Shoestring

Austern Founders Photo

The debate around whether or not university degrees are overrated is a heated one these days, especially as young EduTech startups begin to become a viable alternative for learning new real-world skills, particularly in the areas of business and computer science. Many reports from universities show that up to 65,000 students actually remain jobless after an average of four months from graduation; and many others are finding it difficult to get ahead of their peers in the local job market. Education startup Austern International, created by UNSW student Lily Wu and cofounder Jamie Lee, has been set up with the purpose of catapulting students into thinking global when it comes to business, by broadening students' mindsets and allowing them to explore the options available to them.

According to a recent article in Forbes, one of the top skills that graduates need to possess is the ability to influence others. Often universities are not the best place for this to be taught, especially because that type of skill set is usually obtained via an associative learning process.

"After 7 years of teaching in the education industry, I have found that students are often ill-equipped to make decisions that can operate locally and globally," says Lee. "The hard skills that students learnt a few years ago may already be replaced by the fast moving nature of today’s evolving society. Instead, students need to learn to adapt quickly and grow with moving trends."

Austern International labels itself as a 'transformational travel experience' for students. It is a three-week long leadership training course for young entrepreneurs and creatives which takes students on an "excursion" of sorts to places like China, Singapore, San Francisco, and even brings students from those locations to Australia to partake in the same learning experiences. During their time on the trip, students get to work with mentors, hear from world class speakers, hang out with globally renowned leaders, and participate in activities such as pitching, networking, strategic problem solving and volunteering at charity events. The pricing is $3,000 per student, and each program accepts 30 to 40 students. While there are only three trips a year at the moment, the founders said they will organically scale as demand increases. There is a slight risk factor with this business model, especially if the universities themselves decide to run similar programs. Having said that, there is also a large opportunity for Austern International to leverage universities by becoming a preferred supplier for this service, which would enable it to scale significantly faster.

“We started Austern International because we wanted to make students global leaders," says Lee. "Imagine if today there are two candidates going for the same job, with the same qualifications. The only difference is that one has spent their entire career in Australia, whilst the other has had different experiences in multiple places like Hong Kong, Singapore and US. The second candidate [displays] a stronger global mindset and will have a much higher success rate [when interviewing for jobs] because they are more aware of trends on a global scale.”

As small businesses and enterprises alike begin to take a global outlook when it comes to building their businesses, a global understanding, leadership skills and an innovative mindset will slowly become core features that employers look at when hiring. "Austern International can help students piece these aspects together in a very short period of time," says Wu. "Our [programs are] held in various renowned cities around the world, where students are paired with exceptional mentors, understanding how they work and think, how they lead and innovate. These mentors come from high-growth startups like Dropbox to high-flying corporations like Microsoft and Google." "This will not only allow them to become leaders and effective problem solvers, it will open up countless doors of opportunity for them to grow their network. In the end, they want students to know that they are not confined to their degree and their area, the world is their oyster for innovation and change."

Within the first year of launch, over 100 university students around Australia and UK have gone through the program. Many of these students have also decided to launch their own businesses. In November 2014, Austern International was awarded the AMP Tomorrow Maker Award where there were over 5,600 other contesting entries.

Students are able to apply online to travel to Sydney in November 2015, Singapore in January 2016 or San Francisco in February 2016. There are plans to launch Beijing and Hong Kong trip in mid-2016.

Disclosure: One of the founders of Austern International is an employee at Startup Daily. However, Startup Daily is not in any way affiliated with Austern International.

dick_costolo4

Marlon Brando once complained that working on the set of a troubled film was like trying to do a crossword puzzle while falling down an elevator shaft. That description came to mind today because it fits perfectly a job in Silicon Valley that recently opened up: CEO of Twitter. [Source: Pando.com]

