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THE NEWS WRAP: Uber facing court action for discriminating against the blind

4:34PM | Monday, 20 April

Uber will have to defend itself against a lawsuit which claims the company is discriminating against the blind by refusing to transport guide dogs.   A San Jose court has ruled the plaintiffs in the case can pursue their claims because Uber is a travel service and therefore subject to the Americans with Disabilities Act.   Aaron Zisser, a lawyer for a disability rights group who helped bring the case to court, told Reuters the plaintiffs were pleased with the decision.   “Uber is a very popular service, and it is important for riders with service animals to be able to use it like anyone else,” he said.   Guess who’s back – back again   Nokia is quietly planning to return to the phone market in 2016, Re/code reports.   The Finnish company – which was a household name due to its popular mobile phones during the 90s and early 2000s – is also planning to explore the virtual reality market according to insiders.   Microsoft finalised a takeover of Nokia’s devices and services business in April 2014 worth more than $7 billion.   Nokia is prevented from selling phones under its name until the end of this year.   You can now message someone who doesn’t follow you on Twitter Twitter is now allowing users to private message people who don’t follow them.   “We hope these changes help you connect more easily – and directly – on Twitter with the people, causes and businesses you care about most,” the company says.   “If you do receive a Direct Message from someone you don’t want to privately converse with, you can still take steps to stop them.”   The updates are rolling out worldwide from today and require users to change their settings before strangers are able to message them.   Overnight   The Dow Jones Industrial Average is down 279.47 points, falling 1.54% to 17,826.30. The Aussie dollar is currently trading at around 78 US cents.   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

How your bottom line can make a difference to society

4:05AM | Monday, 20 April

Startups should think about how their product contributes to the well-being of their customer, not just for the good of society, but for the good of their bottom lines, according to the Shared Value Project’s Mark Kramer.   The Shared Value Project advocates a new way of thinking about the role of business in society, encouraging business to find opportunity in solving social problems in ways that contribute to their profitability and growth.   Kramer says startups should build their products so they contribute to, and incentivise, the well-being of their consumers. They should be targeting markets that are being underserved and attempt to solve some of the social problems that foundations, development agencies and governments are grappling with.   “Shared Value is really about competitive strategy. It’s not just adding on something nice for the sake of being a good citizen, or adding a marketing pitch to what you do,” he says.   “It’s really about differentiating your company by finding a competitive advantage in creating benefit for your customers.”   Kramer gives the example of South African insurance company Discovery Health. To encourage its members to live healthier, it immediately reimburses them 25% of whatever they spend at the supermarket on fresh fruit and vegetables. It also pays their gym club membership, provided they go to the gym twice a week.   “They started with a very simple idea of using behavioural economics, financial incentives to encourage healthier behaviour on behalf of their members,” he says.   “Using a whole range of incentives, they found that over a decade or more their members had a higher life expectancy, six years longer than the average. Got sick less often, recover quicker and have about 14% lower medical costs.”   The company also encourages members to wear Fitbits, so it can track their healthy behaviour and offer rebates and adjustments for their insurance premiums based on that behaviour. For auto insurance if offers members the chance to install a device that tracks driver behaviour, using that data it judges how safely members are driving and reimburses up to half of their petrol bill every month.   “Their population has half the number of traffic fatalities, which of course saves them money not only on auto insurance but health insurance.   “So it’s not CSR (corporate social responsibility) it’s not philanthropy. It’s really looking at many things businesses saw as externalities, social problems outside their purview, and finding that business can actually tackle and make a meaningful difference on those problems, in ways that contribute to their bottom line.”   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Sharks circle in on ridesharing safety fears

4:03AM | Monday, 20 April

Oliver Du Rieu, the founder of Melbourne-based La Mule, was confronted with the safety concerns all transportation network startups must grapple with when pitching on Channel 10’s Shark Tank.   In the latest episode, Du Rieu sought a $50,000 investment in exchange for 5% equity in startup La Mule, a marketplace where users can find fellow travellers to share the costs of road trips. Drivers can post a start and end point, the number of seats available for the trip, and the price of each seat. Travellers can then book a seat for the ride. La Mule then takes a 15% cut of each booking.   While the Sharks appreciated the concept, they did raise potential safety concerns, one shark, Boost Juice founder Janine Allis was particularly blunt.   “The reality is 99.9% of the population is fantastic. 0.1% is Ivan Milat,” she says.   It’s an important point, user safety is a problem transportation network startups like Uber have been grappling with. Fellow shark Steve Baxter queried whether or not Du Rieu had any mechanisms built in to address those concerns. According to Du Rieu it relies on reviews, a Facebook and email verification process, hardly a foolproof safety plan.   Eleven UberX drivers have been charged with operating a commercial passenger vehicle without a licence. But Du Rieu says La Mule’s drivers don’t require taxi licences simply because they are a marketplace for people to connect and share the costs of rides, rather than specifically setting out to earn money for giving people lifts.   He left the show without investment, encouraged to look into addressing those safety issues, but with a general endorsement from all the sharks that La Mule is an interesting idea.   Five months has passed since Du Rieu appeared on the show, and in that time it’s grown its network of Facebook followers from 1500 to over 3000 and has on average between 20 and 30 rides per week being facilitated on the platform. Over 100 rides have been organised since Shark Tank aired on Sunday night. Du Rieu has spent much of the past five months working to develop partnerships with businesses that could give La Mule a steady source of ongoing users and revenue, at the urging of Baxter, who has remained in contact with Du Rieu.   “We just need to prove to everyone that people want to use it, rides being posted on the platform and people sharing as many rides as possible. Whether or not that involves partnering up with someone that will help us get regular rides over a long period of time,” Du Rieu says.   “We did about a month of negotiations with investors in January. But we got to a point where we need to build some traction, really prove the concept, just to show that carpooling does work in Australia.”   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

