exchanged for other property or services, this is treated as a barter transaction. Both the supply of bitcoin and the AUD (Australian dollar) value of the property received may be taxable.   Income tax of bitcoin holders and traders   Where a taxpayer holds bitcoin as an investment, capital gains tax (CGT) may apply to gains or losses made on the disposal of the bitcoin. This requires the taxpayer to track the purchase and sale price of bitcoin in Australian dollars.   If the transaction remains under the A$10,000 CGT personal-use threshold, individuals who use bitcoin to purchase goods or services for personal use will not be subject to CGT. Equally, individuals are not required to report or collect GST when using bitcoin to purchase items for personal consumption.   However, businesses will be taxable where bitcoin is received as payment for an ordinary business transaction, as the business must report as income the AUD value of the bitcoin received. Where bitcoin is paid to an employee, it is a property fringe benefit and FBT may apply to its AUD value. And if a business acquires and exchanges bitcoin in the ordinary course of business, the bitcoin is treated as trading stock.   The ATO says bitcoin mining can be a business, depending on the scale and nature of the bitcoin operations. Mining could be treated as generating services income, as miners verify the validity of bitcoin transactions; but if bitcoin is really an intangible commodity, perhaps this is a business of acquiring or producing that commodity itself.   How do we value bitcoin?   The CGT treatment of bitcoin means bitcoins are not fungible. For example, over time, a business or investor acquires three bitcoins for a cost of $100, $500, and $1000 respectively. Later, one bitcoin is valued at $500, and the business wishes to use one bitcoin to pay for a $500 transaction. This could generate very different tax consequences depending on which bitcoin is sold: a taxable gain, a loss, or no net tax. This produces tax planning opportunities, as for other investments such as shares.   Valuing bitcoin is difficult as it has “no intrinsic value” (as noted in an OECD working paper). It is also highly volatile. Determining market value at receipt and disposal of each bitcoin will result in administrative costs.   GST on bitcoin exchanges   GST will apply to a supply of bitcoin by a registered business and it is not treated as an input-taxed financial supply or as money. When bitcoin is used in a transaction with another business, two GST events occur: the supply of the product and the supply of the bitcoin. If cash were used, GST would be charged only on the product.   While a business purchaser is entitled to an input credit for both the bitcoin and product supplies, this approach presents a commercial disincentive for using bitcoin as a means of exchange compared to Australian dollars. It is likely to be more costly and difficult for businesses to reuse bitcoin in business-to-business transactions.   What is the alternative?   The ATO’s approach is broadly consistent with the tax rulings issued to date by many other countries. US IRS guidance issued in March this year acknowledged bitcoin is a “convertible virtual currency” but states that for tax purposes it should be treated as property. Since then, a range of software has been created that helps automatically complete administrative tasks like valuing bitcoin.   But other countries have taken a more flexible view. The UK has avoided giving a blanket tax classification to bitcoin, instead stating tax rules would be applied depending on the facts. HMRC guidance also notes that, given their volatility, bitcoin investments could be considered as gambling gains or losses (and therefore gains may not be taxable - or losses deductible). Most significantly for businesses, the UK takes the view that VAT will not be chargeable on bitcoin mining or on most trading transactions. Uncertainty about VAT and bitcoin in Europe has led Sweden to recently request that the EU Court rule on the VAT status of bitcoin.   The ATO considered whether bitcoin should be treated as a foreign currency or “money” for tax. Some Australian and English courts have taken a functional approach to defining money as a “generally accepted medium and means of exchange, without being legal tender” [Emmett J, Travelex]. However, this is not widely accepted and other courts indicate that money must be issued or authorised by an act of sovereignty.   A fundamental feature of bitcoin and other cryptocurrencies is that they are non-fiat, that is, not established or backed by a government. But what if bitcoin was to gain recognition as a currency by governments in future? This would undermine the ATO approach. California recently legislated to remove impediments for corporations to put bitcoin into circulation although its not legal tender in the US.   Bitcoin in the global digital economy   The ATO rulings do not discuss jurisdiction to tax bitcoin and nor do they address the challenges of secrecy and tax evasion or money laundering potential of bitcoin. These and other issues are raised in a recent OECD report on tax and the digital economy and an OECD working paper.   The question of which country has a right to tax (and ability to enforce tax rules) is increasingly difficult to answer in the digital world. If mining, or trading, bitcoin is a business or service, where does this occur, given that bitcoin operates on a global peer-to-peer network?   It’s possible that countries will treat bitcoin differently for tax and other regulatory purposes. The German Federal Financial Supervisory Authority classifies bitcoin as a financial instrument or “unit of account” that functions as a form of private money, for regulatory purposes. The inability to identify bitcoin owners is a serious problem for regulators, who may treat bitcoin as currency or cash for transaction reporting purposes even though tax authorities view it as property - and that could help tax authorities with enforcement. The tax and regulatory challenges of cryptocurrencies are only just beginning.   Miranda Stewart receives funding from the Australian Research Council.   Joel Emery 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.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Govt MP visits Fishburners, calls for urgent action to help grow Australia’s startup ecosystem

