Meet the Startmate class of 2012: Part one
It seems like a long time since the inaugural Startmate start-ups were unveiled last year, but, already, the second generation are snapping at their heels.
The seed accelerator program, which offers mentoring and $25,000 in funding in return for a 7.5% stake, recently unveiled the eight start-ups that it will hot house in Sydney for the next three months ahead of an investor meet-and-greet in the US.
With all five participants from the class of 2011 gaining funding, with one even being purchased by Wal-Mart, hopes are high for this year’s intake.
So, which start-ups have made the grade? Over the next two days, we will profile all eight. Here, we speak to the first four.
What? A cheap airfare locator where a team of experts are paid to find the best deal for users.
Founders? Lauren McLeod and Todd Sullivan.
So, what’s the story behind Flightfox?
We both travel around a lot and we realised that there was a better solution to the way we book flights. Prior to this, we were living in Germany and had just sold our start-up Globetrooper.com.
We thought that there could be a crowdsourced solution to finding the best, cheapest flights, rather than trawl through lots of different sites.
Prior to this, we were living in Germany and had just sold our start-up Globetrooper.com.
With Flightfox, if you want to book a flight, you go to the site and enter your trip details. This creates a contest between a crowd of experts who submit their best flight options to you.
You decide which is your favourite idea and the experts are motivated by a finder’s fee.
What’s the pricing model?
It costs $30 to use the service. At the moment, we are trying a different models for the finder’s fee, such as 10% of a certain price saving.
We are targeting international and long haul flights, so $30 on top of that isn’t much.
We started to realise that we needed the benefit of being around other start-ups. It’s surprising how much you can achieve with that kind of help – we’ve managed to code, launch and get customers already. We’ve saved people around $50,000 already. That would’ve taken many months without Startmate.
We applied to the program a few weeks before the internets and actually launched the site after the first interview.
That sounds pretty stressful
Well, yes, we were in a bit of a pickle because we had to launch on the interview day, as well as move from Germany.
We saw the opportunity in Startmate so we came back to Australia. There was a real sense of urgency that we still have now as we have three months until we pitch to international investors.
How was the Startmate process for you?
The application form was quite detailed and we had to be completely committed. The interviews took between eight to 10 hours, testing all our assumptions about the business and whether we were being too optimistic.
We were thinking non-stop about the idea. We were falling asleep at 7pm each night.
Mick Liubinskas gave a one hour speech about focus and why it’s important to not add too many features to your start-up. It’s better to prove the core concept before complicating it.
As our site is global, Mick told us to not worry about offering multiple currency options and to just prove the concept first. That was great advice.
How do you hope to attract users away from the likes of Webjet to Flightfox?
We always knew that flight search was broken. It could take you hours to do. Webjet doesn’t cover most of the budget flights in the world.
Also, a lot of sites only show fares from airlines that they get commission from. We search from every source.
The other thing is that there are humans searching for flights, rather than machines. If a guy wants to fly with three cats or advice where to park his car, a human can answer that. You can’t get that from Webjet or Expedia.
What are your goals for the business?
The three months feels like a deadline, so everything is very fast-paced. We’re looking to get the advice from a maximum of five mentors at Startmate – the mentorship is much more important than the money.
We’re incorporating the business in the US and we will need funding to scale it, as there’s a low transaction amount per customer.
We just need to prove the concept and go from there. Once we explain it to people, it is de-mystified.
What would your advice be to other start-ups that pitch for programs such as Startmate?
Have a clear problem that you’re solving, a clear business model and get proof of concept. Keep it simple. Don’t over-complicate it.
What? A flexible invoice system that sends automatic reminders to debtors.
Founders? Chris Hexton and James Lamont.
What gave you the idea for Invc.me?
We ran a web development company together and we were asked to build a product that allowed a business to invoice its customers.
We wanted to do something that was stylish and superior to with what else is out there. We started work on it about four months ago.
The customer said that they liked it and we thought we could make a product from it. We thought it was worthwhile to apply and focus our energy on this. We’ve stepped away from the web development business to do this.
How does it work, exactly?
It’s a useful tool for accounts receivable. We found that Xero and some others were a bit clunky and there was no way to send reminders and track invoices.
Also, a lot of the other systems don’t allow PayPal payments, which can be a bit inconvenient. We built something that can track payments more easily and can send automatic reminders.
You should be able to send an invoice, set the due date and the system does the rest.
Why apply to Startmate?
It’s well organised and it’s easy to apply online. There are a lot of incubators out there, but Startmate has been around for a year and the mentors are exceptional.
On top of that, you’re giving away a relatively small amount of equity in return for that help. We had a single interview day and, regardless of whether we got into Startmate or not, it was useful for the help and advice we were given.
What points of difference does your start-up have to the other invoice systems out there?
Most other products out there focus on the generation of invoices. We want to make it easier to chase debtors.
A lot of sole traders and businesses with fewer than five people use desktop publishing for their invoices and they need help to track the payments.
What stage are you at now?
The product is ready to sign up to and we are getting feedback from customers on what they need and how we can help them.
