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Vend’s founder reveals how he scored $22 million from Valar Ventures and Square Peg Capital

3:07AM | Wednesday, 26 March

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.

Do I need to get techy to start a retail business?

2:43AM | Thursday, 6 February

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 retail a priority for buying Christmas gifts

12:55AM | Monday, 9 December

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.

Group gifting app wins Startup Weekend Adelaide

12:47AM | Wednesday, 4 December

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.

How finding a solution to a problem brought Pixc to life

12:23AM | Tuesday, 3 December

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.

Using a small crowdfunding campaign to get major exposure

10:24AM | Thursday, 24 October

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.

Seven tips to boost online sales

10:30AM | Tuesday, 22 October

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.

Finalists announced for pitching conference at leading technology conference Tech23

9:04AM | Wednesday, 18 September

Twenty-three start-ups will pitch to a panel of investors and start-up veterans for prizes ranging from meetings with mentors to tens of thousands of dollars at the upcoming Tech23 conference in October.   The start-ups come from a range of sectors including robotics, app development and software-as-a-service.   Marita Cheng, founder executive at robotic arm-maker 2Mar Robotics and chief told StartupSmart the competition was a great networking opportunity for her team.   “It’s a great way to get the message out there about my company and to meet other entrepreneurs and some investors, as well as refine my pitch and have the chance to earn some prize money as well,” she says.   2Mar Robotics launched in April, and is currently refining the second iteration of its product and taking pre-orders. Cheng has been passionate about robotics since she was very young.   “When I was growing up, my mum wanted me to do the chores but I would do it begrudgingly, and thought a robot would be better. And there were none, so I thought, why can’t I be the one who brings them into the world?” Cheng says.   Nicholas Tong, co-founder and chief executive at fall detection and elderly support watch company Edisse told StartupSmart the conference was very well regarded and they’d been encouraged to apply by several mentors.   “The competition will put us in contact with people we wouldn’t usually be able to reach,” Tong says, adding while they’ve been pitching since they launched the start-up eight months ago, they’ve recently been focusing on product development.   “Pitches are iterative in themselves. We’ll get a whole bunch of questions after one pitch and re-factor that in. We’ll need to have another look at it, as we haven’t been pitching as much recently as we’ve been focusing on the second iteration of the product,” he says.   Tong says his team is looking forward to pitching their idea, and getting people excited about the elderly, who he believes have been overlooked for decades.   “Our team quickly knew we didn’t just want to build another social start-up or app. We wanted to create something that had real impact, and we realised falls was a major one. And if you look at the market, it seems like no one really cares and there’s been no innovation,” Tong says.   The speaker line-up for the day will include Alan Noble from Google, Bill Bartee and Larry Marshall from Southern Cross Ventures, Melissa Widner from Seapoint Ventures, Paul Bassat from Square Peg Ventures, and Stuart Richardson from Adventure Capital.   Tech23 is coordinated by Slattery IT. Slattery IT founder and chief executive Rachel Slattery told StartupSmart they were seeing a larger contingent of start-ups based outside of Sydney.   “About half are from Sydney, but in the past it would always be a few more than half. About six are from Queensland, and that’s exciting as usually we’d be lucky to get one,” Slattery says.   “We were looking for the most innovative companies that could demonstrate traction. Ultimately it’s an event, so we look at what’s going to be interesting and who is great talent.”   While prizes haven’t been confirmed yet, Slattery says there are some “fairly hefty wads of cash floating around” and they were delighted to welcome AMP, PayPal and the REA group as prize sponsors.   The start-ups taking part are: 121Cast, 2Mar Robotics, BuyReply, Edisse, Ennova, Food Orbit, Geepers, HSK Instruments, Instrument Works, Intersective, Kounta, Liquid State, My Myk, Nano-Nouvelle, ollo mobile, OneTouch, Open Learning Global, Roomz, SABRE Autonomous Solutions, See-Out, SimplyShow.Me, SkyTree, and Xped Corporation.

