It’s January 1, 2015. You’ve put on four kilos over the last 10 days, having stuffed your face with empty carbs – delicious empty carbs – and feel somewhat guilty. So you make the resolution to join a gym, in order to lose that extra weight and then some, and be in good shape for the rest of the summer! You go out, purchase the 12 month gym membership – for value – and stop going approximately three weeks in, when your joints start aching and the memories of your recent gluttonous activities have faded. The problem? Your resolution sucked. ‘Getting in shape’ is an ambiguous goal. How do you know when you’re in ‘shape’? To have a better chance of keeping the resolution you need to get specific. Say, for example, to lose 8kgs by the end of March. This gives you something quantifiable to work towards. You can track your progress. Measure your gains (or in this case, losses). And there’s a clearly definable point at which you’ve succeeded at your resolution. So what does all this have to do with startups? Well, if you’ve been following along with the previous articles in this series, at the least you’ll have a lean canvas drawn up and filled with some assumptions you plan to test. But before you get to testing, you need to clearly define what results will validate your idea, and what falls short. In some cases this will be an obvious pass/fail type outcome, in others cases you will need to be far more specific. And it should go without saying that you need to track your progress as you go. Tracking your progress, along with knowing your metrics, is crucial to your startup’s success. But it isn’t as straightforward as you may think. It’s easy to get caught up in tracking the wrong types of metrics: ones that don’t actually give you an indication as to the health of your startup. Such metrics are often referred to as ‘vanity metrics’, because they sound good but don’t really say much. An example of this is ‘our product has been downloaded over 1 million times’. Sure sounds impressive, right? But how do you know. The fact that it has been downloaded a lot tells you nothing of the state of the product. And any savvy person in the startup scene will see through this type of metric immediately. Metrics that matter tend to be time sensitive. ‘1 million downloads in the last month’ is far more encouraging than the first statement. Better still is ‘1 million active users per month’ – indicating that not only is your product popular but it has sufficient value that people are engaging and staying engaged to some degree. The vanity metrics steal the headlines, but the metrics that matter are those that tell a more substantial story. So what type of metrics should you focus on at this early stage in your startup? Entrepreneur-turned-investor Dave McClure came out with a guide that goes by the acronym AARRR (which you can view in full via his presentation ‘Startup Metrics for Pirates’), which stands for Acquisition, Activation, Retention, Revenue, Referral. In more detail, this looks like: Acquisition: The various channels by which people find out and visit your startup. These include both offline and online channels, ranging from traditional advertising in print, events, and PR, to more modern channels like SEO, AdWords, and content marketing. Activation: The moment a person uses or experiences your product/service for the first time. Note this is not the same as someone visiting your page or downloading your app. Examples of ‘activation’ include the first time you rode in an Uber cab, or the first time you ‘tweeted’ something on Twitter. Merely signing up to a service or downloading an app does not necessarily count as activation. It is the moment a person becomes a user of your product/service. Retention: Once a person has ‘activated’ and becomes a user of your service, do they come back? A user who comes back to your product/service post their first activation experience signifies that you have created something of value – one of the strongest indicators that your assumption about the problem you are solving is correct. That they come back, and later, how often they come back, are key metrics that you should be paying attention too very early on. Revenue: This one is the most straightforward of the lot. The more revenue you earn for your product/service, the better! It doesn’t apply to all startups – there are now countless examples of companies that have been valued at and acquired for extremely large sums of money without ever seeing a cent in revenue – but for the vast majority of startups, revenue is a significant metric. Referral: This refers to the organic growth of your startup. To achieve what is known as ‘viral growth’, you will need every person who uses your product/service to actively refer more than 1 new person to your product/service. Very few businesses ever achieve viral growth, and even then it is more common in business to consumer (B2C) products/services like social networks and games. There are a lot of potential metrics to