Aviation app developer Avsoft is gaining altitude across Australia, New Zealand and the US following an investment from entrepreneur Simon Hackett, with the company recently releasing an entry-level version of its CASA-approved app for Android devices. Avsoft chief executive Bevan Anderson says before the company’s AvPlan EFB iPad app, pilots used to carry bags filled with flight and gadget manuals. “Traditionally, pilots did all their flight planning using rulers on maps. They used rulers and protractors to measure distances and headings to fly. They then needed to manually take into account winds and other factors when flight planning,” Anderson says. “All this information, maps, airport diagrams and others then needed to be carried into the cockpit. Depending on the flight to be undertaken, this could be kilos of paper.” Following the release of the Apple iPad in April 2010, Anderson started thinking about how a flight book could be compressed into next to no weight in the form of an electronic flight bag app, or EFB, for the new device. “I imagined an app on the device which replaced my pilot’s kneeboard. On my kneeboard I clipped my flight plan on one side and the maps, charts and airport information used for the flight on the other. AvPlan EFB was to be an electronic replacement for this, and that is what it has become (and a whole lot more),” Anderson says. “These days, AvPlan EFB replaces all this, plus more calculations and other performance optimisation functionality in a small device weighing 100s of grams. We can then take it everywhere with us, so no matter where a pilot is, we have all the tools at our disposal. Over the past few years we gained approval from CASA for pilots to use AvPlan EFB instead of carrying all this bulky paper.” The app came to the attention of Australian entrepreneur Simon Hackett soon after he purchased his Pilatus PC-12 aeroplane. In November last year, Hackett invested in a 40% stake in the company, allowing it to expand overseas. “As he got familiar with it and saw what we had achieved, he reached out to us and offered us some investment to assist us to add capability and to grow the product into new markets. Since Simon came on board we have expanded into the United States and New Zealand, and begun the process of bringing AvPlan EFB to a new platform, in Android,” Anderson says. Hackett explains that a key distinction between AvPlan and its rivals is that it began life as a flight planning and flight management application for high end/professional/commercial pilots. “It offers functions that are extremely sophisticated, and that are hugely valuable to this type of pilot. It also works wonderfully well right down to a 'weekend warrior' flying his two-seat sports aircraft to the next airfield for a Saturday BBQ,” Hackett says. “The latter usage model is a perfect fit to our 'Lite' (entry level) version, and the software then lets you unlock more and more features via additional/optional subscription packs, to turn on all the professional pilot tools if you need them. “Because we started life at the high end, AvPlan does these sophisticated things really well (by design, and by intent). Some of our competitors started out as a cheerful tool for the weekend warrior and have grown more sophisticated features later, and in a far more haphazard manner – and we think the result is far less effective than our 'designed-in' sophistication. “In effect, we started at the high end of the industry and we're reaching down toward simpler mission support, where our competitors started simple and have bolted stuff on over time to climb 'upward' to the harder stuff. We think the way around we did it creates a better outcome.” The new Android version, dubbed AvPlan Lite 1.0, is an entry-level version of the app available as a free one-month trial from the Google Play store, with a full subscription costing $69 per year in Australia. “We only exist today as the companies who produced flight planning software for the PC never adapted their businesses when mobile devices began to appear,” Anderson says. “This example is a lesson to us to never rest on your accomplishments, and never bet your business on what is currently the big thing. Always look for new opportunities and respond to market demands, and in our case, the market demands multiple platform support.” “We certainly feel that we have only just begun. With what we are doing, and with the assistance of our fantastic industry partners we expect to see mobile devices bringing more efficiency to aviation: A future where aviation is more accessible to existing and new pilots.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Local services marketplace Oneflare has secured an additional $1 million in funding as the service begins preparations for international expansion. It comes after a group of three principal investors, Les Szekely of Equity Venture Partners, Garry Visontay of the Sydney Seed Fund and Dr Jeffrey Tobias of The Strategy Group, invested $500,000 into the online marketplace in May of last year. Founder Marcus Lim told Private Media that since then, Oneflare has seen rapid growth as consumers looking for local services increasingly turn away from traditional print classifieds. “We’ve grown 300% over the past 12 months, as people leave print classifieds behind as they become obsolete. We add a lot of value for customers and unlike print classifieds we provide a clear return on investment for businesses,” Lim says. “We’re a marketplace for local services, such as cleaners, electricians, plumbers, removalists, painters, accountants and gardeners. A consumer visits our site with a job that needs to be done, and then we package that info up and send it to local service providers. “The consumer gets several quotes and chooses the most suitable provider for them. Then when the job’s done, the consumer can provide feedback which we pass on to the service provider. Since launching in 2011, the service has grown to 50,000 businesses registered in over 200 categories with almost 500,000 visitors per month. Seeing the rapid rate of growth, Lim says Oneflare’s three principal investors have poured an additional $1 million into the business, bringing the total amount raised to $1.5 million. “The three main things we’re looking at funding is international expansion, hiring more staff and scaling our sales and marketing team,” he says. In terms of international expansion, Lim expects Oneflare to launch in the UK within the next 12 months. “We’ve identified the UK as the biggest opportunity for us at the moment. It has a market three times the size of Australia’s, and it’s also similar in terms of language and how trades and services are handled,” he says. “For the past three-and-a-half years, we’ve refined our user acquisition offering. Past of what we’re looking at is that we can scale across countries. So we’ve set seven KPIs for our UK expansion, and once we’ve hit those, we’ll look at other overseas markets.” “The US is crowded marketplace and many of our counterparts are secure in their positions. New Zealand is geographically the closest market to Australia, but online, that’s not really a relevant consideration. “The UK has two times the market size of Canada, so the highest yield in terms of reward for effort.” Aside from its international plans, it also wants to grow its share of the local market. “We had a very lean operation and have been ramping up recently. We’ve had five hires in the past month,” he says. “We want to become the most trusted source for high quality local services in Australia.