A late night hunt for a replacement Raspberry Pi and a sleepless night led to victory for a team of developers known as Gearbox in PayPal and Braintree’s Sydney BattleHack. The team won the 24-hour hackathon with an Internet of Things solution that allows users to open a secure box, which would be placed in public parks and enable access to sports equipment that could be paid for using PayPal. The team cooked the Raspberry Pi they were using during the hack, which sparked a frantic online search for a replacement. A shout out on social media found an eBay seller willing to meet them late on Saturday night and the project was saved. #GearBox just blew a @Raspberry_Pi at the @PayPalDev #battlehack in Sydney. Can anyone locally sell us one?— Tom Frauenfelder (@tomfrauenfelder) July 26, 2014 The senior global director of the PayPal and Braintree Developer Network, John Lunn, who was also one of the competition judges, chuckles when recalling the team’s frantic search, but says it’s all part and parcel of a hackathon. “We had some dramas, but we had a fun time,” he says with a laugh. BattleHack Sydney is one of 14 BattleHacks around the globe and the Gearbox team will now be flown to San Francisco to compete in the BattleHack World Finals in November with a $US100,000 prize up for grabs. It’s the second year BattleHack has been running, but the first time it’s visited Australia, and Lunn says the Gearbox team should have a good chance in the world finals. “We didn’t know what to expect, but were happy to get the a variety of different people, from young university students to more senior people from university, people that worked corporate jobs at large companies in Sydney and people who were working on their own startups,” he says. “The quality was fine. We had a nice mixture of hardware and software and a good completion rate, the hacks we saw were finished.” Midnight is here and so are many of the hackers #BattleHack #Sydney 13hrs to go. pic.twitter.com/KotmO7r0qi— Jason Cartwright (@techAU) July 26, 2014 BattleHack teams were tasked with coming up with a solution to a local problem that would make their city a better place to live, using a mobile application that incorporates PayPal or Braintree. Lunn says there was a great mix of ideas, including a number of which aimed to help the homeless, one of which looked at how homeless people could take donations once the world moves away from physical money, while others dealt with street art and crowdfunding. “I am so pleased we could bring BattleHack to Australia this year to give Aussie developers a chance to show off their skills,” he says. “The creativity and quality of code we saw proved that Australia has world-class developer talent.” Follow StartupSmart on Facebook, Twitter, and LinkedIn
Amazon is reportedly set to launch its own mobile credit card reading technology, according to internal documents from the office supply store Staples, obtained by 9to5mac. The documents say Staples stores are preparing to stock a new product called the “Amazon Card Reader” alongside existing card readers from Square, PayPal, and Staples’ in-house brand. Amazon recently launched a new wallet app for smartphones and 9to5mac speculates that Amazon’s card reader will likely connect to that. Rocket Internet’s Easy Taxi raises $40 million Easy Taxi, a taxi calling app from Rocket Internet, has raised $40 million in a Series D funding round. The company launched in 2011 and has roughly 185,000 drivers, with 150,000 of those added over the past year. It’s available in 160 cities across 30 countries predominantly in Latin America, Africa, the Middle East and Asia. Easy Taxi co-CEO Dennis Wang says the funding will allow the startup to continue its growth in existing markets, while also scaling its operations and improving its service so as to appeal to “more audiences and geographies”. US cable companies say Google and Netflix biggest threat to net neutrality In a filing to the US Federal Communications Commission, Time Warner Cable claimed that the controversy over internet providers potentially charging websites for access to “fast lanes” on the internet is a “red herring”. It says the real danger is that Google or Netflix could start demanding payments from internet providers, as customers expect access to the most popular websites, an internet provider would have no choice but to pay. The National Cable and Telecommunications Association says a relatively connected group of large internet companies such as Google, Netflix, Microsoft, Apple, Amazon and Facebook have enormous and growing power over people’s ability to access what they want on the net.