pay attention to, as outlined above. The approach you must take when starting out is to focus primarily on Activation and Retention. If you can create a product/service with strong metrics around Activation and Retention, you will have something worth paying attention to. You are far better off finding 100 people who absolutely love your product/service and could not live without it, than having 100,000 people who have tried your product/service but are only lukewarm about it. So that’s it for the series, you’ve now got the know-how, the inspiration, and the time to make something happen over the coming holiday season. Good luck and let us know how you go via twitter with the hashtag #2015istheyear. Amir Nissen is program manager at AngelCube This is concludes our #2015istheyear series. Good luck! Part one – 2015 The year for my idea. Part two – How to validate your idea this Christmas. Part three – How Ash Davies created his ‘YouTube for books’ startup Tablo. Part four – Why ‘manual first’ can help you MVP quicker. Part five – David Chung of etaskr on chucking in corporate life to chase the startup dream. Part six – How this Aussie startup plans to become a leading player in the booming world of bitcoin. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
How this Aussie startup plans to become a leading player in the booming world of bitcoin: #2015istheyear12:53PM | Thursday, 18 December
Today I’m joined by Asher Tan from CoinJar, a startup that lets you buy, sell, and manage your bitcoin. CoinJar was founded by Asher and Ryan Zhou in mid-2013 and it’s been a whirlwind ride ever since. With something in the area of $50 million worth of transactions in their first 12 months of operations, they now have a team of 12 people and offices in Melbourne and London, as they look to become a world leading bitcoin exchange. AN: Asher, thank you for taking the time with me today, I know you just arrived back in the country from the new office in London. How is that going for you? Asher Tan: London is great. It’s one of the finance centres of the world. The UK have very progressive laws relating to bitcoin that make it an attractive market, and one that we will be focusing our efforts on in the coming year. AN: Nice one. To take it back to the beginning, can you tell us what you were doing before startups? AsherT: I was working as an analyst, writing economic forecasts for a large firm. AN: And so what made you want to do a startup? AsherT: I’ve always enjoyed building and creating new things. And I think I’ve always had the startup bug in me, it just took a while for me to find it! In my previous job I had a small team working with me and tried to cultivate a close bond within the team, in order to reach and surpass our targets. The thing was, we bonded so well and met all our targets easily, yet head office didn’t want us to do any more and probably viewed us as loose cannons. AN: Was there any trigger point, any incident in particular that spurred you into action? AsherT: Nothing specific, I was gradually getting more and more immersed in the local startup eco-system, going down to events, making friends with people actively working on startups. Reading all of Paul Graham’s essays on the subject. Seeing other people build and create great product and companies – I wanted to do it too! AN: So how did you get the idea for CoinJar then. Were you on the bitcoin train from the early days? AsherT: I had been working on a completely different idea for a good six months before applying to AngelCube. I met Ryan online and another partner at a networking event, and we applied to AngelCube. During the interview process, they told us that they liked the team, but not the idea, and that if we wanted to get in we should change the idea. At the time I thought it was like Dragon’s Den or The Shark Tank, and they were testing us to see our commitment. Turns out it wasn’t a test. So over the weekend we brainstormed a bunch of other ideas, and CoinJar was the one we agreed upon. Thankfully AngelCube liked the idea as well, and the rest is history! AN: Haha, too funny! It sounds like you’ve never been short of ideas… When did you know that this was the one? AsherT: The early signs were good, even during the first few weeks of AngelCube it was obvious that we were having early signs of success relative to the other teams. For a while things were very stressful, but one of the mentors at AngelCube reminded us that the stress was due to our product being too popular, which is a really good problem to have. It wasn’t too long into the CoinJar journey that we did our first million in transactions. From that point onwards there wasn’t a doubt in my mind. AN: Indeed. Given how fast things have been moving with CoinJar, I’m sure you’ve hardly had time to take it all in. But to date what would you say has been the biggest lesson learnt? AsherT: When you can't figure things out that's what your co-founder is there for. Ryan built bitcoin businesses before, and especially