Mike Cannon-Brookes

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Online retailer Shoes of Prey turns to bricks and mortar after scoring $6.5 million in funding

12:30AM | Wednesday, 3 December

Online retailer Shoes of Prey secured $US5.5 million ($6.5 million) in venture capital this morning to fund its bricks-and-mortar expansion.   The retailer, which enables customers to design their own shoes, started off as a pure play online offering.   But Shoes of Prey’s founders, Jodie Fox, Michael Fox and Mike Knapp, have realised the value of having a physical store presence after the success of Shoes of Prey’s David Jones concession stores.   The funding round was led by US-based Khosla Ventures after the Shoes of Prey team got in touch with Ben Ling, the investment partner at Khosla, through a former Google colleague.   Michael Fox told SmartCompany the deal came together fairly quickly after first reaching out to Ling in July this year.   “That seems to be how venture capital in the US works, warm introductions always seem to help,” Fox says.   New investors alongside Khosla Ventures include Bonobos co-founder Andy Dunn, and ThirdLove co-founders David Spector and Heidi Zak.   Existing investors also took part, including Blackbird Ventures, Atlassian co-founder Mike Cannon-Brookes and Bill Tai from Southern Cross Ventures Partners.   The deal leaves the co-founders with “just under” 50% in equity while Shoes Of Prey’s employees retain 15% equity in total.   In order to “get the deal done” Shoes of Prey’s co-founders had to agree for one founder, at this stage Jodie Fox, to step down from the board.   “US venture firms generally have much smaller boards so we reduced the board to three, so only two of Mike, Jodie and me could be on the board,” Fox says.   “We might set up a rotating structure”.   Fox says “it’s not ideal” but the business should be able to work around the limitation.   Shoes of Prey will use the funding to open more bricks and mortar stores, including in the United States, hire some more key staff and increase its manufacturing facilities.   “We have signed a deal with Nordstrom to open six stores in the US. The first one opened two weeks ago in Seattle and we are opening a store in Westfield Bondi Junction and funding will help with all those stores rolling out,” he says.   Shoes of Prey will roll out another seven stores over the next few months.   “We still sell most of our shoes online but we have realised that there is life left in physical retail,” Fox says.   “It offers a great opportunity for customers to come in and interact with the brand.”   Expanding Shoes of Prey’s manufacturing in China will also reap rewards for the business.   “We have maxed out the size of the space of our factory in China, so we have leased a new three storey 4000 square metre factory and that will give us a lot of room to expand,” Fox says.   “The key thing is that it will bring our delivery time down to deliver shoes within two weeks of the consumer ordering”.   Shoes of Prey previously raised $3 million in Australia in 2012 with further fundraising in 2013.   This article originally appeared on SmartCompany.

Sydney, Australia’s startup capital? Melbourne responds

9:01AM | Thursday, 4 September

Australia doesn't need a startup capital, and certainly not one that operates at the expense of other communities that are popping up around the nation.   Even if we did, there is no evidence Sydney would be the best place for it.   When Mike Cannon-Brookes opined at Sydstart this week that “Australia needs a single city where all its tech startups are concentrated, and that city should be Sydney”, he was essentially suggesting two things:   1. That a single city needs to be the dominant player in Australia in order for our startup industry to be successful.   2. That Sydney has already won the race to be crowned the startup capital of Australia, and that all future community building and government support should be focused on Sydney.   Let’s look at whether these arguments stack up.   Do we need a single city to be successful?   The idea that Australia needs one city to dominate the scene in order to be successful is unlikely to be true. The creation of startup communities is a hard thing to get right, and success does not always go to the biggest and the loudest.   Take Boulder, Colorado as an example. Boulder is a better place to do a startup than Sydney by almost any measure you can conceive of, and yet it has a population of just over 100,000 people.   Clearly size is not nearly as important as quality. You can get great, stand-alone communities operating in various locales quite successfully without worrying about fragmentation of effort.   What about Israel? Tel Aviv is ranked as the second best startup ecosystem in the world by the Startup Genome Project, with more startups per capita than anywhere else and 61 companies on the NASDAQ.   And yet there are other startup communities in Israel that have popped up and been incredibly successful, including Haifa and Jerusalem.   Israel is now widely seen as a “startup nation”, rather than focusing solely on Tel Aviv. With a population of just over 8 million, not even Israel has adopted the centrally planned startup model advocated by Cannon-Brookes.   Cannon-Brookes asks us to adopt the Texas model, arguing that Austin is the leading startup city in Texas.   While that is true, it is hardly an argument for focusing an entire country’s efforts on one city. It's not even an argument that the people of NSW should focus all their energies into the Sydney scene, given that there are still other places in Texas with supportive and successful startup ecosystems.   Perhaps then, that is not how successful communities get built?   If we were going to pick one city, would we pick Sydney?   Even if it were true that one city is eventually going to be the best place to do a startup in Australia, it doesn't necessarily follow that we know who that is going to be.   I cannot think of a single global example where a community has picked an ecosystem winner in advance and set about focusing all their energies in that direction. It’s the equivalent of trying to “pick a winner” before the race has even been run.   Think back to our example of Boulder. Go back 25 years and ask whether the inhabitants of Colorado would have picked Denver (pop. 634,000) to be their startup capital over Boulder (pop. 100,000)?   They would have been wrong, because no one can predict where and how a startup community will emerge. It's harder than that.   That is where we are in Australia. We are Colorado 25 years ago, with all our startup communities in their very early stages of growth.   Strong startup ecosystems are built by founders over very long periods of time. Over the next 25 years, amazing communities will be built in Perth, Adelaide, Hobart, Melbourne, Brisbane, Sydney and others. Some will become bigger and more successful than others, but it will come about through natural, healthy competition.   In 25 years, Sydney may indeed be the best place in Australia to do a startup. Then again, maybe it will be Hobart, Melbourne, Geelong or Newcastle. It really doesn't matter, and we will be far better off as a nation if we encourage all founders to be successful no matter where they live.   Scott Handsaker is the cofounder of Startup Victoria.