National innovation agency and relaxed visa rules among recommendations to develop startup ecosystem: StartupAus report

4:35PM | Monday, 20 April

Australia still lacks the required conditions for a successful startup ecosystem, according to a report released today by peak not-for-profit group StartupAus.   While there is an explosion of startup activity globally, the second annual Crossroads report says it will take several years and bipartisan support to create the right environment for the Australian startup sector.   At the moment, the ecosystem is hampered by issues ranging from education and expertise to access to capital and regulatory environments.   The report recommends establishing a national innovation agency as well as relaxing visa restrictions in the next one to two years so local companies can hire skilled overseas ICT workers to meet the skills shortage.   In the medium to long-term, the local ecosystem needs an injection of young talent in order to boost the number of Australian entrepreneurs. This is critical because – despite the stereotypical view of startup founders being in their 20s – Australian founders are largely in their 30s and 40s and an individual’s risk-tolerance generally decreases over time due to family and financial pressures.   To address this, the report recommends supporting scholarship programs and student startup incubators so that more young people are aware that building startups is a viable career path.   Founder and chief executive of BlueChilli, Sebastien Eckersley-Maslin, told StartupSmart he thinks the biggest thing the startup community needs to build the right ecosystem is awareness.   “We need to make the community outside of the startup ecosystem more aware of what we’re doing so startups become part of the Australian ecosystem, not just the startup ecosystem,” he says.   “The best thing we can do as entrepreneurs within the ecosystem is be awesome and tell everyone about it. The more stories we have the more people will be inspired to come join the community, the more venture capital comes our way… It’s time to get out of the bedrooms and into the streets and tell people what we’re doing.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know.  

The EC’s case against Google is a bad application of outdated laws

4:17AM | Monday, 20 April

On one level, the European Commission’s argument with Google is unsurprising. The EC’s commissioner for competition, Margrethe Vestager’s job is to investigate possible breaches of EU competition law. That is exactly what she is doing with her official complaints against Google’s use of its Google Shopping service. Equally unsurprising, is the investigation of Google’s other possible breaches of its monopoly position with how it controls the use of its mobile operating system, Android.   One should also set aside the melodrama that accompanies such cases. News reports of the case have highlighted calls for the break up of Google as suggested by the European Parliament last year. The reports have also focused on the possible massive Euro 6 billion fine Google faces if the antitrust complaints are upheld. Finally, there is the fact that the case is the result of a conspiracy of competitors, led by Microsoft.   All of the drama however, masks what is going to be a protracted process that could take years, during which time the entire landscape that is being fought over could have changed, not once, but several times. Google themselves were at pains to respond to the accusations that they were harming consumers by pointing out that search was quickly being superseded, and that:   “People are increasingly using social sites like Facebook, Pinterest and Twitter to find recommendations, such as where to eat, which movies to watch or how to decorate their homes”   Whilst it may be true that Google has a monopoly on search of the Internet as a whole, that is certainly not the case when it comes to the “social web” which is well and truly dominated by Facebook, Instagram, Twitter and others. Likewise, Google may have dominated advertising on the desktop but that is increasingly not the case on mobile.   Law and trade policy operate on timescales that are always going to significantly lag technological change. As if understanding the full impact of an existing technology on consumers and competition was already not challenging enough, attempting to do this in the context of what will happen in even a few years is almost impossible. In fact, even determining monopoly in a technological market is not always straightforward. For example, even though Android controls over 80% of the world’s smartphone market compared to Apple’s share of 15%, in terms of mobile e-commerce, users of Apple’s mobile devices account for 5 times the value of Android users.   For all of the EC’s past actions against Microsoft, they were irrelevant in shaping what eventually happened in the market. The actions had no effect on Microsoft’s behaviours, and came as little-to-no benefit to consumers. As with the EC’s complaint against Android, the fact that software comes pre-installed does nothing to preclude a consumer’s ability to run alternative software.   The EC’s objections against Google again raises the more general issue that it is a futile exercise to use antitrust law to retrospectively try and influence the way the technology companies, and the digital economy as a whole, work. As with copyright and patents, the law has simply not been able to adapt and keep pace with the disruptive change brought about by technology and society at a global scale. It has led policy and law makers, and companies not wanting to adapt to change, to focus on the past and act as a break, rather than an enabler, of progress.   It would be a far better use of the EC’s time and resources if their energies were spent creating policy that enabled the digital economy that they profess to want rather than keeping their vision of it restricted to a time that has long since passed.   This article was originally published on The Conversation. Read the original article.