Impact Investment Fund

Melbourne-based Geoff Gourley worked in the corporate world most his life, making money so that he could buy houses and cars. He was doing well financially until he realised that he wasn't very happy at all. He came to the conclusion that focusing on profit over social impact was a poor way of doing business. "I wasn't getting any good feeling out of not giving back," says Gourley. "I had a real pivotal moment in my life in 2008 and that really changed the way I looked at things. It was at that time that I started to create and work in businesses that were making a difference, predominantly, at that stage, in the environmental space." Three years ago, Gourley and a number of partners established a business focused on energy efficiency, renewable energy and solar power called NuGreen Solutions. Through that experience, Gourley learnt a lot about creating a profitable venture that also made a social and environmental impact. This was one of the main reasons he created the recently announced $100 million Impact Investment Fund. There are real barriers for startups out there that have great ideas that will make a social or environmental difference but the access to capital for these ideas does not exist as readily as it does for other ventures. "You go to a bank or investor and and say I've got this idea that's going to improve the social equality of women in the workforce and people often don't invest in that," says Gourley. "However at Impact Investment Fund, we'll invest in those types of businesses, those types of projects, whether it's large renewable energy projects, wind farms or forest projects. There are a whole range of businesses that we will invest in that are ethical and sustainable. We want to make a difference and leave a legacy, but also open a pathway for others to do the same." Where Australia has been quite strong to date with socially conscious startups is in the food industry. Organisations such as Amazonia and Zambrero have programmes core to their business operations that solve issues directly related with what they do. Both are also highly scalable multimillion dollar companies that have produced millionaire founders. It's also worth noting that both businesses are also highly acquirable if the founders ever wanted to sell. The same can work just as easily for sub-service and technology based businesses with the same mantras. Tech giant Salesforce is an example of this with their 1 | 1 | 1 model, which is integrated into their company culture. They give 1% of profits to people and organisations that need it. They do the same with 1% of their product value. And all employees spend 1% of their time supporting causes they are passionate about (this equates to approximately 20 hours a year). Since starting this, they have given away over $53 million in grants, 580,000 hours of community service, and provided product donations to over 20,000 non-for-profits. Salesforce started doing this once they were a large company. But more and more startups are looking at making social impact and is the core reason the business exists. The primary focus of socially-focused startups is to make as much money as they can, and drive a profit. The greater the profit, the greater the impact. In fact, I'd argue they need to steer their companies towards profitability faster than that of other startups because having the revenue to deliver on the social or environmental aspect of the business is critical to the entire operation. For Gourley, the last 12 months has been spent formatting the fund and getting it registered. He told Startup Daily that setting up this kind of operation requires a fair amount of due diligence. "Looking at our own profile, investment appetite, how are we going to spend the money, having conversations with all the hedge fund managers all takes a fair bit of time," says Gourley. "The intention is to open the fund around the 1st of July. Once the fund opens, we're in a position to start assessing and making investments into various private and ASX listed entities." The fund will be looking to invest in companies that promote a positive social or environmental outcome. It will also be looking at investing in media ventures that communicate social and environmental messages, such as digital media companies that have a social focus. Examples include highly-scalable startup companies like ThankYou Group and TOMS Shoes. It is also the world's first Impact Investing Fund to be Branded Trust Certified. Branded Trust is similar to B Corporations, however, the process for certification is a lot more rigorous in the assessment and the benchmarking.

"We'll be originally be making investments in Australia and New Zealand" says Gourley. "But we're certainly going to be having both a local and global focus. It'll be fantastic to invest initially in all great Australian ideas because we do want to give local businesses and entrepreneurs and individuals access to this level of capital. I mean a $100 million impact investment fund is one of the biggest in the country. Funds by VCs that fund startups at the moment, (the ones on the bigger side of things) are still only around $20 million in size. That's not sending a message out there that we want to back Australian ideas. $100 million is. That's our starting point."

"We want this to be a billion dollar fund not just $100 million. We want to be a billion dollar fund investing in Australian businesses, particularly ones that have a social environmental angle outcome to them. We see that now's the time to do that, to try to create change for the future".