8:44AM | Wednesday, 27 August

Recently, parliamentary secretary to the Minister for Communications, Paul Fletcher, spent time at the Fishburners co-working space in Sydney, where he spoke with Fishburners general manager Murray Hurps, Head of Engineering at Google Australia Alan Noble and a number of startups.   Here are five things he took away from his visit:   1. The importance of STEM education   “Alan Noble and I discussed how Australia’s education system needs to better support students studying STEM subjects (Science, Technology, Engineering and Mathematics) to help develop Australia’s tech sector.   “Alan said that we need to look at how our education system can allow students to grow their ability in, as he phrased it, ‘computational thinking’.”   2. Employee share ownership schemes matter   “Attracting and retaining talented staff is a potential ‘blocker’ to the success of start-ups. As I noted in a recent speech, employee share ownership plans and share options are a key tool used to attract staff, widely used in the tech sector in the US and other countries.   “Today our tax settings mean that Australian start-ups – and indeed later stage companies – cannot match the equity and option offerings of tech firms overseas, including the US.   “This issue is being looked at by the taskforce which is working on the National Industry Investment and Competitiveness Agenda: the taskforce will report to the Prime Minister later this year.”   3. Capital is key   “Raising capital is a key issue for start-ups in Australia. The government is considering a recent report from an advisory committee on corporations law, which makes recommendations about ‘crowdfunding’ – that is, how could we streamline the regulations governing the raising of investment capital to facilitate the use of the internet to raise small sums of money from large numbers of people.”   4. Startups create jobs   “I was reminded during the visit to Fishburners that the high-tech sector can play an important role in new job creation. A recent report from America’s Kauffman Foundation found that new business formation was 23 per cent more likely in the high-tech sector of the US economy than in the private sector as a whole.   “Adding to that, in information and communications technology (a sub-set of the broader high-tech sector) it was 48 per cent more likely. The report also found that new and young firms in the high-tech sector are more robust job-creators than such firms in the broader economy.   “The OECD reports in its most recent Science, Technology and Innovation Report that one third of job creation in the business sector comes from young firms with fewer than 50 employees – even though these make up only 11 per cent of total employment.”   5. Technology will disrupt major sectors of the nation’s economy   “Looking at the innovative new technologies under development at Fishburners, I was reminded of how digital disruption is impacting all sectors of Australia’s economy. A recent report from Deloitte Digital found that almost one-third of the Australian economy faces imminent and major disruption due to the transformative power of the digital economy.   “The sectors most likely to be affected include some of Australia’s biggest employers, such as retail and professional services.   “As the recent StartupAus ‘Crossroads’ report argued, startups have a key role to play in this disruptive environment, noting: ‘As a nation we need to take immediate and far-reaching steps to address market failures that are impeding the maturation and growth of our startup ecosystem.’”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

A new name and fewer neck-beards for growing SydStart

8:53AM | Wednesday, 27 August

Australian startup conference SydStart is considering a name change, in order to reflect its growing prominence as a national startup event.   Founder and event coordinator Pete Cooper says the event’s reach encompasses far more than just the Sydney area, with international and interstate representation growing each year.   SydStart 2014 will be held at the Hilton in Sydney on Tuesday September 2 and features 120 exhibitors, and over 50 speakers and panellists, including the likes of Freelancer CEO and chairman Matt Barrie, and Atlassian co-founder Mike Cannon-Brookes.   “It’s easy to get the headline numbers growth, but the hard part is to get the sheer range,” he says.   “We’ve got everything from IoT (Internet of Things) in the home, to bespoke fashion and high volume, high capacity cloud services.   “We’ve got a huge percentage of women entrepreneurs this year, which has been part of a steady trend. My teenage daughter has been a big motivator for me to get away from the neck beards, they’ll be there and they are still some of the nicest and smartest guys, but the sheer range is great.”   220 startups applied for SydStart’s pitch event. These were narrowed down to 30 finalists. The Top 10 will pitch on the main stage at SydStart in front of a host of potential investors, while the next 20 finalists will get the chance to pitch on the expo stage to help them build awareness.   The Top 10 finalists include:   BLRT - Communication   Go Far - Driving optimisation   You Chews - Catering marketplace   Thinkable - Research marketplace   Coalfacer - Research marketplace   UrbanOutsource - Home services marketplace   Stockspot - Financial advice   Rbutr - Crowdsourced rebuttal   Next For Sale - Property pre-marketplace   Touch Payments - Mobile payments   Cooper says he was unsurprised the Top 10 was dominated by marketplace startups.   “I’ve seen this trend coming for years,” he says.   “I think it’s a combination of the Australian education system, we’re not narrowly educated so marketplaces are a natural thing. So Australia is well placed because of the diversity in our education, our history of good commerce and the force of law.   “Australia is a natural place to build great marketplaces, look at Design Crowd, 99 Designs and Freelancer.”   Over 1000 people are expected to attend this year’s event, which Cooper describes as “the hobby that ate my life”.   “It was supposed to be a part time thing I do a few weeks a year, but it’s become enormous,” he says with a laugh.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Australia has a mobile advantage that it needs to focus on