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Perth coworking space Spacecubed has successfully raised over $50,000 in a crowdfunding campaign to open up a new space on level nine of its main St Georges Terrace venue. Founder and chief executive Brodie McCulloch told Private Media the additional space, aimed at larger teams, comes as Perth’s startup scene continues to boom. “We’ve been pretty blown away by the interest. And it’s been interesting, because we’ve had a couple of bigger sponsors, for example PwC have sponsored an idea wall and Optus has sponsored a phone booth,” McCulloch says. “But it’s otherwise mostly been entrepreneurs and individuals who like what Spacecubed is doing and have contributed small pledges of $100 to $200.” Spacecubed first launched in September 2012 as the first coworking space in Perth, with the aim of creating a central hub for the city’s startup community. In August of last year, it expanded by opening a second coworking space down the road from its first, at 131 St Georges Terrace. “Spacecubed has been growing steadily for about two-and-a-half years now. In that time, we got a lot feedback saying they wanted a space for larger teams of five to 10 people,” he says. “The other consideration was that we wanted it to be in the same building. So we’ll have 140 entrepreneurs and innovators working from our building, at 45 St Georges Terrace. We now have 500 members from a range of social, environmental, technology and creative industries. “[Level 9 is] another 500 square metres of space with two meeting rooms, four board rooms, another kitchen and good views of the river and spaces for small teams with some coworking space. There will also be enough space for 70 teams.” Spacecubed is increasingly being used by corporates, not-for-profits and government agencies, such as iiNet, Landgate and AngliCare WA. According to McCulloch, increasing corporate interest in innovation is providing a key boost to Western Australia’s startup scene. “Bigger companies in Perth – the Rio Tintos and RACs – are looking at innovation, and how to facilitate and collaborate in innovation with the startup communities. “Recently, Wesfarmers’ chief executive was asked with their biggest competitor is, and he said it’s Amazon. So they’re starting to see the need to understand how the market is changing.” McCulloch cites the recent RAC SeedSpark program, a joint program between the Royal Automobile Club and Spacecubed, as an example of how corporate interest is helping to boost the WA startup community. “RAC SeedSpark looked at how to engage people through mobile apps. And rather than build their own, they put out a challenge around five categories, They had 200 interested people submit 50 ideas submitted, and nine finalists presented their idea to a panel of experts.” “The idea that was selected was Today We Learned. It’s an app that allows teachers to talk to 50 parents in just 60 seconds. It’s not an idea that the RAC would have come up with on its own, and yet it fits in with learning and education, which is one of the RAC’s central missions.” While some entrepreneurs have already begun using the new space, the official launch event for Spacecubed Level 9 is coming up on November 5. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The Victorian Labor Party has promised to establish Start-Up Victoria, an independent statutory authority that will support startups, should they be elected to government. The commitment sees Labor promise $60 million over four years to fund the project, which will be administered by the Premier’s Jobs and Investment Panel. Opposition Leader Daniel Andrews made the announcement while speaking at the Australia-Israel Chamber of Commerce recently and says Start-Up Victoria will have an independent board that will bring together business leaders, vice chancellors, entrepreneurs and experts. “Start-Up Victoria will take our best ideas from conception to completion, from mind to market,” he says. “It will help nurture our most promising proposals into life. If you visit the Technion and the Weizmann Institute in Israel, you know for sure that this is where the world is headed.” Startup Victoria is not to be confused with Startup Victoria, the not-for-profit organisation dedicated to building and supporting Victoria’s startup ecosystem. Startup Victoria has over 4000 members and received $100,000 in seed funding from the state government when it launched in April. A spokesperson for the Victorian government says it has already been providing a wide range of assistance to the industry. “The Coalition government has a commitment within the Digital Economy Jobs for the 21st century statement to establish a Digital Economy Ministerial Advisory Committee (due Q1 2015), to advise on the development of the digital economy, including the development of digital startups and entrepreneurs,” the spokesperson says. “Disconnected Labor thinks throwing taxpayer dollars at public servants to write businesses cases will equate to a startup ecosystem. This is another Labor policy thought bubble and it shows they can’t be trusted with people’s money.” Startup Victoria co-founder and board member Scott Handsaker says the organisation “warmly welcomes” the Victorian opposition showing its support for the Victorian startup industry. “Melbourne has a fantastic opportunity to become an entrepreneurial cluster if both the community and the government of the day work together,” he says. “Startup Victoria looks forward to working with either side of the government after the election to help Melbourne become a world class startup ecosystem. “The choice of name is perhaps a little confusing, but we are confident that can be worked out. Ultimately we care more about the policy and what it can do for startup founders in Victoria. Anytime we can get politicians talking about startups and devising policy to help them, it’s a good thing.