Three start-ups get go-ahead from experts to explore Asian markets after pitching competition

8:54AM | Thursday, 22 August

Three start-ups that took part in the TiE Go Asia Pitch event at the Pollenizer’s The Hive in Sydney were met with considerable interest by a panel of seven entrepreneurs from Asia last night.   Dilip Rao, president of the TiE Sydney chapter which coordinated the event said the popular ideas on the night were Ollo Mobile, a panic button and support service for children and the elderly, kids singing platform Singa Entertainment and social planning app TheBestDay.   “Ollo Mobile did really well, because it’s about elderly people and children and everyone cares about them. The other surprising one was Singa. I thought it was cute, but everybody loved it,” Rao says.   There was significant interest in the karaoke app from the Indian judges, given the popularity of Bollywood movie musicals.   “Everyone is crazy about these film songs, and the chaps from India thought this was a goer. But obviously it needs to be localised,” Rao says, adding Singa is focused on growing into China.   “We suggested they explore franchise or partnerships in each target country, as they would need a lot of money to do the IP negotiation work in every market that was interested.”   Rao added that all of the judges were interested in TheBestDay app for their own personal use, and agreed the potential for the app in the Indian market was enormous.   “50% of the Indian population is under 25-years-old. If they can make the app cool, it could really take off,” Rao says.   “Those guys are going to focus on validating their business model here in Australia for a few months, and then they have a fork in the road. Do they go to the US and compete with everyone there, or do they go for a new market?”   The other start-ups at the event were shift-work management app Fewzion; sales team training app Trainthem; data-driven fleet vehicle management app Mercurien; and Member Pass, a user interface add-on for Paypal.   The judging panel included three judges from India, two from Singapore, and two from Hong Kong.   In July, Rao spoke to StartupSmart about why each region of India needs to be considered as its own distinct market.   The Go Asia Entrepreneur Program is run by global, not-for-profit entrepreneur network TiE.   It’s sponsored by two high-profile start-up accelerators, the Optus-Innov8 Seed Program and ANZ Innovyz Start program, which recently announced their latest intake of start-ups.

Etsy to offer check-out in Australian dollars

8:38PM | Thursday, 8 August

Etsy, the online marketplace for handmade goods and vintage items, is allowing sellers to process payments through credit and debit cards in local currencies, rolling out its Direct Checkout offering to Australia and 14 other markets.   Prior to the Direct Checkout service, users had to process payments through PayPal in American dollars. Payments can now be processed in an additional nine currencies, including Australian dollars.   Sara Wyman, international program manager of Direct Checkout, told StartupSmart implementing the new currencies was a top priority as offering local currencies was a major factor in the purchasing decisions of customers.   “Worldwide, we’ve noticed our sellers are very concerned about listing in currencies of their buyers,” Wyman says. “I think it’s going to be really important for Australian sellers. You guys have been asking for this product for a year, and we’re really excited about it.”   The new currencies will enable more than 90% of the 25 million users to purchase in their own currency.   Buyers will set one price, and Etsy will translate that into the 10 available currencies depending on a customer’s designated currency.   “We’ll change our currency conversion rates every hour, so they’re always up to date,” Wyman says.   He says the move to allow customers to pay via credit card was good news for sellers.   “We know from research that buyers are more likely to purchase again when they keep credit cards on file, and they spend more when they use credit cards.”   Australia is one of Etsy’s strongest markets, with a top five position in both buyers and sellers. Australian Etsy activity generated over 3 million orders between 2005 and 2012.

