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Controversial tech entrepreneur to political leader: The new startup career path

4:45PM | Tuesday, 22 April

Controversial tech entrepreneur Kim Dotcom has announced the formation of a new political party, known as the Internet Party, ahead of New Zealand’s next general elections in September.   German-born Dotcom is best known as the founder of the controversial file sharing website Megaupload, for which he was indicted in the US on charges relating to piracy.   Since then, he’s gone on to launch a new venture, a highly encrypted cloud storage service called Mega.   His new party’s positions include delivering cheaper high-speed internet, better oversight of spy agencies, opposition to the Trans-Pacific Partnership Agreement, copyright reform, the introduction of a digital currency and the introduction of a digital bill of rights.   However, Dotcom is far from the first tech figure to turn to politics – with some having more success than others.   StartupSmart looks at five other high-profile tech figures from the tech world who have gone on to their hand at politics – often with mixed results.   1. Julian Assange, Wikileaks Party   Should Dotcom’s party get off the ground, his political career will inevitably be compared with that of Julian Assange.   Assange is best known as the founder of whistleblower website Wikileaks, along with a long-running series of court cases relating to rape allegations in Sweden. Since August 2012, facing the threat of arrest, Assange has been granted asylum in the Ecuadorian embassy in London.   After being granted asylum, Assange announced plans to form a Wikileaks political party. The Wikileaks Party contested the 2013 federal election, but only received 0.66% of the vote.   Along the way, several high-profile candidates, including prominent academic and former Wikileaks lead Senate candidate Leslie Cannold, abandoned the party.   2. Ross Perot, Reform Party   A far more successful minor party campaign was run in the US by Texan tech entrepreneur Ross Perot.   Perot got his start in the tech industry all the way back in 1962, when he launched an information technology equipment company called Electronic Data Systems. Perot eventually sold the company to General Motors in 1984, which in turn sold the company to HP in 2008.   It was around the time of the sale to General Motors that Perot met another young tech executive named Steve Jobs. After being ousted from Apple, Jobs had launched a new tech startup called NeXT, and Perot decided to make an investment.   The products Jobs’ company developed included an operating system called NeXTStep, which would eventually form the basis of Mac OS-X and iOS after Jobs returned to Apple. Perot also sold another venture – Perot Systems – to Dell in 2009 for $US3.9 billion.   Of course, these days, Perot is best known for standing as an independent third candidate in the 1992 US presidential election against incumbent George Bush Snr. and Democratic Party candidate Bill Clinton.   The Texan stood on a platform combining a mix of policies mixing positions traditionally advocated with the left and the right of US politics. For example, Perot advocated a balanced budget, a tough stance on drug policy and opposition to gun control. However, he also advocated in favour of abortion rights, protectionism, an end to outsourcing and a strong Environmental Protection Agency.   Perot ended up winning 18.91% of the vote, an incredible result for an independent presidential candidate in the US. He stood a second time in 1996, picking up 8% of the vote against President Bill Clinton and Republican candidate Bob Dole.   Story continues on page 2. Please click below. 3. Rickard Falkvinge, Pirate Party   Of course, when it comes to Kim Dotcom, perhaps the best political role model to follow might be Rickard Falkvinge.   Falkvinge grew up in the Swedish city of Gothenburg, next door to the home ground of football club Västra Frölunda.   Falkvinge’s biography reads like a list of tech entrepreneur clichés. He got his first computer, a Commodore VIC-20, when he was just eight-years-old. By the age of 16, he had launched his first tech startup, a company called Infoteknik. At the age of 18, Falkvinge hired his first employee.   More than making profits, Falkvinge was motivated by the free exchange of ideas that came with the early home computer market. He grew increasingly concerned that harsher copyright laws being lobbied for by the motion picture and record industries could stifle online innovation.   His concerns about patents, copyright law and file sharing restrictions led Falkvinge to form a new political party. On January 1, 2006, he launched the website of his newest venture – dubbed the Pirate Party.   While the new party managed just 0.63% of the vote in its first Swedish elections, it grew to 7.13% for the 2009 European elections. The pirate party model was mirrored internationally, including in Australia. On January 1, 2011 – five years after its launch – Falkvinge stood down as party leader, handing control to his deputy, Anna Troberg.   4. Malcolm Turnbull, Liberal Party   In Australia, the most prominent example of a (far less controversial) tech executive turned entrepreneur is communications minister, Malcolm Turnbull. Before entering into federal politics, Turnbull has served in many roles, including as the general counsel to Kerry Packer’s Consolidated Media Holdings, the cofounder of law firm Turnbull McWilliam, the chair of the Australian Republican Movement, a journalist and a partner at Goldman Sachs.   Turnbull became the chair of pioneering Australian internet service provider OzEmail in 1994, also becoming an investor in the company. In 1999, at the peak of the ‘90s tech boom, Turnbull sold the company to US telco MCI WorldCom.   In 2004, Turnbull won the by-election for the federal seat of Wentworth, being elected as the local Liberal Party MP at the general election later that year. Since then, he has served as the environment minister in the Howard government, as well as the leader of the opposition.   5. Paul Fletcher, Liberal Party   These days, Paul Fletcher is best known as the Liberal MP for the federal seat of Bradfield, as well as a parliamentary secretary to the minister for communications. It’s a position he’s held since December 2009, when he won the seat at a by-election after former opposition leader Brendan Nelson retired from politics.   However, before entering into politics, Fletcher served as a senior executive in one of Australia’s largest telecommunications companies Optus, between 2000 and 2008.   After stepping down from the role, Fletcher authored a book titled Wired Brown Land? Telstra's Battle for Broadband, which dissected the case for Telstra being allowed to build the national broadband network.   He has also run a strategic consulting business focusing on the communications industry, and also served as the chief of staff to former communications minister Richard Alston.

