General wisdom among tech entrepreneurs is that the ideal number of co-founders is two or three. There is a good reason for it – an analysis of a dataset of 100,000 startups by Startup Genome shows that solo founders take 3.6x longer to reach the scale stage, compared to a founding team of two. However, taking a co-founder on board brings its own risks. Here’s a short guide to picking the right person. 1. Find someone with a complementary skillset According to serial tech entrepreneur and Stanford lecturer, Steve Blank, startups are inherently chaotic, and finding a product/market fit in that chaos requires a team with a combination of skills. The skills you need depend on the industry you’re in but, in general, co-founders should have complementary skills. In mobile and web startups, that usually means great technology skills, great business and marketing skills, great UX design and product skills. Most people are good at one or two of these, but it’s very rare to find someone competent in all areas. 2. Find someone who shares your vision and values Co-founder disputes are very common and are a frequent cause of startup failure. A lot of these disputes stem from founders having different ideas about how to run the company and where it should go. One thing is to put your vision and priorities on paper; another is to live it day by day, especially when your original idea proves wrong and you need to change direction. Likewise, the values you live by will plant a seed for what becomes a company culture. The reality is that co-founders will have different values but, together as team, you have to define a common value system. Having done so will likely play an important role in taking your startup forward. 3. Find someone with grit Once you have an idea, you need to be able to pursue it, even in the face of adversity, if you want your startup to succeed. Frankly, entrepreneurship is extremely challenging, and to persist through those challenges, you need grit. Professor Carol Dweck, of the Stanford Department of Psychology, has done extensive research on the subject of grit, which she defines as ”the disposition to pursue very long-term goals with passion and perseverance, stamina and ability to win things over the long-term and work very hard at it”. According to her research, the key to grit is having the right mindset. Dweck observed two different mindsets among people: Fixed mindset: A belief that you either are talented or not. Failure is proof of your inability. Intelligence and talent are just fixed traits. Growth mindset: A belief that abilities are developed. Setbacks and criticism are a sign that you need to improve. You learn and grow yourself and think long-term. People with a growth mindset are more resilient to challenges related to their abilities and performance than those with a fixed mindset. 4. Find someone who stands out Founder personalities are important and often popularised. Many companies end up looking like founder cults – Steve Jobs is a great example. Peter Thiel, investor and founder of two billion-dollar companies (PayPal, Palantir), believes there is a connection between being a founder and having extreme traits. According to him, the key to PayPal’s success was the eccentricity of all founders: “Four of them were born outside of the United States. Five of them were 23 or younger. Four of them built bombs when they were in high school. Two of these bomb-makers did so in communist countries: Max in the Soviet Union, Yu Pan in China. This was not what people normally did in those countries at that time.” According to his observations, if all traits distributed in the population were aggregated on a normal distribution chart with extreme traits on the right and left side of it, you will find most founders on both ends of the curve, rarely in the middle of it. True or not, entrepreneurs like Richard Branson, Bill Gates, Warren Buffett or Larry Ellison certainly add a little substance to this. 5. Find someone with whom you have a history of working together In the case of startup ‘unicorns’: 90% co-founding teams of $1 billion+ startups comprise people who have years of history together, either from school or work; 60% have co-founders who worked together; and 46% who went to school together. Further findings reveal that teams that worked together have driven more value per company than those who went to school together. Only four teams of co-founders didn’t have common work or school experience, but all had a common thread. Two were known and introduced by the investors at founding/funding; one team were friends in the local tech scene; and one team met while working on similar ideas. The take-away? The most successful co-founder teams are the ones where the people have known each other in other contexts, prior to the company at hand. Sources: TechCrunch, Peter Thiel’s CS183: Startup – Class 18 Notes, Stanford University. This piece originally appeared on Appster’s blog.
Rapidly growing international tech businesses like Airbnb and Uber should be subjected to stricter regulation to ensure they don’t avoid their tax obligations, according to shadow assistant treasurer Andrew Leigh. Leigh is giving a speech to the McKell Institute in Sydney tonight, in which he will call on the Australian government to continue the fight against multinational corporations that deliberately avoid paying their fair share of tax. “The sharing economy needs to be better regulated,” Leigh told Fairfax ahead of the speech. “I certainly don’t believe that the sharing economy should expand because it’s avoiding taxes. It ought to expand on offering a better product to Australians.” Leigh said there’s “an extraordinary number” of Australians that have used Airbnb and individuals who make money from renting out their homes, should pay tax on that income. “There’s nine million empty bedrooms in Australia at the moment. That’s a huge number of spare bedrooms for people looking to make ends meet on their mortgage … [regulators] simply need to say that if people are making income that ought to be reportable in tax returns.” Sharing economy needs regulation Leigh previously wrote about the benefits of the ‘sharing economy’ in an opinion article in the Herald Sun earlier this month, but also spoke then of the need to “think creatively” to ensure the balance between regulation and incentives to grow is correct. “At the moment it’s also hard to know if the people providing these [Uber] services are paying their taxes and doing the right thing when it comes to insurance and other consumer protections,” Leigh wrote. “For sharing economy services, we’d ideally have a set of rules that offer core protections for public safety and make it easy for everyone to pay tax on what they earn.” “At the same time, those rules would be flexible and simple enough to support the growth of these services. We should particularly aim to avoid strangling them through over-zealous regulation, because regular consumers would then miss out.” Read more: The sharing economy is here. University of New South Wales economics professor Tim Harcourt told SmartCompany it is “probably smart” to increase regulation for startups such as Uber, which operate in an industry in which