It's certainly a grand vision and I would agree that the taste and interest in socially impactful businesses has grown significantly over the last five years. However, labelling $20 million funds as not sending a strong message that people are behind Australian startups is perhaps a little harsh, especially as some of those local funds have played pivotal roles in now global startups like Safety Culture, Canva, Culture Amp, Shoes of Prey and strong local performers like GoCatch and Airtasker. Impact Investing is becoming more prominent across the country and take a number of different forms. There are retail funds like Australian Ethical Super and Future Super; there are wholesale funds like the soon-to-launch Impact Investment Fund and The Impact Investing Group. We also have organisations like Renata Cooper's Forming Circles that invests small amounts of seed funding into small businesses and startups that have a social impact.

"As more funds become more successful, the mainstream will start to shift saying 'You know what, I am going to invest my self managed super into that fund because I'm going to get a return but also I'm doing a good thing," says Gourley.

"Right now there is a very small group of people playing in this space. We all know each other, we're all in it for the right sort of reasons. If anything, it's good collaboration between the players in this space. So people like Berry Liberman from Impact Investing Group and Danny Almagor who owns Small Giants, are big players in this sector. They've been in it a bit longer than us. They're doing some amazing stuff and now if there's a way we can collaborate and help each other, then we're definitely open to that."

Featured image: Geoff Gourley. Source: Supplied.

Macropod Blog

After its previous post about why Macropod chose to stay in Australia, cofounder Alan Downie received quite a few questions about raising money in Australia vs raising in the US and about their experience funding a startup generally. Whilst the post was quite personal, and very much about their journey, it seems to have resonated quite strongly with a lot of readers. [Source: Macropod Blog]

Grieg Cranfield

There are plenty of platforms that connect business owners with available freelancers, including juggernaut brands like Upwork (formerly Elance-oDesk), Australian public company Freelancer.com and a plethora of smaller players, especially local players that operate within their own countries. All of these companies work off a clip-of-the-ticket business model where the platform takes a portion of the total payment made to the freelancer. The platforms are also fierce about protecting being that 'connector' in the equation, meaning that communicating outside the platform with a freelancer is usually a no-go zone. New Zealand based startup Yudoozy believes that it could be the next iteration of the well established 'freelancing platform concept' with its business model that goes against the grain, taking no commissions, not having freelancers bid for jobs and not seeing itself as the middleman platform in which all communications between employer and freelancer must take place. Yudoozy's business model is based on employers paying a monthly subscription as opposed to collecting a percentage per hire or from an hourly rate. For NZ$200 a month, employers have unlimited access to all contractors and freelancers on the platform - and not just their availabilities and rates but also their direct contact details. In fact there is no booking engine within the platform at all, making it almost work like a database of available talent rather than a contractor management platform per se. This is intentional. Co-founders Greig Cranfield and Trudi Batson both have strong backgrounds in recruitment. Cranfield worked in a London agency recruiting UX designers for large digital agencies before moving to New Zealand. The same issues kept arising with clients when it came to finding short-term and project-based contractor staff in particular. Batson is the owner of Razzbri Digital, which is a digital recruitment agency based out of Auckland, New Zealand. It was also the agency Cranfield worked for when he moved to New Zealand. Cranfield went to Batson with the idea for Yudoozy, saying that he thought this was the way forward when it came to managing contractor talent and if they didn't do it, somebody else would. "Clients want to be able to go from literally log-in to being able to see snapshot of who's available, their rate and how quickly they can get to me, as quick as possible, so we've kept that down to 15 seconds," said Cranfield. "Straight from their log-in, customers will just see their dashboard, which has got their favourited contractors and recent search, and so on. The most important thing is the search bar across the top, so if customers need a designer based in Wellington, or a PHP developer in Auckland, they can search and the platform populates a list underneath with a calendar view so the employers can see availabilities." The Yudoozy platform, which is around two months old, already has more than 300 freelancers in its database. Employers can see who's available this week or how many are available in the next month; and can click directly on anyone they think might be interesting. It will bring up their profile, work experience, bio, hourly rate and most importantly, their contact details and portfolio. This essentially makes Yudoozy more of a directory than a booking system. The other important distinction between the platform and global competitors is that all freelancers on the platform must be based in New Zealand. The co-founders are very passionate about keeping local jobs, even outsourced ones within the country. Obviously this model presents a risk to Batson's existing business, because the model essentially cannibalises an entire section of Razzbri, at least in the short-term. In the longer term, it could end up being the smart move because as more and more employers seek out an easy monthly, self-driven solution for hiring, Yudoozy could very well be the first port of call.