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Entrepreneurs and developers will be able to quickly test their ideas and easily reach an international market thanks to new online tools launched today by digital and accounting solutions company Intuit. The new developer.intuit.com site makes it possible for developers to test an idea for a new app by working with sample code and trying it out on Intuit’s QuickBooks Online platform within 15 minutes. Intuit Australia managing director Nicolette Maury told StartupSmart the new software will save developers a significant amount of time in testing their product. “In the past it can historically take a developer anywhere from a couple of days to weeks to develop an app and go through the processes of getting it tested and online,” she says. “Developers spend a lot of time upfront on something they’re not sure is going to work.” Once an app is built, the company’s software allows developers to publish live on the new apps.com within two weeks. Maury says the new apps.com platform will allow developers to reach a global market – something that has traditionally been difficult to achieve. “As we know, it’s hard for developers or innovators – especially if they’re starting up a business for the first time – to start accessing customers,” she says. “We know we have a thriving community of developers and innovators. Rather than investing all this time and energy and then trying to break into the US market, they can have a product that is available to global small businesses rather than just the market they’re in.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The Australian Private Equity and Venture Capital Association has welcomed an indication from the federal government that changes will be made to the Significant Investor Visa to encourage more investment in venture capital. The Significant Investor Visa currently provides a pathway to permanent residency for overseas investors who have an eligible investment in Australia of $5 million for at least four years. The Industry Innovation and Competitiveness Agenda stated the government’s intention to reform the visa program so as “eligible investments” align with the government’s “national investment priorities”. Trade and Investment Minister Andrew Robb has now indicated that venture capital is one of those priorities. He told The Australian the government has concerns that under the current scheme investments are going to low-risk government bonds and as a consequence “Australia is getting nothing out of it”. “My view is we should channel investment into areas of relatively higher risk,” he says. “In those areas, the few hundred million additional dollars invested into venture capital space, for instance, would be transformational; it would make a real difference.” Australian Private Equity and Venture Capital Association head of policy and research Dr Kar Mei Tang agrees. She says, for many years, Australia’s startups have been increasingly squeezed for capital as traditional investors decreased their exposures to high-risk ventures over time. “Every year, Australian venture capital and private equity managers see a strong pipeline of startups, research-driven ventures and innovative small businesses that have the potential to be our future economic drivers,” Tang says. “But many of these promising young businesses and entrepreneurs struggle to secure funding because that kind of risk capital is in short supply here in Australia. “The government’s move to reform the Significant Investor Visa rules to channel new investment capital to venture capital and small business is a welcome move. Even if a small proportion of these funds are invested into Australian venture capital to back more commercialisation activity, this will be a good start towards helping to grow the ‘D’ in ‘R&D’.” Blue Sky Venture Capital investment director Dr Elaine Stead says the industry shouldn’t count on such a boost until the full details of such a scheme emerge. That said, she agrees with Robb, that if such a reform was to result in a “hundred million additional dollars into the venture capital space” it would have a huge impact. “I do think there are more companies that are fundable than there is available venture capital. And the amount of VC funding in the (Australian) market at the moment, I’m not sure exactly what the money would be, but it’s probably in the order of $200 million in total active VC funds,” she says. “So funnelling that sort of money into the system would be transformational.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Telstra-backed accelerator muru-D has announced the 11 startups that make up its second class, and they’re the most diverse batch of entrepreneurs co-founder Annie Parker has ever been involved with in such a program. The 11 startups come from a range of industries and include education platforms, a surfboard manufacturer that uses 3D modelling and a digital marketplace for freight transporters to sell unused capacity. The teams that make up those 11 startups include three female chief executive officers, two female chief technical officers and founders from China, Argentina, Brazil, Zimbabwe, the United States, the United Kingdom and Australia. “The diversity part of it is really unique,” Parker says. “I’ve done goodness knows how many of these, this is my 14th run through (an accelerator program), and this is very easily the most international I’ve ever had.” Lean startup methodology says it’s important for startups to aim global from day one, and Parker says Australia’s startup ecosystem needs to do that too. She’s practising what she preaches at muru-D. Of the startups that applied, more than 20% came from overseas, some from as far as Silicon Valley and India. “The message is getting out there, through our mentor network, which is global, and that bodes very well not just for our startups, but also for the health of our ecosystem,” Parker says. “Yet again, we’ve been able to uncover world class entrepreneurial talent and are delighted with the quality of applicants coming into the academy. We’ve seen just how significant this experience has been for our first round graduates and we can’t wait to get class two underway.” Muru-D takes a relatively modest 6% stake in companies in exchange for $40,000 in funding and access to its network. Parker says that, combined with the fact it’s backed by Telstra and as a consequence doesn’t have its own funding concerns, makes the program appealing to startups. The startups in muru-D’s second batch include: FanFuel; a sponsorship marketplace where brands search, measure and secure their sponsorship deal. FreightExchange; a digital marketplace for freight transporters to sell their unused capacity to businesses that need to ship goods. Wattblock; quick, customised web-based energy-saving roadmaps for residential and commercial strata buildings. Disrupt Surfing; custom surfboards made using 3D modelling. You Chews; an online platform, making it easy to find great food for meetings and events. TripALocal; an online platform that connects travellers with local hosts for authentic local experiences. Peep Digital; an intelligent, phonetic English language technology platform to help children, youths and adults struggling with English pronunciation and comprehension. VClass; the first hybrid-education platform that combines the power of internet VoIP and traditional pen and paper to create an online teaching experience like face to face. Instrument Works; developers of wireless, portable sensors and instruments to build the internet of things for research. CrowdSourceHire; a pre-hire assessments marketplace platform that crowd sources industry experts to assist with assessment of jobs for companies. SoccerBrain; making it easy for anyone to coach a team, providing tailored, interactive training sessions week-by-week for coaches and players. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Two Sydney-based startups are joining forces to give startups the technical skills necessary to turn their vision into a reality. Networking site Crowdsurfa yesterday announced it is teaming up with coding school The Coding Factory to connect tech-skilled co-founders with entrepreneurs. The partnership follows Crowdsurfa’s launch earlier this year, with the startup marketing itself as essentially a match-making service for co-founders. Crowdsurfa co-founder and chief executive Vache Aknian told StartupSmart it made sense to bring both his startup and The Coding Factory closer together. “They [The Coding Factory] are teaching people how to code, so they’re bringing up a culture and community of tech co-founders,” he says. “And Crowdsurfa has entrepreneurs searching for tech co-founders. We’ll just align them together.” Aknian says The Coding Factory will encourage its community of tech whizzes to reach out for potential co-founders on Crowdsurfa. “It was almost a no-brainer for us because we have awesome projects and people searching for co-founders,” he says. “It just aligned perfectly with our goals and their goals.” The two startups are planning to host regular meet-ups and events next year, but for now the partnership is focused on connected startups with people who have technical knowledge. Aknian says forming a partnership with another startup is a good way for an early-stage startup to connect with other people in the industry and spread the word. “Collaboration is key,” he says. “If you can support each other there’s nothing stronger. The best thing about the startup community is we have like-minded people.” The Coder Factory was launched in September last year with the vision of teaching people the technical skills needed to build their own app. The startup’s co-founder Dan Siepen said he was excited about the partnership because entrepreneurs often just needed a tech co-founder to make their vision happen. “I’ve always wanted a platform that would not only connect entrepreneurs, but also highlight what a particular startup needs from a skilled co-founder – whether it be a software developer, general manager or growth hacker to add to the firepower that a startup needs to grow.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The new Gmail app, Inbox, is not just an email app, according to its developers. Inbox is being released as an invite-only system that works on the Chrome browser, Android phones, and iPhones. It’s still a Gmail app, but instead of giving its users the traditional lists of emails, it tries to intelligently give you more information so you don’t even have to open them. Google Now-style information cards appear in line with the message list and include things like flight times, package tracking and photos. It also tries to bundle emails into groups that you can quickly dismiss. Former EA CEO takes over at Unity Unity founder and chief executive officer David Helgason is stepping aside to let former Electronic Arts CEO John Riccitiello take over the job, VentureBeat reports. Unity is a company that makes game-creation tools for developers. Helgason says not much will change at Unity and he believes Riccitiello is the right person for the job. “I will be heavily involved in the company’s direction,” Helgason says. “(Riccitiello) is the right person to help guide the company to the mission that we set ourselves over a decade ago: democratize game development. “John completely agrees with our vision and our strategy. If anything it means that we’ll be more focused than ever about making sure everyone has access to the best technology and services.” Twitter releases new developer toolkit Twitter has unveiled Fabric, a new developer toolkit with software products to help build better third-party apps. Fabric was showcased by Twitter executives in San Francisco at the social media giant’s first mobile developers conference, Flight. Overnight The Dow Jones Industrial Average down 153.49 to 16,461.32. The Australian dollar is currently trading at US88 cents.
Australian startup Bigcommerce has signed a lucrative partnership with one of the world’s largest e-commerce platforms, Alibaba. The deal will provide Bigcommerce merchants with greater global access to products and services, and will result in Alibaba integrating its buyer and supplier network with Bigcommerce’s e-commerce platform. Alibaba services millions of buyers and suppliers from countries including China, India, the United States and Thailand. In a statement announcing the partnership, Bigcommerce co-founder and chief executive officer Eddie Machaalani says the deal will help the startup’s merchants grow their business “every step of the way – from sourcing to selling”. “Alibaba.com provides access to the world’s largest network of suppliers and manufacturers of goods that will help our merchants build their online presence and expand into new revenue opportunities,” he says. Bigcommerce merchants can now source products directly from manufacturers around the world, including the ability to find suppliers and receive quotes within 48 hours with the AliSourcePro service. Finding new and niche products will be easier for Bigcommerce merchants with the integration of Wholesale Checkout, Alibaba’s wholesale marketplace. They’ll also have one-click access from the Bigcommerce platform to Alibaba.com where they can find products, register and complete purchases. Bigcommerce merchants can now purchase goods directly from the world’s leading network of independently verified manufacturers. In addition, they’ll have access to Alibaba buyer services such as payment protection program Escrow and third party inspectors for quality control. Alibaba director of global marketing and business development Michael Lee says the company is partnering with Bigcommerce to make it easy for its customers to do business anywhere in the world. “Alibaba.com and Bigcommerce together are building an integrated e-commerce ecosystem and helping to introduce more small and medium-sized merchants and online stores to the global market.