We’re all just making it up as we go along, and other startup lessons from Sydstart

9:06AM | Wednesday, 3 September

If the Australian startup ecosystem was to have a family reunion, SydStart might be it.   Over 1000 startup founders, budding entrepreneurs and investors gathered at the Hilton in Sydney yesterday for SydStart 2014.   Among them were Australia’s best and brightest entrepreneurs, Atlassian co-founder Mike Cannon-Brookes, Freelancer chief executive officer and chairman Matt Barrie, Startmate founder and investor Niki Scevak, Canva co-founder Melanie Perkins and many more.   It was Mike Cannon-Brookes, perhaps the most uncomfortable with his position as one of the key figures the Australian industry looks to for advice and guidance, who drew the most interest.   He spoke of feeling like a fraud when meeting other prominent startup founders from around the world and being pleasantly surprised by the fact that they felt the same way. And he had a lesson for founders: entrepreneurs are all the same.   “You move up this weird totem pole of entrepreneurs, where you get to meet more and more interesting people and you to these weird points where you’re so excited to meet them, and you think to yourself ‘Wow, I’ve read about this person 40 times, just to get a half hour coffee is amazing’,” he says.   “And then they turn up and they feel the same way and it’s like ‘wow, this is weird’.   “You realise all these other super successful entrepreneurs are in exactly the same boat and that never goes away. They’re all doing it for the first time, they’re all making it up as it goes on, they’re basically making smart judgment calls and getting 80% of the decisions right. Ploughing ahead and continuing to be bold. They don’t get timid as the stakes get higher.”   That point – all entrepreneurs are the same, all are learning on the job, all are “making it up as it goes on”, permeated the entire conference. Throughout the day, it was impossible to miss the many conversations going on between founders after advice and investors, or the successful entrepreneurs taking time to give it to them, regardless of who they were.   It was a point Niki Scevak later picked up on.   “If you look around the investment landscape you have all these people that believe in cliches that aren’t true,” he says.   “They want to invest in proven founders, with a great management team, in this really, really big market, as if any of those are knowable at the time you get to invest.   “All of these great success stories that Australia has been home to, they were started by, no offence, people with very little experience who had just finished university, no business experience, they looked like complete jokes and not only that they were entering into markets that were incredibly crowded.   “You’re actually looking for first time founders that look like a joke, it sounds a bit silly, but founders know that. Founders know it’s a complete mess at the start. It’s not actually about that, it’s a couple of levels deeper and what unique insight do you have.”   As Fishburners general manager Murray Hurps pointed out as the conference closed, when he began his startup 16 years ago, there was nobody to help out with that mess.   That’s since changed thanks to the many co-working spaces and community leaders like SydStart conference coordinator Pete Cooper, as some of the many founders in attendance pointed out.   SimpleNutrution.me founder Nathan Murphy spoke of the value of SydStart to people like himself.   “SydStart is like a big family reunion every year where you get to see old faces, share war stories and hopes for the years ahead,” he says.   “You gather around the elders and listen attentively to their advice for finding success.”   For Play2Lead founder Theresa Lim, SydStart was not just about advice but also a place to recruit her team.   “I was only expecting to potentially (meet) developers who I might add to my team or investors who might be interested,” she says.   “No only did I achieve that goal, but I made several customer leads from enterprise as well.   “I’ve had so many doors open to key customers through this (Fishburners and SydStart) community. Everyone is driven and helpful – the event itself inspires me to just keep going! Pete Cooper and Murray Hurps are tirelessly dedicated to making our startup community thrive.”