existing competitors are subject to long-standing regulation. But Harcourt says when it comes to innovative companies, it is often a case of “learning as we go”. “With startups, we often don’t know what will happen in practice until there are some miles driven,” Harcourt says. “We wouldn’t pass legislation for rocket ship rides to the moon, but you never know, Richard Branson might start doing that.” “You have to be open to innovation and entrepreneurship as soon as possible and where there is some evidence of problems, you consult with industry,” he says. The problem with base erosion and profit shifting In Leigh’s speech tonight, entitled ‘No country ever tax dodged its way to prosperity’, Leigh will describe base erosion and profit shifting – or BEPS – as “among the most important global economic debates of our time”. “It’s difficult to put a figure on the tax dollars lost to BEPS – after all, it’s hard to count something that isn’t there,” Leigh will say. “But we do know that when Labor, in our last term of government, closed just a few of the loopholes that facilitated BEPS, the budget was over $4 billion better off.” “It is often said that tax is the price of civilisation. If that’s so, there’s also a strong argument that requiring companies to contribute their fair share wherever they make profits around the world civilises the forces of globalisation.” While Leigh will say in his speech that “globalisation creates many opportunities for economic good”, he says if a “global tax system creates incentives for doing dodgy deals, then dodgy deals will get done”. “Likewise, if the financial framework supports honest dealing and a fair contribution by all, then big corporations will find less reason to stray from this path.” Closing tax loopholes Leigh says politicians and policymakers are the “architects” of the incentive system for global businesses and it is possible to “get those incentives flowing in the right direction”. Leigh says work is already being done to achieve this, citing the OECD action plan on BEPS, commissioned by the G20 in 2012, and the Irish government’s moves to close the “Double Irish Dutch Sandwich” tax loophole, but called on the Australian government to do more. “Unfortunately, while the Irish government is closing tax loopholes, to the benefit of everyone, including Australian taxpayers, the Australian government has re-opened significant ones, which will costs us dearly,” he says. “Tony Abbott and Joe Hockey’s decision not to proceed with Labor’s proposals to tackle debt loading and improve the offshore banking unit regime has effectively handed $1.1 billion back to big global firms.” Harcourt believes there is bipartisan support for minimising tax avoidance by multinational corporations in Australia, pointing out that Treasurer Joe Hockey has also spoken publicly about the need for more action. At the end of the day, Harcourt says small businesses can ultimately be the losers from large corporations avoiding their tax obligations. “The great Australian concept of a fair go doesn’t just apply to the unemployed or people with disabilities,” Harcourt says. “It also applies to small businesses.” “Small businesses are general happy to pay tax if the blue chips are also paying tax, but if they read about the large companies avoiding tax, they feel an unnecessary tax burden.” This story originally appeared on SmartCompany.
Australian design startup Canva was one of the 10 finalists pitching at the 2015 International CES in Las Vegas as part of Richard Branson’s Extreme Tech Challenge competition this week. In total, more than 2000 startups from over 100 countries worldwide entered the competition. The Las Vegas leg of the competition saw two finalists picked by a judging panel including some of the biggest names in the tech industry, along with a people’s choice champion. While it didn’t win the contest, the competition was nonetheless a golden opportunity for Canva to pitch its business model to some of the most influential names in the tech industry. The judges included CES producer Gary Shapiro, Bill Gates’ scientific advisor Boris Nikolic, Monster Products' head monster Noel Lee, Robert Scoble, Brazilian venture capitalist Veronica Serra, former Priceline chief executive Jeff Hoffman; and Bioheart founder Hoard Leonhardt. The three winners were invited to visit Branson’s private island, Necker, to participate in the Necker MaiTai networking event. Canva chief executive Melanie Perkins told Private Media the company is looking forward to the year ahead, and has a lot of exciting things in the pipeline. “We're thrilled to have been selected as a finalist for the Extreme Tech Challenge and to be recognised alongside such innovative companies,” Perkins says. “Last year, we reached one million users, launched our iPad app, unveiled the Canva Button to allow other websites to integrate Canva, and opened our designer marketplace for graphic designers to contribute their own layouts and elements, and earn a royalty whenever they're used.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Best of the Web: How the Simpsons changed the English language; Lessons in entrepreneurship from The Colbert Report; When Marissa Mayer tried to be Steve Jobs12:52AM | Friday, 19 December
We see the influence of The Simpsons in all aspects of our lives – from cultural references to the products on supermarket shelves. But over on the Oxford Dictionaries blog, Michael Adams takes a look at how the cult TV show has influenced the English language. “The first episode of The Simpsons aired twenty-five years ago, on 17 December, 1989, and since then, English has never been the same,” says Adams. While most people will be able to rattle off the words invented by The Simpsons creators, or the catchphrases of the main characters, Adams says it is “two small but powerful words” that have made the biggest impact: d’oh and meh. Lessons in entrepreneurship from The Colbert Report Cultural touchstone The Colbert Report gave us plenty of laughs during its time, but the long list of successful entrepreneurs who appeared on Stephen Colbert’s show also dished out some important lessons. Writing for Inc, Oscar Raymundo rounds-up some the best of these lessons from the likes of Virgin founder Richard Branson and media entrepreneur Arianna Huffington. The one skill Colbert’s guests all have in common? The ability to laugh at themselves. When Marissa Mayer tried to be Steve Jobs Yahoo chief executive Marissa Mayer has a tendency to compare herself to Apple co-founder Steve Jobs, writes Nicholas Carlson. In this piece for New York Times Magazine, Carlson uncovers exactly how Mayer went about attempting to transform the fate of aging tech giant Yahoo and her varying degrees of success. “Mayer often compares her situation with the one Jobs inherited, and many expect her to insist that she needs at least the five years he received before his turnaround began to succeed with the release of the iPod.” But with growing pressure from shareholders with a preference to see a merger of Yahoo and AOL, means Carlson says “Mayer may not be able to buy herself the time”. This article originally appeared at SmartCompany. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