8:25AM | Wednesday, 27 August

Australia is home to some of the world’s best mobile designers and developers, an advantage startups should be capitalising on, according to bigtincan founder and chief executive officer David Keane. Our advantage? Distance.   “Because we’re a long way away, we just don’t follow the trends in America. People here are forced to think about fresh new approaches,” Keane says.   Bigtincan was one of the first companies showcased at Sydney’s Tech23 conference back in 2009. Five years on, bigtincan is a very different company. Back then it was a calls and messages platform that helped people save money on their phone bills, allowed users to control how their smartphone rings and vibrates, and enabled them to make money by sharing content.   While its focus remains firmly on mobile, it now offers tools that allow its users to increase productivity by providing secure access to all types of content.   Keane points to companies like Firemint, acquired by EA, and Tapulous which was acquired by Disney, as examples of mobile first companies founded by Australians that have been able to take advantage of new approaches.   “We’ve found that Australia is an amazing place to get mobile design, and to take that design and build things, not just representations of what’s already on the web, but really fresh new ideas,” Keane says.   “Rather than using Australia as a test market, we should look at Australia as a core place where we can build these mobile first products, because it will work in Paris, Chicago, San Francisco just as well as it does in Sydney or Melbourne.   Having since relocated to Boston, the company wants to give back to the conference that Keane credits with helping it get started and is sponsoring Tech23’s Enterprise Mobility Leadership Award.   The winners of the award will receive a trip to Boston in order to gain an understanding of the industry in the region, network and establish connections.   Keane says when leaving Australia bigtincan strongly considered Silicon Valley as a potential base, but ultimately settled on Boston, an option he’d like to see more Australian startups consider.   “It isn’t just about seeing some VC in Silicon Valley and getting funding,” he says.   “The East Coast of the US is a great place to be, a lot of large US companies are based on the Eastern coast of the US, from Boston, right down to Atlanta and further to Florida. We found that customers really liked the idea that we’re there locally and able to work with them closely to provide the right solution.   “I really want to help people understand that’s sustainable. If you can do that, and get users loving your platform and get customers that’s really important.”   Companies participating in Tech23 get the opportunity to present their businesses models to a panel of industry leaders and over 400 potential investors.   Applications close on Friday August 29.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

BugHerd raises $1 million for task management system rollout

8:58AM | Monday, 25 August

Australian bug tracker startup BugHerd has raised $1 million in Series A funding, part of which will be used to roll out a more robust and powerful version of its task management system called Stack.   BugHerd provides web developers and designers a way of managing website development issues quickly and easily. It is a graduate of Australian startup incubator Startmate and Silicon Valley-based 500 Startups.   It has over 50,000 users worldwide and 1000 new business customers joining every month. Some of the world’s largest digital agencies are among its users including JWT, DDB, Publicis and BBDO.   The bulk of the funding comes from Australia-based Tank Stream Ventures and Starfish Ventures, in conjunction with 500 Startups.   BugHerd co-founders Alan Downie and Matt Milosavljevic say the funds allow the company to accelerate its growth plans with a focus on delivering visual, client-focused tools for digital and creative agencies.   “There are plenty of bug trackers and project management tools out there, but they tend to put a focus solely on the development team, forgetting that there are other people involved in the project,” Downie says.   “This is a dilemma we can solve.   “As product development timelines shrink and design becomes mission-critical, regular feedback from stakeholders and clients using tools like BugHerd can make thousands of dollars difference to a project’s budget.”   Tank Stream Ventures investment manager Rui Rodrigues says BugHerd’s high growth was one of the attributes that made it an appealing investment.   “Software is present more than ever in today’s world and BugHerd has an ambitious vision to transform the way businesses develop online projects in a collaborative way,” he says.   “TSV has a strong focus on software-as-a-service businesses and we’re thrilled to be working with BugHerd team, who we believe have managed to build significant traction and are well placed to execute on that vision.”   Starfish Ventures investment director Anthony Glenning agreed that BugHerd’s high growth was attractive.   “Starfish is delighted with BugHerd’s growth to date,” he says.   “The expanded product offering envisioned is set to continue that high growth trajectory. Starfish is excited to participate again in helping BugHerd achieve its goals.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Airbnb appoints country manager for Australia and New Zealand

8:01PM | Monday, 25 August

Airbnb has announced the appointment of Sam McDonagh as country manager for Australia and New Zealand, in a move to boost local awareness of the accommodation company.   A native from Perth, McDonagh has over 20 years’ experience in senior management roles at companies including eBay and iiNet. He also co-founded Quickflix in 2003.   McDonagh will also be a tasked with ensuring Airbnb is providing Australian customers with unique travel experiences within Australia and around the world.   “Australia and New Zealand are incredibly important markets for Airbnb both in terms of domestic and international travel,” says Varsha Rao, head of global operations at Airbnb.   "Sam has a deep passion for travel and a great track record growing companies that are focused on strong customer communities, which will make him a great asset to Airbnb.”   According to Airbnb, it is experiencing rapid growth in the region with the number of Australian listings on the platform more than doubling in the last year alone.   Inbound travellers to Australia and New Zealand are also increasingly using the service to secure unique accommodation experiences, with the number of guests booking through Airbnb more than tripling year on year.   McDonagh will be based in Sydney and will be focused on supporting the local team in strategic initiatives and partnerships to further develop and grow Airbnb in the market.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Australia front runner in e-commerce race: report