During the ‘90s and most of the 2000s, there was little doubt about which device was primarily used to access the internet: the PC. Sure, there were other devices you could use to access the internet. The web has been accessible in some form on mobile phones since the early 2000s. There were also early tablets, some PDAs and web TV devices with internet capabilities. But the office desktop, laptop or home computer was the primary device – and often the only device – most people used to surf the web. During the recent Google I/O developer conference, the tech giant revealed that it now views smartphones, rather than PCs, as the primary device people use for accessing the internet. Of course, mobile-first doesn’t mean that people aren’t choosing to use other devices when they have the choice – quite the opposite. It is certainly far more comfortable editing an Office 365 document on a PC or laptop than on a mobile. Likewise, reading an e-book is far more enjoyable on a tablet than on a smartphone. But people aren’t likely to be carrying these devices with them at all times. For most people, assuming nothing better is available, the first device they’ll grab to check for new emails, quickly look up a fact in Wikipedia, take a photo of their restaurant meal or send a tweet will be their smartphones. In other words, their mobile is their first “go-to” device for accessing the internet. Just to be clear, by “the internet”, I’m not just talking about the web. I also mean email, cloud-based services, apps, streaming video, and everything else on the internet. This shift has taken a number of years – it’s certainly not a new trend – and has a number of profound implications for how people use the internet. In turn, these implications have massive implications for many businesses. Here are five of the fundamental and profound differences between the old PC-first internet and the new mobile-first internet: 1. It’s always on and always connected The first is that the internet – including apps, the web, emails, cloud services – is now always instantly accessible. The smartphone – and through it, the internet – is permanently connected, always on and always carried. In the past, even if people carried their laptop around with them in a bag, few would bother to pull out a laptop and boot it up to quickly look something up in the middle of a dinner party. But with a smartphone, whipping it out and quickly checking Google to settle an argument is an everyday occurrence. So long as your customer is awake, you can now assume they have almost immediate internet access. 2. Built-in billing Aside from always being available, by its very nature, there’s also a number of billing systems built-in to smartphones. At the most basic, there’s the carrier bill or the prepaid credit. On top of this, there are the various app stores, as well as services such as PayPal. Unlike on the PC, a purchase is always potentially just a tap away. 3. Tap for customer service Likewise, tapping on a phone number in many mobile browsers will result in a phone call being made. This means making a call is potentially part of the built-in experience of every mobile app or website, unlike when PCs dominated the internet. So placing an order or a customer service phone call from a website is now just a tap away. 4. A location-aware personal media form Unlike on a PC, where people often shared a device or even an account, the smartphone is a strictly personal media form. Smartphones, by their very nature, are also location aware. Even the most basic of ‘90s 2G feature phones had to know which cell tower it was connected to at any given moment. This ability to target consumers by location at all times just wasn’t there in the days when most people relied on a desktop PC. It is now. 5. Incredibly accurate audience information The combination of the mobile as a strictly personal media form and information about the location and context of media that is being consumed means smartphones can produce the most accurate audience information of any media form in history. TV ratings or newspaper readership (the number of people to read a paper, rather than the number of copies circulated) was always a best guess effort. Smartphone analytics tell you the precise number, location, device type and time your customers view your content. And all in real time. Massive opportunities As a result of the ubiquity of the smartphone – and recent ACMA figures show 12.07 million Australians now own a smartphone – it can now almost be assumed that anyone accessing the internet also has access to all the functionality of the internet on a mobile device. So here’s a question: Is your web presence built for the old PC-first internet in mind? Or do you have mobile (or responsive) websites and apps that take advantage of the mobile-first internet? If you don’t have a mobile- first strategy, there are a range of opportunities your business is missing out on. This article first appeared on SmartCompany.
Medium and small businesses, including startups, need better access to growth capital funding, including venture capital and private equity, the Financial System Inquiry interim report has found. The report, which was released Tuesday morning, says Australian venture capital funds have not provided investors with adequate compensation for associated risks. Australian venture capital funds formed between 1985 and 2007 had a pooled internal rate of return -1.4%. It says barriers to generating significant investor interest include the aforementioned underperformance of VC funds, as well as the fee structures of VC and private equity funds, the tax treatment of venture capital limited partnerships, and scale. “The Australian market may be too small for some ventures to be viable, particularly when it comes to commercialising a product,” the report says. “In addition, certain cultures, particularly relating to risk, and extensive networks need to be developed to facilitate a thriving venture capital industry.” The inquiry notes it received submissions suggesting superannuation funds should be encouraged to invest in securitised SME loans and venture capital funds. “A mandate requiring superannuation funds to do so may also involve an implicit guarantee by the Government, which the enquiry does not consider to be appropriate,” it says. “Superannuation funds could consider investing in venture capital funds as part of a broader approach to diversifying their asset portfolios.” It says changing the research and development tax credit system to a quarterly basis for new ventures, which VC funds argue would help alleviate cash flow constraints, is an issue that should be considered as part of the Tax White Paper process. In a statement, Australian Private Equity and Venture Capital Association chief executive Yasser El-Ansary says if those barriers are removed, private equity and VC funds could play a more significant role in supporting startups. “Australian venture capital funds are currently invested in around only 200 startups and early stage ventures,” El-Ansary says. “There is substantial scope for the industry to play a greater role in building Australian businesses and creating new employment opportunities – especially in new high innovation industries of the future – if the enquiry makes recommendations for changes to some existing policies and regulations later in the year.” Technology and the financial system The report also highlights the role technology is playing in opening up the financial sector to non-traditional players. “Incumbents in the Australian payments industry are facing competitive challenges from new market entrants, such as PayPal, POLi, PayMate and Stripe,” it says. “Closed-loop pre-paid systems operated by companies outside the financial sector outside the financial sector, such as Apple, Skype and Starbucks, are holding growing amounts of customers’ funds. “Apple has also recently signalled its interest in mobile payments more broadly and recently developed fingerprint biometric authentication for its phones.” The inquiry received a number of submissions highlighting the potential risks virtual or crypto-currencies like bitcoin present to the current financial system. Those risks include the safety of the funds stored in such a way, which it says are at risk of system collapse or fraud, the highly speculative nature of virtual currencies which could lead to investor protection issues, their pseudonymity and the money laundering potential that comes with it, and their cross-jurisdictional nature. “Whether new entrants should be brought within a regulatory perimeter depends on the nature and scale of the risk they present, and who bears the risk,” the report says. “Government needs to strike a balance that allows the benefits of innovation to flow through the financial system, while maintaining stability.” The report concludes that government and regulators should take a flexible and technologically neutral approach to regulation, which is not currently the case as some federal and state regulations require the use of certain forms of technology.