News that Google representatives are in talks with Richard Branson’s Virgin Galactic are seen as further evidence the web company is looking to set up a series of low-orbit satellites to help connect more people to the internet. Reports earlier this month said Google was planning to spend more than US$1 billion on a network of 180 satellites to provide internet access from space. Then Google revealed last week that it paid US$500 million for the satellite imaging company Skybox. It says the deal will give it access to better imaging technology for Google Maps, but it could also see it launch a new satellite network for delivering internet access. Google is already experimenting with new ways to provide internet access in remote locations through its Project Loon, which began in New Zealand last year and uses antenna held aloft in balloons. Access to digital networks and information are playing an increasingly important role as we move towards a more networked society. The global population today is approximately 7.1 billion, yet only 2.4 billion people are connected to the internet. Over the next six years this is expected to double, reaching 5 billion in 2020. It’s not just about the web Significantly, internet users will not be the key source of growth. There is increasing demand coming from a range of devices, systems and infrastructure being connected to the internet – home security systems, personal health monitors, cars, trams, trains, smart meters for power, gas and water, traffic lights and offices, as well as public spaces and buildings. As the internet is further industrialised the big technology companies are tapping into the growth in networked devices – usually referred to as the Internet of Things. Currently, 16 billion devices such as smart phones, tablets, security systems and smart meters have a network connection. This will grow exponentially towards 50 billion in 2020. There is a change in the focus of connectivity too - from individual people to houses, towns and cities. Large information and communication technology (ICT) companies such as Google are driving this increase in global connectivity, as their biggest market growth opportunity lies in the areas of population that do not have internet access. The World Economic Forum – which monitors the digital divide through its annual Networked Readiness Index – also sees the urgency in making the internet accessible to remote communities from the developing world. They are the people likely to benefit from substantial improvements in the quality of life through access to ICT. Other players trying to connect the world Google is not alone in this race. Facebook’s founder Mark Zuckerberg has also announced similar satellite plans to connect the unconnected, through the internet.org project. There have been past attempts to increase internet connectivity via satellites, such as the Iridium Project by Motorolla, now Iridium Communications. Iridium provides satellite phone connectivity across the globe via a constellation of 66 satellites. The service is limited by very low data rates - approximately 10kpbs - with costs of around A$1 to A$2 per minute of access. Well ahead of its time, the Iridium project faced significant challenges with a range of technological issues as well as failing to effectively monetise the idea. There were serious issues with the inter-satellite links needed to maintain the network, its handsets were bulky and its internet access plans were expensive. It remains largely an emergency communication tool and for infrequent access such as asset tracking in maritime/defence applications. Iridium plans to launch a new satellite service, Iridium NEXT, delivering peak download rates of 1.5Mbs by 2017. We will have to wait to see if the second incarnation of Iridium can increase its subscriber base. There have also been several other commercially yet-to-be-proven proposals that looked at high altitude long operation platforms making use of aircrafts and balloons to deliver similar broadband services. These platforms use the millimetre-wave (30-300 gigahertz range) frequency bands (currently targeting around 28-33 gigahertz range) to deliver broadband wireless services to locations theoretically wherever access is required. But none have yet to offer a product to market. Current satellite constellations are small (such as the 66 in Iridium) with each satellite often covering an area in excess of 1000km2. With limited bandwidth (often less than 100 megahertz available) to share between thousands of subscribers, individual subscribers get very low internet speeds. Looking for growth Yet new services are emerging. The Federal Communications Commission in the United States has approved Globalstar’s request to use a frequency band adjacent to the WiFi frequency window to offer satellite based WiFi coverage. Additionally, operators such as Intelsat and Inmarsat provide satellite internet connectivity across the globe. The growth in connected people and things presents an expanding market opportunity. Google’s business relies on its users delivering information upon which it can target advertising. It appears to be pre-emptively meeting the projected demand in order to increase its services. Satellite technology has matured and is now able to provide increased access and throughput to users and devices. Google’s approach is similar to that deployed by mobile phone operators. By increasing the number of satellites, individual beams can cover smaller areas, approximately 100-200km2 thus sharing scarce frequency spectrum with fewer customers, increasing internet access rates. Competition for Australia’s NBN In Australia, NBN Co offers broadband plans using existing satellites to about 3% of Australian population scattered around the massive landmass in areas with lower population density. The company has been designing its own satellites, which will be launched soon to increase access to broadband in remote Australia. But the project is facing major obstacles in terms of securing the highly regulated satellite launch rights. It is reported that NBN is in negotiation to secure a launch orbit spot. Google is not confining its vision to satellites or balloons. Google Fiber also plans to offer fibre connections with greatly improved speeds (compared to that offered by NBN) in selected USA cities directly competing with traditional telcos such as AT&T. This is driving innovation in the sector, with these new technologies providing possible options for the NBN to deliver broadband to cheaper and faster to remote Australian regions where wireline access to broadband may be difficult. Google’s satellite play highlights its serious intention to move into the new converging world of computing and communications, driving further competition and changes in the communications sector in the near future. Thas Ampalavanapillai Nirmalathas is currently the Director of Melbourne Accelerator Programs (MAP) which supports entrepreneurial activities of the University Community through business acceleration models. He is also an Associate Director for the Institute for the Broadband-Enabled Society. This story was originally published at The Conversation. Read the original article.