11:00AM | Wednesday, 30 November

Australia has the third highest business-to-consumer e-commerce sales rates in the Asia-Pacific region, according to a report by German-based business intelligence organisation yStats.com.   The Asia-Pacific B2C e-Commerce Market report paints a very different picture from a recent report from the University of Sydney, which claimed Aussie retailers are behind the eight ball when it comes to engaging customers online and at risk of losing out to overseas competitors.   The yStats report shows between 2013 and 2018, the Asia-Pacific e-commerce sector is forecast to grow by more than 20% a year, with Australia cited as a front runner in the region.   Australia had the third highest B2C e-commerce sales rates for the region, coming in behind China in first place and Japan in the number two spot.   Internet penetration in Australia was also one of the highest in the region at 80%, with over three quarters of internet users making purchases online.   The report found the travel sector accounted for around a quarter of total B2C e-commerce sales in Australia, while two of the most purchased physical product categories were electronics and fashion products, each accounting for more than 10% of the total sales.   Adam Schwab, founder of one of Australia’s biggest e-commerce players Aussie Commerce, told SmartCompany while he believes Australia will struggle to ever overtake markets such as the US, it was certainly punching above its weight.   “While our e-commerce companies are certainly not the biggest, we have some of the best players globally,” says Schwab.   The report shows the leading players in the Australian market are foreign names, such as Amazon and eBay, which are among the most visited websites in the country.   However, it said local merchants are rapidly emerging with the number of local online stores tripling in recent years.   Schwab says one of the biggest advantages the Australian e-commerce sector has over other markets is the country’s readiness to adapt to technological changes.   He says for pure e-commerce players in Australia, there is a further advantage of competing against the entrenched nature of the established retail players in the country.   “E-commerce is taking on established players who have had it easy for a long time,” he says.   While Schwab believes the established retail players are getting better at adapting to online demand, he says they had previously operated in a protected environment that allowed them to charge more than international competitors.   Schwab says e-commerce cuts out the middle man and issues such as the high cost of wages for bricks-and-mortar retail staff, making Australia more competitive on a global level.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.   This article originally appeared on SmartCompany.

How much do we really know about privacy on Facebook?

8:17AM | Monday, 25 August

The recent furore about the Facebook Messenger app has unearthed an interesting question: how far are we willing to allow our privacy to be pushed for our social connections? In the case of the Facebook Messenger app, the answer appears to be: “Not as far as Facebook thinks.” For those who are not yet on Facebook (yes, there are some), the social media giant has been asking all users who want to continue sending messages to their Facebook friends on their mobile devices to download a Facebook Messenger app. Facebook is preparing to stop the chat feature on its main Facebook app. The Messenger app has been available for a while but only recently became compulsory. Messenger was first introduced back in 2011. Uproar over app permissions Beyond the complaints about adding another app to the mix, the real controversy emerged when new downloaders discovered that the app, especially on Android, was asking for a whole raft of permissions. These included the ability to read your SMS messages, read your phone call log and access the photo roll on your device. This seeming intrusion into the privacy of users sent people into an uproar on the internet. An article from the Huffington Post on the dangers of Facebook app permissions went viral this month. There were plenty of follow-up articles on the situation from the Wall Street Journal, Washington Post, famous rumour-debunking site Snopes.com and, ironically, statuses and rants shared ad infinitum on Facebook itself. Even now, the fallout continues, with many one-star reviews of the app appearing on the Apple app store. Articles continue to appear on many tech sites reassuring users that downloading the app does not give any more permission than many other apps (including the main Facebook app itself). Facebook tries to ease concerns For the record, Facebook maintains that it hasn’t done anything wrong and that the permissions that have been requested are standard practice for many apps, both theirs and those of others. Believe what you will, but of course this then raises the more interesting question: how far are we willing for our privacy to be pushed in this digital age? Remember that many of these complaints about the Messenger app are coming from the same cohort of people who regularly share details of their lives, such as photos and event invitations, on Facebook. Even as the social media platform changes and people get frustrated with how Facebook is controlling our lives, people continue to use the site as a social tool. Who reads privacy policies anyway? It’s clear that we want to have our cake and eat it too. A study from Carnegie Mellon University in the US suggested that if we were to read the privacy policies of every web service we use just once in a year, it would take a full month of our work time. Instead, we rely on blind trust and obscurity (“surely they don’t care about me”) to get through these situations. Perhaps this is why people are so upset with the Messenger app; it exposes terms that we all agreed to but would prefer to remain blissfully unaware of. Of course, some recent stories have come to light that suggest our fears aren’t totally unfounded. For instance, the revelation that Facebook conducted an experiment on the news feed of thousands of its users shows the company has no qualms about using our data. Or the more recent story by Wired of the journalist who committed to “Like” everything on Facebook for two days, only to find his friends slowly pushed out of his news feed and replaced with corporate sponsorship and left/right-wing political opinion. The true cost of connecting online These articles are beginning to show the dark side of social networking. A new movie by director Jason Reitman promises to do even more, showing how people are connected but also conflicted about their social life. The movie, Men, Women & Children, follows the digital life of several different participants as they navigate the digital world of the 21st century. Trailer So, what to do? The internet and social networking allow us to remain connected, but it comes at a price to our privacy, which some are apparently not willing to pay, or at least not willing to acknowledge. Perhaps the problem will solve itself, as digital native children replace their digital immigrant parents in the world of the 21st century, and our expected level of privacy changes. Or perhaps we will all tire of Facebook and social networking, move away form such platforms and no longer have this issue. But more likely one day somebody will realise that just as the industrial age needed regulation on roads and manufacturing, so too does the information age need regulation on the use of information. And when that day comes, perhaps we all need to stop relying on blind trust and take the time out of our year to read the new privacy legislation. Michael Cowling 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. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Forget the clutch, self-driving cars need ‘adjustable ethics’ set by owners