Overseas shoppers to inject $16 billion into Australian online retail by 2018

7:30AM | Wednesday, 24 July

Businesses not in the online retail sphere will have to move fast if they want a share of a predicted $16 billion spend by international shoppers by 2018, according to new research.   The new study, released yesterday by PayPal and conducted by Nielsen, ranked Australia as one of the world’s six key shopping destinations for cross-border shopping.   The study samples the views of more than 6000 online consumers aged 18 and above across six countries. The respondents have all made purchases on international shopping websites in the previous year, with the research estimating 94 million cross-border shoppers will spend $105 billion online this year.   The study predicts cross-border online shopping will contribute $5 billion to the Australian economy this year, with shoppers in China, the United States and the United Kingdom most interested in buying our products.   Of the six major international destinations surveyed, Chinese shoppers will spend $2.3 billion on Australian products in 2013, US shoppers will buy $2.1 billion of goods and the UK will spend $486 million on Australian good online.   In terms of year-on-year growth in Australian online retail exports, Thailand is the fastest growing market at a rate of 105%, followed by Russia at 67% and Israel at 55%.   In a statement, PayPal president David Marcus says the increasing prominence of online shopping is a “massive opportunity” for all retailers.   “Cross-border trade is nothing new. Our local stores are filled with goods from around the world. What is new is how easy it has now become for consumers to shop online directly from merchants around the world and the massive opportunity that represents.   “The emergence of these ‘modern spice routes’ is great news for businesses the world over. Our message to merchants is if you are looking for new ways to grow your sales, especially in an economic downturn, start selling directly to 94 million cross-border shoppers in these six markets and own a piece of this $105 billion market,” he says.   Many Australian online retailers engage in heavy discounting on goods in an attempt to compete with overseas competitors, but the research indicates this isn’t the most efficient way to maximise sales.   The survey found only 10% of overseas shopping spend comes from people shopping for a bargain online, despite this type of shopper accounting for a quarter of all online consumers.   Retailers offering a unique product were in luck, as people who shop for unique items and look for new places to shop online account for 30% of total spend, while only accounting for 13% of the online shopping population.   The study also finds online retailers must address key concerns for shoppers, including online security.   Nine-out-of-10 consumers place great importance on having buyer protection for their overseas purchases and seven-out-of-10 consumers cited identity theft and fraud as the top reason for not making a cross-border purchase.   While online retail spend is growing, Retail Doctor Group chief executive Brian Walker told SmartCompany it still accounts for only a small percentage of overall retail spending.   “Retailers need to understand and embrace cross-channel shopping. They need to have an online site and use it for research and have a physical store environment where the majority of business will be done, and that store needs to be exceptional.   “Eighteen of the top 20 online retailers in the US have physical stores. You can’t run away with the notion that it’s all about online shopping, but you have to give credence to its value,” he says.   Walker recommends creating a unique product to generate value online for the customer, not focusing on price discounting, and ensuring quality customer service.   Advantage Advisors partner and retail expert David Gordon told SmartCompany going online gives retailers opportunities to research overseas markets.   “The barriers to entry in terms of establishing a market overseas are diminishing because of the web. The added incentive is, once a bricks-and-mortar retailer creates a ‘preach head’ in an overseas territory via the web, it can lead to a bricks-and-mortar extension into that territory,” he says.   In Australia, many popular overseas brands have started to establish a bricks-and-mortar presence as well, such as Top Shop and Zara, with H&M arriving in 2014.   Gordon says one of the greatest challenges for Australian retailers going online is responding to the different seasons.   “How the retailers manage the different seasonal complexities is interesting. It comes down to whether they specifically ensure they have enough stock for overseas customers from the previous season, or whether they position it so they’re selling next seasons stock earlier to overseas,” he says.   “This is something each retailer will need to work through and they need to ensure they understand the range and they’ve got the necessary stock.”   Gordon says brands will also need to learn how to cater for the different sizes and shapes of people around the world.   “One thing a number of Australian retailers have failed to do is recognise the sizing in some countries overseas is totally different. American body-shapes are larger and Asian shapes are smaller, their sizing dimensions need to change between countries,” he says.   This story first appeared on SmartCompany.