A new name and fewer neck-beards for growing SydStart

8:53AM | Wednesday, 27 August

Australian startup conference SydStart is considering a name change, in order to reflect its growing prominence as a national startup event.   Founder and event coordinator Pete Cooper says the event’s reach encompasses far more than just the Sydney area, with international and interstate representation growing each year.   SydStart 2014 will be held at the Hilton in Sydney on Tuesday September 2 and features 120 exhibitors, and over 50 speakers and panellists, including the likes of Freelancer CEO and chairman Matt Barrie, and Atlassian co-founder Mike Cannon-Brookes.   “It’s easy to get the headline numbers growth, but the hard part is to get the sheer range,” he says.   “We’ve got everything from IoT (Internet of Things) in the home, to bespoke fashion and high volume, high capacity cloud services.   “We’ve got a huge percentage of women entrepreneurs this year, which has been part of a steady trend. My teenage daughter has been a big motivator for me to get away from the neck beards, they’ll be there and they are still some of the nicest and smartest guys, but the sheer range is great.”   220 startups applied for SydStart’s pitch event. These were narrowed down to 30 finalists. The Top 10 will pitch on the main stage at SydStart in front of a host of potential investors, while the next 20 finalists will get the chance to pitch on the expo stage to help them build awareness.   The Top 10 finalists include:   BLRT - Communication   Go Far - Driving optimisation   You Chews - Catering marketplace   Thinkable - Research marketplace   Coalfacer - Research marketplace   UrbanOutsource - Home services marketplace   Stockspot - Financial advice   Rbutr - Crowdsourced rebuttal   Next For Sale - Property pre-marketplace   Touch Payments - Mobile payments   Cooper says he was unsurprised the Top 10 was dominated by marketplace startups.   “I’ve seen this trend coming for years,” he says.   “I think it’s a combination of the Australian education system, we’re not narrowly educated so marketplaces are a natural thing. So Australia is well placed because of the diversity in our education, our history of good commerce and the force of law.   “Australia is a natural place to build great marketplaces, look at Design Crowd, 99 Designs and Freelancer.”   Over 1000 people are expected to attend this year’s event, which Cooper describes as “the hobby that ate my life”.   “It was supposed to be a part time thing I do a few weeks a year, but it’s become enormous,” he says with a laugh.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Aussie startups shine at 500 Startups’ demo day

7:18AM | Thursday, 31 July

Three Australian startups from the Sydney-based seed funding program Startmate stood out at 500 Startups’ demo day for its ninth batch.   Venturebeat selected over-50s online dating service Stitch, photo organiser and enhancer Lumific, and crowdsourced sport predictions service SportHold as three of the five startups that caught the publication’s eye at the demo day.   Stitch was co-founded by Andrew Dowling, who is one of the Startmate program mentors, while both SportHold and Lumific were both took part in Startmate’s 2014 program.   The mentor-driven program offers $50,000 in investment in exchange for a 7.5% stake and access to countless networks and mentors.   Startmate co-founder Niki Scevak was not surprised they were making an impression.   “This is all fantastic evidence that Australia is producing great tech founders,” he says.   Scevak played down Startmate’s influence, crediting the Australian startup ecosystem more broadly, saying Australia and its startups continue to punch above its weight.     "5 startups that caught our eye from 500 Startups' Batch 9" - 3/5 are Aussie & from @startmate. Truly great program. http://t.co/wGqabRmruR — Mike Cannon-Brookes (@mcannonbrookes) July 30, 2014     In addition to highlighting three Australian startups, Venturebeat went even further, suggesting in a separate article that Dropbox should look at acquiring Lumific.   “I sure hope file-sharing company Dropbox sent someone down to 500 Startups’ demo day today because they should really talk to a nifty little startup called Lumific,” the article says.   “…Lumific would actually make for a perfect addition to the way Dropbox’s users interact with the photos they store in their Dropbox accounts, which the company has been increasingly refining,   “And Dropbox should really buy it.”   Scevak chuckles at the suggestion, noting it’s not Startmate’s preferred outcome.   “It probably does make sense but we don’t want them to sell,” he says.   “The core value of Startmate is to try and create something really big and durable that will last a really long period of time.   “Sure some exit early in their lives, and people fail lots of the time, but the passion we have at Startmate is for playing the long game.”   Applications are now open for Startmate’s 2015 intake.

Startmate opens applications for 2015 intake

7:54PM | Sunday, 27 July

Sydney-based mentor-driven seed funding program Startmate has opened applications for its 2015 intake, with the iconic program now entering into its fifth year.   First run in 2011, the Startmate program was a pioneer in the Australian startup scene. Based on an observation that VCs were missing in action in Australia at the time, it was inspired by the success of US-based seed funding programs such as Y Combinator and Techstars.   Startmate and Blackbird Ventures co-founder, Niki Scevak told StartupSmart the program has proven Australia has the talent to build world-class tech companies.   “If you look at something like 500 Startups or Y Combinator, a large proportion of the teams there are international and they’ve moved to San Francisco to start their business,” Scevak says.   “But really, you can launch a startup anywhere and we believe Australia punches well above its weight in terms of talent.”   Scevak says the big change in 2005 will be the increased importance of Startmate graduates from past years.   “The big change after five years is the network of alumni companies. We’ve invested in 29 companies over the years, and that network is increasingly becoming even more important to the program than the mentors.   “The folks who have gone through Startmate want to give back to the program, so the alumni and the mentors is really a one-two punch.”   Startmate initially offered startups a $25,000 investment in exchange for a 7.5% stake – a figure that has since been increased to $50,000 (which gives successful companies a valuation of $666k). Aside from the investment, the program offers startups office space and legal advice for its duration, and includes demo days where technology can be demonstrated to potential early-stage investors.   A key feature of Startmate has always been the use of high-profile mentors from the Australian startup and tech community. Some of the mentors have included Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar; Tjoos co-founder Bart Jellema; and Spreets co-founder Dean McEvoy.   The first program in 2011 generated 86 applications, which were eventually narrowed down to just five participants. The first intake was made up of Bugherd, Chorus, IRL Gaming, Grabble, and Noosbox. By the end of the year, one of the participants, Grabble, had been acquired by the US retail giant Walmart.   Between January and April 2012, Startmate returned with its second intake, with the program increased to eight participants. The number of aspiring entrepreneurs and startups boomed to 164, with Clique, Flightfox, Property Inspector, Invc.me, Ninja Blocks, ScriptRock, Setkick and Young Republic eventually chosen for the program.   It returned bigger than ever in 2013, with the initial investment doubling to its current level of $50,000 for 7.5% equity. The 2013 participants included 7pm Anywhere, Bugcrowd, GetStall, Kinderloop, SalesTeam, Shiftr, Storyberg, and Tutor on Demand.   In late 2013, applications opened for Startmate’s fourth intake, with the 2014 program kicking off earlier this year. The participants included Lumific, HayStackHQ, Inductly, Drawboard, Flirtey, Foogi, Composure, and SportHold.   In 2015, Scevak predicts Startmate will attract more than 250 businesses, with the growth of applications now tracking the number of startups in the ecosystem.   Applications for the 2015 program are available on this page.