8:49AM | Monday, 25 August

One of the issues of self-driving vehicles is legal liability for death or injury in the event of an accident. If the car maker programs the car so the driver has no choice, is it likely the company could be sued over the car’s actions.   One way around this is to shift liability to the car owner by allowing them to determine a set of values or options in the event of an accident.   People are likely to want to have the option to choose how their vehicle behaves, both in an emergency and in general, so it seems the issue of adjustable ethics will become real as robotically controlled vehicles become more common.   Self-drive is already here   With self-driving vehicles already legal to drive on public roads in a growing number of US states, the trend is spreading around the world. The United Kingdom will allow these vehicles from January 2015.   Before there is widespread adoption, though, people will need to be comfortable with the idea of a computer being in full control of their vehicle. Much progress towards this has been made already. A growing number of cars, including mid-priced Fords, have an impressive range of accident-avoidance and driver-assist technologies like adaptive cruise control, automatic braking, lane-keeping and parking assist.   People who like driving for its own sake will probably not embrace the technology. But there are plenty of people who already love the convenience, just as they might also opt for automatic transmission over manual.   Are they safe?   After almost 500,000km of on-road trials in the US, Google’s test cars have not been in a single accident while under computer control.     Computers have faster reaction times and do not get tired, drunk or impatient. Nor are they given to road rage. But as accident-avoidance and driver-assist technologies become more sophisticated, some ethical issues are raising their heads.   The question of how a self-driven vehicle should react when faced with an accident where all options lead to varying numbers of deaths of people was raised earlier this month.   This is an adaptation of the “trolley problem” that ethicists use to explore the dilemma of sacrificing an innocent person to save multiple innocent people; pragmatically choosing the lesser of two evils.   An astute reader will point out that, under normal conditions, the car’s collision-avoidance system should have applied the brakes before it became a life-and-death situation. That is true most of the time, but with cars controlled by artificial intelligence (AI), we are dealing with unforeseen events for which no design currently exists.   Story continues on page 2. Please click below. Who is to blame for the deaths?   If car makers install a “do least harm” instruction and the car kills someone, they create legal liability for themselves. The car’s AI has decided that a person shall be sacrificed for the greater good.   Had the car’s AI not intervened, it’s still possible people would have died, but it would have been you that killed them, not the car maker.   Car makers will obviously want to manage their risk by allowing the user to choose a policy for how the car will behave in an emergency. The user gets to choose how ethically their vehicle will behave in an emergency.   The options are many. You could be:   democratic and specify that everyone has equal value pragmatic, so certain categories of person should take precedence, as with the kids on the crossing, for example self-centred and specify that your life should be preserved above all materialistic and choose the action that involves the least property damage or legal liability.   While this is clearly a legal minefield, the car maker could argue that it should not be liable for damages that result from the user’s choices – though the maker could still be faulted for giving the user a choice in the first place.   Let’s say the car maker is successful in deflecting liability. In that case, the user becomes solely responsible whether or not they have a well-considered code of ethics that can deal with life-and-death situations.   People want choice   Code of ethics or not, in a recent survey it turns out that 44% of respondents believe they should have the option to choose how the car will behave in an emergency.   About 33% thought that government law-makers should decide. Only 12% thought the car maker should decide the ethical course of action.   It falls to the car makers then to create a code of ethical conduct for robotic cars. This may well be good enough, but if it is not, then government regulations can be introduced, including laws that limit a car maker’s liability in the same way that legal protection for vaccine makers was introduced because it is in the public interest that people be vaccinated.   In the end, are not the tools we use, including the computers that do things for us, just extensions of ourselves? If that is so, then we are ultimately responsible for the consequences of their use.   David Tuffley 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.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Google Wallet not planning an Australian launch, leaving a big opportunity for local mobile payment startups