THE NEWS WRAP: Dutch prosecutors launch criminal investigation into Uber

4:26PM | Sunday, 19 April

Dutch authorities have launched a criminal investigation into Uber because the company is providing an illegal taxi service that violates a court order, according to Reuters.   The investigation is the latest setback for the ridesharing service in Europe. Last month a German court issued a nationwide ban on unlicensed taxi drivers with fines of up to $300,000 for violating the law.   The move saw Uber bowing to pressure and agreeing to pay for transport licences for its UberX drivers.   To date Dutch police have fined 23 Uber drivers more than $2000 for operating without a licence. In Australia, unregistered taxi drivers can attract fines of up to $7500. French senate supports law requiring Google to reveal its algorithm The French senate has supported a law that would require search engines to reveal their algorithms in order to ensure fair and non-discriminatory search results, according to TechCrunch.   The chamber’s amendments to a draft economy bill could also see search engines forced to include a minimum of three rivals on the first page of search results. Google, which owns an overwhelming chunk of the search engine market, has always kept its search algorithm top secret.   The draft legislation comes at a time when Google is coming under tough scrutiny in Europe for allegedly abusing its dominance of the internet to the detriment of competitors.   The French upper house will vote on the legislation and its amendments next month before it has the opportunity to be passed into law. WhatsApp reaches 800 million users worldwide Messaging platform WhatsApp has reached 800 million monthly users.   The company’s current rate of growth puts it on track to reach one billion users by the end of the year, according to The Wall Street Journal. The messaging app has grown by 100 million active monthly users every four months since August 2014.   Facebook purchased WhatsApp last year for just over $28 billion. Overnight The Dow Jones Industrial Average is down 279.47 points, falling 1.54% to 17,826.30. The Aussie dollar is currently trading at around 78 US cents.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Regional Queensland startups get a boost with ilab roadshow visits, Mentor Blaze coming to Cairns and Townsville

4:06PM | Sunday, 19 April

Entrepreneurs in regional Queensland are set to receive a boost, with ilab planning a series of Regional Startup Roadshow seminars in Mackay, Rockhampton, Gladstone and Maryborough, while Mentor Blaze events will run in Cairns and Townsville on the same day as Brisbane.   The Regional Startup Roadshow will be hosted by ilab director Bernie Woodcroft and MPT Innovation Group director Gary Morgan. They will discuss technology startups and how regional cities can establish successful ecosystems, along with the risks and opportunities that come with entrepreneurs developing technology-based business ideas.   The seminars will run between 7.30am to 9.30am in Mackay on April 27, Rockhampton on April 29, Gladstone on April 30, Maryborough on May 1.   “We are doing this to identify and promote startups in Mackay, Rockhampton, Gladstone and Maryborough. My goal is to get those guys involved in a statewide conversation about startups in regional areas,” Woodcroft says.   Woodcroft says he hopes the events inspire entrepreneurs in those communities to begin developing their own startup ecosystems. He cites 2015 StartupSmart Regional Startup Award winner SafetyCulture, as an example of a highly successful regional startup.   Along with the Regional Startup Roadshows, ilab is also running simultaneous Mentor Blaze events on April 23 from 4-6pm in Brisbane, Townsville and Cairns.   “Mentor Blaze is where we get a lot of mentors together in one place at one time with many different skills, including investors, founders, and experts in areas like legal, IP and tax,” Woodcroft says.   “We’ll have 10 mentors in Townsville, 10 in Cairns and 40 in Brisbane, and then close to double the number of mentees. So in Brisbane, we’ll have 30 mentors and 50 mentees. It allows people to road-test ideas in a concentrated timeframe with experienced mentors and it generates a really amazing buzz.   “The mentees can be students, parents – anyone really – at the ideas stage. It builds the ecosystem and networks, and we’ll do it in three places twice a year, and in five places next time.”   Startup Townsville organiser Richard Sazima told StartupSmart education and resources for small businesses are often not appropriate for startups.   He says while first-generation regional startups such as Safety Culture had to figure everything out for themselves, they can help second generation startup entrepreneurs to succeed faster through mentoring, support, infrastructure and investment.   “We’re trying to collaborate statewide with the startup ecosystems on the Gold Coast, Sunshine Coast, Brisbane, Cairns, Toowoomba and elsewhere. Any we’re trying to foster a larger ecosystem group including local government, educational institutions and the local chamber of commerce,” he says.   “So an event [like Mentor Blaze] really serves two purposes. One, it’s a great education event, and two, it’s a call to action. When entrepreneurs have problems, it’s a chance to talk to people who have gone through that same experience or have contacts who can help.   “We’re not a big centre – we can’t compare with Brisbane, Melbourne or Sydney – but we are catching up fast!”   Click here for more information about the Regional Startup Seminars is available here, and more details about Mentor Blaze are available on its official website.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

The health tech revolution will be televised: New accelerator offers $40,000 and broadcasting services