BRW Rich List revealed: tech entrepreneurs fresh faces among the usual crowd

6:04PM | Sunday, 29 June

Miners and property developers are among Australia’s wealthiest people, but young technology entrepreneurs are snapping at their heels, according to the 31st BRW Rich 200 released Friday.   Gina Rinehart once again topped the BRW Rich List with an estimated worth of $20.01 billion, down from $22.02 billion the previous year.   Anthony Pratt, chairman and chief executive of paper and packaging company Visy Industries, came in at number two and is Australia’s richest man, with a net worth of $7.64 billion. James Packer came in at third place with $7.19 billion.   Despite the usual pack of miners, property investors and those born into wealthy families dominating the list, people who have made their fortunes from striking it out alone in the IT industry are quick on their heels.   Former Smart50 winners and Atlassian founders Mike Cannon-Brookes and Scott Farquhar have surged ahead in this year’s rankings, coming in at number 35 and 36 respectively. Between them, the pair is worth $2.14 billion. Last year the entrepreneurs were worth $250 million each.   Atlassian, a software development company founded in 2002, has averaged 40% on year growth for the last five years.   Cannon-Brooks and Farquhar have been hailed as examples of how Australian tech companies can thrive on the international stage. However, the pair also has their priorities set on other things besides profit.   In April, they pledged $35 million to community-building after setting aside 1% of the company’s equity to charity when starting the business. Farquhar told SmartCompany Atlassian has a passion for investing in charity for the long-term, especially when it comes to giving people the skills to help others.   “It’s really about education,” he said. “Ideally in 50 years’ time we want to say we have really achieved fixing something rather than just patching over something.”   Another entrepreneur, Ruslan Kogan, also fared well and came in at number 162 – his first time making it onto the list with a net worth of $320 million. Kogan’s business is going from strength to strength, and launched in New Zealand in March.   “Our goal is to deliver the latest technology at market leading prices,” he toldSmartCompany. “Whether it is manufacturing our own Kogan products, or sourcing the world’s biggest brands, we can cut out all the middlemen to guarantee the best prices.”   Mining magnate turned politician Clive Palmer didn’t fare too well in comparison to previous years, falling a massive $980 million in comparison to last year. However, fellow miner Andrew Forrest had the opposite fate – his wealth jumping from $3.66 billion to $5.86 billion this year.   The average age of those on the BRW Rich 200 is 64, and of the 200 people on the list 39 of them are billionaires. Only 7% of the rich-listers are women.   The richest people in Australia: 1. Gina Rinehart - $20.01 billion 2. Anthony Pratt & family - $7.64 billion 3. James Packer - $7.19 billion 4. Frank Lowy - $7.16 billion 5. Ivan Glasenberg - $6.63 billion 6. Hui Wing Mau - $6.35 billion 7. Andrew Forrest - $5.86 billion 8. Harry Triguboff - $5.5 billion 9. John Gandel - $4.08 billion 10. Kerr Neilson - $3.35 billion   This article originally appeared on SmartCompany.

Atlassian pledges $35 million to charity: Founders call on entrepreneurs to do more

4:31AM | Monday, 14 April

With Atlassian’s latest share sale valuing it at $US3.3 billion the Australian software company has pledged $35 million to charity.   Founders Scott Farquhar and Mike Cannon-Brookes set aside 1% of the equity in Atlassian to the Atlassian foundation when they started the company.   Farquhar told SmartCompany the foundation is part of the “untold” story of Atlassian and the latest valuation means it is now a $35 million foundation on paper.   Like Atlassian’s business plan, Farquhar says the company takes a long term view to its charitable giving.   “It’s really about education,” he says.   “Ideally in 50 years time we want to say we have really achieved fixing something rather than just patching over something.”   Farquhar says the Atlassian foundation concentrates on education rather than services such as homeless shelters which, while vital, don’t really address the root cause of the problem.   So far the Atlassian foundation has focused on charities such as Room to Read which works on educating children in the developing world.   “Their motto is that world change starts with educated children,” Farquhar says.   In addition to the $35 million in foundation stock, Atlassian has donated another $7 million to the Atlassian foundation and $3.1 million of this has been on-donated to Room to Read.   Farquhar says Australia does not have the culture of entrepreneurial giving like the United States.   “We want to encourage other entrepreneurs to pledge 1% of their equity early on when it’s not worth much,” Farquhar says.   “Then, like Atlassian, hopefully in the future it is worth more.”   This article first appeared on SmartCompany.