We are still awaiting the details of the federal government’s Entrepreneurs’ Infrastructure Program, and how this may impact the Australian entrepreneurial ecosystem. While this program is estimated to provide $484 million of funding, this is only half of what was spent under now-scrapped programs such as Commercialisation Australia, the Innovation Investment Fund and the Industry Innovation Precincts, representing a significant decline in government spending on entrepreneurs and innovation. While many agree that government programs can be improved, the cuts show a lack of understanding of the Australian entrepreneurial ecosystem. It also places us behind other nations that have put the needs of entrepreneurs at the centre of industry policy, recognising they are a driver of economic growth, prosperity and innovation (for example, as seen by President Obama’s Start-up America initiatives). Many agree that the current budget seems to focus more on SMEs rather than high-growth technology companies, or smart specialisation for the nation. There is a glimmer of hope that the government will finally address the Employee Share Option Program (ESOP) in Australia, which is considered a crucial way to incentivise early employees to work in a start-up (and a barrier that all stakeholders have been lobbying to change for many years). Development of crowd-sourced equity platforms are not highlighted, however the issue is currently under review by the Federal Government. Yet overall, this budget points to a broader lack of understanding of the Australian entrepreneurial ecosystem and also the nature of entrepreneurship and innovation. In a recent study completed at ATP Innovations, Australia’s largest technology incubator, we interviewed many entrepreneurs to understand what entrepreneurial life is like in Australia. We learnt of the difficulties in hiring and retaining key employees in the early stages (with taxation around ESOP the main issue), we listened to mixed views on whether it was necessary to go to the US to secure venture capital funding, to overcome the conservatism of the Australian VC market. We observed the significant impact that R&D tax concessions can provide - not in determining whether to pursue a technological venture, but in keeping start-ups alive. We noted the value of attracting larger technology firms to locate or operate in Australia (through various industry innovation support programs and incentives) due to the spillover effects for the local ecosystem. So what is it like being an entrepreneur in Australia? Don’t believe the hype Much of the hype around entrepreneurship today focuses on “hero entrepreneurs” – the stereotypical image of Virgin founder Richard Branson and his extroverted, risk-taking personality. Yet this picture doesn’t accurately reflect day-to-day life as an entrepreneur. This research busts the myth that entrepreneurs succeed because of inherent personality traits – because they are born that way. Sure, they may be determined and passionate, but they also follow processes and patterns of developing and testing ideas, building support networks and developing certain communication and business skills. Becoming an entrepreneur The entrepreneurs in this project wanted to solve problems and to use their technical expertise to develop creative solutions. What was their typical career journey? Many of the younger cohort emerged from university, mainly from technical (science and engineering) faculties, to further develop – at first, at least - their own technologies. Most created start-ups later in their careers, after seeing a problem in their industry and identifying a solution but being unable to implement it within an organisation. The notion that entrepreneurship is a high-risk/high-reward activity was not prominent. Leaving full-time employment for a start-up is risky, but many do so having been successful in their careers and with the security of a strong professional network and a fall-back position. Entrepreneurs are not necessarily risk takers, but they are seemingly more comfortable with uncertainty. The study’s participants were determined, resilient and passionate, as well as being sufficiently open to risk to be able to give up a full-time job. However, they were also aware of the need to acquire stronger marketing, networking and social interaction skills – skills they weren’t born with. They needed to learn how to articulate a value proposition, how to understand the needs of the market, how to pitch and sell an idea, and how to persuade investors of the merits of an idea. More findings of the report are available here and include discussions of how entrepreneurs measure and communicate success (to each other and to investors). It’s not always clear to those on the entrepreneurial journey whether they are moving in the right direction. Determining progress can take a number of forms and is an unstructured process. We examine the art and science of valuing start-ups (emphasis being on the art), the requirements of early stage networking and the structure of entrepreneurial networks (many cultivating what sociologists describe as “weak ties”). We also explore whether entrepreneurs feel entrepreneurship can be taught and whether you need to go to business school. A better understanding of the realities of entrepreneurial life in Australia will lead to better informed industry policy, and perhaps increased support for an ecosystem that is a key driver of future growth and development for Australia. The authors do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations. This article was originally published on The Conversation. Read the original article.
US-based bitcoin merchant processor Bitpay has raised $US30 million ($A32m) in Series A funding, the largest amount ever raised in a financing round for a bitcoin company. Investors include Index Ventures, Yahoo founder Jerry Lang’s AME Cloud Ventures, Felicis Ventures, PayPal founder Peter Thiel’s Founders Fund, Horizon Ventures, RRE Ventures, Virgin Galactic’s Sir Richard Branson and TTV Capital. Cheaper Kinect-free Xbox One announced Microsoft has announced it will be releasing an Xbox One without the Kinect sensor, resulting in a significantly lower cost. The console launched in Australia last year for $599, the new Kinect-free version will be $100 cheaper, retailing for $499 when it’s released on June 9. Split-screen multitasking coming to iPad? In an effort to match Microsoft Surface’s “snap” feature, Apple appears likely to add a new split screen multitasking feature to iOS 8. Overnight The Down Jones Industrial Average is up 19.97 to 16,715.44. The Australian dollar is trading at US93 cents.