at the start of our journey it was him leading the charge in terms of what direction we should take, what we need to build, etc. Some of his ideas were crazy, and we spent many a night arguing over what was worthwhile and what was not. Thankfully most of his ideas were right! AN: Excellent! And just lastly, do you have any advice for the would-be entrepreneurs out there reading along and getting inspired to be the next Asher Tan and Ryan Zhou? AsherT: Hustle. You have to use every resource at your disposal to keep your startup alive. At the end of AngelCube all the teams went to the US as part of the program, with the goal of raising a seed round. As a group we went down to a startup trade show called TechCrunch Disrupt, the thing is, all the other startups looked very slick and professional, with banners and display monitors and everything. As a three-month-old startup we had none of this. So what we did was go down to Best Buy and purchased the biggest screen we could get our hands on. We were careful to take very good care of it whilst in our possession and not remove any of the stickers. As a result, we were the only AngelCube team to have a display monitor in our booth, which we returned as soon as the trade show was done, so it cost us nothing”! AN: Wow, thanks a bunch, Asher. Best of luck with CoinJar in the coming year. Amir Nissen is program manager at AngelCube This is the part six of our #2015istheyear series. Part one – 2015 The year for my idea. Part two – How to validate your idea this Christmas. Part three – How Ash Davies created his ‘YouTube for books’ startup Tablo. Part four – Why ‘manual first’ can help you MVP quicker. Part five – David Chung of etaskr on chucking in corporate life to chase the startup dream. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Today we’ve got a case study of the corporate kind, bringing you up close and personal with David Chung, co-founder of etaskr – an online resourcing platform that is an enterprise software version of sites such as freelancer and oDesk. It aims to connect those looking for workers inside an organisation to those looking for work. The etaskr story is an interesting one because its roots stem from the corporate world, a world many consider to be diametrically opposed to the world of startups. Unlike many startup stories you hear emanating from entrepreneurship hubs like Silicon Valley – where the founders are college dropout computer hackers who built an app over a beer-driven weekend – etaskr was founded by two work colleagues who left the security of corporate life to pursue their dreams as entrepreneurs. I had the chance to sit down with David and find out what it was like to move from corporate to startup, how it helped, what adjustments needed to be made, and what he would have done differently if he had his time over. AN: Firstly David, can you give us a quick idea of your background? DC: I went along a pretty well-trodden path of good marks, a double degree in commerce and law then getting a few graduate offers of which I chose a management consultancy position at KPMG. I quickly realised that this was not going to work for me and I made the life-changing decision to resign. Serendipitously, I was recruited for a position in the innovation department at KPMG as an innovation analyst, and that I feel is the key moment that has led me to this great path of building a startup. AN: Interesting. So what was working in the innovation department of a large corporation like? DC: At the time, it was really exciting. We had a framework that was heavily directed by your own creativity that moved projects from ideation to testing as quickly as possible. Then if we got the right signals we would go to pilot and then production. Looking back on it now though, it’s a much more conservative approach to building a startup but you’re solving your company’s problems and things move a lot slower because of how many stakeholders you have. It was certainly much more suited to me than consultant life though. AN: OK. And how did you manage that transition? DC: My manager and mentor Tom was really helpful, plus some books he recommended I read, namely: The Lean Startup by Eric Reis, and The Little Black Book Of Innovation by Scott Anthony, the latter dealing with corporate entrepreneurship. I think my people skills helped too as I got on really well with one key product developer, Pat, who helped teach me about product management, and we built some really cool things together. He eventually became my co-founder! AN: So what triggered you to leave corporate innovation and get into startups? DC: Well, funnily enough, I was researching an idea for work that involved co-working spaces. I made a visit to Inspire9 and while I was there I was explaining to Nathan (co-founder of AngelCube) what I do. He asked me if I had any ideas of my own and that if so I should apply to AngelCube as applications would be open for another week. Well, that got me thinking and back at work I asked