4:06PM | Sunday, 19 April

A new virtual accelerator program focusing on health tech startups is offering $40,000 in broadcast time and services in exchange for 7% equity, with the possibility of a further $40,000 cash in exchange for another 7% in equity.   The Rumpus Oz Innovation Challenge is a six-month accelerator program coordinated out of Little Tokyo Two in Brisbane, Fishburners in Sydney and either i9 or York Butter Factory in Melbourne.   Co-founder Leigh Angus told StartupSmart along with gaining access to experienced mentors, senior advisors and investors, participants will also be featured in a six-part observational documentary.   “It’s a documentary around the accelerator that focuses more on the characters in the startups than the people running the program,” Angus says.   “During the six-part series, there will be stories around topics such as co-working and angel investing. While we all speak startup, most of the general public aren’t familiar with these terms, and so the aim is to raise awareness of startup terms in the general community.”   The program will be shown on YouTube, with the organisers saying they’re also in talks with various broadcasters, and each episode will be an opportunity for the startups to showcase their products and services before they raise money directly from viewers through Kickstarter.   “We will also offer up to $40,000 – more for some and less for others – as we take the cohort through. We’ll isolate those that need the capital during the program,” Angus says.   Angus points out that along with some of the leading co-working spaces on the east coast, the program is backed by the main health tech meetup groups in Brisbane, Sydney and Melbourne.   The program also boasts an impressive list of advisors. They include Fishburners founder Peter Davison, iAsset president Scott Frew, muru-D/AWI/Pollenizer mentor Nick Gonios, RedEye founder Wayne Gerard, Health Tech Innovation Queensland founder Greg Beaver, NICTA UX design manager Hilary Cinis and St. Vincent’s Hospital’s Dr Pamela Blaikie.   However, some in the startup community have questioned the value of $40,000 worth of broadcast time, publicity and services in comparison to other accelerators that offer either $40,000 in cash, or services an early-stage startup would typically need, such as service development.   “The difference between this program and other accelerators is that most will get startups investment ready, then send them out to angel investors. But Australia has a fairly young angel investment community, and many startups end up spending a lot of time knocking on door,” Angus says.   “We’re trying to bypass the angel round altogether by getting products to consumers, and allowing them to fund the startups they like directly.   “Most smart entrepreneurs don’t just go to accelerators for money, go to accelerators for money, they also go for exposure and mentoring. So we’re offering them a more national network that’s more comprehensive in the advice they receive.   “We take our cohort from bootcamp to broadcast.”   The health tech focus of the first program follows in the footsteps of Innovyz in Adelaide and STC in Melbourne, which recently closed applications for their health tech accelerator programs. There is also an equity crowdfunding platform, called Healthfundr Australia, which is set to focus on the health tech sector.   Meanwhile, meetup groups in both Melbourne and Brisbane are booming in terms of attendances, while Queensland-based incubator ilab has recently hosted Australia’s first Startup Weekend for health.   Applications for the program close on May 3, with the bootcamp and initial filming on May 16 (Brisbane), May 23 (Sydney) and May 30 (Melbourne). The program commences on June 30, with an elimination round at the end of July, broadcasting scheduled for the end of September and program completion at the end of October.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Finalists in Startup Hero category shine through with big ideas

4:40AM | Wednesday, 15 April

Over the past two weeks, we’ve been taking a look at the finalists in each of the categories in the 2015 StartupSmart Awards. Today we examine the Startup Hero category.   The HIV/AIDS epidemic in sub-Saharan Africa, helping people with disabilities to find work, and aiding the investigation of crime are the three problems being tackled by the finalists in the Startup Hero Category at tonight’s StartupSmart Awards.   It’s been a big couple of weeks for finalist Enabled Employment. The Canberra-based startup, which helps employers tap into an underutilised talent pool of people living with a disability, recently won Optus’ Your Shark Tank competition and launched an entirely new platform aimed at employing defence force veterans.   Your Shark Tank judge and founder of Shoes of Prey, Jodie Fox, praised Enabled Employment founder Jessica May for finding a real gap in the market.   “Not only does Enabled Employment help those living with disabilities find work, it also acts as an advocate for their community and helps break down barriers,” Fox says.   Around 15% of Australians of working age (between the ages of 15 and 64) have a disability, according to the Australian Network on Disability. Australia ranks 21 of 29 OECD countries for labour force participation of people with a disability.   “People just don’t realise how amazing people with a disability are,” May says.   “All the research suggests they take less sick leave, are more loyal and will save you money. They’re an untapped talent pool.”   Joining Enabled Employment as a finalist for the Startup Hero category at the StartupSmart Awards are condom manufacturer HERO Condoms and police investigation platform My Evidence.   HERO Condoms is tackling the AIDS epidemic in Africa by helping address a lack of free quality condoms. For every condom sold it donates one to an African nation. It estimates over the next year it will donate between three and five million condoms.   Developed by policeman Tung Tran after he was ambushed and shot while attending a domestic dispute in 2010, My Evidence is a mobile app that collects digital evidence for investigations. It allows police to capture evidence on a smartphone or tablet and share remotely with colleagues.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Charity startup Shout for Good snapped up by ANZ Bank

4:46AM | Thursday, 16 April

Australian micro-donation platform Shout for Good has been snapped up by the ANZ Bank for an undisclosed amount.   The move comes at a time when major Australian companies and institutions, including the four major banks, are turning to the startup sector in order to create innovative products and get ahead of their competitors.   The acquisition follows Shout for Good’s $1 million raise last year in order to expand into the US market.   The startup has more than 150 charities on the platform and its app has been downloaded more than 90,000 times in Australia.   Co-founder and chief executive of Shout for Good, Jane Martino, told StartupSmart one of the msot important elements of business is being able to let go at the right time.   “It can lead to more substantial growth and benefit for you, the business and its customers,” she says.   “That is definitely the case in this instance. It is also the second time I have sold my business so perhaps that makes the process easier.”   Martino says ANZ’s focus on innovation and the social sector made the alignment between the two companies “exceptionally strong”.   “There is also opportunity to extend the platform into other regions where ANZ operates such as New Zealand and Asia which will provide instant growth that would have taken many years for Shout to build independently,” she says.   Chief executive of ANZ Global Wealth, Joyce Phillips, said in a statement the acquisition was made in order to make it easier for the bank’s customers to donate to charities.   “We wanted to provide a way for our customers to give to charity that’s easy, relevant, simple and transparent,” she says.   “Shout makes donating relevant for everyone by relating donation amounts to everyday purchases such as ‘shouting’ a friend a coffee – which has proven to be successful because it’s so simple.”   Phillips says Shout was especially attractive to the bank because it was fully optimised across desktop, mobile and tablets.   As part of the acquisition, Martino and Shout’s chief technology officer Charlie Carpinteri will join ANZ.   Shout has partnerships with Australian charities including Cancer Council Victoria, Breast Cancer Network Australia, Kids Helpline and the Heart Foundation.   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