The bitcoin rollercoaster continues this week with Japan announcing plans to regulate transactions, two bitcoin exchanges hacked and one closed, and a chief executive found dead of suspected suicide in Singapore. This week, the Poloniex exchange and Flexcoin’s bitcoin bank were both hacked, with Canada-based Flexcoin announcing their closure shortly afterwards. “As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately,” a statement from the company said, which also confirmed the loss of 896 bitcoins, worth over $650,000. The sudden closure of key Tokyo-based exchange Mt Gox last week sent shockwaves through the community. The bitcoin price dropped from around $US800 to $US500 before holding steady. Australian bitcoin experts and entrepreneurs welcomed the news of Mt Gox’s demise. The Japanese government did not. The Nikkei stock exchange has reported the government intends to establish rules for the trading of bitcoin, including taxes on bitcoin transactions. But the bitcoin start-up ecosystem is weathering the storm. A hackathon is taking place in Texas and Blockchain.info has acquired the ZeroBlock bitcoin trading platform. US-based Bitcoin Foundation said in a statement last week that recent events were certainly not the end of bitcoin. "As our industry matures, we are seeing a second wave of capable, responsible entrepreneurs and investors who are building reliable services for this ecosystem,” read an emailed statement. Australian start-up leader Niki Scevak has significant skin in the bitcoin game, after leading an investment round for Melbourne-based bitcoin start-up CoinJar. Blackbird Ventures invested $500,000, their maximum possible amount, in the start-up in December. Scevak says while it was obviously going to be a bumpy road, they were not remotely concerned about the current issues. “I have not changed my view at all about the long term potential of bitcoin,” Scevak told StartupSmart. “The fundamental innovation of bitcoin is still strong. What’s amazing is bitcoin has never been broken on a protocol level. All the bad things have been human fallibility and the age old phenomena of people stealing or doing silly things.” He adds bitcoin remains one of his biggest investment interests and Blackbird is actively seeking to invest in more crypto-currency start-ups. In sad news that is yet to be directly linked to the turbulence in the bitcoin ecosystem, First Meta’s chief executive Autumn Radtke was found dead near her home in Singapore, where the exchange is based. Radtke, 28, had previously worked for Apple, and Richard Branson as a business and sales consultant. She co-founded Geodelic Systems in 2008. She had recently published an essay on the psychological price of entrepreneurship in the hardcopy edition of Inc. magazine. In a statement, First Meta’s board chairman Douglas Adams said the team was shocked and deeply saddened by the loss. “Our deepest condolences go out to her family, friends and loved ones. Autumn was an inspiration to all of us and she will be sorely missed.” Launched in 2009, First Meta has raised capital from Plug and Play, as well as Singapore's National Research Fund. If you’re feeling depressed you can call Lifeline 13 11 14, BeyondBlue 1300 224 636 or MensLine 1300 789 978.
Crowdfunding site Kickstarter has posted a security notice revealing hackers gained access to its customer database and is urging all users to immediately change their passwords. In a post on the company’s official blog, chief executive Yancey Strickler says the hackers did not gain access to credit card information and the vulnerability used by the hackers has since been closed. “While no credit card data was accessed, some information about our customers was. Accessed information included usernames, email addresses, mailing addresses, phone numbers, and encrypted passwords. “Actual passwords were not revealed; however, it is possible for a malicious person with enough computing power to guess and crack an encrypted password, particularly a weak or obvious one. “We set a very high bar for how we serve our community, and this incident is frustrating and upsetting. We have since improved our security procedures and systems in numerous ways, and we will continue to do so in the weeks and months to come.” Branson lobbies federal government not to financially assist Qantas Virgin founder Richard Branson has taken out full-page advertisements in News Corp papers telling Prime Minister Tony Abbott to “think twice” about providing financial assistance to Qantas. “Should the Australian taxpayer be forced by the Australian Government to prop up the Qantas Group, as Federal Treasurer Joe Hockey is suggesting, business people worldwide should think twice about investing in Australia for fear of such intervention in their sectors,” Branson says. “Qantas has gone to its shareholders on numerous occasions over the last few years to wage its capacity war against us. “Now that shareholders have turned that tap off, the company is turning to the Australian taxpayer to try and bail it out.” Overseas quantitative easing might be boosting the Aussie dollar Reserve Bank assistant governor Christopher Kent has warned the Australian dollar might be overvalued as a result of the money printing programs of major overseas central banks. “The fact that these expansions have been occurring for some time suggests that they may have been placing some upward pressure on the Australian dollar in the years following the onset of the global financial crisis,” Kent says. “The fact that they are still playing out may have continued to provide some support to the Australian dollar beyond the time at which the terms of trade and the interest rate differential had begun to decline.” Overnight The Dow Jones Industrial Average closed up to 16154.4. The Aussie dollar is up to US90.59 cents.
An app to make gathering a group’s money for presents won the recent Startup Weekend Adelaide, beating 21 ideas and 10 teams to take out the top prize. SoGiftIt enables users to easily gather and manage funds for splitting the cost of presents for friends or co-workers. The team of four developed a point of difference through partnerships with retailers that enables the cash collectors to use the app to check out, similar to PayPal but as a group. Co-founder Derek Munneke pitched the idea on Friday night, and the team launched a basic version of the product, which they used to gather funds to buy the weekend organiser flowers on Sunday night. “We proved it from the user side and now need to prove it from the customer side. We have a few companies to approach in mind, and we need to prove it and flesh it out a bit more. If we can get retailers on board then we’ll seek investment to turn it into a full product,” Munneke says. Munneke, who runs a software development company, told StartupSmart he was wary of the term entrepreneur, and preferred to focus on the hard work of developing products and young companies. “Entrepreneur gets overused. Richard Branson is an entrepreneur, the rest of us are really start-ups,” Munneke says. “In this start-up boom one of the best ways to make money is to provide the shovel, so we make mobile apps.” Munneke says the SoGiftIt team are hoping to launch the app by March 2014, and doesn’t anticipate seeking much investment for it. SoGiftIt was selected as the winner by a judging panel that included Graham Wakeling from InBusiness Magazine, Stephen Rodda from ITEK Ventures, Kishen Vijayadass of BDO, and Shane Yeend of Imagination Nation. Startup Weekend Adelaide co-ordinator Chris Hooper told StartupSmart the idea stood out because it was a problem everyone had experienced. “Organising presents can be an absolute nightmare and the bigger the company the more complicated it is. They built the product over the weekend and actually used it, so we were all convinced,” Hooper says. This is the fourth Startup Weekend held in Adelaide. Hooper says about 10% of the graduates go on to become companies, and some of the founders from the first weekends returned this time to mentor aspiring business owners. He adds these weekends are key to fostering entrepreneurial activity. “There has been a lot of simmering under the surface activity about entrepreneurship in Adelaide, and events like this help bring it to the front. We’re getting a lot of encouragement from local and state governments, which believe we need more start-ups in South Australia to diversify our risks in terms of some of our other ageing industries,” Hooper says.