8:15AM | Friday, 22 August

Google has revealed it has no plans to launch its Google Wallet mobile payment platform in Australia, with the news leaving a large gap in the local market for Australian tech startups to fill.   As Fairfax reported, at a Trans-Tasman Business circle lunch in Sydney, Google Australia’s managing director Maile Carnegie revealed it had no plans for an Australian launch.   During a wide-ranging discussion, Carnegie listed off a number of priority areas for the tech giant in Australia, mentioning that there are no plans for a local launch for Google Wallet.   A Google spokesperson confirmed to Private Media the tech giant didn’t have any plans for a local launch of its online payments platform.   "Right now, we're focusing on Google Wallet in the US, and don't have a plan to share for international roll out,” the spokesperson says.   It’s good news for local startup entrepreneurs in the online and mobile payments space, such as Rewardle founder and managing director Ruwan Weerasooriya.   Rewardle recently added support for Android Wear devices, after appointing the former head of Fairfax’s digital and metropolitan news divisions, Jack Matthews, as its chairman.   Weerasooriya told Private Media that tech and banking incumbents don't have a lock on the future of payments, particularly when it comes to the mobile devices.   "Mobile computing is changing the game; the disruption allows a nimble start up the opportunity to compete and win against large, powerful incumbents,” Weerasooriya.   “As demonstrated by the recent porting of Rewardle onto the Android wearable OS which allows our members to make payments using their smart devices, mobile payments is becoming a bigger part of our offering and focus.”   However, the news is not universally positive for mobile payments startups. Earlier this month, Tappr launched a pilot program, its JUVO system, which integrates an MPOS (mobile point of sales) app with a card reader.   Co-founder and chief executive Brett Hales told Private Media Google’s entry to the market will bring a lot more attention to the sector.   “We handle more on the merchant side of things rather than the consumer side, where Google Wallet operates, so our emphasis would be on integrating support for Google Wallet and other payment systems into JUVO,” Hales says.   Hales also speculates that Google’s decision to focus Wallet on the US market is because banks in the US have not made the sorts of investments local banks, such as CBA, have in mobile payments.   “Google have seen this and seen it might not be a good idea to tackle the Australian market,” he says.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Trevor Owens’ top tips for lean startups

8:33PM | Sunday, 24 August

What Eric Ries brought to lean, Trevor Owens made a machine, or more specifically the world’s leading bootcamp on lean startup methodologies.   The entrepreneurial phenomenon known as Lean Startup Machine (LSM) is heading to Sydney in September for the second time, and this time Owens is making the trip.   Speaking to StartupSmart Owens says that the most common misunderstandings of lean startup – which advocates build, measure, learn – are the most obvious ones, “it’s not about being cheap, nor is it just about startups.”   “Lean is simply an approach to decrease uncertainty,” Owens says. “And a startup refers to releasing something new under conditions of uncertainty.”   Less obvious to many though is how to know if you are testing the right assumptions and which ones to test first, which Owens concedes can be “tough”.   Owens suggest that people aim for their “highest risk assumption” first, and then assess what would be required to test it.   “Essentially you need to aim for the risk that will return the ‘biggest bang for your buck’, that is the test that will give you the highest amount of learning for the least amount of time,” he says.   When running tests the trick is to reduce confirmation bias, says Owens, and this can be done through asking detailed questions.   “All founders have confirmation bias, you can’t really get away from that, but you can make sure that you don’t ask leading questions and you get as much detail as you can,” he says.   “Some confirmation bias is good though, but you need to ask the right questions and not just the ones that will give you the answers that you want.   “You can avoid confirmation bias, by asking a question that would prove you wrong.”   OWENS’ LSM TIPS:   Lean startup methodologies can be implemented by anyone in any size company The first assumption you test should be the one that gives you the most learning in the least amount of time Ask about past behaviour rather than future behaviour Don’t reveal what you are testing Lean works in B2B as well as B2C B2B markets can be broken up into enterprise, medium-sized and small businesses. Enterprise and medium have the most decisions to make, so aim for small (where the person using the software is the decision-maker), and grow from there. StartupSmart is giving one of our Sydney readers a chance to win a ticket to the LSM workshop on September 5-7. Please send us an email with the subject line “LSM ticket” to  news@startupsmart.com.au and tell us in 25 words or less why you’d like to attend. Competition ends Wednesday, 27 August 2014.  Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Calling all startups! UNSW has an MBA strategy for you