In terms of scaling the company beyond New Zealand, Cranfield told Startup Daily that the same 'local talent, local outsourcing' model would apply within those roll-outs.

"It is really important [to our model]," said Cranfield. "For buy-in, a lot of the freelancers we spoke to earlier on, and still speak to for user testing, have said they really appreciate that it's for local freelancers only."

This comes down to the competitiveness of the outsourcing space for freelancers. On a global platform you have freelancers from advanced economies competing with others from emerging economies and it is not sustainable for a coder in New Zealand or Australia to go head-to-head with another from somewhere such as Poland.

"A lot of the clients we talked to said that the temptation is there to send something overseas but the quality is never as good of what they get back so it does seem to be a real key differentiator for us," said Cranfield. "Something that's got a lot of buy-in as well is that we are helping to keep the local job market thriving."

Although the platform is in its first iteration and 'local focus' is a strong point that will help Yudoozy gain significant traction, I do question the company's decision to not integrate a contractor management solution into the platform. Having hired many contractors over the years in both my own business and corporate roles, I would say that the 'finding' part of the solution is on the money, but these days that end-to-end service is becoming more of an expectation as opposed to an add-on.

Having said that, Cranfield was clear that nothing about the current version of the platform was finite and that feedback from users is something he and Batson are using to build the platform clients want. Over the coming months Yudoozy will begin to prep itself for the prospect of raising a seed funding round to further its reach across the country.

Seedstars

On July 18th this year, Seedstars World, one of the most prominent global seed-stage startup competitions is returning again to Sydney to check out the local technology ecosystem. This is the third time the organisation has held a regional heat within Sydney, in a competition that now includes more than 50 countries, up from 36 countries that were involved in the series of events last year. All regional winners of the local competitions are invited back to Switzerland to pitch at the finale held in February 2016. Previously the winner of the overall competition received a USD$500,000 equity investment. However, this year two more equity prizes of USD$500,000 were added to the FinTech and TravelTech categories, meaning the total investment available totals USD$1.5 million. The competition is open to any seed-stage company founded less than two years ago that has raised less than $50,000 in funding and has a MVP available. Seedstars mentioned in a statement that the competition is also looking to shine the light on companies that solve regional issues or develop profitable products for the global market. Seedstars partners with businesses such as MEST, Google for Entrepreneurs and Microsoft to help it identify who the fast-growing startups are. “Seedstars World is a platform connecting investors to the next generation of startup entrepreneurs pulling the spotlight from Silicon Valley and Western Europe," says Alisee de Tonnac, Seedstars World CEO. "We honestly think the best way to have an impact in fast growing startup scenes is by investing and promoting entrepreneurship. We look forward to seeing how the different startup scenes have evolved in a year and the new startups in the country.” In Australia there will likely be 12 startups that will be invited to pitch for the opportunity to compete at the final event. Last year the winner of Seedstars Sydney event was Fishburners based startup GoFar. [caption id="attachment_41775" align="aligncenter" width="900"]