As for the price point, we haven’t really decided. It could well be $15 a month or maybe with a higher tier or two.
It seems like a good time for a start-up like ours. There’s a good market out there for us. We want as many customers as possible and plan to build the business as quickly as we can.
What is the greatest challenge you face during the Startmate program?
Three months is a short period of time and it’s already flying past. The biggest challenge will be iterate the business in that time and ensure that customers are happy with the product.
What? An online pre-production planning tool for filmmakers.
Founders? Matt Drake, Chris Rickard, Hamid Nazari and Brian Gaffney.
How did Setkick come about?
I (Drake) am from Vancouver in Canada and the other three founders are from Melbourne.
Chris came to Vancouver and was working for a start-up over there. We started to talk and, having a background in film, we brought up some of the problems in the industry.
Film is about five years behind in terms of technical innovation – a lot of the communication is still done with pens and bits of paper.
We thought there was a huge gap in the market for a mobile platform for filmmakers. We decided we could leverage mobile devices to get information to crew members during the pre-production process.
It seemed silly to print something off to just hand to someone standing next to you. On film sets, you’ll have the director5 looking at storyboards on his or her iPad, so why can’t the crew have the same kind of thing with schedules?
How did you get to Startmate in Sydney, then?
We had the idea about a year-and-a-half ago and it was clear that we needed seed funding to take this from the basement to the real world.
Surprisingly, there weren’t a lot of options in Vancouver, but there were plenty in Melbourne, such as PushStart and AngelCube.
We applied to YCombinator and didn’t get in and then Startmate came up. We thought it would be great to get over here and work on the product full time.
I had never met the other two founders, other than via Skype, before I got here. We spent eight months working on it, so that it has grown from a passion into a business.
It sounds corny, but it just felt right. We believed in it and we still do.
How does the product work, exactly?
The focus is on pre-production, so that things such as call sheets and reports are automated and put into a format that everyone can access.
Everyone has access to the platform, so they can see the spread sheets as they are updated. The film industry is very niche and it lots of terms that are particular to the industry, so it makes sense to have an app specific to this area.
It seems silly to do these things manually when we have the technology. We did some select testing with friends and we got great feedback.
We’ve had a steady stream of Beta sign-ups and we are now looking to opening it up.
Has the Startmate program been useful so far?
Yes – it’s felt like we’ve been learning 1,000 things a day! Things that you can’t really put your finger on, the vague things you never really think of.
Having access to 25 very successful mentors is the biggest thing. To a young start-up, money is tight and it’s good to get advice on things such as whether to spend $100 on Google Adwords.
It’s been an eye-opening experience. We’ve got all this advice at our fingertips and it’s far easier to learn the lessons you need to learn in this environment.
We were very encouraged by the successes that Startmate had last year. Last year, they got mentors involved after five months, but this time they’ve e hit the ground running – there were drinks with the mentors on the first day. It’s all very collaborative.
What’s the goal?
We wrote on a big white board a while ago “Be investable.”
We need to build traction and get users to the site. We are a bit more mature than some of the other start-ups here, so we know who we need to target first.
The goal is to be a platform for every department – everything from pre-production to the camera guys.
China and India are pumping out more films than Hollywood in terms of pure volume, so that is certainly on our horizon. We have set our sights on those markets as they haven’t grown up with the old way of doing things and should be ready to embrace the new technology.
What? A mobile app that provides location-centric messaging and event information between users.
Founders? TJ Tan, Dennis Lo, Steve Cossell and Nishant Menon.
How long have you been working on this, Steve?
I was working on this part-time after work for three months before Startmate. It was definitely just a dream at that stage. Things were moving slowly.
The other three founders had normal day jobs. I’m doing my PhD.
What’s the concept?
It’s a mobile and web app that combines different event applications. So, if you want to connect with your mates for a pub crawl, you set up an ETA and track them, to see where they are.
Other location-based apps dissolve immediately, but we want to build events that stay around. We are working on integrating Facebook, Google and other events, so that they can be accessed via the app.
Why is this needed?
Lots of different apps provide this kind of information but no-one combines it. Initially, we want to provide GroupOn-like ideas, based on location.
We can piggyback off GroupOn or provide an Eventbright-like idea and buy tickets via the app. There are a few ideas how we can monetise it.
It’s still in its initial stages. We’re building a prototype for Apple, Android and Windows.
Why approach Startmate?
I saw that Startmate said it was for people with technical skills but didn’t know quite what to do with them.
A lot of people build apps as tools but not as businesses. We wanted Startmate to help steer us so that the app can be profitable. It’s important that you know what you’re building and that it is for the customer, not just for you.
Did you get a lot from the application process?
The other start-ups have such great ideas that you could tell that everyone was an engineer, rather than an entrepreneur. It’s so valuable to have the connections and to be mentored properly.
What are your ambitions?
We want as many people as possible using the app and then we’ll monetise it. We will introduce some sort of gaming element so that it is not just blandly tracking people – things like incentives for showing up on time.