PayPal and Braintree will be hosting a 24-hour hackathon in Sydney on July 26 and 27, where developers compete for the chance to win a trip to Silicon Valley and $US100,000 ($A105,000). The hackathon is part of the global BattleHacks competition that visits 14 cities around the world before culminating at the World Finals event in November. During the Sydney Battle Hack, developers will be tasked with building a mobile application that solves a local problem of their choice and incorporates the PayPal API or Braintree SDK. Developers can compete as individuals, as a team or find people to collaborate with on the day, with a maximum of four people to a team. The winner of the Sydney Battle Hack will be flown to the finals at PayPal’s headquarters in Silicon Valley to battle it out for the $US100,000 prize and “battle axe” trophy. The Sydney judging panel for the Sydney Battle Hack will include John Lunn, global director of the PayPal Developer Network, and influencers within the Sydney tech scene to be announced in the coming weeks. John Lunn, global director, PayPal and Braintree Developer Network says they are excited to be able to bring Battle Hack to Australia. “Battle Hack is designed by developers for developers. We see it as a way to reward the best and brightest developers,” Lunn says. “Additionally, we hope to change the lives of the winning team through the prize money we offer, whether it’s helping a sick relative like one of our Moscow winners did or building their own business. “Unlike many other hackathons, we aren’t looking to take equity in their companies or influence their work in any way.” The first prize up for grabs at the 2014 Sydney Battle Hack includes flights and accommodation to the World Finals in Silicon Valley, and a chance to win the grand team prize of $100,000 USD. For more information and to register, visit https://2014.battlehack.org/.
Australian e-commerce company Bigcommerce has confirmed reports eBay-owned Magento has named it as the software-as-a-service migration provider for its ProStores and Magento Go platforms, which will be discontinued on February 1, 2015. Magento and Bigcommerce have carefully coordinated the design of a migration program to ensure that ProStores and Go retailers can begin making plans to migrate their stores well before the critical holiday season. The eBay Enterprise senior vice president of product and strategy, Mark Lavelle, says the company chose Bigcommerce to help with the transition because of their shared commitment to client success and their proven track record of migrating large groups of merchants onto their platform. In a statement announcing the deal, eBay says Magento is a “natural choice” because of its client-centric culture, tight integration with PayPal and the ability for its clients to sell on eBay. “Magento is dedicated to helping fast-growing retailers succeed,” he says. “Throughout this transition period, we will fully support both ProStores and Go, and clients will receive the same level of customer service they’ve come to expect.” Bigcommerce has previously migrated more than 6000 ProStores retailers onto its platform and has migrated an additional 6000 stores from other platforms, which it says gives it the industry’s deepest expertise in terms of in-house professional services and tools to help clients successfully relaunch their stores. Bigcommerce chief executive officer Eddie Machalaani, one of the company’s two Australian co-founders, says the team is excited to work with the new merchants they’re acquiring in the deal. “We understand that the to-do list for small business owners is never-ending, and our teams are standing by to deliver the very best migration and onboarding experience so merchants can focus on growing their businesses,” he says.
The introduction of pin-and-chip regulations for credit card purchases on August 1 threatens to do away with the traditional pub bar tab forever. Under the new regulations, signatures will no longer be valid as a method of payment confirmation. This means publicans won’t be able to charge the credit cards of patrons who leave without closing off their bar tab at the end of the night. The situation has created a big opportunity for a new Australian app named Clipp, which looks set to cash in on a market that has suddenly found itself thirsty for new pre-authorisation and payment systems. Its co-founder, Greg Taylor, has experience in the area, having been the co-founder and chief executive of mobile coffee card loyalty app eCoffeeCard, a venture he sold to Beat the Q earlier this year. Taylor told StartupSmart his latest venture “is like Uber for bar tabs”. “You don’t need to hand over your driver’s licence and credit card. Instead, you download the app for iOS or Android and connect your credit card through PayPal. It integrates through the bar’s point-of-sale system to your phone, which has a tab number,” Taylor says. Taylor says the app allows customers to split a bill, close off a tab without needing to flag down a waiter, or leave a tip. “For corporate hospitality, this is perfect. One of the big challenges is for people who have to record expenses. The great thing about Clipp is that a tax receipt is emailed directly to the customer” Taylor says. The startup has already signed up 140 venues, including The Argyle, Mrs Sippy, The Lobo Plantation, Martin Place Bar, Gin Palace, and Bar Ampere. According to Taylor, the app has even gained the attention of Woolworths-controlled ALH Group. “ALH is the biggest group to trial the app. It recently finished a pilot in some of its venues in Melbourne…They own 250-odd venues and it needs solutions in terms of pre-authorisation,” he says. “The reason why that trial was successful was because of operational efficiency – it’s about 20 seconds quicker for them than the alternatives.”