The GoFar team based at Fishburners in Sydney[/caption] GoFar is a Sydney startup modelled on Formula 1 technology and is looking to change what drivers spend on each tank of fuel. It claims if drivers save up to 20 percent on each tank of fuel. Using a dongle plugged in under the steering wheel, and a ‘Ray’ that sits atop the dashboard, combined with a smartphone app, the startup tracks trips and energy released and used by things like accelerating, braking, and driving up and down hills. With energy released translating to fuel used, tracking this data allows GoFar to tell drivers where they are spending money and help them change their behaviour behind the wheel – often, inefficient driving like particularly fast acceleration or harsh braking mean petrol is wasted. The Ray emits a red light to signal drivers that they are partaking in wasteful or dangerous driving behaviours. GoFar recently raised 320% of its goal during its recent Kickstarter campaign. “Seedstars is a tremendous organisation that provides Australian startups with access to investors and global networks, rarely seen in Australia," says Steven Arthur, Desk X Space and local ambassador of Seedstars. "I am excited to be the Australian Ambassador for 2015 and canʼt wait to see who our 12 finalists will be.” This year, Seedstars has partnered with Deloitte, who is the local sponsor and host for the Sydney event. Further support is being provided by General Assembly, LawPath, Stripe, as well as TechinAsia as the regional media partner. The jury panel will consist of Craig Blair from AirTree Ventures, Rui Rodrigues, Managing Partner at Tankstream Ventgures, Garry Visontay, General Partner at Sydney Seed Fund, Andrea Kowalski, Investment Director at Balidor Investment Management and Dean McEvoy from Blackbird VC.

Simon Baker, CEO and Co-Founder, CricHQ (Left), Stephen Fleming, Director and Co-Founder, CricHQ (Center), Andy Lim, Chairman and Founder of Tembusu Partners (Right), at the joint press conference

Wellington based startup CricHQ announced yesterday afternoon that it had secured US$10 million (NZ$14.3 million) in funding from Singaporean private equity firm Tembusu Partners. The funding will help the company scale globally and enhance its digital cricket platform. Cricket is the the second most popular global sport that has a presence in 102 countries around the world and an estimated global following of over three billion people. CricHQ was founded by serial entrepreneur Simon Baker and Stephen Fleming (New Zealand's most successful captain and test batsman in history) and is a platform that makes it easier for cricket clubs to take care of their administration. Cricket admin usually consists of paper-based, time-sensitive methods of data collection. The startup solves this issues through its digital platform which combines integrated competition management, live scoring and customer relationship management to negate the problem of data loss. The platform also includes a cricket administration module that integrates with its real-time scoring app and offers performance insights for coaches and players, whilst providing fans the latest essential cricket information. Thus far, 41 out of the 106 national governing bodies in New Zealand have partnered with the Wellington based tech business to better administer games in their jurisdictions.

Other than using the cash injection to upgrade the current platform and build additional features for its users, the company will begin to expand its reach geographically by making senior appointments to its operations team in India, the United Kingdom, South Africa and Pakistan. India is an obvious large focus for the startup considering it is the single biggest market in the world for the sport.

"[This] investment enables CricHQ to expand significantly and achieve our growth targets," said Baker. "An institutional investment of this significance, and the support of shareholders and clients such as New Zealand Cricket, validates our business strategy. CricHQ will benefit from Tembusu's experience and network in Asia, and is based in Singapore; the ideal gateway to our key markets."

In addition to being supported by key industry bodies such as New Zealand Cricket, CricHQ has also had significant support from the New Zealand Government, with it being viewed from very early on as a key home-grown innovation and digital product with enormous export potential.

"Tembusu believes that CricHQ's business model is highly scalable and it has a huge opportunity to become the world's leading online repository of cricket information," said Andy Lim , Chairman of Tembusu Partners. "We are proud to partner CricHQ in its exciting growth journey."