500 startups’ AgFunder uniting a fragmented marketplace

4:22AM | Wednesday, 15 April

AgFunder, part of 500 Startups’ 12th batch, wants to make it easier for agricultural technology startups to source funding.   Australian entrepreneur Michael Dean, the co-founder of agriculture technology investment platform AgFunder, hopes his startup will help speed up the development of technologies that will be necessary to feed the world’s fast-growing population.   “Agriculture is by its nature a very fragmented marketplace to invest in as obviously the money is located in the cities and quite often the developers are based in the country where the farmers are,” he says.   “Connecting the two has traditionally been a very difficult exercise. By creating an online platform – a precursor for an investment bank – we’re able to offset the fragmented nature of the market.”   Dean says most of the technologies tipped to become game-changers in the near future are already being utilised or tested in agriculture.   “If you look at agriculture and all of the new technologies that are emerging – whether they be robotics, internet of things or big data – the whole precision agriculture sphere of development is really being reflected in agriculture technologies,” he says.   “We’re talking about Google coming up with driverless cars. Well, we’ve had farmers turn to driverless tractors. We need to feed probably more than 9 billion people by 2050 with no more land and no more water – probably less of both. So it’s absolutely important that we are applying these technologies to agriculture.”   The best thing about 500 Startups, according to Dean, is the “collegial” nature of the program.   “The team make a big thing about talking about their 500 family and you really do feel like a family,” he says.   “It’s been very useful to have that exposure to previous batches and just benefit around their experience and knowledge, pitching and people we should be talking to.”   When asked what his advice would be for entrepreneurs wanting to try their luck at getting into the 500 Startups program, Dean says having a good team is crucial.   “The important thing is to make sure you’ve got the right team,” he says.   “A good team is crucial and most investors invest in a team [rather than an individual]. You need to understand your market, you need to understand your product and express that when you’re pitching. You should have a clear vision of where you’re going as well – that’s not to say you might not pivot once you get into the accelerator because that does happen – but the important thing is being clear with your objectives and what you’re doing.”   500 Startups has invested in more than 800 companies from more than 40 countries.   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

Startups need to sell more than a product

4:44AM | Wednesday, 15 April

Over the past two weeks, we’ve been taking a look at the finalists in each of the categories in the 2015 StartupSmart Awards. Today, we examine the Best Startup category.   Startups need to do more than just sell products, according to the founder of an online marketplace shortlisted for the 2015 StartupSmart Awards.   Richard Kelsey, who co-founded Beer Cartel with Geoff Huens in 2010, told StartupSmart the key to scaling lies with giving more value to customers in order to retain them as well as acquire new ones.   In the case of Beer Cartel, that means sending out a monthly newsletter with the latest brews and educating people about how to make their own craft beer.   “Two years ago we had say around 400 beers that we stocked and now we have around about 1100,” Kelsey says.   “So we’ve grown at the same time sales have grown. A lot of it comes down to marketing – we’ve really focused on building up our customer base.”   The startup is on track to bring in $1.2 million in revenue by the end of this financial year.   Kelsey says he would advise entrepreneurs who are thinking about launching a startup or have an early-stage company to invest in marketing and pay attention to the lean startup method.   “I’d say try and grow awareness and interest in your product through marketing as cheaply as possible,” he says.   “You can spend a lot on marketing but you can also be creative and do things a lot cheaper. Across everything you do there is probably a way to do it leaner – you just have to find out how to do it. The old way of doing things is a bit more expensive and can also time a bit more time, so if you can try and find a shortcut that both cuts cost and helps you do things much more efficiently, definitely do that.”   Joining Beer Cartel as a finalist in the Best Startup category at the 2015 StartupSmart Awards are e-commerce platform Temple and Webster, media startup I Quit Sugar, hardware startup Powerpod and app developer Buzinga.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

THE NEWS WRAP: On-demand marijuana startup backed by Snoop Dog raises $US10 million

