{"id":43738,"date":"2023-10-20T15:30:46","date_gmt":"2023-10-20T15:30:46","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/12-ways-to-make-your-web-start-up-investable-startupsmart\/"},"modified":"2023-10-20T15:30:46","modified_gmt":"2023-10-20T15:30:46","slug":"12-ways-to-make-your-web-start-up-investable-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/12-ways-to-make-your-web-start-up-investable-startupsmart\/","title":{"rendered":"12 ways to make your web start-up investable – StartupSmart"},"content":{"rendered":"

2012 is shaping up to be the best year yet for Australian tech start-ups. <\/span><\/p>\n

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Sydney venture BigCommerce recently secured<\/a> $15 million in funding, in the wake of 99designs\u2019 $35 million backing from Accel Partners<\/a>.<\/p>\n

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With the likes of Freelancer.com and games developer The Broth making huge strides in the US, and up-and-comers like BugHerd and TripMedi set to follow suit, Australia can no longer be dismissed as a technological backwater.<\/p>\n

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However, it remains devilishly hard for web and mobile start-ups to lure funding from investors, especially within Australia.<\/p>\n

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To help maximise your chances, Andrew Birt, co-founder of new Melbourne-based tech accelerator AngelCube<\/a>, has put together the 12 essential steps for impressing tech-minded investors.<\/p>\n

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1. A well-rounded team<\/h2>\n

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Building a start-up is a long and lonely journey and the data shows startups with two to three co-founders are far more likely to succeed than single founder start-ups. Investors realise this and are much less likely to back ideas run by a single founder.<\/p>\n

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The Startup Genome Report, an in-depth analysis of 650 start-ups,<\/i> found that well-rounded teams with a blend of business and tech co-founders stand a far greater chance of succeeding:<\/p>\n

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Balanced teams with one technical founder and one business founder raise 30% more money<\/i><\/b>, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.<\/i> <\/i><\/p>\n

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The lesson? Before building anything, build your team and make sure there\u2019s a blend of tech, marketing and sales skills within your team.<\/p>\n

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2. A clear market gap<\/h2>\n


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While there are exceptions to this rule (eg. Twitter) you need to fill a market gap for your start-up to succeed.<\/p>\n

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You need to solve a real problem and the incumbents you\u2019re competing against need to be lousy, slow or unfocused.<\/p>\n

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For example, Xero.com didn\u2019t invent accounting software \u2013 they just realised existing software sucked.<\/p>\n

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They innovated, took accounting software to the cloud and made it look nicer and easier to use.<\/p>\n

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The incumbents (MYOB, Quicken etc) were incredibly slow to respond and Xero ate marketshare, got funded and scaled. They\u2019re now a publicly traded company on the NZX.<\/p>\n

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The incumbents opened this gap by being lousy.<\/p>\n

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Gaps also emerge when consumer sentiment changes; when new technology emerges or, when a new model educates the market (eg. Groupon rising to prominence in the US paved the way for an army of local imitators).<\/p>\n

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If you can tell the investor a story about the gap in your market, and how it emerged you\u2019ll capture their attention.<\/p>\n

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3. Timing is everything<\/h2>\n


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Timing is everything for web start-ups. It’s so much easier to succeed in an emerging market, than a saturated, mature and stable market.<\/p>\n

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If we look at group buying again as an example, Australian start-ups like Spreets, Scoopon, Crowdmass and JumpOnIt all capitalised on the hype created by Groupon in the US.<\/p>\n

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While savvy people now question the deals model, most of these start-ups have already had an exit or major liquidity event.<\/p>\n

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If you tell an investor you\u2019re launching a daily deals site today, unless it\u2019s very niche, they\u2019ll laugh.<\/p>\n

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They know the market is saturated, the competition is intense and the barriers to entry are zero. It\u2019s time to get out, not into, this market.<\/p>\n

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The good news is there\u2019s always a new \u201chot market\u201d.<\/p>\n

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For example, Airbnb\u2019s rise to prominence and a $112 million investment has sparked a wave of interest in “Collaborative Consumption” start-ups such as TaskRabbit.com, Vayable.com, SkillShare.com, ZipCar.com all could be localised here.<\/p>\n

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Also, like the Xero.com example too, enterprise software is still an attractive market.<\/p>\n

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The incumbent in many software niches is often outdated shrink-wrapped software making them prime candidates for disruption.<\/p>\n

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Gamification sparks peoples interest too \u2013 social games, marketplaces, the list goes on.<\/p>\n

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The point is start-ups that target emerging markets are far more likely to be taken seriously by investors. Find these markets.<\/p>\n

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4. A cool one sentence pitch<\/h2>\n

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Simple is marketable. If you can’t explain your start-up in a sentence, chances are it’s too complex and investors will be just as turned off as customers.<\/p>\n

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Here are two simple formulas that help you clarify and refine your offer.<\/p>\n

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Option 1. [Startup name] is the [Well Known Startup] of [Insert Industry]<\/p>\n

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Example. [Drive My Car Rentals] is the [AirBNB] of [Car Sharing]<\/p>\n

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Option 2. [Startup name] makes [Task] [Benefit] for [Insert Target Market] by [Doing]<\/p>\n

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Example [Freelancer.com] makes [Outsourcing Work Overseas][Easier] for [Small Business Owners] by [Offering Crowd Sourced Marketplace of Services].<\/p>\n

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5. Minimum viable product<\/h2>\n


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If you can\u2019t demonstrate a product, you\u2019re wasting everyone\u2019s time.<\/p>\n

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Investors don\u2019t want to hear about a \u201cgame-changing\u201d technology that you\u2019re working on, or will build as soon as you\u2019re funded.<\/p>\n

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They want to see a real product. Something tangible they can play with; and with feedback from real customers that validates you\u2019re solving a real problem.<\/p>\n

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MVP doesn\u2019t mean building a minimum<\/i> product; it\u2019s a strategy and process directed toward making and selling a product to customers.<\/p>\n

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If investors can see you have a strategy for improving your product, adapting to feedback and, most importantly, acquiring customers they\u2019ll take you seriously.<\/p>\n","protected":false},"excerpt":{"rendered":"

2012 is shaping up to be the best year yet for Australian tech start-ups.   Sydney venture BigCommerce recently secured<\/p>\n","protected":false},"author":1,"featured_media":59632,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,25,6,13,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/43738"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=43738"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/43738\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/59632"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=43738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=43738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=43738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}