The long-term view is the secret to Atlassian’s success

4:04AM | Thursday, 10 April

Atlassian’s $US150 million ($A159m) share sale announced yesterday has rocketed co-founders Scott Farquhar and Mike Cannon-Brookes into Australia’s billionaire rankings.   Farquhar talked to SmartCompany from Los Angeles last night as news broke of the deal which values Atlassian at $US3.3 billion.   Farquhar and Cannon-Brookes are each believed to own close to 40% of the share capital and neither is selling down their stake as part of this sale, which leaves them with paper wealth of $1.4 billion each.   Farquhar says the deal was brokered by “inviting bids from a small number of select parties” and will assist Atlassian’s future growth through an injection of both capital and expertise.   “We have always been about thinking long term so the investors we get on board, like Accel Partners, help us set up the company for the next stage of growth,” he says.   “As we head towards an initial public offering we’ve now got one of the largest tech investors in the US on board and with their public market experience they will really help us set up.”   “It also allows our employees, some of whom have been around for 10 years to realise the value of their Atlassian stock.”   Farquhar would not be drawn on the timing of an IPO for Atlassian but it is “not in the next few months”.   The share sale is the latest move in a trajectory which has seen Atlassian soar to global prominence. In 2013, the business booked revenue of $US149 million up from $US111 million in 2012.   Farquhar says revenue is on track to be “north of” $US 200 million for this year. He attributes Atlassian’s success to “taking a long term view of everything we do”.   “At Atlassian, we want to be around in 50 years’ time,” he says.   Farquhar plans to grow the business further by expanding into multiple markets.   “As software development becomes an increasing part of every single business, our products actually become quite critical to every business,” he says. “That’s the area for growth of us.”   Atlassian plans to achieve this growth without hiring a single salesperson.   “We are not anti-sales; we are pro automation,” Farquhar says.   “We take an engineer’s philosophy to everything that we do. We are really about scaling the business.”   Although Farquhar concedes eventually Atlassian may have to follow a more traditional sales path if it wants to sell into large businesses at the top instead of going through the business’ developers.   “In the future we may have sales situations where we need to speak their language,” he says.   The biggest challenge at the moment for Atlassian is its stellar growth according to Farquhar.   The business has averaged 40% year on year growth for the last five years.   “We are growing fast. With that comes the inevitable issue of scaling, it sounds mundane but finding office space when you double in size every two years is hard.”   Atlassian’s move earlier this year to shift its domicile from Australia to the United Kingdom caused some soul searching in Australia’s tech scene but Farquhar insists Atlassian is still an Australian company “through and through”.   “We still collect all our revenue globally through Australia and the large number of people we are hiring are through Australia,” he says.   Farquhar says the move followed a global search to find the best place for Atlassian to be based “for the best interests of the company”.   Atlassian’s “back office people” analysed where Atlassian’s customers were, where the team wanted to live and settled on the United Kingdom.   “We looked at Singapore but the UK made sense because of the treaties between Australia and the UK it is easier and the global investor base is more used to investing in a UK company.”   But Farquhar does say the talent pool in Australia is limited.   “We don’t graduate enough computer science graduates from university,” he says. “That is the biggest constraint on our growth.”   “We have a unique company culture so we spend a lot of time on hiring for promotion and continuing that culture. I think half our staff have been here less than one year and four months.”   Atlassian has previously criticised the government for its approach to 457 visas for skilled employees and Farquhar says the program is essential because the Australian technology environment has more jobs than people to do them.   “Arrogance and lack of a strong industry in Australia meant we didn’t have mentors for a long time,” he says.   “Our argument with the government on these visas is that a lot of the people who could train us are highly qualified people we need to import from Silicon Valley.”   “Now we have mentors in our business and also on our board.”   This article first appeared on SmartCompany.

Google launches e-book celebrating the stories of Australia’s rising startup sector

4:46PM | Tuesday, 1 April

Google Australia has launched a campaign, armed with an e-book and video, to encourage Australians to take up coding.   Written by Fran Molloy, Start with Code shares the stories of the rising startup ecosystem, including startup founders including Noller, Peter Bradd, Marita Cheng and Mitchell Harper.   In the foreword, Communications Minister Malcolm Turnbull writes about the profound changes the internet and technology have wrought on the world.   “We need to improve the way we teach our kids; we need to inspire a generation of digital natives who are already avid consumers of technology to embark on careers as entrepreneurs and coders, in e-commerce and as engineers.”   The need to overhaul the education system to equip Australia with coding skills is something Atlassian cofounder Mike Cannon-Brookes also argues for in the book.   “At Atlassian, we know in the next 20 years we are going to have to hire a truck load of computer science people. We’ve got to start breeding them way earlier. We need to train them, at school, now.”   The investment in tech skills and the startup community, both key themes in the book, are argued for by accelerator founder and investor Niki Scevak.   “People call it a brain drain, I call it a brain boomerang, where they’re flying over but they’re coming back a few years later and bringing all that skills and knowledge they’ve had in Silicon Valley back to Australia.”   Google has also launched a video with the book, which celebrates Australian innovation so far and suggests learning to code is a fundamental step for any aspiring inventor today.   Check out the Australian inventions such as boomerangs, notepads, utes, wine casks and Wi-Fi in the video below.   {qtube vid:=THEpcW7vFkc}

Do you remember your first time? Twitter launches tool to help find your first tweet