8:29AM | Wednesday, 20 August

After a successful first year, the Strategy meets Startups program run by the University of New South Wales is back and calling on even more startups to take on MBA students.   The program sees students from the Australian Graduate School of Management’s (AGSM) MBA course paired with startups, with the goal of applying the student’s business acumen and skills to a particular strategic issue facing that startup.   Last year 20 startups took part in the 12-week program, with some going on to hire the students they were paired with.   This year the program is searching for roughly 60 startups in the Sydney area who wish to take part.   To be eligible, startups need to have been running for at least two years, have a team of between three and 20 people, located in a premise other than a person’s home and be able to identify a significant strategic problem that if solved will significantly benefit the business.   Dr Jeffrey Tobias, an adjunct faculty at the AGSM and an angel investor who has invested in a number of startups, says the program is part of the school’s effort to focus more on entrepreneurship.   “For the students, who typically come out of the corporate world and have lived in the corporate environment, they get to immerse themselves in an area that they would never be able to experience,” he says.   “A typical startup has a CEO and a team with passion, drive, and maybe some money. But very often what they don’t have is the business skills and experience of an MBA student, who is typically 30 years old and has worked for a number of years.   “It’s a huge win-win.”   Tobias says for many of the MBA students, entrepreneurship and startups were a career path few considered and the program helps direct more business expertise into the startup community.   “One of the challenges is people don’t know what they don’t know,” he says.   “The easy path is to take a traditional career. What we’re trying to do here through experimental learning, through being immersed in a startup environment, is say you can do these things.   “A number of students have said you’ve changed my life, I’ve changed my career, I never knew this is what I could do. I realise now there’s an opportunity to build something on my own.   “The program is building entrepreneurship in a very different way.”   Twenty startups have already applied for the program. Submissions close on August 29. To apply, click here.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Paying bills through Satoshi’s living room, all part of a plan to grow cryptocurrency in Australia

8:41AM | Tuesday, 19 August

Brisbane-based bitcoin startup Living Room of Satoshi is giving Australian consumers the opportunity to pay bills though BPAY with bitcoin.   During the last financial year, $293 billion worth of payments were made through BPAY and 870,000 BPAY payments occur each day.   Living Room of Satoshi co-founder Daniel Alexiuc says they saw significant opportunity in the space for bill payments with cryptocurrency.   The service is completely free, although the startup can make small profits on bitcoin exchange rate movements. The payments are processed on the same day the bitcoin transaction is completed.   The name is a nod to the pseudonym used by the individual or group of individuals who created the technology that powers bitcoin. With regard to his ‘living room’, there’s also an explanation.   “I guess we imagined that’s where ‘Satoshi Nakamoto’, if he was going to pay bills, that’s where he might do it,” Alexiuc says with a laugh   The startup launched in May and has processed $180,000 worth of bill payments since, and is currently processing around 10 bills per day.   “I bought some bitcoin about a year ago, and it was a service I was looking for, so my brother and I came up with a solution,” Alexiuc says.   Offering such a service for free is part of Alexiuc’s plan to help bitcoin grow in Australia. A strong bitcoin ecosystem is required if Living Room of Satoshi is to successfully develop its own bitcoin-based bill payments system.   Alexiuc, who also started an e-commerce business that ships live fish, says they’re currently developing such a system called SatoshiPay, which he hopes will provide an alternative billing option for small businesses.   “It’s surprising how high the fees are for merchants who use BPAY,” he says.   “There’s an opportunity there for a lot of merchants to save money.   “We had a lot of trouble as a small business with payment options. PayPal is the only viable solution, but they’re very difficult to deal with.   “We’re approaching merchants, and also some companies that offer printing services on behalf of billers and aggregated different payment options. It’s still in beta but we’re hoping to get our first merchant online in three months’ time.”   The viability of such a service relies on what decision the Australian Tax Office makes regarding the regulation of cryptocurrencies.   Alexiuc says the worst case scenario is if the ATO decides to treat bitcoin as property.   “If they treat it as property and we have to pay GST on transactions, that would basically kill it in Australia,” he says.   “But we really don’t think that’s very likely. They look pretty favourably on it.”   The startup is being funded by its founders, although they have spoken with venture capital investors.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Global events marketing platform raises $2 million in The Big Pitch funding

8:48AM | Tuesday, 19 August

ECAL, a global events marketing platform, has raised $2 million from investor and former Dodo Internet founder Larry Kestelman’s Oxygen Ventures, after winning The Big Pitch.   Oxygen Ventures offered up to $5million worth of funding to startups who won its Big Pitch competition, the final of which was held in Melbourne in June.   Joint winner WeTeachMe is still in negotiations with Oxygen Ventures, as is People’s Choice winner Black Delta and finalist etaskr.   ECAL, founded by Patrick Barrett in 2012, delivers on-time marketing information into consumers’ calendars, driving increased awareness, engagement and sales.   It serves more than 6 million calendar activities each day, a figure growing month on month.   ECAL has over 100 major clients across the US, Europe and the Asia pacific. Its initial focus was major sports and has big name American clients like the NFL’s New England Patriots, Chicago Bears, Washington Redskins and the NBA’S Boston Celtics.   The $2 million will drive new product development outside of major sports, the launch of a Software-as-Service version of the platform and expand the sales in North America.   “The capital will enable us to expand our geographic footprint, to service new markets, and to develop our product further,” he says.   “By having someone with Larry’s experience involved in the next phase of growth, we will be the beneficiary of far more than the $2 million on investment Oxygen brings to the business.”   Kestelman says he’s thrilled to be involved in the company.   “ECAL is such a terrific idea, brilliant in its simplicity, and we see great potential for its use beyond sport and entertainment,” he says.   “At Oxygen, we back great teams, big ideas and bold plans, and we are very much looking forward to our partnership in ECAL.”   Joining Barrett and Kestelman on the E-DIARY Pty Ltd Board is former is iSelect CEO Matt McCann and Oxygen Investment Director Ilya Frolov. The company has also recruited an advisory board that includes Microsoft’s Chris Bernard and David Riemer, formerly of Yahoo, in addition to current MYOB CTO Simon Raik-Allen.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