Pat if he would be interested in joining me. He did, we drew up our plans for world domination, googled how to pitch and a few weeks later got in! AN: Sounds like it all happened rather quickly! DC: Yeah, it was crazy. We had to commit to AngelCube full-time, but to do that we had to resign from KPMG with one week’s notice! Thankfully, my boss at KPMG was really understanding. He told us that he knew that we would one day apply everything we’d been doing and learning to the big bad world and we’d fly the coop. I felt like Anakin Skywalker saying goodbye to Obi-Wan – before he turned to the dark side of course. We still keep in touch and he’s one of our biggest supporters. AN: And the idea for etaskr was one you picked up whilst at work? DC: So we got into AngelCube with a different idea, but they invested in us as a team, not the idea. So we decided to park it for a couple of days and just throw ideas around to see if we could come up with something a bit juicier. And so etaskr was born. The idea was heavily based on solving our own problem of working as consultants and being ‘on the bench’. It’s exactly what it sounds like – there’s not enough work and you sit on the sidelines trying to look busy. Not having much work might not sound like a big problem to those who haven’t worked inside a big firm, but it’s a nightmare. You go from being motivated and ambitious to frustrated and anxious – but you’re told it’s all part of the job. What we’ve realised in the startup world though is that you don’t just have to accept that – you can build crazy solutions that can change behaviour. AN: How did you find the shift from corporate life to startup life? DC: Pretty huge. First your mindset around ‘work’ completely changes. You no longer clock on, do your structured tasks that are managed and reviewed then clock off. You’re constantly thinking about creative, meaningful things you can do for your startup. It doesn’t really feel like work anymore – well apart from the compliance stuff – but you bring so much more energy into it because you don’t see it as doing something for a pay cheque. You’re doing something you’re crazy about! AN: Cool. This has been great! Just lastly, what advice would you give to people working in the corporate world who are at this moment thinking about doing a startup? DC: If you’re feeling underappreciated, disengaged and underutilised at work – well first off you should pitch etaskr to your boss because you’ll begin discovering awesome opportunities inside your company you never knew existed. But secondly you should trust yourself to go out and build your own dream instead of someone else’s. It’s a huge learning curve, or learning cliff face as I like to call it – but startups bring the best out of you. To sum up – smart people should build things! Amir Nissen is program manager at AngelCube This is the part five of our #2015istheyear series. Part one – 2015 The year for my idea. Part two – How to validate your idea this Christmas. Part three – How Ash Davies created his ‘YouTube for books’ startup Tablo. Part four – Why ‘manual first’ can help you MVP quicker. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
A common refrain in Silicon Valley is ‘manual first’, referring to all the different approaches you can take to validate and grow your startup idea before putting any time into building a web or mobile application. The reason this approach is so popular is due to the speed at which you can accomplish things. Speed is everything for a startup. It is one of your few natural advantages over pre-existing competition. Because you’ve invested so little in your idea to this point, it will never be quicker or easier to change what you’re doing, be it slight changes or drastic ones. Big companies have mass, and with mass comes momentum. Momentum is great if you know where you are going, but crippling if you need to change directions suddenly. So how does ‘manual first’ equate to getting the ball rolling on your startup? The answer lies with an MVP. That’s not a sports reference mind you, rather in this context MVP stands for minimum viable product. That’s startup lingo for doing what you have to in order to learn whether the assumptions around your idea are valid. What this means in practice depends on the type of startup you’re creating and the particular hypothesis you’re hoping to test. Typically, you want to test the biggest assumptions in your business first, which usually equates to “will anyone use my product/service?” A good assumption to validate before going out and dedicating your life to making it happen, don’t you think? In fact, everything we try to do as entrepreneurs, be it speaking to people, creating a lean canvas, and testing the various hypotheses within, is geared towards de-risking the startup as quickly as possible. So, what might an MVP look like for your idea? If your idea is for a product that you plan to sell and distribute online, one clever MVP is known as the ‘smoke and mirrors’ technique, which involves setting up a landing page for your ‘product’ (including relevant information such as price, benefits, feature set, etc), sending people to said landing page (often via some paid ads on Google, Facebook, or whatever platform is relevant for your target audience) and seeing how many people actually click the purchase button. The point of this exercise is that you find out relatively cheaply – whatever money you spent getting people to your ‘product’ website – if anyone wants what you have to offer. If no one bites then there’s not much point in building out the product. You’ve invalidated the hypothesis that your product is the solution for a certain group of people, whom you believe suffer from a certain type of problem. From this you can deduce that: 1. The people who came to your site weren’t the correct subsection of people (change your advertising). 2. The people coming to the site were OK but the positioning of the product was not (change the content of the landing page). 3. The offer wasn’t compelling enough for the price (change the price). 4. People aren’t really interested in the product (put more work into researching the problem – is it really a problem?) If your idea is more service than product, then you can utilise ‘the Wizard of Oz’ technique to validate your assumptions (the name bears homage to the old man who hides behind a curtain pretending to be a powerful wizard in the children's classic The Wonderful Wizard of Oz). If your startup revolves around some type of service, the Wizard of Oz technique means physically complete the service by emulating the actions of what you would eventually code and automate. As an example, say you had an idea for an online gift recommendation service. Manually emulating the service in this case may take the form of finding potential gifts for a user by personally going through shopping catalogues looking for gift ideas that match said users preferences, then returning the results online as files in an email. To the user, there is no difference between an algorithm sourcing the gifts automatically and you working behind the scenes doing the same job. This approach often involves creating a site that is slightly more complicated than setting up a simple landing page and some ads, but generally not much more than an extra form field or two. Note that if you are completing manually what you intend to offer as an automated service, you shouldn’t be shy about taking money for said services. Some tools that you might find useful for this part of the process include: Balsamiq – a wireframing tool that lets you sketch out your website or mobile application. Unbounce – a tool that lets you create, publish, and test landing pages for your startup. FluidUI – similar to Balsamiq, but with a later stage focus, higher resolution designs and the ability to put your prototype onto your mobile and test it out directly. Google AdWords – you know Google, you know ads on Google, this is where you go when you want to put your own ads on Google. Facebook have a similar platform you can find via https://www.facebook.com/advertising Wufoo – a customisable online form builder with no coding required. Regardless of what tools and techniques you use for the job, keep in mind that speed is the essential ingredient. The faster you can prototype, iterate and prove an assumption, the faster your idea transforms into a viable startup. So, get out of the building, speak to customers, figure out what they want, what it looks like, put that online, and see if anyone buys! From there it’s wash, rinse, repeat… with one caveat which we’ll cover in the next article! Amir Nissen is program manager at AngelCube This is the part four of our #2015istheyear series. Part one – 2015 The year for my idea. Part two – How to validate your idea this Christmas. Part three – How Ash Davies created his ‘YouTube for books’ startup Tablo. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
In conjunction with AngelCube, this December StartupSmart is challenging all those would-be founders out there to turn their ideas into reality. Here’s the first in a series of articles we’ll be running over the next two weeks that we hope will provide some inspiration for those that need that extra push. Be sure to follow along, support one another, and share your journey using the hashtag #2015istheyear. Greetings and salutations! It’s that time of year when we look back on what was, and ahead to what’s next. It has been a huge year for startups, from Facebook's acquisition of WhatsApp for $19 billion to Melbourne’s own LIFX raising a $12 million A round from Sequoia. There’s been more than a few local success stories, and we’ve been lucky enough here at AngelCube to count some of our alumni amongst those. Australia has even got its very own Startup Show. The local startup scene is rocking! No doubt you’re looking forward to some well-earned R&R over the Christmas/New Year period, spending time with the family, spending money on