THE NEWS WRAP: APRA’s bad loan warning

9:23PM | Wednesday, 11 September

The Australian Prudential Regulation Authority has issued a report warning lenders about a spike in the number of high-risk loans, with the number of borrowers mortgaging more than 90% of a property’s value spiking during the June quarter.   “It is important for [authorised deposit-taking institutions] to ensure that new borrowers are able to service debt and afford higher repayments when interest rates rise from current record low levels,” APRA says in the report.   “While the business non-performing loan ratio has gradually declined over the past few years, it remains elevated relative to pre-crisis levels.   “This reflects weaknesses in a number of industries, particularly the commercial property industry and those industries impacted by a high exchange rate and subdued consumer spending.”   Dick Smith surges towards an IPO   Electronics retailer Dick Smith has appointed Macquarie Bank and Goldman Sachs to explore the possibility of an initial public offering worth around $500 million.   The IPO would see private equity company Anchorage Capital, which purchased the chain from Woolworths in November of last year, sell the company for more than five times the amount it purchased it for.   Apple’s share price dives after iPhone unveiling   Apple’s share price slid by 6% after the company unveiled its new iPhone 5C and 5S smartphones, with leading analysts criticising the lack of new hardware innovation in the devices.   “Investors were put off that Apple's price point didn't go low enough to attract a new market. It doesn't have the same range in price that Apple's competitors have," Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters.   "Also, there was nothing transformational announced. It has the fingerprint scan and new colours, but bigger features, like different screen sizes, don't seem to be at the ready. This was less than expected from a company that has a reputation for surprising with a killer product or strategy.”   Overnight   The Dow Jones Industrial Average is up to 15326.6. The Aussie dollar is down to US 93.26 cents.

Best of the web reads: How to harness the power of fast innovation

8:17AM | Friday, 9 August

With the constant demands business owners face each day, it’s hard to harness new opportunities in the market, and find the best way to put innovations in place.   Are tight deadlines, big teams and micro-management the key to launching new ideas and measuring results quickly? Apparently not, according to writer Scott Antony. For the Harvard Business Review Blog Network, he explores five ways to do things better, and they may not be quite what you expect.   Most people spend a lot of time weighing up options, but in business, deliberation is impractical. For the Farnamstreet blog, writer Shane Parrish draws on the world of elite baseball to consider how we can use our “strikezone” to make the best choices. He also tells us how to know when we’re not fit to call shots.   The world of high finance, computers and crime always allures, particularly the case of the Goldman Sachs programmer accused by the company of lifting proprietary computer code. The case, which saw the man jailed for eight years, has raised questions over exactly what he did wrong. Michael Lewis delves into it for Vanity Fair.   With their red-striped poles and no frills interiors, barber shops verge on ‘historical relic’ when it comes to the hairdressing industry. But a mysterious attraction keeps them alive. To a female, they feel like a no-go-zone – a secret place for men to groom and chat with the barber they become friends with over the years. For The Spectator, Henry Jeffreys gives his view on why barber shops are booming, and why he keeps going back.   This story first appeared on SmartCompany.