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Tracking mobile and data usage for expense claims is about to get easier, thanks to Perth-based startup Mobilyser. The Mobilyser app, which launched this week and is available on smartphones or via a web portal, allows subscribers to easily tag contacts and dialled numbers as personal or work-related. It then calculates the claimable total on calls, data and SMS in an “easy to read” report. It uses the Australian Tax Office’s recommended calculation method to get the best result. It stores 24 months of call-related data, enabling users to report on call usage for a full financial year. Mobilyser founder Robbie Adams says the app is solving a problem that anyone who has made a work-related call on their mobile can relate to. “Even when we have all the information in front of us it’s not easy to calculate all the genuine work calls,” he says. “Even harder is making an accurate assessment of work-related data usage. “Whether users lodge regular expense claims to their employers or an annual claim on their tax return, Mobilyser can generate detailed logs and reliable totals at the touch of a button.” Mobilyser is available for free for the first 30 days, but requires a $4 per month subscription to be paid from then on. In the short term, the startup is targeting individuals as its primary customers, although it plans on developing a solution for enterprise in the coming months. Adams says he will be targeting big tax companies like H&R Block, as the product has the potential to save them a lot of time. Adams says it’s only been in recent years, as smartphone adoption has begun to skyrocket, that such a solution became viable. The startup is heading to the Web Summit in Dublin later this year, where Adams says it will be chasing investment. So far, he’s bootstrapped Mobilyser himself. “That’s going to present some fantastic opportunities for us,” he says. “Straightaway the business has been built for the global market. The great thing about Mobilyser is we’ve built it at the moment to comply with ATO regulations, they’re [regulations] also extremely similar elsewhere.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
A new consumer-to-consumer bitcoin exchange has launched, looking to take advantage of the vulnerability of exchanges that sell directly to users, caused by the Australian Tax Office’s decision to treat bitcoin as property. Independent Reserve, launched on Tuesday, is backed by “a group of private investors in Australia and Asia”, promising to be the cheapest Australian bitcoin exchange. Other bitcoin exchanges, which sell bitcoins directly to users, are required to charge 10% GST on the total amount of bitcoins being provided. So $1000 worth of bitcoin will cost $1100 plus any commissions they might charge. Independent Reserve charges a .5% commission on exchanges, and absorbs the 10% GST it’s required to charge on that commission. The startup’s head of business development, Lasanka Perera, says while the ATO ruling is good for Independent Reserve, it’s not ideal for the state of bitcoin. The exchange has been in development since early 2013 and Perera says the decision to operate a consumer-to-consumer exchange was not influenced in any way by the ATO decision. “We couldn’t have foreseen the GST ruling from such a long way out,” he says. The exchange is trading in US dollars in an effort to make it more appealing to global bitcoin buyers. Perara says his experience in foreign currency exchange means Independent Reserve is able to offer competitive exchange rates, so the decision to trade in US dollars won’t hurt Australian consumers. “We’d love to be in Australia’s biggest and best marketplace for bitcoin in three to six months’ time,” Perera says. In the coming months, Independent Reserve will be looking at developing a consumer app as well as entering the merchant point-of-sale space. The startup is based in Sydney and chief executive Adam Tepper says Australia is a good regulatory environment from which to operate. “Australia is politically stable with a strong regulatory regime,” he says. “We have spoken consistently with ASIC and the ATO as Independent Reserve has developed, as well as had the company audited by PricewaterhouseCoopers. We’re very comfortable that we have the right settings here to ensure its safety and success.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
In a true, thriving startup ecosystem, venture capitalists understand failure, according to Steve Blank, the academic and entrepreneur who popularised the lean startup movement. “In the US, this is kind of funny. When I used to get asked that question I’d change the subject by saying isn’t that Bill Gates over there? And maybe change the topic,” Blank says. “In the last three or four years every VC in Silicon Valley needs to give lip service to lean startup. It’s changed dramatically. “Whether they explicitly believe that failure means experience, I say hell yes. I think that is the nature of an entrepreneurial cluster. Now if you fail three or four times in a row they stop returning your phone calls. But a single failure, does not put you out of business.” According to lean startup methodology, startups are able to “fail quickly” and learn from those mistakes to make the necessary pivot required to find a successful business model. Blank was speaking at the Australian Sports Technology Network’s annual conference in Melbourne yesterday. He says when he created his seventh startup, Rocket Science Games, he had his own experience of failure. “I made it onto the cover of Wired magazine. There I am, hot stuff: ponytail, baseball cap, kind of embarrassing my kids, still cringe when they see it. I was riding high – 90 days later I realised I’m going out of business,” he says. “I’ve raised $35 million. Still the world thinks it’s great. Heading to the ground, I call my mum and I say, ‘Hey mum, I just lost $35 million’.” He went on to tell his mother, a Russian immigrant, the two venture capitalists who had invested that money gave him $12 million to start his next venture. “She said in Russian, ‘They told us the streets were paved in gold in America, it must be true’,” Blank says. “I tell this story only because what happened was the VCs really did believe failure equals experience, and I returned a billion dollars each to the two VCs who gave me that $12 million. “And by the way, that’s not a Steve Blank story. That’s a Silicon Valley story. That’s an entrepreneurial cluster story. “Smart VCs, when you have a cluster, believe that entrepreneurship is not just execution. You’re betting on the team, on the people, on the passion, on the vision and sometimes on the circumstances. “When you can’t get them to believe failure equals experience, you don’t have the right culture yet.