4:30PM | Tuesday, 14 April

A San Francisco startup that delivers medical marijuana to customers on-demand has raised $US10 million in Series A funding in order to launch nation-wide.   The capital injection was led by DCM Ventures, with 500 Startups and Fresh VC also participating in the round.   Founder and chief executive Keith McCarty said in a statement the funding will allow the company to fill 50 job vacancies across all areas of the business.   “We want to thank our early patients and partners in the San Francisco Bay Area who have contributed to our success to date,” he said.   “These major milestones are only possible with their support. The new funding enables us to expand rapidly by further developing our technology, building new dispensary partnerships and scaling our team for hyper-growth as we expand nationwide where marijuana is legal.”   Apple says no to selfie sticks   Apple is banning selfie sticks from this year’s Worldwide Developers Conference, according to Apple Insider.   “You are not permitted to make audio or audiovisual recordings of WWDC or take professional photographic or video equipment, or wearable recording devices into Moscone West or Yerba Buena Gardens,” the event’s attendance policy reads.   “In addition, you may not use selfie sticks or similar monopods within Moscone West or Yerba Buena Gardens.”   Pocket raises additional $US7 million in capital   Pocket has raised an additional $US7 million in funding in order to expand its team and launch in products, according to Venture Beat.   The startup allows users to save content from across the web – including social media platforms such as Twitter – and read it later or keep on-hand for future reference.   Pocket has raised $US14.5 million to date.   Overnight   The Dow Jones Industrial Average is up 59.66 points, rising 0.33% to 18,0365.70. The Aussie dollar is currently trading at around 76.7 US cents.   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

Want to share a lift to work? This Perth startup is here to help

4:08AM | Tuesday, 14 April

A new ridesharing service has launched in Western Australia with the aim of pairing up people who regularly drive along a similar route.   Hitch a Ride, a new startup based in Perth, hopes to save people money and reduce traffic by getting people to share lifts and split the costs of petrol and parking.   Unlike with on-demand services such as Lyft and Uber, payment is optional and negotiated directly between the driver and passenger.   “It’s more of a social network than just an on-demand service like Uber,” co-founder Ben Rattigan told StartupSmart.   “You can log either a hitch or a drive and then once you do that, it comes up for your Facebook friends and if they are going in the same direction you can organise when and where to meet up and you can share a ride.”   Rattigan says while he is aware of Lyft Line – a US service for people who want to share a car with someone going in the same direction – the idea for Hitch a Ride came about when one of the co-founders needed to get home but couldn’t.   “He had one-too-many drinks and couldn’t drive home,” he says.   “There were so many people driving past but he had no way to let them know he needed a lift.”   While concerns have been raised over people getting into strangers’ cars through apps such as Uber, Rattigan says Hitch a Ride is simply helping to facilitate what already happens in the community.   “Most people want to ride with people they know or have some sort of introduction to through Facebook or whatever social media it is,” he says.   “We’re in the very early stages… we need to get the Android version built and improve the user experience. Once that’s all done we’re going to go out and raise more funds for our marketing budget and see where it takes us from there.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

BlueChilli launches in Melbourne with new recruits

4:54AM | Tuesday, 14 April

Sydney-based accelerator and venture capital fund BlueChilli has launched it Melbourne office and scooped up a general manager and community manager to head-up its Victorian operations.   The Melbourne office will be based out of co-working space The Cluster with the aim of growing the city’s healthy startup scene by bringing entrepreneurs without a technical co-founder into the ecosystem.   BlueChilli founder and chief executive Sebastien Eckersley-Maslin told StartupSmart the move south is the latest step in BlueChilli’s growth strategy, having previously closed a $5 million funding round led by Myer Family Investments and Simon Hackett last year.   “BlueChilli’s model is now at a stage where we can support a large number of startups,” he says.   “We’ve got our model down pat and started 55 companies. Now it’s about getting our model into other areas and communities and supporting them and building awesome startups.”   The next step for BlueChilli is to take the business model to overseas markets.   “BlueChilli is in negotiations with a number of existing incubators and accelerators overseas for licensing our model and taking the BlueChilli concept to a global audience,” Eckersley-Maslin says.   “The idea is having a full network of mentors and funding all around the world supporting the startup no matter where they were funded, seeded or grown… So truly building a global network of entrepreneurs.”   Eckersley-Maslin describes the two employees heading up the Melbourne operations – Sophie Hose and Ren Butler – as “kick-arse” and “awesome”.   Speaking to StartupSmart this morning, Sophie Hose – general manager of Blue Chilli Melbourne – said the accelerator will host “chilli chats” every Tuesday afternoon.   “It’s extra support for early stage founders who are navigating the difficulties of starting up either alone or with a small team and want a founding board to help them succeed,” she says.   “As part of having a really healthy startup culture in Australia we need to have a lot of early stage startups to put through that pipeline. So supporting people with ideas and helping them make decisions and allocate their resources early is key for us to building the ecosystem the whole way through.”   Hose says having an all-female team in Melbourne will be “an interesting experiment” to see if that will translate into more female founders coming out of Melbourne.   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