THE NEWS WRAP: Business conditions and housing industry confidence up in the US

6:33PM | Monday, 17 June

Confidence among builders in the troubled US housing sector and general business conditions in the world’s largest economy are up, according to two leading market indexes released overnight.   The National Association of Home Builders/Wells Fargo Housing Market index, which measures confidence among home builders, jumped to 52 in June from 48 in May, with a number over 50 meaning more builders see business conditions as favourable than poor.   Meanwhile, the New York Fed's "Empire State" general business conditions index rose to 7.84 from -1.43 in May, where a reading over zero indicates expansion, although the report is not entirely positive.   “Sentiment may be improving but actual output isn't improving. This report suggests manufacturing activity is sluggish and that we are seeing that in the US and the rest of the world,” says senior Bank of America Merrill Lynch economist Michelle Meyer.   AirAsia founder plans to retune the Australian insurance and hotel markets   AirAsia founder Tony Fernandes has opened up a national headquarters for his Tune Group in Melbourne, with ambitious plans to expand into the no-frills accommodation and insurance markets.   Fernandes has also announced plans to open his first Tune Hotel in Melbourne, where guests will be offered a low-cost hotel room for a budget price but will be charged extra for air conditioning, television, daily room cleaning and towels   “Tune provides a whole new market that we don't perhaps provide for as well as we should in Melbourne and Victoria. I think it will significantly increase the number of people that travel and stay in Melbourne,” Victorian Premier Denis Napthine says.   “We have a good brand and we have a bit of a captive market with the people who travel with us on travel insurance. Insurance is marketed in a very old-fashioned way. "I think people want choice and to tailor make their insurance a bit, depending upon their lifestyle,” Fernandes says.   NAB boss expects Australia to avoid a recession   National Australia Bank chief executive Cameron Clyne has revealed during an interview with The Australian he expects Australia to avoid a recession.   “We have this national gloom hanging over us. When the unemployment figures come out, no one believes them but they are quite robust. They are real,” Clyne says.   Clyne cited the reaction to a recent Goldman Sachs report showing Australia has a 20% chance of recession next year as another example of the “national gloom”, pointing out that in the US more attention would be paid to the 80% chance of avoiding recession.   Overnight   The Dow Jones Industrial Average is up 0.73% to 15,180.08. The Aussie dollar is down to US95.66 cents.