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Innovation is putting yourself in the path of change, according to startup academic Jerome Engel. He believes those best placed to do that are the young, and Australia needs to do all it can to encourage young people to become entrepreneurs. Engel is the founding executive director of the Lester Center for entrepreneurship, at the University of California, Berkeley, and was speaking at the Australian Sports Technology Network’s annual conference in Melbourne on Tuesday. “You don’t create change, but you can ride change and turn it to your advantage, to society’s advantage, to your business's advantage,” he says. “Put your effort into it, and harvest the process of change, or get run over it.” Engel has worked in the venture capital industry in Silicon Valley for a number of years before turning to academia and remains active venture capital investor today. He says it’s that experience, working in Silicon Valley for Ernst and Young specialising in venture capital and high growth startups, where he was able to learn a great deal about what it takes to create a successful startup cluster. He describes that period of learning as “drinking from a fire hose”. “I got to see a lot of cases, and recognise a lot of patterns,” he says. He says the challenge for Australia is to figure out its identity and, with the right conditions, it will be defined by entrepreneurs that are currently in university or high school. “The idea of being an intellect, but not just an intellect, a doer, someone who takes ideas and puts them to work, and creates new ventures around ideas, that’s cool,” Engel says. “That wasn’t true 20 years ago, it’s true today. These are the people that are going to shape (Australia’s) cluster of innovation. We have to find them, help them, energise them, give them the tools they need so they can help us, and we can help them succeed. “Those of us over 40 know what the world is. But it’s not clear to us where the world is going. Find somebody who’s 18. They’ll tell you what the world is going to be like with some clarity.” Engel suggests that what he saw in Silicon Valley was the development of industries in a context in which it didn’t belong. “What you are is not what defines you, but its what you can be,” he says. “We want to engage with those who take knowledge and put it to work – the entrepreneurs. We have to give them the support that they need, I’ll call that venture capital, you can call it financial services, it can come from any source, not necessarily organised venture capital. And we have to engage the major corporations to be the partners with entrepreneurs. “Typically we look at major corporations as stakeholders, as incumbents, who will see the insurgents – the entrepreneurs, as the enemy. No longer. The incumbents need to help capture value from the entrepreneurs and they can only capture that value if they share that value with them. “That’s a secret ingredient. Other ingredients are management teams, professionals and governments that are enabling.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Adviser Ratings, a platform that lets users review their financial planners has launched, hoping to rebuild consumers’ faith in the sector. The startup, armed with a database of 18,000 financial planners, is offering a Rotten Tomatoes-like service for people wanting to find a financial planner, and those who want to review one. It’s currently limited to Australia, but co-founder Angus Woods says the team is looking to take the platform overseas as soon as possible. Adviser Ratings will give each of its 18,000 financial planners an ‘adviser’ rating, which will be based on their qualifications, experience in the marketplace, and compliance. In addition advisors will also be given a customer rating, which will be based solely on customers’ reviews. Woods says there’s been a need for such a platform since the global financial crisis. “There’s a crisis of confidence in the financial planning space,” he says. “Adviser Rating is about rebuilding the trust and confidence in the industry. The number of people that use financial advisers in Australia in dwindling. It’s our aim to help grow that pie.” The platform conforms to Australian Competition and Consumer Commission guidelines, and as such it has a number of mechanisms in place to prevent astro-turfing and similar practices. That’s achieved by a combination of manual and automated checks of things like email and IP addresses. Whenever a negative review is posted the subject of the review is given a period of time to respond to the criticism, before it goes online. Customer reviews aren’t your typical one out of five, with a short spiel, like you might see on the Apple App Store. Woods says the startup worked with economists and psychologists to develop a survey of three to four minutes for reviewers. The platform will continue to be available for free to users looking for a financial advisor, or wanting to review one, and monetisation will centre on building “value adding” products which can be offered to financial planners. Woods says he and his co-founder Christopher Zinn have funded the startup themselves, but they’re currently finalising an investment proposition, which they’ll be taking to investors in the near future. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Every parent of school-aged children is familiar with the dreaded permission slip. Melbourne-based startup ParentPaperwork wants to remove those paper-based permission forms from education altogether. It has developed a platform that allows schools to create an unlimited number of customisable forms and uses a combination of email and secure webpages to capture parents’ responses. Co-founders Fiona Boyd and David Eedle came up with the idea in 2007, but back then, it was met with little enthusiasm from schools. Last year, when Boyd was fed up with the amount of school permission forms they needed to complete for their three children, 32 in an eight-week period, they decided to try again. After a soft launch in June, ParentPaperwork has 14 schools signed up as paying customers and another 38 signed up as part of a 30-day free trial. Boyd says the feedback from customers so far has been great. “One of our customers, Melbourne Girls Grammar, tracked very carefully the parent responses, and during their first week of using the platform, they sent a notification out at 9am on Friday. They had a 56% response on that activity by lunchtime and they said there’s no way we could achieve that with a paper-based system,” Boyd says. “On average