LinkedIn is way more than just your online resume and Rolodex. LinkedIn is now a go-to source of business news, a content publishing platform and a contact relationship manager (CRM). Find out why LinkedIn is the best social media platform for start-ups, hands-down. If you’re undecided, check out these six reasons to get on-board straightaway! 1. LinkedIn is your auto-updating Rolodex Back before LinkedIn we’d all keep a Rolodex or maybe an online database of contacts, but if that person changed jobs or businesses, we’d lose contact when their details changed. Nowadays, LinkedIn means we don’t need to worry about losing contact with people or losing their business cards. 2. Now it’s your free CRM Since the recent rollout of ‘contacts’ functionality, you can now tag contacts, add notes and reminders, and record how you met them. That is a huge improvement in how we can manage our ever-growing network of business contacts. Note: you can install this new functionality on your LinkedIn for free, but it doesn’t happen automatically. You’ll be prompted to install it when you login, and it takes a few minutes to process all your contacts into this new format. The invite to install it does look like a banner ad, so keep an eye out for it and don’t accidentally ignore it! 3. It’s the place for business news LinkedIn is fast becoming the go-to place for business news. You can read unique articles written by a wide range ‘influencers’ and well-known business leaders, such as Sir Richard Branson, Bill Gates and Arianna Huffington. In addition, it also has the LinkedIn Today feature where they publish popular content from all around the web. 4. LinkedIn is your free content-sharing platform It is now as easy as ever to share your content with your entire professional network. You can also submit your best articles to LinkedIn Today and if they decide to publish your work, you’ll be exposed to thousands more readers. And publishing your articles to LinkedIn Groups is the perfect way to introduce your content to new readers, and engage with them. 5. You can connect with fellow professionals My colleague Selina Power got me thinking about better ways to use LinkedIn in her recent podcast. Until my subsequent discussions with Selina, I’d been quite closed in my approach as to who I accept as a ‘connection’ on LinkedIn. My reluctance to accept people that I did not know personally lay in the fact that it may be seen an as endorsement of that person, when in reality I didn’t know any more about these people than what they say in their bio. I was initially sceptical about connecting, but since LinkedIn is becoming much more of a content publishing platform, it makes sense to broaden my network, so more people can read and interact with my content. After all, we are marketing a business, and this is the perfect content marketing tool. My rule of thumb now is to accept people if they have written a personalised request. 6. LinkedIn is improving everyday LinkedIn continues to get better and I’m sure there are many exciting improvements in the pipeline. I still wish that LinkedIn had the ‘follow’ functionality for individuals like it does for Company Pages, because it would allow for people who you don’t know to still opt-in to receive your content. That way it would still mean you could limit your connections to people you actually know but share your content far and wide. Maybe that will be next. To help your LinkedIn marketing you may also like to download the LinkedIn 5-Minute Daily Marketing Plan – there’s a version for beginner, intermediate and advanced.
Family lives of entrepreneurs: In her last column for the print version of Inc., Meg Cadoux Hirshberg reflects on her time charting the ways entrepreneurship impacts upon families. She writes that because entrepreneurs owe the best of themselves to their businesses and families, work-life balance is impossible – but that doesn’t mean they shouldn’t try. How snacking became respectable: It may be hard to believe, given the much publicised problem with obesity in the US, but snack foods were once looked upon with suspicion and even scorn. But this essay in The Wall Street Journal describes how commercialisation altered the image of snack foods to become respectable. Richard Branson on taking an inspiration vacation: How does one of the world’s most recognised entrepreneurs nurture inspiration? He makes sure he disconnects from the office and carries a notepad and pen for whenever an inspiring thought comes to him. In this article for Entrepreneur, Richard Branson also suggests asking whether staff return from their own holidays inspired and recommends group holidays. Six skills for triple-strength leadership: The Harvard Business Review has identified an emerging, but rare, brand of leader – one with three distinct sets of strengths. This leader is seen as someone who can engage across the private, public and social sectors. The magazine sets out the six skills that set these leaders apart, including balancing competing motives, acquiring transferable skills, and building networks.
Billabong has struck a deal worth $395 million in total with US private equity firms Altamont and Blackstone, with Launa Inman set to be replaced by former Oakley chairman Scott Olivet. The complicated deal will see Altamont and Blackstone group lend $325 million as part of a bridging loan and five-year debt facility, with Altamont paying an additional $70 million for adventure sports brand Dakine. The deal will see Billabong repay its $289 million syndicated debt facility in full and gain an additional $106 million in working capital. In return, Billabong will pay Altamont 12% interest on the loan along with 42 million share options, which if exercised will see the private equity firm own between 36.3% and 40.5% of the surfwear company. Etihad increases stake in Virgin Australia Etihad Airways chief executive James Hogan has revealed his airline has been buying shares in Virgin Australia, after receiving permission from the Foreign Investment Review Board to lift its stake from 10% to 19.9%. Aside from the 13% stake held by Richard Branson’s Virgin Group, other key shareholders include Air New Zealand at 23% and Singapore Airlines at 19.9%. “We fully support [Virgin Australia chief executive] John Borghetti and his management. We have a great relationship with Air New Zealand and we have an amicable relationship with Singapore. While we don't code-share on passenger routes, we code-share on cargo. This is about our options and we continue to work through that,” Hogan says. ASIC forces Commonwealth Bank and HSBC to change “potentially misleading” ads The Australian Securities and Investments Commission has forced the Commonwealth Bank and HSBC Australia to change “potentially misleading” advertising presenting complex protected loan and structured financial products as being simpler and less risky than they actually are. “HSBC claimed that its structured products were suitable for 'traditional deposit investors looking for a way to enhance their returns through exposure to financial markets, but are unwilling to put their capital at risk should the market not perform as expected',” ASIC says. “[But] this statement was inappropriate and potentially misleading due to the risk of capital loss with certain [of the] HSBC structured products being promoted.” Overnight The Dow Jones Industrial Average is down .21% to 15451.85. The Aussie dollar is down to US92.43 cents.