The internet ain’t what it was in 2004 and on the tenth anniversary of Web Directions, the conference organisers are taking the time to remember just how far it’s come. “When we started Web Directions, we were just looking at ‘the web’, but now it’s the foundation for almost everything,” says Web Directions co-founder John Allsopp. “It’s powering major financial institutions.” The conference has two tracks, engineering and product, and its status as one of Australia’s premiere web events is highlighted by some of the big local and international names Allsopp and fellow Web Directions founder Maxine Sherrin have managed to attract. Genevieve Bell, Intel Fellow and vice president of Intel Labs, as well as director of User Experience Research at Intel Corporation, is delivering a keynote. Bell leads a team of social scientists, interaction designers, human factors engineers and computer scientists focused on people's needs and desires to help shape new Intel products and technologies. On the product side, Douglas Bowman, who just recently left Twittier as its creative director, is one of the big names they’ve managed to attract. Also on the product line-up is Scott Thomas, who famously worked on the Obama campaign, but also for the likes of Fast Company, Apple, IBM, HP, Nike, Patagonia, Levis, the Alliance for Climate Protection, and Craigslist. Younghee Jung from Nokia’s corporate research team, focusing on enablers of social development through mobile technology, will also be speaking at the conference. On the engineering side, Bill Scott, senior director of business engineering at PayPal, will be speaking, along with Railsbridge founder Sarah Mei and Jake Archibald who works in Google Chrome's developer relations team. Allsopp says he feels the calibre of speakers makes it the best line-up they’ve had and competitive on an international level. “These are world class speakers by anyone’s standard,” he says. This year also means a change of venue, moving from the Convention Centre to the Seymour Centre. “It’s got a good vibe and it’s both edgy and accessible, which makes sense for us,” Allsopp says. Allsopp says they’ve always advocated the benefit for teams and individuals to get out of the office and become rejuvenated by immersing yourself in the amazing work so many in the industry are doing. “We want to create that feeling when you can’t wait to get back to work because you’re just pumped with ideas,” he says. “For a lot of people who come from all over Australia, it’s the one chance in a year to catch up with people in the industry.” The full program can be found here.
Using eBay just got a whole lot lazier, with the company today launching a new app that will sell your items for you. This is the latest release for the company after having recently launched its Pinterest-style eBay Collections in Australia. The eBay Valet app takes every step of the selling process – from determining an item’s value to listing it online and shipping it when sold – and handles it on behalf of users, according to TechCrunch. The company already had a similar web-based platform named, Sell For Me, and Valet is set to make online selling even easier and more approachable, for both first-time buyers and those who find the eBay process time consuming. The process will now only require sellers to take a picture of their item and enter a description. The item then gets sent to one of eBay’s ‘valets’, someone who works for eBay, and within 30 minutes the seller will receive a valuation range and be asked if they still want to sell the item, reports TechCrunch. If you have a box handy, eBay will send you a shipping label. If not, the company can send you a free, prepaid box instead. Then you simply log on and watch the sale happen, typically via a seven day listing. After the items are sold, you pocket 70% of the profits straight into your PayPal account. Valets are vetted by eBay to rigorous standards, according to Business Insider. Valets must be able to: List 100,000 eBay listings each month, have storage capacity to hold and manage items received for at least 21 days, List items across all eBay categories, Have a physical presence in all major metropolitan hubs in the US, Have a demonstrated ability to reach Top Rated Seller status within 90 days of starting valet services.