Australian social selling app for the younger generation ready to take on eBay

7:16PM | Sunday, 14 July

A 20-year-old entrepreneur has launched an online sales app targeted at the new generation of online shoppers and integrated with social media.   Stephen Chapman, founder of the social selling app Facebuy, told StartupSmart the way Gen Y was selling and buying online has changed.   “This is a younger generation targeted tool because eBay has been around for a long time and my generation isn’t looking at eBay, that’s for our parents,” Chapman says.   He says the app focuses on fashion, concert tickets and textbooks first, as these are the items young people are selling online via Twitter and Facebook.   “We’ve created a centralised place to sell these items that feeds straight through Twitter and Facebook, so your friends can comment and promote it,” Chapman says.   Launched two weeks ago, the app has been downloaded over 500 times, has 300 registered users and 150 items have been uploaded.   “That conversion rate is pretty good. It’s definitely working and we can see potential,” Chapman says. “We’re focusing on a customer-reach model rather than revenue, while we’re still tweaking it.”   The app is free to download and users can also list their items for free. For each sale, Facebuy takes a $2 fee and 1.5% of the price plus 30c goes to PayPal.   Chapman says they’ll be focusing on recruiting eBay sellers in the next few weeks, especially those who have listed more than 400 items and have good customer feedback.   “We’re going to show them it’s a cheaper, quicker, younger and trendier way to sell online, that doesn’t carve their bottom line up,” he says, adding the idea was sparked by his frustration having the pay listing fees on eBay.   With a brand similar to Facebook and eBay as its main competitor, Chapman is staying focused on his point of difference.   “Yeah, the big giants always want to sue anyone to stop them starting up. I looked into it and I’ve trademarked the word Facebuy in Australian markets, and there was no issue,” Chapman says, adding it’s using the Facebook API (application programming interface), so Facebook knows it exist.   “But these big giants are faceless. They can’t have a personality or personal story attached to their brand like I can. We can be more agile and add new categories, and tweak as we go.”   Chapman says his focus is on developing the customer base in Australia, and seeking funding and mentoring to expand internationally.   “China and Hong Kong will be big for us. Maybe not them selling to each other, but a lot of power sellers on eBay of cheaper products come from there,” Chapman says.   Facebuy is also one of 250 entrants in the Million Pound Startup competition, which is run by London-based start-up incubator Digital Shoreditch.

Australian eBook start-up achieves funding success in Amsterdam

7:26AM | Tuesday, 2 July

E-book writing, publishing and promotion platform 7write is looking for a home after attracting $250,000 in seed funding from a range of investors, including early PayPal investor Australian Peter Davison.   The start-up is in the final stages of the three-month Startup Bootcamp Amsterdam program. It is set to launch in public beta in the next week or so, final tweaks to its platform permitting.   The founder and developer of 7write, Paul Hayes, told StartupSmart the funding breakthrough and intense training experience has rewarded his commitment to getting 7write into an accelerator program.   “There are about 400 global accelerator programs. I didn’t apply for all of them, but I definitely applied for at least 50,” Hayes says.   “It took me four years to get here. I tried many, many different ideas and start-ups.”   7write offers writing software with a range of extra support tools, an eBook file-generating software and digital marketing support.   Hayes says the success of 7write breaking through the crowd of ePublishing start-ups is due to offering a complete solution in an often confusing space.   “We understand a lot of people will take certain pieces of the puzzle, whereas we take an author by the hand and guide them through from concept to fully published eBook and paperback. We’ve gone to extreme efforts to simplify a complex process,” Hayes says.   Hayes started developing the interface for the platforms in September after trying to develop a range of start-ups. He says the demand after he listed on Beta List spurred him on.   “I did a one-pager and a lean launch on Beta List and had over 1000 people sign up, so I knew I was onto something,” Hayes says, adding that the listing and following accelerator applications attracted interest from investors in New York and Dubai.   Despite the success, Hayes is backing away from any claim of being a disruptive technology.   “We’re not trying to disrupt the publishing industry. There is a huge space for self-publishers to work synergistically with the major publishers,” he says.   “The number one problem publishers face is finding the next big-selling author, and the number one problem writers have is getting noticed by publishers and getting a contract.”   Tapping into emerging markets   Hayes says 7write taps into these problems as well as the rise of successful self-publishers achieving mainstream publishing success, such as E L James’ Fifty Shades of Grey and Hugh Howey’s Wool.   “We’re partnering with publishers around the world and giving them access to our sales data. So people who publish with us are getting exposure to publishers who are increasingly seeking out new talent who already gained traction,” he says.   Set to move into public beta shortly, the 7write team is in contract negotiations with several major publishers.   The focus on data is something Hayes is keen to keep developing.   “I know for a fact it was one of the things that interested Peter Davison quite significantly. So the more people who publish with us and the more data we collect, the better,” Hayes says, adding that they’re starting to experiment with cover split testing,   “In our development pipeline, we’re working on features like split test covers. It’s pretty close to impossible to do this in Amazon at the moment, but we’ve talked to Amazon and they agree that the number one factor in sales is the cover.”   The 7write team charges an upfront fee for authors to use the software that includes ISBN allocation, professional cover design, file conversion, and global sales. They also take a 10% cut of sales.   “We do that to align our interests with the author, they win and we win. We’re constantly experimenting with ways to sell more books,” Hayes says.   While anyone can publish using the service, Hayes says they’ll be offering extra services for bestselling authors, and working with them to test experimental marketing tactics before rolling them out to the wider network of authors.   Hayes says their focus post-accelerator will be on expanding the team of four, developing an HTML5 version of their software and working out where to base the business.   “We really are going to go where is best for the business. We do have a lot of interest and a strong base in Australia with a couple of funding offers available. But the majority of publishers are in Europe, so London, Amsterdam and Berlin are strong options for us too,” he says.   International focus   Hayes says not limiting the idea to a geographic location and honing his time management skills were key to the company’s success so far.   “Don’t limit yourself, apply to global accelerator programs. If I only applied to Australian programs, I would have had a fraction of the options,” Hayes says.   “If I had to pick one main skill to learn, it’s time management. If you can master your time, that’s a huge step up. You need to work out how to get things done. When you start up, there is so much focus on the idea and the notion the idea is what is going to get your there.   “But, really, the idea is just a multiplier of the team; if you learn to get things done, and combine that with a powerful idea and a powerful market research, you’re set.”