3:45AM | Friday, 21 March

In celebration of its 8th birthday Twitter has launched FirstTweet, a tool that helps users find the very first message they sent.   We take a look at what some of Australia’s top startup folk had to say in their first tweet.   First off, here’s mine, clearly not aware of the location irrelevance of social media:   Anyone here from Perth, Australia?— Bronwen Clune (@bronwen) February 3, 2007   And StartupSmart journalist Rose Powell took the opportunity to be excited about being on Twitter:   @kirifarrell I know, I feel like this weekend went so fast. And looook, I'm on Twitter!— Rose Powell (@rosepowell) May 13, 2011   The Fetch’s Kate Kendall’s first tweet was in that awkward third person thing we used to do:   is being a night owl— Kate Kendall (@KateKendall) June 15, 2008   Atlassian cofounder Mike Cannon-Brookes tweeted about tweeting:   is making his first twitter post - and feels like a twit - albeit a connected one apparently!— Mike Cannon-Brookes (@mcannonbrookes) January 7, 2008   Muru-D’s Mick Liubinskas wanted us to know where he was:   Working from home in Woolloomooloo— Mick Liubinskas (@liubinskas) September 25, 2006   Canva Founder Melanie Perkins went for something fairly safe and vanilla:   Enjoying San Fran and all the exciting tech events it has to offer.— Melanie Perkins (@MelanieCanva) June 5, 2011   Twitter has asked users share their initial messages using #FirstTweet. 

Is portfolio investment theory friend or foe to entrepreneurs?

1:19AM | Tuesday, 28 January

Atlassian co-founder Mike Cannon-Brookes and Artesian Ventures managing partner Stuart Fox debated the impact of portfolio investments approaches, where an investor backs many start-ups with smaller amounts in the hope one or two works, at an event in Sydney last week.   Cannon-Brookes, who also called for Australian start-ups to stop selling their companies so early, described portfolio theory as problematic for start-ups.   “I want portfolio theory to be on my side, not on his side. Even at Blackbird (a start-up investment fund), the problem with a lot of investors is they want the portfolio theory on their side and I don’t think they should. Stay away from big corporates, they can get you into all sorts of trouble,” Cannon-Brookes said.   Fox shared Artesian’s plans to invest in between 500 to 1000 start-ups in the next five years and how portfolio theory was key part of their approach.   “If we’re going to invest in 1000 start-ups and they’re all billion dollar exits, we’re going to double the market cap of the ASX so that’s not probably going to work,” Fox says, adding the approach was likely to increase in popularity as new investors join the angel community.   ‘If we want external investors, we need to make this look attractive to investors who, no offence, are going to have a portfolio approach. They’re going to price it against not just the people in the room, but also against other asset classes.”   Cannon-Brookes added technology investors make most of their money on the one-in-a-hundred companies.   “You need to believe you’re the one in a hundred or you’re starting a different kind of business,” Cannon-Brookes says. “The greater proportion of the returns flow to the winner and that’s it. In almost any kind of technology, the winner takes it all and everyone else is well who cares.”   With this in mind, portfolio theory leaves underperforming start-ups more vulnerable. Fox explained they were quick to get rid of start-ups that have started to fail.   “Our sh-tty ones we turn the oxygen off. I don’t want to be harsh, but we turn the oxygen off. We’ll hit an idiot bid first but that’s the same,” Fox says.   “If anything comes out of my view, it’s that we’re not prescriptive. We want to get in really early on a lot of things,” Fox says, adding Artesian is backing got a couple of great companies who aren’t looking at maximum value of $20 million.   Artesian Ventures has also recently launched VentureCrowd, a crowdsourced equity platform that will open in February. Fox said it should open up further funding opportunities as it will have a lower cost (minimum $1000) to access than an angel investment ($10,000 and up).

Leading accelerator program Startmate opens applications for fourth intake

10:26PM | Monday, 7 October

Designed to turn Australian technical founders into successful global entrepreneurs, one of Australia’s first start-up accelerators Startmate is now open for applications.   The program will run next year from January to May. Companies will spend three months in Sydney and two in San Francisco.   Startmate is seeking around eight companies, which will receive $50,000 in seed capital, in exchange for 7.5% equity.   Startmate co-founder Niki Scevak told StartupSmart they’re seeking founders with big dreams and plans.   “Beyond the very product centric technical team, we’re looking for people with large ambitions, the crazier the idea the better. We really want to work with teams who want to make a big difference in the world, so the scale of the ambition is what we’ll be selecting,” Scevak says.   He says they’re committed to approaching each pitched idea with an open mind, adding that being the hundredth start-up to tackle an idea didn’t hurt Google, Facebook or Atlassian.   “Anyone doing anything in an incredibly crowded area will be taken as seriously as brand new ideas. The ideas may sound incremental, but it really does matter why the founders have chosen to pursue this idea, and if they have a unique insight into it,” Scevak says.   “It’s about why they care about their customers and if they have an authentic connection to the market. We look for what in their lives have driven them to this idea.”   The program includes an impressive line-up of mentors including Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar; Tjoos co-founder Bart Jellema; and Spreets co-founder Dean McEvoy, as well as several partners from Square Peg Capital and Blackbird Ventures.   This will be the fourth intake for the program. Previous participants include BugCrowd and NinjaBlocks.   Start-ups can apply via Angel List.