Flirtey Team

The vision at Flirtey has always been to transform four key industries through the use of drone technology: Humanitarian, Online Retail, Food and Courier Delivery. The company has been actively rolling out initial commercial drone trails in New Zealand in partnership with TradeMe, one of the country’s largest online retailers, and New Zealand Search and Rescue (LandSAR), through which Flirtey demonstrated its ability to deliver urgent medical supplies via drones. Today marks a significant milestone in not just the Australian startup's journey, but the US drone industry as well, with Flirtey and NASA both anticipating the green light to conduct the first Federal Aviation Administration (FAA) approved deliveries by drones on US soil in Wise, Virginia, as part of an event labelled 'Let's Fly Wisely'. There are two types of unmanned aerial vehicles (UAVs) that will deliver pharmaceuticals and other medical supplies at a free medical clinic in Wise, Virginia - one is a fixed-wing aircraft operated by NASA in Langley, and the others will be multi-rotor delivery drones operated by Flirtey, which can safely be called the world's first autonomous aerial delivery service. 'Let's Fly Wisely' is a collaboration between Flirtey, NASA, The Mid-Atlantic Aviation Partnership at Virginia Tech, The Health Wagon, Remote Area Medical, Rx Partnership, Seespan Incorporated and Wise County. The FAA selected Virginia Tech in December of 2013 as one of six national test programs to conduct research about integrating unmanned aircraft into the nation's airspace.

There is a huge gap across the country in the medical space where many citizens across Virginia and rural America are outside the reach of essential health services. Each year, Remote Area Medical USA and Health Wagon organise a clinic at Wise County fairgrounds that provides free eye, dental and healthcare services to those in the community in urgent need. In fact, this is the largest healthcare outreach program in America. From the next clinic on July 17th, the most urgent prescriptions will be provided from pharmacies located out of town. To get these to the community as soon as possible, the pharmacy will deliver them to the local airport where they will be collected by large fixed winged aircraft operated by NASA and flown to Lonesome Pine Airport. When the prescriptions arrived there, they will then be loaded onto Flirtey drones and delivered directly to the Wise County Fairground. Flirtey are expected to deliver around 24 packages of prescription medication, weighing approximately 10 pounds (4.5 kilograms). “This is a Kitty Hawk moment not just for Flirtey, but for the entire industry,” said Flirtey Co-Founder and CEO Matt Sweeny. “Proving that unmanned aircraft can deliver life-saving medicines is an important step toward a future where unmanned aircraft make routine autonomous deliveries of your every day purchases.” This is the first time that America will be able to view how delivery drones can have a real-world impact in important industries like health, where urgent care can be provided more quickly. “This is the first step in proving that on demand drone delivery can revolutionise the way medical care can be delivered to remote communities, and eventually from your local pharmacy to your front door,” said Flirtey Co-Founder Tom Bass. “This will be a game changer for millions in America.”

The Flirtey delivery drone is a hexacopter constructed from carbon fibre, aluminium and 3D printed components. It is a lightweight, autonomous and electrically-driven unmanned aerial vehicle. It has a range of over 10 miles return and lowers its cargo via tether. It has built-in safety features such as low battery return to safe location and auto-return home in case of low GPS signal or communication loss. Flirtey was established in Sydney in 2013 and is today based in Nevada, USA. Sweeny told Startup Daily previously that the company’s strategy is to “develop scalable drone delivery technology". He said that development is taking place in the US office; and New Zealand was being used as a test bed for Flirtey's technology. The way the startup began rolling out its commercialisation strategy is by starting 'test' operations over unpopulated areas, then slowly expanding across populated smaller sites and eventually cities. The startup has learned a lot from New Zealand that it will be able to take and use as part of its strategy to roll out drone delivery programmes across the world. In addition to its commercial testing efforts, Flirtey is also in the early stages of looking at a new investment round to help it keep up with its growth plans and compete on the world stage. Product iteration and investor talks will most likely happen in parallel.