We’re also a startup business at Legal123.com.au – just like you. And so as we approach the end of the financial year we’d thought we’d post some helpful advice about what’s on our “to do” list with June 30 fast approaching. 1. Change from monthly to annual subscriptions: review your services Pre-paying expenses is an often repeated end-of-year tax strategy, so pay as many of your expenses pre-June 30 to minimise your tax bill. This is one of the more obvious items you are likely already doing. But as an online business we use a lot of subscription-type services, which are mostly billed monthly to a company credit card. These expenses are usual for most businesses: web hosting, video hosting, website analytics packages, social media monitoring services, backup plans, etc. However, most of these services offer discounts for committing to an annual subscription – in the order of 10-15%. It’s worth checking out and this is the time to do it. So we reviewed all of our monthly subscriptions and services. First of all, we made sure we were going to stick with the service, and if not, found an alternative service or dropped the activity entirely. Then we checked and applied for any annual discounts. Dollars saved are dollars made. 2. Get ready for cloud accounting on July 1 At Legal123, we actually moved onto cloud accounting two years ago. This made such a huge difference to our business, we think it is worth mentioning for this year. We can’t speak highly enough about cloud computing. For us, the advantages were threefold: No spreadsheets and end-of-year panic Better communication and up-to-the-minute advice from our accountant Real-time reporting and knowing exactly where we are financially If you’re not using a product like Xero, you should be. And if you’re thinking of using such a product, get ready and do it now. Transferring over at the beginning of the financial year will make your life a lot easier. As it was, we transferred over two months after the year started and there’s quite a lot of work importing transactions from bank accounts, PayPal, etc. A lot of this could have been avoided with a neat and tidy switch over on July 1. 3. Outsource those small, nagging projects This is another part of the pre-paying expenses idea which also takes advantage of the “end of year get it done now” euphoria that small business owners experience pre-June 30. I don’t know about you, but I love that buzz. We’ve got six or so smallish projects that have stalled. Plus we’re in the middle of a website re-design. It’s a great time to knock those projects over now. Publish the project online – we use eLance and 99designs – pick a freelancer, give them all the information they need and let them get the job done. And don’t forget to ensure you pay their costs pre-June 30. 4. Purchase any small assets or consumables As a 100% online business, we’re surprised how little we spend on office consumables, etc. Almost all our documentation is electronic, we share files, send email (sometimes with massive attachments), almost never go into the Post Office, and we hold Skype meetings rather than battle rush hour traffic. But we still needed better Wi-Fi in one of our back offices – so it’s a great time to buy a Wi-Fi repeater. We also wanted to upgrade our business iPads and every year we upgrade our computers – so off to the Apple store. And we thought we’d also ‘pre-load’ our online advertising budget, which is probably our biggest consumable expense. That’s it. Not a lot, but worth doing a check around the office to see what needs upgrading or pre-paying and doing it now. 5. Review our financials and plan for next year Lastly, we always have a mid-June discussion with our accountant. Just to ensure they know the lay of the land and there are no surprises; they can confirm the superannuation and other payments that need to be paid, etc. And of course they can just log into our Xero cloud accounts and see everything for themselves. Brilliant. It has saved a lot of time and money, ours and the accountant’s. But it’s also a good time for us to review the whole year, assess progress. We don’t have set budgets, but we do have a very clear strategic direction and financial goals, so it’s good to review those. And then the fun stuff – planning the next year and visualising what it will be like. What new products will we add, which will we drop, how will our positioning change, what the message will be, what extra help do we need, where will we find those new members of the team, etc. Let the heated debates and coffee drinking begin!
US-based bitcoin merchant processor Bitpay has raised $US30 million ($A32m) in Series A funding, the largest amount ever raised in a financing round for a bitcoin company. Investors include Index Ventures, Yahoo founder Jerry Lang’s AME Cloud Ventures, Felicis Ventures, PayPal founder Peter Thiel’s Founders Fund, Horizon Ventures, RRE Ventures, Virgin Galactic’s Sir Richard Branson and TTV Capital. Cheaper Kinect-free Xbox One announced Microsoft has announced it will be releasing an Xbox One without the Kinect sensor, resulting in a significantly lower cost. The console launched in Australia last year for $599, the new Kinect-free version will be $100 cheaper, retailing for $499 when it’s released on June 9. Split-screen multitasking coming to iPad? In an effort to match Microsoft Surface’s “snap” feature, Apple appears likely to add a new split screen multitasking feature to iOS 8. Overnight The Down Jones Industrial Average is up 19.97 to 16,715.44. The Australian dollar is trading at US93 cents.
Like a lot of Year 12 students, Zeryab Cheema is not sure what he wants to study next year, unlike most of them he’s making up his mind while running a startup that already employs 30 people, both in Australia and overseas. While his age might make his success rather unique, Cheema is already a seasoned entrepreneur having worked on his own startups since the age of 14. His taxi mobile booking app Taxi 24/7 has just secured a deal with payments platform iZettle, a partnership that will allow the app to launch in the UK. The app brings mobile, voice and GPS together, allowing people to deal directly with the nearest cab. The idea is that users of the app can speak directly to the drivers. Cheema has been working on the iZettle deal when he gets home from school at 5pm until around 10pm every night, then waking up early in the morning to do his school homework. He spent the Easter break setting up a new company office and his Christmas break in the US speaking to potential partners. But there’s a clear incentive – the iZettle partnership alone is potentially lucrative with the UK taxi industry representing over 700,000 drivers. Cheema has insider knowledge advantage too with his dad having worked as a cab driver in the past. “This is the first cornerstone which will allow us to leverage our success into other international markets including Germany, Spain and the Nordics,” Cheema says. “Our aim is to equip at least a thousand drivers over the course of the coming 12 weeks with the reader through our roll-out of the pilot testing program.” Cheema originally intended to first launch his app in Australia in partnership with PayPal, but delays to their mobile payments system locally meant he looked to overseas markets, though they will be launching here in May. The app is already available in the US through a partnership with PayPal there. The iZettle deal will make the solution available to UK drivers at a price individually tailored for each fleet. Cheema says one of the unique benefits of Taxi 24/7 for drivers is that they were incentivized to use the app through a 3.5% commission on each transaction processed, which could amount to around £50 a week. “Our focus is on getting drivers to use the app and getting passengers hooked on using it,” Cheema says. He says the app will remain free to use with revenue coming from a 2% transaction fee. Originally they had planned to charge a small subscription fee on a monthly basis, but they had abandoned that model believing it would not scale. Funding for Taxi 24/7 has all come from internal sources and Cheema says they were expecting $1 million though the government’s R&D incentive scheme. Disruptive taxi apps have been a source of much contention for the taxi industry which is under threat from new players like Uber and Lyft. Cheema is not too concerned though, saying his app is ready to be used by the luxury car market as well.