Friends in high places: The rich listers investing in Australian start-ups

10:50PM | Monday, 7 October

It takes many things to get a business off the ground.   It takes a flash of insight, plenty of drive, and good advice. It takes savvy staff and helpful networks. It also takes something few start-up founders have to begin with: money.   Australia’s venture capital industry is growing and maturing. But the funds to finance start-ups don’t just come from high finance. Increasingly, a generation of Australian entrepreneurs who made or grew their fortunes over the past decade are investing their money back into start-ups, either directly or through niche venture-capital firms. Through this, they’re helping build a start-up ecosystem able to support new, growing start-ups, using the spoils of yesterday’s success stories.   Here are just a few rich listers putting some of their money back where it came from.   James Packer   In many ways the trailblazer in this regard was James Packer, who made a fortune investing in companies like SEEK and Carsales.com.au a decade ago.   While by no means a successful start-up leader (Packer inherited most of his money), he has nonetheless grown his fortune through savvy start-up investing, a passion that doesn’t appear to have ebbed with time.   Packer bought a 25% stake in SEEK for $33 million in 2003. When the business listed, Packer’s stake was worth $150 million. By the time he sold out, he had made $440 million from his investment.   He was also an early investor in Carsales.com.au, putting $100 million for a stake in the company that sold for $500 million a few years later.   Those were some of the best dot.com investments ever made in Australia, and, perhaps spurred by his early success, Packer has continued to invest in start-ups with potential to disrupt their industries.   One of his most recent investments was last month in taxi app goCatch, which could radically disrupt Australia’s cab companies and Australia’s Cabcharge monopoly by allowing passengers to book a taxi by directly liaising with the driver.   Paul Bassat   Packer is joined in his goCatch investment by Paul Bassat, a cofounder of SEEK who’s since left running the business to his brother while he focuses on investing.   Bassat is the cofounder and joint chairman of Square Peg Capital, a newly minted venture capital firm that’s already put money into a heap of start-ups like beauty-box business Bella Box and design start-up Canva.   “First and foremost, we want to back fantastic people who are smart, passionate and high integrity,” Bassat told StartupSmart when Square Peg was formed a few months ago.   “For businesses that have been around for a few years and have a bit more traction, the question of if they’re solving a problem has been partially answered. If it’s an early stage business without a track record, we want to know exactly what the problem you’re trying to solve is if you’re actually solving it, in a unique and differentiated way.”   Bassat is also a mentor at Startmate, which offers mentoring and seed financing to online and software start-ups.   Mike Cannon-Brookes and Scott Farquhar   Bassat isn’t the only rich lister to volunteer his time mentoring young companies.   Scott Farquhar and Mike Cannon-Brookes, who cofounded Atlassian and for two years have topped the BRW Young Rich list, are also mentors at Startmate.   Last year, Cannon-Brookes also invested in Shoes of Prey, which gives shoe lovers the chance to customise every part of their shoes online and have a unique pair created and shipped.   Both Atlassian cofounders put money earlier this year into Ninja Blocks, a Sydney start-up that builds devices that let people link their devices to physical things in their homes (‘SMS me when the washing is done’, for example).   This story first appeared on SmartCompany.

Tinkler out but most made a killing: Secrets of the Young Rich

9:01AM | Thursday, 19 September

It often surprises casual observers that the annual BRW Young Rich edition counts the 100 youngest self-made entrepreneurs under 40.   After all, in most industries, awards for ‘rising stars’ and the like cut out at 25 or 30.   The reason BRW has to give people 40 years to shine is simple: hardly any businesspeople make a killing by 30. A list cutting off there would be dominated by sports stars and celebrities. And for a business publication, that wouldn’t interest its readers as much.   Almost all of the Young Rich 2013, unveiled in the magazine’s flagship edition out this morning, are aged from 30 to 40. The youngest person on the list, MotoGP rider Casey Stoner, is aged 27.   SmartCompany spent a fascinating morning dissecting the latest list. Here’s what Australia’s youngest millionaires have in common.   Life’s work   Most of the Young Rich are entrepreneurs, who started companies and over years helped grow them.   Apart from the sports stars and celebrities, there are few employees on the Young Rich.   Thanks to Nathan Tinkler dropping off the list this year, there are now two more. Todd Hannigan and Tom Todd made their $84 million joint fortune by leading Nathan Tinkler’s Aston Resources before it listed. In 2011 they lost their jobs, but were given six months’ pay and a whole lot of stock in the process. They sold their stock before things got rocky for the sector.   This must be especially galling for Tinkler. BRW doesn’t think his assets exceed his debts. He didn’t make the $18 million cut-off, leaving him entirely off this year’s list. Around this time in 2011, Tinkler was valued at $1.13 billion.   Most of the Young Rich have had a good year. Exactly half increased their wealth this year, while only 16 lost wealth. The rest were more or less steady.   Tech tricks   The full Rich 200 list, for which there is no age limit, is dominated by property developers. But the Young Rich has few of those.   Over one in three (34) of the Young Rich made their money in technology, of which 22 were web entrepreneurs. In the top 10, eight started technology companies.   These include Atlassian founders Mike Cannon-Brookes and Scott Farquhar, steady at number one with a joint fortune of $550 million. They were pegged at $480 million a year ago.   The fastest-rising names in the top 10 are Ruslan Kogan, of Kogan.com, who more than doubled his fortune to $315 million, and Freelancer.com chief Matt Barrie, who’s risen into the top 10 with $185 million (he was pegged at $50 million last year). Both companies are looking at listing on the ASX in the near future, which could see their founders get a lot richer if all goes well.   Reinvesting the profits   If so, they’d be some of the few Young Rich-listers to turn their business success into serious disposable income. For most of the Young Rich, their wealth is ‘paper money’. They own large stakes in highly successful businesses. If those businesses list or are sold, they can cash in some of that ownership.   Until then though, many of the Young Rich are fanatical enough to keep most of their wealth tied up in the one thing.   For example, at Kogan.com, the online electronics retailer, shareholders Kogan and David Shafer reinvest the profits every year. Shafer told BRW their remuneration was on an “as needs” basis.   “Building something is much more exciting,” he said.   Perhaps this need to reinvest profits is driven by Australia’s low venture capital spend. According to a recent PwC report, there is less venture capital available in Australia, relative to our population, than in Israel, the US, Norway, Switzerland, Demark,  Britain, or France.   When capital to expand isn’t readily available, revenue can be the best source of funds.   Slim pickings for women   As always with Australian rich lists, there are few women wealthy enough to make the cut-off.   Only seven women make the Young Rich, of which the wealthiest is Carolyn Creswell ($55 million), of Carman’s Fine Foods. The next wealthiest is Erica Baxter ($40 million), who is in the process of finalising her divorce from rich list-fixture James Packer, which could see her secure another $100 million according to recent reports.   Other women on the list are Lilly Haikin ($40 million held jointly), who bought chocolate café chain Max Brenner to Australia, PageUp People founder Karen Cariss ($25 million held jointly), golfer Karrie Webb ($22 million), MyBudget founder Tammy May ($20 million), and model Miranda Kerr ($18 million).   This story first appeared on SmartCompany.