Kaggle president on how they did it, and tips on how to tell your start-up’s story to raise millions from investors

6:20PM | Thursday, 20 June

Data science platform Kaggle grew from a Melbourne start-up to a global success story in just a couple of years.   Now based in Silicon Valley, Kaggle president and chief data scientist Jeremy Howard spoke to StartupSmart about how they grew, how they raised $11 million in their first round of funding and why they’re not keen on setting goals.   “It’s been extraordinary. From the outside you only see what works, but from the inside it’s even more exciting because you know the 99 things that didn’t,” says Howard.   The Kaggle platform connects companies seeking data analysis to over 100,000 data scientists through competitions. The data scientists aren’t employed by Kaggle, but are competing for significant cash prizes.   They ran their most complex competition so far with General Electric a few months ago, using extensive flight and weather data to predict flight times.   “The phase two competition will take the winning model from phase one, and use that to create a simulation of flights. And this time we’re not just asking people to predict flights, we’ll be asking people to recommend and recalculate the optimal route,” Howard says.   “We only need to do one thing to keep the data scientist community ticking, we just need to give them a good diet of interesting data sets and projects,” he says.   Kaggle has a team of three top-level Kaggle contestants working on sourcing and configuring the competitions.   The idea for Kaggle emerged in 2010 when chief executive and founder Anthony Goldbloom was writing for The Economist and realised everyone he was interviewing had the same issue – finding good scientists to analyse their data.   Goldbloom noticed the Netflix Prize, a data analysis prize offering a million dollars in prize money, attracted 70,000 entrants and thought the competition model may be a good way to bring top data-wrangling talent together.   Howard became the first angel investor in Kaggle after he met Goldbloom at a statistics meet-up in Melbourne. Howard had been competing in Kaggle competitions and had become the number one participant in the system.   After 18 months, Howard and Goldbloom had a developer in India and a part-time graphic designer. They were ready to take the next step, so Goldbloom and Howard flew to Silicon Valley to raise funds.   “We had no revenue or very, very little. We had run maybe 20 competitions and we had maybe 15,000 data scientists registered on the site,” says Howard, who adds it felt like they’d read every book and article about fund raising in preparation. “We’d never been to Silicon Valley, never raised money, and we didn’t know any venture capital investors.”   But their self-education and determination paid off, and they raised $US11 million in three months, from Index Ventures, Khosla Ventures, a large investment from PayPal co-founder Max Levchin and 12 smaller investors.   This article continues on page 2. Please click below.   “It was more funding than we were originally planning for but we were trying to create a marketplace. The most important thing to do in a market place is generate liquidity, because until you do that you’re in danger of someone surpassing you, but as soon as you do no one can really get a foothold,” says Howard.   “The most important thing for raising money is location. If you’re not in Silicon Valley, it’s really unlikely you’ll raise that kind of money. So step one is get to the Valley, step two is have a good idea, step three is have a good story and step four is sell yourself.”   According to Howard, the capital they raised was about more than the business premise.   “It’s definitely not just the power of the idea. It’s about the story that you tell around the idea,” Howard says. “We worked really hard at the messaging of story, to tell it in a compelling but realistic and honest way.”   The funding has led to the move from Melbourne to Silicon Valley, better competitions, and bigger clients. The Kaggle team has grown to 18 staff.   The rapid growth and success of Kaggle has propelled them into new territory and Howard is wary about setting goals for the future.   “It’s tricky to have milestones in a start-up because you can’t predict the future when you’re doing something no one has ever done before,” says Howard. “Increasingly we’re finding we’re doing things no one else has before, so we need to figure it out ourselves.”   They’ve recently launched an initiative called Kaggle Connect.   “It’s a virtual consulting expert service, and there is no sales model for that. So what kind of marketing collateral do you have? Which businesses do you target? What kind of price point do you charge?” says Howard.   But the doubts are not holding the Kaggle team back. “Everything we’ve done, we had no idea what we were doing,” says Howard. “You need to be tenacious and creative and maintain optimism that you’ll figure things out as you go along.”