we’re seeing half of the parents completing and submitting their online forms within 24 hours.” Getting a quick response isn’t the only advantage of the system. Boyd says a school with around 600 students would save between $27,000 and $32,000 in teachers’ and administrators’ time, as well as the cost of printer paper and toner. The startup is also about to launch a new platform, targeting the aged care market, which they see as another industry where permission forms are a pain point. That platform is being trialled with Homestyle Aged Care, which operates 10 facilities in Victoria. Boyd and Eedle have bootstrapped ParentPaperwork, with about $60,000 from friends and family. They’re currently searching for seed investors. Boyd says that capital will be necessary to help accelerate growth; although she’s confident with some more of their own funding the duo can bootstrap it to a point where it’s cash flow neutral, and eventually cash flow positive. In August, Parent Paperwork won Startup Victoria’s first pitch event and scored a sit down with Gavin Appel and Dan Krasnostein from Square Peg Capital. Boyd says it was a great experience and loved working closely with other startups. “Getting insight from other startups is really, really valuable and so much more credible than from those not doing the journey themselves, well at least at the very early stages when the going is tough,” she says. “This is really significant to us as the whole pitching thing is something we didn’t feel so comfortable with and the four training sessions we did with Nic Hodges and Nick Rakis were brilliant in helping us refine our message to talk about what matters to an audience in a pitch. (Startup Victoria’s) Thomas Anbeek did a great job pulling the training sessions together and encouraging all the companies.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Venture capital firm OneVentures has announced the first close on its Innovation and Growth Fund II, which is set to inject $100 million into the Australian Series B and Series C venture capital landscape. The company has raised $60 million to date on this round and is ready to start investing. OneVentures managing director and chief executive officer Michelle Deaker says it’s well on the way to its $100 million target. The fund will focus on startups in the fields of healthcare, education, mobile, media, cloud computing and data, sensors and robotics, and food security, that are looking to raise between $5 and $20 million. The investors, high net worth individuals and family offices, are mostly from Australia. Deaker says that is evidence that these types of investors are acknowledging a “dearth of capital” in this section of the market. “The rapid rate at which the fund has attracted investment from high net-worth individuals and family offices reflects the strong appetite for opportunities in high growth-technology companies in Australia,” Deaker says. “What often happens in Australia is family offices and high net worth individuals; they go where they see a market opportunity left behind by someone else.” The market opportunity, she says, is created by the fact that there are barriers to superannuation funds investing in venture capital. She adds that investors were also attracted by the results of OneVentures first fund, the OneVentures Innovation Fund. “The carrying value of the investments of that fund is two-and-a-half times (initial investment) and that doesn’t include the fact we have a likely exit for one company, that will likely return whole of investment,” Deaker says. That fund, worth $40 million, differed slightly from this latest fund, focusing on earlier stage companies. “OneVentures is intent on supporting innovation beyond the startup stage where there is a significant structural gap in the market caused by a lack of capital; meaning value investing is still possible,” Deaker says. “Capital raised by Fund II will be focused on investing in Series B and C stage funding where businesses are generally approaching profitability but need capital to build scale and fuel growth. “Often the entrepreneurs who run such companies are forced to move offshore in their search for this funding. At OneVentures we want them to have a quality onshore professional investment alternative.” According to the Australian Private Equity and Venture Capital Association Limited, venture capital and private equity funds have invested $30 billion into Australian businesses over the past 10 years. Deaker says that’s a small fraction of the money sitting in superannuation funds and with high net-worth individuals. “There is huge potential for Australia’s economy to enter a new and innovation-based era of growth as more of the money is mobilised through vehicles like Fund II.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Australian online fashion brand GRANA has just closed a $1.1 million seed financing round from Bluebell Group and a group of respected strategic and angel investors in Australia and Hong Kong. GRANA operates online only and deals directly with fabric mills, cutting out all middlemen, plus it ships direct from its new warehouse in Hong Kong where the entire team is based. Investors in the recent $1.1 million seed financing round include Bluebell Group – a large multinational retailing group that has been operating for over 50 years and represents over 100 luxury brands in Asia including Dior, Paul Smith and Jimmy Choo. Luke Grana, the startup’s 30-year-old founder, told Private Media that during a beta launch in May GRANA sold out a run of 2000 pima cotton t-shirts at $14 each, with the ‘prove points’ playing an important part in securing investment. “I reached out to investors and said ‘if I can sell 2000 t-shirts will you invest?’, and most said yes. We came off a beta launch and proved we could sell 2000 t-shirts, and then it’s just about closing the deal,” Grana says. In October last year, Grana moved from Manly Beach to Hong Kong to launch the company, with $150,000 in capital from previous ventures. “I’ve been working on the concept for over a year – it’s my fifth business. I thought of the idea when I was back in Australia. I was really annoyed at the quality of fabric in Australian stores and the prices were high. “I was visiting my brother in Peru and found out a lot about Peruvian pima cotton – a special type of cotton people say is the best in the world. It’s extra-long staple, making it more comfortable and durable than regular cotton. “I came home with pima samples and gave them to friends and family to wear. I didn’t know a lot about fashion so I worked for Zara for three months and took a job at French Connection.” The cost of shipping packages in Australia was a key factor in the move. “Selling online-only meant I could sell good quality fabrics at a low price. I was