the family, eating enough food to feed a small family… And as you sit there, eyes glazed over in a food induced coma, you think about how the years fly by, each faster than the last. You start reflecting on what’s going on in your life, what you’ve achieved and accomplished, and what you haven’t. Chances are good that if you’re reading this, one of those unfulfilled ambitions is to run a startup. The good news is, now is the best time, bar none, to do something about it! You’re already set to make some New Year’s resolutions right? Make one of those resolutions the commitment to starting. Do something about that frustrating problem at work. One thing that would make your life, or the life of someone close to you, that much better. That stroke of genius which will change the world and make you so rich that you could literally buy Christmas next time it rolls around. Now for the bad news: if you stay on the couch, nothing much will change (surprise surprise). This isn’t a 12-month gym membership that you give up on by February, nor is it 12 months without drinking that you forget by Friday. It’s simply a resolution to start. We’ll cover what you need to know to get your startup off the ground over Christmas with some follow-up articles. But for now it’s on you to make that commitment. Write it on your hand. Tape it to the back of the toilet door. You can even tweet about it – we’ve got you covered with a snazzy hashtag – #2015istheyear – should you decide to do so. Remember; there’s no idea too crazy; no idea too small; no idea too ambitious. No one is saying your idea has to change the world. No one is saying you have to make the next Facebook, or be the next Elon Musk. But you have to do something. Otherwise it will be the end of 2015 before you know it, and you’ll be sitting on your couch, eyes glazed over in a food induced coma, reflecting on how the years pass by ever faster, and your startup dreams remain unrealised. Committed and ready to get started? Good. Our next instalment in the series is ‘How to validate your idea over Christmas’ and it will be out shortly. Remember: #2015istheyear Amir Nissen is program manager at AngelCube. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Given the sheer volume of public hand-wringing by traditional players such as the resources industry and large retailers over threats to their revenue, it seems that some view innovation as something to be wary of, rather than enthusiastically embraced.
A Melbourne entrepreneur has outlined the key lessons he learnt while pitching to an accelerator in the United States, encouraging start-ups to “keep hustling” while they wait for funding news.
A new start-up program in the United States is aiming to give university students a firsthand taste of life in a start-up, but it’s unknown whether the program will be extended to Australia.
Business degrees are becoming less desirable among Australian students, with research showing applications for management and commerce degrees declined 15.4% over the decade to 2011.
University students in Melbourne will have just 48 hours to launch web-based start-ups from scratch this weekend, as part of their participation in Startup Hackathon Melbourne.
More than 3,000 Australian university students have enrolled in entrepreneurship classes this year, new research shows, but experts say entrepreneurs cannot succeed without experience.
The number of university students in technology degrees is in long-term decline, according to a new report, with concerns that the shortage will impact web-based start-ups.
The leader of a local student entrepreneurship group has likened Australian student-start-ups to those in Scandinavian countries, claiming there are more similarities than there are differences.
Student Entrepreneurs has unveiled the 2011 winners of its Idea Pitch competition, which saw 20 student start-ups from Victorian universities compete for prizes worth more than $15,000.
University graduates may become even more inclined to work for a company rather than start their own business, with a new report showing graduate salaries are on the rebound.
University students are being encouraged to attend a 48-hour start-up “hackathon”, hosted by Student Entrepreneurs, to gain insight into the start-up scene and develop their ideas into viable businesses.
The University of New South Wales is inviting start-ups to attend a career fair for its computer science and engineering students in a bid to encourage graduates to join start-ups.
Industry experts say students are still wary of starting their own businesses despite new figures that reveal job prospects for university graduates have dwindled during the past two years.
Most people know that social media giant Facebook was founded by Mark Zuckerberg who, at the age of 23, was studying psychology at Harvard University.
US venture capitalist Peter Thiel has offered $100,000 to 24 young entrepreneurs providing they stay out of college for two years to further their business ideas.