New findings reveal which Australian universities are creating the most entrepreneurs

8:37AM | Tuesday, 20 August

Data released this week by US tech database CrunchBase has found the University of New South Wales produced more technology entrepreneurs in the past 15 years than any other Australian university.   The data was based on the CrunchBase dataset of over 170,000 companies, including 169 Australian entrepreneurs. CrunchBase is a free database of technology companies, people, and investors where anyone can upload information on start-ups.   Australians on the database included Dean McEvoy from Spreets, Tess Walton from Aruspex, Mike Cannon-Brookes and Scott Farquhar from Atlassian, Alicia Navarro from Skimlinks and Eddie Machalaani from Bigcommerce.   The University of New South Wales was ranked number one in Australia and is credited with launching the careers of 16 entrepreneurs.   UNSW had more than double the number of entrepreneurs produced by the University of Technology Sydney, which took second place and clocked in with seven entrepreneurs.   Monash University, Queensland University of Technology, University of Queensland and University of Sydney shared third place with six entrepreneurs.   Swinburne University, Melbourne University and the University of Newcastle were credited with four entrepreneurs each.   Josh Flannery is the student enterprise manager at the University of New South Wales entrepreneur program and commercialisation arm NewSouth Innovations.   Flannery told StartupSmart while the results were recognition of their commitment to encouraging entrepreneurship, he believes UNSW and NewSouth Innovations are about to reach a tipping point and start producing even more successful start-ups.   “It’s been an experiment really, but we’re at a tipping point now. I’m speaking to 60 to 70 individual students who are working on start-ups at the moment,” Flannery says.   UNSW runs entrepreneurial and innovation-themed subjects in every faculty and has a variety of internal programs.   “What’s maybe different is our NewSouth Innovations commercialisation approach. We now give 100% of the equity to the students. That’s not the case in every university yet but it’s becoming the trend,” Flannery says.   He adds that universities play an important role in encouraging young entrepreneurs and can do more to boost the start-up ecosystem.   “Universities play a very important role in nurturing entrepreneurial students, but also something I’ve found that we’re doing, which is relatively new, is almost offering the entrepreneurship career route as an alternative to the safe route as a consultant in a big firm,” Flannery says.   “The way we’re doing that is encouraging students to have a go at something entrepreneurial right now, when they have the least expectation on their shoulders than they will at any point of their life.”

‘Just outraged at the insanity of Julia Gillard’: Tech start-ups hit back in 457 visa row

3:39AM | Friday, 15 March

Key players in the Australian tech start-up scene have lashed out at Prime Minister Julia Gillard’s suggestion the 457 visa program is being abused by the IT industry.

Blackbird Ventures rolls out $30 million start-up fund

3:09PM | Thursday, 14 March

Blackbird Ventures is determined to offer Australian start-ups much-needed Series A funding rounds, after announcing the formation and first close of its $30 million venture capital fund.

Star-studded event series helps entrepreneurs face the Startup Grind

2:40AM | Wednesday, 27 February

The US-founded Startup Grind event series continues to grow in Australia, with the Sydney and Melbourne chapters set to host the founders of Atlassian and Zendesk respectively.

Independent eftpos provider Tyro surpasses $3.5 billion in transactions

3:27AM | Monday, 11 March

Independent eftpos provider Tyro Payments has vowed to step up its fight against the big banks, after revealing it surpassed $3.5 billion in credit and debit card transactions in 2012.

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