Meet the Startmate class of 2013 – part two

3:16AM | Tuesday, 19 March

Above: Ben Sze, Duncan Anderson and Jeremy Cox from Tutor on Demand   Yesterday, we profiled three of the restless young start-ups that are aiming to become the next Aussie tech superstars, with a little help from the Startmate accelerator program.   There was the SME tech help service, the communication tool for parents and child minders and the security crowdsourcers.   Below, we speak to three more of the Startmate class of 2013, which have been lavished with $50,000, intensive mentoring and a trip to the US.     Tutor on Demand   Website: https://tutorondemand.com.au/   Founders: Ben Sze, Duncan Anderson and Jeremy Cox   What if you were a student wanting to top up your studies with some learning via your smartphone? And what if you were a teacher after a little extra cash and the chance to help a wider pool of students?   These two elements are drawn together for Tutor Demand, which features video content of 18 different teachers discussing 15 different topics, to help high school students.   Where did this idea spring from?   Anderson: Ben, Jeremy and I all worked together at Goldman Sachs and then did our own thing. We kept in touch and Ben was tutoring a bit. He had an idea to set up Skype, so we have tutors one side of a city and students the other side of the city.   He spoke to me about an idea in South Korea called MegaStudy, which is an on-demand resource with multiple teachers. It has a market cap of $1 billion.   We thought the business model could work here in a similar way.   Why hasn’t this happened until now? It seems like quite a simple idea.   Sze: Internet speeds weren’t so good until about 10 years ago. But, also, schools are slow moving beasts.   We are focused on finding great teachers and empowering them to teach more than the 50 students they normally teach.   Another barrier to entry is the time teachers would have to take to build and then sit and upload content – there’s a lot of time commitment there and not a lot of time.   How does it work?   Sze: We record teachers doing video lectures over a week period and show it in bite-sized pieces, five or six videos.   The focus is high school at the moment. There’s a really good opportunity as no one rewards good teachers – you get the same regardless of whether you are a good or bad teacher, unlike, say, a lawyer.   We have a recording studio, so the teachers come to us, do a Powerpoint presentation and walk away. There’s no need for them to have equipment, so there’s no hassle for them.   Students get access online through a referral or their school purchases access on their behalf. They might use it for just Year 12 physics or five other subjects, for example. Four weeks before exams, we expect to see lots of students watching all the videos and doing a crash course.   Who are you selling this to, exactly?   Anderson: Initially, we saw this as additional to the schools – there’s a big market for top-up lectures and here you get great teachers at great price points.   But we had teachers come to us and say they want to purchase for a class and a few libraries asked the same. So two schools purchased from us.   We are currently looking at all channels – directly to students and parents and some to schools.   What’s the business model?   Anderson: We sell subscriptions to get access to a subject for an entire year, over two parts. So you get, say, chemistry for $25 for one part. That gives you unlimited access. We’ve found that students usually buy more than once.   Schools can then buy access for all subjects, for a price per student. We are still trying to figure that out.   Sze: One school we piloted with had nearly 50% of students using the videos getting an A or A+ in their final exams. Only 25% get an A or A+ usually. We were quite pleased with that.   So far, we’ve reached 2,700 students across 350 different schools.   For schools, it adds another level of teaching. Students get access to a great teacher whenever they need it. They have an iPhone app they can use wherever they go and consolidate what they’ve learned.   None of you has a tech background, which is strange for a tech start-up.   Anderson: Yes, it is a bit unusual. But we did get it designed and get it all done, so I’d view us as project managers that have an understanding of tech, but didn’t build the core project.   We had people help us out with recording, generally multimedia students. The back-end was initially built by friends of Ben, while the design came from a few different places.   What would your advice be to anyone applying to Startmate?   Anderson: If you’ve built a lot of start-ups in the past, you’ll probably have an easy time. But if you haven’t, get traction first.   It helped us that we had customers, product and revenue. It wasn’t just talk. If you apply, don’t just have a great idea. Go out there and build something.   You all had comfortable jobs. Why do this?   Anderson: Building your own thing is much more interesting and engaging than working for other people.   Tutor on Demand can have strong, positive effects on society. Good education allows people to make better decisions.   We feel we can empower great teachers and build something that is riskier but the reward is completely different. As Steve Jobs says, do something you love that doesn’t feel like work. You end up really caring about what you’re doing.   Story continues on page 2. Please click below. Shiftr     Website: http://www.shiftrapp.com/   Founders: Adrian Dean and Ludek Dolejsky   Shiftr is a very modern start-up story. The founders discovered each other via Google and launched a simple but clever idea for an app despite only meeting each other a couple of times – mainly due to the fact Dean’s Canberra base was a little far from the Czech Republic, where Dolejsky was living.   The start-up’s app allows workers to swap shifts without lengthy phone calls and organisation.   What’s the benefit of being in Startmate?   It’s a big learning curve, having seen the calibre of our peers. Startmate has given us $50,000 – which is 50,000 $1 experiments we can make to run and iterate our ideas.   We want to get into a tight cycle of rapid change, while companies don’t change so quickly. We want bang for our buck in every way, such as getting a place rent-free in Sydney. A friend agreed to this if we arranged to move his stuff in, which I did. It saved us around $10,000.   So how did you meet Ludek?   I was in San Francisco when I first made contact, via a Google search. I had another idea called MyMyke, which was a distributed microphone app.   He’d created software for that so I contacted him. He’d developed something to just spy on friends, something fun, and I said let’s retool it. We worked on it for a month and then I shared a Pilsner with him when I went backpacking.   I then floated the idea of Shiftr maybe 18 months ago. My girlfriend couldn’t get out of work and had the whole hassle of calling around and getting a replacement. She had the threat of not getting work if she dropped out without getting someone to cover her.   I thought there was a real opportunity there to create an app that was easy for staff to use. I didn’t want to create a full rostering system, as it’s hard for businesses to change those big processes, but employers weren’t bridging to smartphone very well when swapping shifts, they’ll use Facebook or text.   How does it work?   Any employee can download the app and invite co-workers in. We include managers in this too, as they are on the front line, having to deal with this pain with tools lumped on them by IT departments; people who have never flipped a burger.   Employees jump in and can create a shift – it takes you about 10 seconds. You push ‘swap’ and it notifies everyone in workplace that they want to swap and other staff have the option to grab it. The manager gets to choose the winning employee.   How will you monetise it?   We are going to charge managers when they want to claim their workplace as official workplaces. We’ll add features such as group messaging and store ‘walls’. Obviously they get control over swapping too.   It doesn’t require everyone in the business sign up, but catching point is around 40% of a workplace. We trialled a McDonald’s store and it had a 60% take-up in the first few hours.   We’ll have a subscription model with a 30-day trial. The charge depends on the business, we’re looking at $30 to $40 a month.   We are looking at a flat site fee. We found workplaces want that, rather than pay $1 per employee or anything like that.   We’re actually a small part of these massive rostering systems. We are filling that pain point when someone calls up to say ‘I can’t make it’ because it costs a lot of time to coordinate.   Eventually, we’d like to be able to match people who are skilled casual workers with different workplaces. That’s the long-term vision – complete labour flexibility.   How did you persuade Ludek to move here?   Well, Australia has a certain allure to it. Every European thinks Australia is a beautiful place with beautiful people and beaches.   He has a tech consultancy company and felt he could take it as far as he could. This way, he gets to learn more and challenge himself.   I think we complement each other well. I’m not overly technical, while he’s not someone to sit in front of a client.   How many workplaces have signed up?   We started on one site with a trial. We had a terrible product but the look on the manager’s face was ‘wow, staff can see shifts in their phone’. He recommended it and it grew rapidly to eight workplaces in Canberra.   We’ve now got 18, with another three coming on board – I’ve had calls from businesses in Hobart and the Central Coast.   We feel a lot of these companies have this problem. This initial roll out works well with McDonald’s, but we’re also looking at Woolworths and Walmart – big brand names. We have interest from nurses and doctors too.   We have just had the app on the app store and have done no marketing, so people are obviously searching for it. Managers say ‘we need this.’   Next, we’ll target industry groups and thought leaders that are talking about absenteeism. We’re starting to ramp the marketing up.   We’re getting a lot of fanatical support from managers in McDonald’s –one guy got us into five different stores as he was raving about it.   What are your ambitions for the business?   Niki (Scevak) gave us a pep talk and said you need to accelerate to five to 50 to 100 stores quickly, otherwise you’ll lose out.   The longer term goal is to crack into the US market. We’ve had to be very careful when choosing our words – shifts works well across countries, where roster in US means sports roster.   I hope to get into the US by May. If we’re not hitting our targets, we’ll see if the value proposition is strong enough and if we can continue. We don’t want to be stuck with a stillborn company, earning enough to pay salary but not growing.