How to get into an accelerator: The three T criteria

4:19AM | Tuesday, 14 April

You’ve got a global vision for how to change the world, a few friends who’ve heard the pitch and love it. The team is in place, and there might even be a few early customers. You know it could be the next big thing, as long as you get some good advice and a couple of lucky breaks along the way.   Accelerators take startups in their infancy and try and help get them to the stage where they’re ready to take investment and take over the world. But typically less than 5% of teams that apply to an accelerator get selected. What can you do to be in that select group?   Typically funding is granted to startups that excel across at least one of the following three criteria. Team A great team makes a world of difference. Here we are looking for people who have a history of working together and getting results. Founders who are technically capable, who can point to a portfolio of things they’ve built or designed. Previous startup experience is a big plus. Basically we’re backing the team in to come up with an interesting solution to one of life’s many problems. Technology Startups which get in on the back of a new technology are the least common for accelerators. Primarily because unless the technology is in itself a standalone solution to a problem, it normally involves a bunch of joint ventures and partnerships, dealing with firms who are slow moving and of an ethos the polar opposite to startups.   Inventors of new technologies tend to come from research institutions such as universities, the majority of whom are more interested in continuing to invent than founding a company. Note that by ‘new technology’ I refer to something that has not been invented prior, not the novel assembly of ‘off the shelf’ products in the way Dell got started in computers. Traction Traction is the holy grail for startups. It is proof – to a degree – that you’ve made something people want. Traction is evidence that your team is functional enough to get something done, and into the hands of your users.   The question then is what sort of traction do you need to have a shot at an accelerator? The answer depends on what you’re working on, but generally falls into either users or customers. If it’s the former, a good metric is 100 users who love you. Meaning there’s 100 people out there who would be devastated if you’re startup ceased to exist tomorrow. It can be hard to know that in advance, so a good indication is how active these users are in using your product/service. If they’re using the product or service day in day out it’s a pretty good indication of the affirmative.   Conversely, if your startup solves a business problem then you should have a handful of paying customers. It doesn’t matter if yours is a beta version full of bugs, or a pilot program with only one hundredth of the benefit you plan to deliver. If you’re solving a business problem make sure you charge your customers at least a token amount. Check out How I Got My First 3 Customers as a good reference point for getting started.   Funnily enough, team and technology take a lot longer to accrue than traction. You can go out tomorrow and hustle for traction, the same cannot be said for team and technology.   If you’re working on a startup and feel you would benefit from going through an accelerator, come check out our AngelCube information night, in Sydney on Wednesday, April 15. Registration here.   Amir Nissen is program manager at AngelCube. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Australian web design startup Elto acquired by GoDaddy

4:41AM | Tuesday, 14 April

Aussie web design marketplace Elto has been snapped up by domain registration company GoDaddy for an undisclosed amount.   GoDaddy – which has 12 million customers worldwide – raised $605 million earlier this month after listing on the New York Stock Exchange.   The acquisition comes as the company expands its customer offerings and aggressively targets small businesses and startups.   Elto was founded in 2012 as way for small businesses to make simple changes to their website for a set fee.   Originally called Tweaky, the startup later rebranded, moved to San Francisco and closed an investment deal with Blackbird Ventures.   More than 60% of Elto’s customers are based in the United States, along with all of the company’s major partners such as WordPress.   Chief executive of Elto, Ned Dwyer, told StartupSmart he and his co-founder PJ Murray decided to be acquired by GoDaddy because of their “huge customer base” of small business owners.   “It’s also about the team, the people who are running GoDaddy these days,” he says.   “In the last couple of years GoDaddy have been making big bets on top talent through acquisitions and hiring from companies like eBay, Intuit and Amazon – I get to work with some incredibly smart people every day.”   Dwyer says he and PJ will be joining the team at GoDaddy, and while he is excited to start working on building “the biggest marketplace we can” it is still bittersweet to sell something they have been working on for so long.   “We would have liked to stay as an independent company but we also couldn’t turn down this opportunity,” he says.   “It’s also nice to be able to focus 100% on building a great product experience with no distractions from things like balancing the books, managing payroll and the million other things you have to do as a founder that keep you from delivering value for customers.”   The deal has been in the works for some time, with Elto putting a halt on accepting new projects at the start of this year.     General manager of hosting at GoDaddy, Jeff King, said in a statement the company was excited to announce its latest acquisition.   “Ned and PJ have built something people truly want at Elto — and something that GoDaddy’s small- to medium-sized business customers need,” he said.   “We’re thrilled to welcome them into the GoDaddy family.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

One word of advice from Eric Ries

4:14AM | Monday, 13 April

Some years ago, I was lucky enough to hear Eric Ries speak. I was just embarking on my founder journey, and he’d written the business bible, The Lean Startup. After he finished, I bought a copy of the book and lined up to have it signed. When I reached the front, I told him that I’d just started a tech company. What was the one piece of advice he could give me? He looked at me, smiled and wrote a single word in the dust jacket.   Focus.   I walked away shrugging my shoulders. Surely he could come up with something more profound than that. Wasn’t he missing the point?   That was in 2011 and I was doing everything but focus. I’d come up with an idea for a business that I thought was brilliant (Not quite this one, although it bore the same name). Better still, everyone else thought it was brilliant too. I’d raised money from a range of investors who all had suggestions and contacts. Before I knew it, we had someone trying to launch Posse in London, affiliate arrangements with more than 10 partners, media deals and a white-label opportunity with an insurance company. It felt like we were on fire.   The truth was that I had no idea what I was doing. I was good at selling a dream and everyone was buying in. I thought that interest and excitement must mean that I had a great business, ignored warning signs that our model wasn’t working, and propped up the story by securing more and more deals.   Fortunately we were able to sell that business and it still runs today under the name ‘FutureFans.com.au’. Next time around I was determined to take Mr Ries’ advice. But focusing is not always easy.   I’m naturally an optimist. I love to say ‘yes’ – of course that’s possible. Optimism is important for entrepreneurs but it can also be a hindrance. Learning to say ‘no’ has been one of my toughest lessons.   Right now, saying ‘yes’ is more tempting than ever. We’ve just merged our business with Beat the Q; we’ve had media attention, huge sales and product momentum; and everyone has an idea for how they could fit in. I regularly arrive to an inbox of more than 200 emails from the night before.   Just two weeks ago we were approached by a corporate to run a major promotion in conjunction with a charity. The whole thing would have cost us $10K but would have generated lots of users and profile. Naturally, everyone in the office (including me) was excited. We had only two weeks to pull it together but, to an optimist like me, it was possible.   Behind my excitement I heard Eric Ries’ advice ringing in my ear. We hadn’t planned on any marketing activity this year. We have product, recruitment and the development of processes to think about. We also didn’t have money in the budget – I’d have to move resources from something else.   A week before we were due to start I called my business partner in and had the tough conversation. Even though this was a great opportunity, we shouldn’t do it. We had to focus. Fortunately he agreed instantly, and we broke the news to the rest of the team. I was surprised that in the context of ‘focusing on our plan’ they also understood.   In this instance I’m sure we did the right thing. The challenge comes when it’s unclear. Often, game-changing opportunities have arisen from unexpected meetings. But no one can afford to attend random meetings in place of getting things done.   I’ve become much better at focusing now I’m focused on it. This means doing fewer things than I’d like, prioritizing, and doing one thing at a time. And a focused approach creates a more motivated team than chaotic optimism. People like order, and it’s rewarding to complete things one by one.   Follow  StartupSmart  on Facebook, Twitter, and LinkedIn.