A Croatian start-up has embarked on an ambitious video campaign to attract Richard Branson’s attention, in a bid to get their hero to meet with them for advice, and possibly invest. The team behind Babywatch, a tool that lets pregnant women hear and see their baby’s heartbeat on their smartphone, have invested in a professionally produced video pitch to attract Branson’s attention. Founder Davor Runje told StartupSmart they’re aware it’s a long shot. “All three of us wish to meet Richard Branson and ask him for his advice and/or investment. We are quite aware of how popular he is and how difficult it is to get to him,” Runje says. The video took four days to shoot, and according to Runje, the clip is full of Richard Branson’s favourite things. “The video is full of references to Richard Branson. Everything is happening on a beach, there is a lot of kitesurfing and there are beautiful girls,” Runje says. “The video is a tribute to Richard Branson by guys that want to meet their business and lifestyle idol.” More than 30,000 people have watched the video and it’s been widely covered in Croatia. They’re hoping with international traction it might just get Branson’s attention. “We are hoping that by showing our passion and determination, we would get the attention of the most popular business leader in the world,” Runje says Runje and his team Urska Srsen and Sandro Mur bootstrapped to develop the product, and are currently running a crowdfunding Indiegogo campaign to ship the first batch of orders. With the first orders due to ship soon, Runje and his team are seeking investors, ideally Branson. “We were thinking about finding an investor to take the start-up to a new level in terms of international visibility, marketing and distribution,” Runje says. The video can be viewed here.
With a new book, XERO for Dummies, out on the market, Heather Smith is a big believer in cloud accounting, especially for business owners who aren’t comfortable with their financial literacy. “Accounting is just like driving, you can’t do it without checking the dashboard. When you run your own business, you need to identify KPIs (key performance indicators) you should be monitoring, and cloud accounting helps you easily track your financial ones,” says Smith, who has 22 years’ experience as an accountant and certified advisor for Xero and MYOB, two of the major players in cloud accounting. She has been running her own business for eight years. Smith spoke to StartupSmart about her top five tips for start-ups setting up cloud accounting, and how they could get the most out of it. 1. Use it to save time and boost growth “I recommend start-ups, if you’re serious about going into business, get your financial side sorted out as quickly as possible so you have the time to know what’s going on financially, and be scalable,” Smith says. “If you’re doing cloud accounting right, it’ll free up your time to grow your business.” Smith says cloud accounting, and the opportunity to see at a glance your entire bank feeds, sales data and invoices, will allow start-up operators to strategically grow their business by automating systems. “There does seem to be a trend in business at the moment to move to subscription payment services and a cloud accounting system can do this without you even thinking about it. This creates a money funnel for your business,” she says. 2. Make the most of plug-ins and report features Smith says some of the plug-ins, such as the Timely time management plug-in and the debt-tracking options, can boost your cashflow very quickly. “Personally, I implemented a debtor tracking solution and I was able to improve my debtor days by 10 days, and that was massive,” Smith says, adding the executive reports with detailed KPIs create a goal system for start-ups who are working on their own. “You can monitor how many and what value of invoices you’re doing a month, or a week. This will enable you to stay focused on constantly pushing up the average value of the total invoices, rather than aiming for more invoices, which means more work and may not be the best way to grow your business.” 3. Getting expert help to set it up properly will be easier and ultimately cheaper “We have such an onerous tax system in Australia,” Smith says, noting that sitting down with your accountant or bookkeeper now to install a system will save you stress and time next financial year end. Smith says start-ups who set up a cloud accounting system as early as possible will avoid complicated and costly fixing later on. “This first stage is the hardest stage. But if you get help after a couple of months, to fix it up takes a lot longer and can be thousands of dollars.” 4. Overcoming data security concerns Smith says the data security concerns around cloud accounting are minimal, and there are significant data security benefits too. “Xero data is historical data not future data. Someone who gets in can’t access your bank account and extract money. So if you’re prepared to do online banking you should be set to do cloud accounting,” she says. Smith says business owners should be more worried about losing their financial data through computer crashes, or natural disasters, adding that she’s based in Brisbane and has seen too many businesses lose their records from flood or fires. “You need to have a secure back-up plan in place, so use a cloud-based option, backed up in real time in multiple services. I still suggest to people they make their own back-ups, but cloud will be far better.” 5. Take responsibility for the financial management of your business Smith says many small business owners may want to avoid the financial details of their business and outsource that work to an accountant. While that can work for a few years, Smith says this approach holds businesses back from reaching their full potential. “Don’t put on blinkers and say you don’t want to learn this stuff. If you are in business you need to know this stuff. But you can take the time you need to learn it slowly,” Smith says. “Richard Branson doesn’t do his own tax but he does understand the numbers. Don’t abdicate that responsibility.”