Point-of-sale software provider Vend today announced an additional $22 million in capital funding led by PayPal co-founder and the first outside investor in Facebook, Peter Thiel of Valar Ventures, and Square Peg Capital. Vaughan Rowsell, founder and chief executive of Vend, told SmartCompany the software provider will use the new funds to expand its presence in the North American market through new partnerships, resellers, staff and customers across the continent. “We are in high growth mode and now is the time to really put the foot on the accelerator and continue our growth,” Rowsell says. “It really enables us to grow our channel, working with point-of-sale retailers in Australia and through channels like Apple, Zero and PayPal.” Launched in late 2010 in New Zealand, Vend now has offices in Australia and the United States and turned over $5 million last year. The operating system is used in over 10,000 stores in more than 100 countries but Rowsell has his sights set for further growth using the investment. “It also allows us to grow our headcount to 20 or so people on the ground in Australia, which allows us to work with much larger accounts,” he says. Rowsell says Vend was able to secure the funding from Valar Ventures and Square Peg Capital after establishing a relationship with Thiel. “We’ve been a part of the San Francisco scene for the last three years, we’ve had an office there and I’ve spent a lot of time in the Valley and it is one of the amazing things about that place that everyone is so connected,” he says. “We’ve been looking for the opportunity to work closely with [Valar Ventures] as they bring a whole lot of expertise in terms of understanding the payments space and helping us unlock the US market.” Rowsell says the size of Vend’s private capital raising “really validates the big shift in businesses moving to the cloud”. He claims there is a “resurgence” of independent retailers who have become more competitive against big chain stores by adopting cloud-based point-of-sale software. “Cloud-based retail in Australia is now going much more mainstream,” Rowsell says. Vend raised $NZ8 million ($A7.5m) in May 2013, and $NZ3 million between its first two capital rounds in 2011 and 2012. This article first appeared on SmartCompany.
I’m starting a new retail business and I’m not very techy. Can I survive without having to adapt to all this modern day hoo-ha? Once in a generation, retail goes through a change that could never have been predicted – and cannot be ignored. Here are a few examples of such change: In 1984, we rushed into the shops on Saturday morning knowing that if we didn’t buy what we needed by 12pm, we wouldn’t be able to shop again until Monday morning… Very few of us would have believed Sunday would become the second biggest trading day of the year for most retailers just 30 years later. In 1954, supermarkets as we know them today didn’t exist, with 90 cents of every dollar spent at a small, independently owned business... Very few of us would have believed that just 60 years later, they would take 80 cents in every dollar spent on consumable goods. In 1904, horse feed, rum, coffee, coal and clothing was all purchased at the same store, usually on an account or “appro” (on approval)... Very few of us would have believed that up to 80% of purchases would be spent on a plastic debit or credit card just one generation later – some of it by just touching the card against a pole. In 2014, any retailer that says online shopping, e-tailing, retail-apps, or social networking is just a trend they can do without may well be reminded of the above. Today’s generation research product and price on the web, read online forums for tips where to shop, use mobile apps to find a coffee or clothing (and maybe even horse feed), pre-pay with PayPal, and use their phone to store their ‘frequent coffee’ credits. Facebook is The Argus of today (look it up kids), Instagram is the Christmas catalogue that was once stuffed in the mailbox, Twitter is today’s radio advert telling you that 20% off all stock starts in 15 minutes, and blogging has just about replaced ‘word-of-mouth’ as the best way to give and get feedback on good service or a yummy muffin! So before you think we are in the middle of a short-lived trend, think again about the once-in-a-generation paradigm shift that is really going on – with or without us! My suggestion: bring your kids, nieces, nephews, friends and staff around for a BBQ, and pick their brains as to how to adapt, sustain, evolve and grow your business by being a part of the new world that has emerged. To answer your specific question: Can you survive? Of course, you can ‘survive’ – the way a weed manages to survive in the cracks of the footpath for far too long. But you won’t thrive in the way the manicured and well-fed garden bed thrives growing right next to the same footpath!