Three Sydney entrepreneurs off to Silicon Valley after winning coding competition

5:58PM | Monday, 27 May

Three tech entrepreneurs are into the international AngelHack Accelerator program and off to Silicon Valley later this year after the personalised digital postcode app they built in a 24-hour coding competition took out top honours in Sydney this weekend.   Andy Longworth, Jethro Batts, and David Boulton won the AngelHack competition with their app Hate You Cards, which allows users to take photos of themselves and turn them into joke text messages and emails to send to their friends.   More than 90 people attended AngelHack Sydney with organisers estimating the crowd was 55% developers, 8% designers and 37 % business people. They formed 22 teams, and many were at the Fishburners co-working hub all night.   The event was judged by Alfred Lo from Optus Innov8, Robert Love from PWC Digital, Gary Visontay at Sydney Seed Fund, Seb Eckersley-Maslin at Blue Chilli, and Willix Hallim at Freelancer.com.   Danila Davidson, one of the coordinators of the event, told StartupSmart this year’s win was a deviation from previous years.   “We want teams to create something that is ready to use after 24 hours. So it’s best to focus on a real problem that can be solved with an app that you can actually build in 24 hours,” Davidson says. “Hate You Cards wasn’t problem-focused, but it’s innovative and fun, and would work well with existing platforms.”   AngelHack Sydney is part of the international AngelHack program, which runs in over 30 countries. It was launched in San Francisco in recognition of the challenge of finding founders for new projects.   “It’s a really, really important issue that we all talk about all the time, how hard it is to find a tech funder. We also talk about how hard it is to find and recruit good coders. So we run these events to empower coders, to connect business owners to coders and to get good coders in front of the best tech founders in San Francisco.”   Winners Longworth, Batts and Boulton are to start the 12-week AngelHack Accelerator program soon in preparation for their trip to Silicon Valley. They will receive a $1100 stipend to fly to San Francisco for 10 weeks of mentoring and introductions to incubators and investors. They’re also provided with 10 days of accommodation with a series of events, with conferences and connections to follow.   The AngelHack team provide this in exchange for a 2% stake in the companies they are supporting. The program is sponsored by Amazon Web Services, PayPal Developer, Facebook, Google Developers and Tropo.   Previous winners include crowd funding platform WeFunder and cloud file security system Airpost.