When Yahoo! chief executive Marissa Mayer announced a complete ban on employees working from home in late February, she copped a hefty amount of criticism. But as Mayer wrote in her memo to staff, some of the best decisions and insights come from “hallway and cafeteria discussions, meeting new people and impromptu team meetings”. The international co-working community has thrown its support behind Mayer, insisting workers are more productive when they are together than when they are alone. In fact, Mayer’s decision was one of the hot topics at the annual Global Coworking Conference, held in Texas earlier this month. Nearly 500 shared workspace enthusiasts met to discuss the merits of working alongside others, and the evolution of the way we work. Of course, not everyone is a fan of shared workspaces, however modern they might be. Among the critics is British entrepreneur Sir Richard Branson, who has stated: “In 30 years’ time, as technology moves forward even further, people are going to look back and wonder why offices ever existed.” But for many people, offices – and co-working spaces in particular – offer an opportunity that is simply not available whilst working from home. That is, the opportunity to collaborate. Co-working spaces continue to gain pace throughout the world, and Australia is certainly no stranger to the concept, having welcomed a throng of new venues in recent years – much to the delight of start-ups. However, there comes a time when start-ups need to decide whether they’ve outgrown their co-working space. StartupSmart spoke to a number of industry players to determine whether you’d suit a co-working space, when it’s time to move on, and how co-working spaces could improve. Pros and cons of co-working spaces If you do decide to use a co-working space, you need to think about how it will affect your operation. For example, you and your team could run the risk of being distracted by others. “This can definitely happen. It’s up to the individual. Those who thrive in co-working spaces are able to block out distractions when they need to get down to work,” says Tweaky.com co-founder Ned Dwyer, who used to work out of Inspire9. Dwyer was also a panelist at Australia’s 2013 Coworking Conference, hosted by Inspire9 and Hub Melbourne earlier this month. In addition to distractions, the image you wish to convey to clients can become an issue when you’re operating in a co-working space. “Co-working spaces can affect how clients perceive you,” Dwyer says. “But generally it’s in the positive – in my experience clients found it amusing that we worked in such an unusual environment. If your clients might care, maybe it’s not for you.” Sole trader Linnet Hunter, founder of Wild Sky, lives in the country but uses Hub Melbourne as her city base one day a week. Like Dwyer, she says her clients are intrigued by co-working. “I do a lot of one-to-one coaching, which requires a private and confidential space,” says Hunter. “I have always had the most positive response from clients… They have always been thrilled to meet at the space. “It has quite a corporate feel and some clients are under the impression that everyone in the room works for me, which is a good start! “They are always curious and delighted to find the space, and to know more about it. I am perceived as being quite ahead of my contemporaries by being part of it.” Getting the most bang for your buck David Vandenberg, who heads up Fishburners and EngineRoom in Sydney, admits co-working spaces could, at times, be more flexible and less generalist in their approach. However, he has made a point of developing two very different offerings within his own co-working spaces. “With EngineRoom, they’re the spaces I’ve created for digital businesses, whereas Fishburners is focused on tech product businesses,” he says. “The digital service guys have clients, designers, developers, UX, SEO – that type of thing. “Right from day one, I’ve been tailoring the EngineRoom spaces to be accommodative of that so that they’re presentable. It’s definitely somewhere where people do bring their clients. “It has been [the same] with Fishburners but that’s not the main purpose of Fishburners. A lot of those guys aren’t really dealing with clients so much.” Hunter believes co-working spaces are getting better at catering for the specific needs of start-ups, and are becoming more flexible. “Hub [Melbourne] has created permanent spots for groups who now have a few employees – something they refused to do in the early days,” she says. “The Hub is flexible in that it alters its approach as it grows and tries to involve the members in changes to some extent.” Story continues on page 2. Please click below. Outstaying your welcome Dwyer says while a co-working space can offer start-ups numerous benefits, there are ways of knowing when you’ve outgrown it: You’ve got more employees than will fit into the meeting room for your morning WIP. Your employees are spending more time playing ping pong than shipping product. That big client comes in for a meeting but the meeting room is double-booked so you have to go to the ball pit. They run out of desks to house your employees. Vandenberg is quick to point out size isn’t the only factor, although it is an important one. “The things they’re thinking about are ownership of their culture and ownership of their space and branding,” Vandenberg says. “Obviously once you get up to 20 or 30 people, you shouldn’t be in a co-working space – that doesn’t make sense. I find the transition point is around six to 10 people. “When companies get around that size – say around the 10 mark – that’s when it becomes a lot less valuable to be part of a community like that… There’s less opportunity for engagement.” Moving out “The first thing is to communicate clearly with the space you’re moving out of. They’re a small business themselves relying on your rent for their income so they need to plan,” says Dwyer. “Let them know it’s not working for you (for whatever reason) and give them a roadmap for how and when you’ll be moving out. “Often these spaces are incredibly responsive to feedback so if there is an issue causing you to leave, make sure you let the space know – they might even be able to fix it. “Finally it’s usually easiest to move on the weekends as it’s far less distracting for other members of the space and doesn’t interrupt your own work week.” Another entrepreneur, who wished to remain anonymous, says they are considering moving out of their current co-working space, but doesn’t anticipate it will be a tricky process. “I am thinking of moving to another larger, less crowded, less noisy co-op space. I would need to change my address on about three documents and that would be it,” the entrepreneur says. Keeping in touch Dwyer says it’s definitely worth staying in touch with your co-working space even after you’ve moved out. “We still stay in touch with Inspire9 and go back to work out of there at least once a month. We still feel like we’re part of the community but we also enjoy the benefits of having our own space,” he says. “By being a part of the community, we’re able to find out about upcoming events, find out what other cool start-ups are working on and find new people we can work with.” The changing face of co-working spaces “We’re going to see more specialisation going forward. That’s what should happen,” says Vandenberg. “Personally, I’m not a big fan of just your regular co-working spaces… It can be a bit too social and not really focused on business. But I think there’s a huge space for more specialisation. “We see more spaces opening up around hardware hacking, industrial design, video production and other markets that need different types of shared resources and infrastructure.”
Australian entrepreneurs are being encouraged to write a 25-word submission for the chance to sit on a panel with Sir Richard Branson at a University of Queensland Business School event.
Some say it’s too late. Some, even those who have been continuously calling for the nation to go to the polls for the past three years, say it’s too early, given the budget announcement isn’t until May.
When you’re planning a business, it’s natural to spend a lot of time thinking about how you’re going to brand your first product. But what about your second product?
Well, the non-ratings season is upon us. You can tell by the fact that any TV not tuned to the cricket is endlessly showing infomercials thinly disguised as “home repairs shows” or the repeats of “gritty” Australian dramas that are so brilliant that no one bothered watching a decade ago.