annoyed with the prices Australia Post were quoting for shipping a 1kg box within Australia,” he says. “I always knew Hong Kong was a global manufacturing and mega-hub for logistics so I reached out to DHL in Hong Kong to form a partnership. “DHL offered us next day delivery to Australia at prices lower than Australia Post. They also have five planes going from Hong Kong to Australia everyday so they can offer us discounted rates due to their sheer volume. “Also, DHL were very interested in supporting GRANA as a new online only e-commerce brand. The other major draw card to move to Hong Kong is that we have the potential to ship to a global market.” GRANA currently ships products to eight countries and plans to open up shipping to over 20 countries soon, all direct from Hong Kong. Over the past two months, Grana has also hired a team of seven people to help scale the brand globally. Aside from expanding into new markets, GRANA will soon be releasing a full range of fabrics including Japanese denim jeans, French poplin shirts, Mongolian cashmere sweaters, English Oxford shirts, Irish linen shirts and USA twill chinos. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Aeeris, the company that operates Australia’s only national location-based weather and hazards early warning service, is seeking to raise $6 million through an initial public offering (IPO) on the ASX. Aeeris executive chairman and chief executive Kerry Plowright told Private Media the original idea for the company and its Early Warning Network (EWN) came in 2006, while he was working on an e-commerce collaboration project. “I looked out the window at storm clouds – this was a year that was a bad one for bushfires and natural disasters – and I asked ‘why doesn’t anyone warn people about disasters based on location’,” Plowright says. “So we spent the year in development and rolled it out at the end of 2007 with an operational system. It was the first system for severe hazards in the world, and it’s been in operation since then. Since launching, Plowright says there have been over 20,000 separate events the company has sent alerts for, covering everything from solar flares and bushfires to floods and cyclones. “No one understood what we were doing at first, so we made it free for the first two years. Brisbane City Council was one of our first customers. They piloted it for a year and then tendered that out. We won the tender to provide services for their residents,” Plowright says. The company now boasts 185,000 subscribers, over 43,000 app and Facebook users and over 100 paid corporate and government clients. It provides bespoke services across a number of industry verticals including local government, construction, mining, containers, heavy haul/freight and rail. The system delivers warnings through SMS, voice, email, push notifications, Twitter, directly into the client’s own IT systems. Aside from preventing loss or damage, this allows businesses to save money by continuing operations without being overly cautious. With company directors increasingly liable for the safety of their employees, it’s unsurprising the EWN has attracted interest both at home and abroad. “Initially, an IPO wasn’t on our mind, but with our company growing internationally and piloting successfully with a company in North America. We have huge opportunities, and we needed to resource those opportunities appropriately,” he says. “You could potentially go down the route of bringing in new investors, but [an IPO] was the cleanest opportunity for us.” Plowright says while he would not have been comfortable with taking a company to an IPO three or four years ago because it would have been a speculative investment, he now feels he has a mature business model. “We’re different to a lot of the tech companies you see out there, because we’ve got a rapidly growing revenue base. We have a mature and proven business model and over 100 customers,” he says. He also says assembling the right team and accurate costings going into the IPO has been “most important” as it has prevented a cost blowout. The IPO is being managed by Veritas Securities and the listing application for the ASX will be lodged in the next few weeks once the prospectus has approval from ASIC. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
ScriptRock cofounder tells entrepreneurs to “have an open mind” at startup events as Tech23 approaches10:13AM | Friday, 17 October
The cofounder of Australian IT DevOps company ScriptRock, Mike Baukes, says an open mind is the key to getting the most out of startup events such as Tech23, which can be an important networking opportunity for emerging entrepreneurs. Recently, ScriptRock successfully raised a $US8.7 million ($A9.8 million) in a series A round led by August Capital. Also participating in the round were Peter Thiel's Valar Ventures, Square Peg Capital and Scott Petry. Coming on the heels of the Tech23 being named for 2014, with the event taking place next week, Baukes told Private Media ScriptRock first attended Tech23 back in 2013. “We were invited to Tech 23, and we went there without really knowing too much about it at first. There were lots of people around – especially corporates – and many of them didn’t know about us. “So we were able to solidify our product, and we were also able to meet a couple of potential customers. We were introduced to AMP – who still use our product – and Telstra – nothing much happened with them – and it really lifted our profile. “From there, we went on a long journey using our existing customer base in Australia and then moving to the US, before launching a final version of our product in October last year.” An important step in that journey was being accepted into a startup accelerator program run by US virtualisation software company Citrix, a relationship fostered in part through Tech23. “What Tech23 did for us is facilitate a good relationship with Citrix. Before we went in we had won a Citrix Award and had been in talks about their enterprise-focused accelerator. But it was only really at the event that we were able to talk and then a few months later we ended up joining their accelerator. Baukes also has some advice for the startups at Tech23 in 2014. “From a personal development perspective, getting in front of a group of people you don’t know is one of the fastest ways to get validation for an idea,” he says. “The three keys are to identify the product, the market you are targeting and your point of differentiation. Your product or service needs to be well-defined – it needs to be something that is unique and different. It’s a point a lot of entrepreneurs and founders tend to forget. “Always go into these events open minded. Being open and candid can lead you to opportunities you didn’t expect.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.