Cashed-up Dropbox snaps up Snapjoy

3:19AM | Monday, 11 March

US-based start-up success story Dropbox has acquired online photo library Snapjoy for an undisclosed sum, less than one week after its acqui-hire of music streaming service Audiogalaxy.

Spotify set to snag $100 million in $3 billion valuation

3:49AM | Monday, 11 March

Music streaming service Spotify is set to close a $100 million funding round that would value the company at $3 billion, believed to be a $1 billion drop from a much-rumoured valuation in May.

THE NEWS WRAP: Former Victorian commissioner gets nod as first federal small business commissioner

3:42AM | Tuesday, 12 March

Mark Brennan has been named the first federal small business commissioner, according to a report.

Zendesk hunts for software developers after opening new centre

9:37AM | Friday, 28 September

Australian software developers will gain access to a new Melbourne-based development centre set up by Zendesk, which will serve as a hub for the development of cloud technologies.

Angry Birds developer Rovio sets its sights on 2013 IPO

8:59AM | Monday, 6 August

The Finnish gaming company behind much-loved mobile app Angry Birds is preparing for an initial public offering in 2013, but says it’s in no hurry in light of Facebook’s ill-fated stock market float.

Five top tips to create a gay-friendly workplace

5:35AM | Tuesday, 22 May

Small business owners are being urged to ensure their workplace is inclusive of gay and lesbian employees, after large companies dominated a list of the most gay-friendly organisations.

Yelp files for $100 million IPO despite no profit

12:24AM | Friday, 16 December

US-based local reviews website Yelp has filed for a $100 million IPO, with reports suggesting a valuation of up to $2 billion, seven years after it was founded by two former PayPal employees.

Dropbox raises $250m after declining Apple offer

10:59AM | Wednesday, 19 October

US-based tech start-up Dropbox has raised $250 million in funding, with a reported valuation of $4 billion, after it emerged that it turned down a nine-digit buyout offer from Apple two years ago.

LinkedIn IPO could be first of many: Expert

5:01AM | Tuesday, 10 May

Professional social networking site LinkedIn has filed for a $US3.5 billion IPO, with a research analyst saying the tech industry can expect the trend to continue as the sector displays signs of “bubble behaviour”.

The top 10 start-up billionaires

3:53PM | Sunday, 13 March

The world’s major economies may have struggled to get back to pre-GFC growth levels last year, but the world’s wealthiest people appear to have been nicely insulated.

THE NEWS WRAP: Report says Australian housing affordability among worst in the world

1:21AM | Monday, 24 January

Melbourne and Sydney have been named as two of the most unaffordable housing markets in the world in a controversial report by research firm Demographia. The organisation's annual International Housing Affordability report ranks 325 housing markets around the world by comparing income median household income to median house prices.

THE NEWS WRAP: Harvey claims to be the target of “vicious and hateful” media attacks

1:11AM | Friday, 7 January

Gerry Harvey has said that he will back away from the campaign to impose GST on online sales after claiming to be the target of “vicious and hateful” attacks via social media and talkback radio.

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