From quacks to quarks: What crowdfunding could do for duck genitalia and black holes

8:28AM | Monday, 18 August

  Last year US-based scientist Patricia Brennan was forced to defend the National Science Foundation’s decision to fund her study in duck genitalia, something the scientific community regarded as totally legitimate.   It’s not an uncommon problem, and one the University of New South Wales hopes to address by launching Thinkable, a crowdfunding platform that aims to make it easier for the public to understand the value of scientific research.   Thinkable founder and chief scientist Dr Ben McNeil, a researcher at the University of New South Wales, points out it’s often the most “curious” of projects that end up being most important.   Take CSIRO scientist John O’Sullivan, who was investigating black holes when he developed a key patent used in Wi-Fi.   “The importance of those crazy ideas hasn’t been well communicated. It may seem to be completely irrelevant, but the biggest discoveries often come from those areas,” McNeil says.   “These types of areas of research are getting cut and it’s because it’s hard to argue the benefits. We’re trying to give anyone access to learn and fund and track this type of research if they want to.   “In many ways specialisation creates a disconnect with more and more people.   “The ability for people to connect with your research is dampened, paradoxically.”     McNeil describes Thinkable as an open science platform where researchers at universities or research institutions will be able to display their projects, and if they want to, attempt to raise funding.   Users will be able to learn about projects via quick video snippets similar to those found on Pozible and Indiegogo, and track their progress.   “The complexity of science makes it inaccessible for a lot of people, but elevator pitches are the way to change that,” he says.   “There’s this huge broken system of how the world connects to our work, as well as how we engage with the world.   “Anyone can come onto Thinkable and learn, track researchers, see what they do and engage with them – that’s the number one priority for us.”   Five University of New South Wales researchers are the first to showcase their projects on the platform, with ideas for studying ocean acidification, blindness, heart disease, alcohol consumption and obsessive compulsive disorder.”   Thinkable is now calling on more researchers to join the platform and provide updates on their research.   “Right now we’re building the community,” McNeil says.   “We want to build an ideas network with cutting edge ideas from people who are doing really great stuff.   “The initiative will not only accelerate discovery, it will build greater trust and communication between scientists and the public, by democratising science.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Appster attracts senior industry heavyweights as strategic advisors

8:18PM | Monday, 18 August

Appster, one of Australia’s fastest growing web and app development companies, has appointed two new strategic advisers to the business, former chief commercial officer at Virgin Australia, Liz Savage, and former CFO for PayPal, David Jaques.   Founded two years ago, Appster now has offices in Australia, India and the USA.   David Jaques has been instrumental in the financial success of several leading global organisations, including PayPal and BlueRun Ventures (Nokia’s venture capital fund). Currently the CFO at Greenough Consulting Group and  former CFO at 500 Startups, Jaques launched his career with Barclays Bank PLC working in both London and New York until taking on the position of senior vice president at Silicon Valley Bank.   During his time at PayPal, Jaques was instrumental in raising private equity finance totalling $140 million and coordinated the merger of PayPal Inc. and X.com Corporation, resulting in a $680 million valuation. Under Jaques’ management as CFO, BlueRun Ventures’ assets increased from $150 million to $1 billion in six years.   Appster cofounder and managing director Mark McDonald says Jaques is an “institution” of the startup world.   “He has provided financial advice to some of the world’s leading organisations and I am thrilled he has agreed to join the Appster team as an adviser,” McDonald says.   Liz Savage, who joined as an adviser in May this year, has extensive experience in building and growing brands and businesses globally.   Savage was fundamental in building easyJet in its first 10 years from startup to Europe’s leading airline, which now operates across more than 30 countries and last year flew over 60 million customers.   Savage then joined Monarch Travel Group as managing director of its Flights & Holidays business, before being headhunted by Virgin Blue to the position of chief commercial officer in Australia, tasked with transforming the airline from low cost to premium, as well as launching and building the new brand of Virgin Australia.   Savage held accountability for the group’s $4 billion global revenue and customer-facing functions including sales, marketing, pricing, loyalty, contact centres and the group’s digital and holiday businesses.   McDonald says Appster’s future is looking very bright under the guidance of the two new appointments   “The whole team at Appster is honoured to be working with Liz and David and we look forward to taking Appster to the next level,” McDonald says.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

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