Online shopping for Christmas gifts is becoming the norm for shoppers, with 65% planning to buy a gift via local websites this year, new research shows. A survey of more than 1000 shoppers conducted by financial services group Aussie found that 47.7% of shoppers plan to buy a gift from overseas retailers. However 4.4% confessed they stop at a service station on Christmas Day to buy a last-minute gift, while 24.3% do their shopping at a local shopping centre on Christmas Eve. Aussie chief executive Ian Corfield said that local and online retailers are making a “real dent” in Australian’s gift spending habits. One quarter of shoppers plan to spend between $250 to $499 on gifts, while almost 19% intend to spend between $1000 and $1999. Just over 15% responded that they will spend between $750 to $999 on spoiling friends and family. The remaining 5.7% intend to spend under $249 in total on gifts. Cash looks set to be the number one method of payment for gifts, at 67.6%, followed by credit cards at 54.3% and debit cards at 48.8%. PayPal and other online purchasing tools will get a solid workout, 32.4% of respondents intending to use them. “It looks like Australians will be racking up many millions of dollars in credit card fees again this Christmas,” Corfield said. The survey also found that 70% of shoppers do their shopping at a steady pace leading up to Christmas, while 60% dedicated a full day to get it done before December 25. Handmade gifts still got a look-in, with just over a 25% intending to give things they had created themselves. And 8.3% said they will re-gift last year’s presents. The results come as Australian Christmas shoppers are forecast to spend $7.07 billion this week, up $490 million from last week, in the second-biggest shopping week of the year, according to the Australian National Retailers Association Christmas Retail Index. This is part of a $42.1 billion expected spend on Christmas from November 14 until Christmas Eve. ANRA chief executive officer Margy Osmond said the next two weeks will see the bulk of Christmas shopping occur. “We’ve reached the serious end of the shopping calendar and Australian shoppers are expected to spend almost $16 billion over the next fortnight in what will be the two biggest shopping weeks of the entire year,” she said. “Bricks-and-mortar stores will experience a sizeable increase in sales at the till, with spending expected to hit $5.5 billion – an increase of 32% since last week. “Domestic online retailers will have their biggest week of the year where sales will reach $1.55 billion – up 23% on last week’s figure. “Overseas online purchases will begin to peter off as the delivery deadline closes in and shoppers look for other alternatives to ensure they’ve crossed everyone off the Christmas shopping list. Ormond said that shoppers in NSW will make the biggest contribution to sales, spending about $2.15 billion, while in Queensland they will spend $1.49 billion. This story first appeared on SmartCompany.
An app to make gathering a group’s money for presents won the recent Startup Weekend Adelaide, beating 21 ideas and 10 teams to take out the top prize. SoGiftIt enables users to easily gather and manage funds for splitting the cost of presents for friends or co-workers. The team of four developed a point of difference through partnerships with retailers that enables the cash collectors to use the app to check out, similar to PayPal but as a group. Co-founder Derek Munneke pitched the idea on Friday night, and the team launched a basic version of the product, which they used to gather funds to buy the weekend organiser flowers on Sunday night. “We proved it from the user side and now need to prove it from the customer side. We have a few companies to approach in mind, and we need to prove it and flesh it out a bit more. If we can get retailers on board then we’ll seek investment to turn it into a full product,” Munneke says. Munneke, who runs a software development company, told StartupSmart he was wary of the term entrepreneur, and preferred to focus on the hard work of developing products and young companies. “Entrepreneur gets overused. Richard Branson is an entrepreneur, the rest of us are really start-ups,” Munneke says. “In this start-up boom one of the best ways to make money is to provide the shovel, so we make mobile apps.” Munneke says the SoGiftIt team are hoping to launch the app by March 2014, and doesn’t anticipate seeking much investment for it. SoGiftIt was selected as the winner by a judging panel that included Graham Wakeling from InBusiness Magazine, Stephen Rodda from ITEK Ventures, Kishen Vijayadass of BDO, and Shane Yeend of Imagination Nation. Startup Weekend Adelaide co-ordinator Chris Hooper told StartupSmart the idea stood out because it was a problem everyone had experienced. “Organising presents can be an absolute nightmare and the bigger the company the more complicated it is. They built the product over the weekend and actually used it, so we were all convinced,” Hooper says. This is the fourth Startup Weekend held in Adelaide. Hooper says about 10% of the graduates go on to become companies, and some of the founders from the first weekends returned this time to mentor aspiring business owners. He adds these weekends are key to fostering entrepreneurial activity. “There has been a lot of simmering under the surface activity about entrepreneurship in Adelaide, and events like this help bring it to the front. We’re getting a lot of encouragement from local and state governments, which believe we need more start-ups in South Australia to diversify our risks in terms of some of our other ageing industries,” Hooper says.
Despite being kicked out of a Founder Institute entrepreneur training program in its early weeks, Pixc founder Holly Cardew wasn’t discouraged. “He didn’t like my pitch,” she tells StartupSmart of the reaction of a Founder Institute mentor to her idea for a business. But she refused to be discouraged by the feedback on Pixc, a web-based service that Photoshops the background out of pictures of products online retailers want to display on their websites within 24 hours. “I knew this was a big problem for shop owners,” she says. Cardew, 26, discovered a need for a service such as Pixc’s while running her Country & Co. marketplace website and finding retailers in country areas needed help with their sites, especially pictures. She launched Pixc in May and soon had an order asking for 800 images to be edited and, after relaunching around September/October, is now processing hundreds of images a week, with a goal to process thousands next year. Last month, Cardew pitched Pixc as part of the Telstra Digital Summit and won a scholarship to visit San Francisco and the SXSW festival in Austin next year. She says she’ll be visiting payments giant PayPal, as well as marketplace eBay and Google. Pixc charges $US2 for each image it edits, with designers around the world accessing them from the cloud to work on them and then return the image when it’s finished for the customer to access. Cardew says a product displayed on a contrasting background can increase sales online by 39%. She says she’s been selling products on the internet since she was 13, but this year feels like she’s solved a problem faced by retailers. “I’m really passionate about helping people sell online and get a thrill out of seeing sales increase.” Cardew has experienced the ups and downs of starting up in the online world. When she was 18, she tried to develop an online travel website and spent all her savings on a digital agency that couldn’t build what she wanted. As a result, she says she taught herself Wordpress to build her own sites. Cardew says her ambition for Pixc is for it to process thousands of images a day, create thousands of jobs in developing countries, and to one day be acquired by a larger online retailer.