The Bitcoin boom: What your business needs to know

4:32PM | Tuesday, 9 April

It’s often said that new entrepreneurial opportunities emerge from economic adversity, but it’s rare for hard times to explode an idea in quite the manner Bitcoin has benefited from.   The independent digital currency was trading at just $20 in February. And then the Cyprus economic crisis hit, prompting people to pull their cash from the failing banks and into Bitcoin.   As a result, the value of a Bitcoin is nearing $200. Heady days indeed for a currency that was only worth around a cent in 2010. Bitcoin is going mainstream.   But what exactly is Bitcoin and why should small businesses in Australia care about it?   The basics   Bitcoin is a decentralised digital currency that allows people to pay each other directly without the need for a financial institution middle man. Payments can be made anonymously in a way, worryingly for governments, that can’t be tracked, traded or taxed – a kind of free market bonanza that cuts down on the hassle and cost of dealing with banks.   {qtube vid:= Um63OQz3bjo}   The concept was created by a mysterious figure (or group) called Satoshi Nakamoto in 2009. Initially only known about by a select band of hackers and tech geeks, the concept has rapidly taken hold and is now being embraced by some businesses as a payment method, alongside standard credit card transactions and the likes of PayPal.   Of course, a currency is only worth something if it’s relatively scarce. To create Bitcoins, you need a highly complex computer algorithm that produces the currency very slowly, with a cap of 21 million Bitcoins to be churned out by 2140.   Select bands of Bitcoin ‘miners’ have emerged – Ozcoin Pooled Mining, based in Perth, claims it is the third-largest Bitcoin miner in the world – but most users obtain the currency through Bitcoin exchanges, such as MT. Gox.   Physical Bitcoins have been created, but the currency is typically traded digitally, stored on a user’s hard drive in a virtual wallet.   Around 11 million Bitcoins are currently in circulation, with 25 new ones created every 10 minutes. The total value is now closing in on the $2 billion mark, more than the currency stock of 20 separate countries.   This valuation increase is illustrated by the fact that US programmers who swapped 10,000 Bitcoins for two pizzas in 2010 – at around a cent a piece – would’ve paid $1.7 million for the pizzas in today’s prices.     Above: Value of Bitcoins in US dollars over the past year: Source. Story continues on page 2. Please click below. Why should I care?   Because other businesses are caring. Yes, there’s the bar in New York that is accepting Bitcoins for a helpful publicity boost, but there are plenty of retailers who are taking a genuine interest.   Why? Well, the process is easier – it doesn’t involve a bank and the transactions are processed on the same day, rather than take days.   Also, it can be cheaper. BitPay charges 1% on Bitcoin transactions, whereas credit cards will slug you 3-5%.   Bowdie Mercieca, founder of Australian online retailer UndieGuys.com.au, has accepted Bitcoin since the start-up launched in 2011, initially as an eBay shopfront.   “We use Woo Commerce, a plug-in that’s based on WordPress,” he tells StartupSmart.   “The buyer chooses the option of Bitcoin, it works out the exchange rate and the transaction is processed.”   “In terms of the process, it’s similar to bank transfer, perhaps a little easier. It takes time to install the plug-in, but it’s very seamless. Previously, the process had to be manual, but now it’s becoming more popular, a lot more software is available for retailers.”   Demand for Bitcoin payments in Australia is still small. Mercieca says he’s had just five purchases using Bitcoins, most of them from the US.   But there are other benefits – by being listed on blogs as one of a fairly select group of retailers taking Bitcoins, UndieGuys is getting traffic, and therefore customers, that it wouldn’t otherwise have.   “With more interest, this possibly will increase – we can see incoming links from Bitcoin websites and there are lots of enquiries about how it works,” Mercieca says.   But he adds: “I initially added it because my background is IT and I was interested in the concept of it. At the moment, it’s still a bit technical. Most retailers probably won’t consider it until it goes fully mainstream.”   The future   The fact that Bitcoin’s value has rocketed in recent months does little to dispel the theory that it is little more than an investment commodity, rather than mainstream currency alternative for the masses.   But even if Bitcoin is a bubble set to burst, the idea behind it should pose a few interesting questions for start-ups who process payments.   What charges are you paying for your transactions? Are you really getting a fair deal? How can you reduce these overheads? And should you be thinking a bit more laterally than just going to your bank?   Ultimately, Bitcoin’s legacy may be to help small businesses think a little more about what moving money around actually costs them.

Learning to say no to the wrong customers

3:29AM | Wednesday, 13 March

Customer acquisition is one of the cornerstones of a successful start-up. But as Vend founder Vaughan Rowsell discovered, not every customer is the right fit for your business.

Jack Johnson helps entrepreneurs Beat the Q

3:42AM | Wednesday, 13 March

An incident at a Jack Johnson concert is one of the reasons why Adam Theobald and best mate Scott Player decided to set up Beat the Q.

PayPal co-founder launches Affirm, aims for one-click mobile payments

2:29PM | Thursday, 28 February

PayPal co-founder Max Levchin is launching a new mobile payments start-up called Affirm, the first project to come out of Levchin’s San Francisco tech incubator.

How to drive revenue through your blog

3:15AM | Thursday, 14 March

If you are an entrepreneur with a blog, you’ll no doubt be keen to learn the different ways to monetise it. Otherwise it’s really just a hobby.

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