you-cant-sit-with-us

I recently came across an interesting thread on the public Facebook group Sydney Startups. The group, which has over 2,600 members and is run by local entrepreneur and Ruby on Rails developer James Martin, was set up for the local community to share resources and information as well as generate discussion about the tech startup sector. Flogging your own product or service in a belligerent manner is something that has always been well policed by the group admin - it's frankly not welcome. The thread from Friday I am referring to was initiated by business coach Laura Francis who was selling a program targeted at female entrepreneurs. While I have had interactions with Laura online and appeared as a guest on her podcast earlier this year, I am unfamiliar with her content, coaching style and business model. I am therefore unable to comment on whether or not what Francis was selling would be beneficial to female founders of startups. However I am familiar with Francis' online lead generation style on social media; she uses provocation as a tool to polarise and attract a niche audience. That is what she did in the post which started out with the line "Hey Business Lady! You say you want it all but you’re a PUSSY! You went into business thinking you know it all…. But, guess what – YOU DON’T!" - to be fair, when you read the entire post and properly analyse the content, it has been deliberately structured to attract a very specific type of person and repel the rest - that's the point of polarisation. Unfortunately, what Francis received from the post was 'feedback' from many startup founders who basically said 'you are not welcome here' and was eventually blocked by the group admin for trolling. To be blunt, a sales pitch made within a group that has been specifically set up for information sharing and discussion should be policed and group members should be vocal to others about contributing in the right way. However, what stood out about this particular thread was not the fact that etiquette was not adhered to, it was that members were more furious about the language used in the post, and that Francis was a business coach posting in a startup focused group. I have seen this kind of reaction before in the Sydney Startups group when it comes to Multi-Level Marketers (MLMs) and Coaches; it appears that startup founders don't like them and don't want them pretending that they are part of our ecosystem. Coaches and MLMs are not startups? Both coaching and MLM based businesses are legitimate industries worth billions and are responsible for employing tens of thousands of people world wide. MLM, in particular, has been around since the 1920s and can be traced back to organisations like the California Perfume Company, which we now know as Avon. Yet there is a widely held view within the startup ecosystem (globally) that these types of companies are not startups and that people working within these companies to sell products are not founders. The simple way to determine this is by looking at the characteristics of a startup and seeing whether coaching and MLM fit the picture. In his essay Startup = Growth, Y Combinator cofounder Paul Graham defines a startup as a company that is designed to grow really fast. He also makes a point in the essay to highlight that in order to achieve rapid growth you need to create something that you can sell to a big market.

To grow rapidly, you need to make something you can sell to a big market. That's the difference between Google and a barbershop. A barbershop doesn't scale. For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people. Barbershops are doing fine in the (a) department. Almost everyone needs their hair cut. The problem for a barbershop, as for any retail establishment, is (b). A barbershop serves customers in person, and few will travel far for a haircut. And even if they did the barbershop couldn't accommodate them. Writing software is a great way to solve (b), but you can still end up constrained in (a). If you write software to teach Tibetan to Hungarian speakers, you'll be able to reach most of the people who want it, but there won't be many of them. If you make software to teach English to Chinese speakers, however, you're in startup territory. Most businesses are tightly constrained in (a) or (b). The distinctive feature of successful startups is that they're not.