After taking out top honours at a host of start-up pitching competitions this year, panic button and support system start-up Ollo Mobile has this week launched a crowdfunding campaign to raise $50,000 in seed capital. Co-founder and chief technology officer Ken Macken told StartupSmart the fundraising campaign was about more than just money. “The campaign is really to reach out to the US and UK audiences to indicate we’re heading out. We’re pretty well known here through winning lots of awards, but that doesn’t go beyond our borders,” Macken says. It’s working. Macken says they’ve received many requests aged care researchers, and entrepreneurs keen to on-sell or partner with them from countries they aren’t even targeting. “Unfortunately we can’t just go everywhere, we need the right numbers. So we’ve got in touch personally to all of them, and put them on a list. We’ve been tasking them to reach out their networks to develop the future user and re-seller numbers,” Macken says. The funds will go towards certification and compliance costs for the hardware panic button component. The success of the campaign hasn’t all been good news though, with PayPal shutting down the campaign after a few hours. “Two hours after we launched they shut us down because they thought we were money laundering because we had so much money coming in. Because our CEO is over in the US, we thought he could deal with it but the US team said we needed to go through the Australian team, so we got stuck in a gap for a couple of days.” Macken says they can see from the backend of the campaign that over they lost over $10,000 of payments that were unable to be completed. He adds neither Indiegogo or PayPal have supplied a list of the names and contact details of those who weren’t able to finish their payments, so they’re focusing on getting the message they’re back online out there via social media.
Internet retail sales conducted by smartphones, tablets and other mobile devices have increased by as much as 400% and it’s critical that merchants refocus their efforts accordingly. Australia's online retail spending totalled $14.2 billion for the 12 months ending August 2013. This level is equivalent to around 6.3% of Australia's traditional bricks-and-mortar retail sector. What’s more, because of the increased use of social media on smartphones and social media’s involvement in retail sales, “social selling” has become red hot. Anyone hoping to improve their online sales success must take advantage of emerging trends like data-driven selling, personalised marketing efforts and specific product recommendations based on a buyer’s past shopping history. Here are seven quick tips for Internet sales success: 1. Make sure your store is ready for the mobile revolution Mobile usage accounts for more than 50% of your visitors. A recent report by marketing website optimisation company Monetate found the average order value purchased via iPhone was $97.49 and the average order via Android was $97.16. Your store has to be prepared for that type of mobile transactional traffic, so creating a mobile-friendly version of your site is a no-brainer. 2. Optimise your mobile site for SEO It’s now just as important to optimise your mobile store for SEO as it is your normal online store as half of your traffic is coming from mobile devices. Be sure to add unique titles, tags and descriptions. 3. Offer local pick-up Research by CBRE shows when given the option, 41% of Aussie shoppers would prefer to pick up their products locally. What’s more, 27% of in-store pickup shoppers make additional purchases. If you don’t have a physical storefront, offer pick-up at farmers’ markets, craft fairs and other similar locations. 4. Enable “geo-focused” SEO Another way to cash in on consumers’ need for instant gratification and their desire to shop locally is by adding terms and tags to show up in geo-based search results. You should also get listed in location-based price comparison apps like Milo, RedLaser, Shopkick and others. 5. Add real-time product reviews Customer reviews translate to an 18% increase in sales. It’s important, though, to tell both sides of the story. Shoppers who read bad reviews convert 67% more than those who use sites with only positive reviews. Start proactively gathering reviews and set up an email campaign asking buyers to review products. 6. Add product videos By some reports, a video makes a front-page Google result 53 times more likely. Consumers are 64-85% more likely to make a purchase after watching a video. Use pre-produced videos or make your own and add them right to your product pages. 7. Improve your checkout process You can attract more customers and close more sales by simplifying checkout and adding payment. Offering a single-page checkout can boost conversion by up to 21% according to ABtests.com. Provide as many payment options as you can and gateways for credit cards like Google Checkout and PayPal. Finally, increase your average cart value by showing complementary or similar products as an add-on option at checkout. Take a snapshot of your store’s basic analytics today: sales, traffic, etc. Implement the changes I’ve suggested, then compare your snapshot to your numbers three months from now to measure your improvement to determine which suggestions really work for your business and which you may have to tweak for better results. Eddie Machaalani is the co-founder and co-CEO of Bigcommerce, the world's fastest-growing software as a service e-commerce platform that helps power over 30,000 small businesses to sell online.