Agtech key to feeding the world by 2050

4:51AM | Monday, 13 April

Agricultural technology startups are the key to feeding the world’s booming population, according to the founder of a Brisbane-based startup specialising in helping farmers maximise their crop yields.   Paul Turner, the founder and chief executive of data processing and analytics startup AgDNA, told StartupSmart the intersection between technology and crop producers is a space to watch.   “At a macro level the industry is having to double production output between now and 2050 as we go from seven billion to nine billion people,” he says.   “All the forecasts are saying we’re going to have to double our food output but we’re not doubling land. Farming has to get more productive and do more with less. To get that double production you have to get smarter, make smarter decisions and maximise the yield in every single hectare.”   That’s where AgDNA comes in. According to Turner, his startup helps farmers make smarter decisions and not only increase their yield but also minimise their production costs in order to become more efficient and profitable.   Launching in 2012, AgDNA has since pivoted from a record-keeping website to a data processing platform that sends information straight to farmers’ mobiles. The company has raised more than $400,000 in seed funding and is now looking for a Series A through American-based investment platform AgFunder.   Despite agriculture being perceived as a very traditional industry, Turner says the sector is very innovative.   “The large manufacturers have done a fantastic job of imbedding all of these sensors into the tractors, combine harvester sand sprayers and now they have the means of capturing all that data,” he says.   “We’re moving from a world of human-generated data to machine-generated data. So no longer does a farmer have to sit in the evenings and type all of his records into a spreadsheet… now it’s coming off a machine. It’s all of this data that’s coming through 24-7 and now it’s creating a lot of value but creating its own problems with data overload.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

Australian bitcoin exchange igot acquires Kenyan exchange TagPesa

4:08AM | Monday, 13 April

Australian bitcoin exchange igot is looking to Kenya for its next stage of growth.   The Adelaide-founded startup recently acquired Kenyan crytpocurrency exchange and remittance gateway TagPesa. The terms of the deal were not disclosed. In addition the startup has launched a new merchant feature that allows businesses to accept bitcoin payments from anywhere in the world, and have them quickly converted to a fiat currency. Merchants pay a 0.5% transaction fee.   Igot already enables users to buy and sell bitcoin, and pay bills with bitcoin. Although the latter feature is only available in Australia and the number of people using it are in the hundreds, not thousands, according to founder Rick Day. But igot’s key focus is on remittance, and it’s TagPesa’s country of origin that made it an appealing acquisition.   “TagPesa has done some great groundwork in Kenya. For igot to launch in Kenya it was important that we have local partnerships and resources in place. TagPesa offered both,” Day says.   According to the Central Bank of Kenya, remittance inflows to the country totalled $US123 million in February. The average remittance transaction costs between 5% and 9%, igot charges 0.5%.   The success of mobile payments system M-Pesa, means Kenya’s mobile payment system is more advanced than many developed nations. Users of igot are able to cash out using M-Pesa’s mobile payment system.   “The remittance market in Kenya is huge and largely untouched by bitcoin companies,” Day says.   “Igot offers a global transfer service that uses bitcoin as the backbone. We’re present in 40+ countries with local banking relationships. For verified accounts, we’re able to send our users to send money from country A to B using igot and the bitcoin network.”   Day says the startup has not received any venture capital but is talking to investors and is “very far” along in the process.   “Our revenue model is very solid and we will continue to grow the company with or without VC investment,” he says.   However, CoinDesk reported igot received funding from US entrepreneur and investor Jesse Chenard last year. Day did not respond to a request for clarification prior to publication.   A quick scan of Reddit, finds a number of customer complaints, the vast majority of which have been resolved and revolve around delays in withdrawing money. Day says it’s a by-product of the important task of complying with anti-money laundering laws.   “As an online bitcoin exchange, it is challenging for us to know legitimate customers from fraudsters. We’ve stopped over $1.2 million worth of frauds in the past few months. Unfortunately, some legitimate customers get caught in this additional verification process and it can definitely be frustrating. We’re trying to improve our internal process to provide a seamless service to our customers.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

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