If we use this as a guide, it can be concluded that coaches are not startups, though a coaching platform that has been designed to reach a massive market could be. MLM based companies are startups as they are designed to grow quickly and service a mass audience. However, the network of 'founders' within these organisations would not be considered startups, they are technically just part of the sales and marketing strategy. Investors love startups in the MLM industry According to recent data from AngelList, there are 34,000 individual investors and venture capital firms that have actively invested in or are looking to invest in the MLM space. Some of those people include UBER founder Travis Kalanick and Eventbrite cofounder, Kevin Hartz. In April last year, entertainment and rewards focused MLM startup Viggle closed a USD$35 million round of capital, and hair extension MLM startup VIXXENN which is experiencing rapid growth at the moment attracted seed funding from firms like Brooklyn Bridge Capital and Corigin Ventures. The reason why investment in an MLM startup is so attractive is because 90% of the revenue made within a MLM environment goes directly to the company headquarters, thereby making MLM owners and investors very rich people. People like Donald Trump, Warren Buffet and Robert Kiyosaki are on record stating that it is a great industry (as an owner) to make money in. It just happens to be that the primary way they make that money is by selling the dream of owning of your own business by choosing which hours you work, and having access to unlimited marketing and technical infrastructure that will allow you to achieve your "dream lifestyle". Often, people join an MLM because they're passionate users of a product, which not only leads to advocacy, but also to the actual selling of the same dream sold to them. It is a growth strategy often seen as a turn-off by startup founders, mainly because they feel that the title of being a "founder" is something that, at least in some capacity, needs to be earned, and MLMs don't quite sync with that philosophy. A love-hate relationship with coaching Contrary to what the opening example in this article suggests, startups do actually engage with business coaches and mentors. Where technology startups founders differ to small business owners and other company owners, is that they prefer to seek these people out for themselves. Like MLM, the Coaching Industry is one of the fastest growing in the world, however unlike MLM there are no dominant players in the space. (There is ActionCoach which is the largest business coaching company in the world, but ActionCoach itself is actually an MLM). The industry is growing annually at a rate of 7.8% according to IBIS World, and in the US alone the sector is worth $1 billion to the economy. So while coaching may be a great industry to make money in and be entrepreneurial, those in the space technically would not be considered startups. Therein lies the distaste, and why startup founders are so quick to jump on unsolicited pitches and shut them down. Is it nice to do that? Probably not, but most training in the life and business coaching industry is geared around helping a particular type of client; and fast-growth, highly scalable tech companies are most definitely not part of the curriculum. You can't sit with us The debate about who is able to participate within the startup ecosystem is not too dissimilar to the small business vs. startups policy discussions that we have written about on Startup Daily. In fact, I am going to argue that defining what is a startup and highlighting what type of products and services truly support startups (i.e. looking at who does and does not actually belong in the ecosystem) is just as critical to policy formation for the space as defining the difference between what a startup and small business is. A startup ecosystem progresses based on its general culture and resources. Startup ecosystems help transform a nation's economy and create jobs of the future. In order to do that successfully, participants within the space need to be collectively working towards that goal. Individuals and organisations that do not align with that goal should not be participants within the ecosystem. The trouble with coaching and MLM is that, at its core, they both promote financial selfishness above national economic growth. That is not to say that: (a) there is anything wrong with wanting to make as much money as you can and live the life that you want; or (b) that startup founders are not financially selfish. The point being made is that in order to be part of the ecosystem, you need to be contributing to the community in a meaningful way. The vast majority of coaches out there don't understand the space properly because they confuse the term 'startup' with 'starting a business'; and MLMs are too focused on growing their own ecosystem to increase personal commissions to consider the bigger picture of what startups are trying to achieve. Although proactive exclusion from the startup ecosystem is not what I am suggesting, I do think that it is worthwhile for the community to assess who actively makes a meaningful contribution and who doesn't. There are far too many individuals and organisations out there speaking on behalf of the startup ecosystem that are in fact, not startups or supporters of startups, and that is a problem, as it sends mixed messages to the government and causes the launch of messy government policy.

Stockspot

Yesterday, Stockspot, Australia's first automated investment advisor and fund manager, announced that it had raised an additional $1.25 million in funding as it continues to grow and expand its business. This is the second round of funding for the FinTech startup that raised $250,000 from the since folded AWI Ventures program last April. Unlike its first round of funding, founder Chris Brycki said this time he met with a few interested parties before settling on terms with fintech venture capital firm H2 Ventures and the investment arm of Rocket Internet Global Founders Capital, whose other high profile Australian investments include peer-to-peer lending business Society One and disruptive design platform Canva. Brycki told Startup Daily that he was pleased that brothers Ben and Toby Heap who originally invested in the first round via AWI Ventures were on board in continuing to support the startup via their new fund H2. H2 Ventures was just recently set up by the brothers after the the parent company of AWI Ventures, ASX listed Australian Wealth Investors withdrew its support for the VC fund. Even though Toby was in charge of AWI Ventures and Ben is the CEO of Australian Wealth Investors, the pull of support came about due to the demise of financial services company Van Eyk, in which the parent company had made an investment. This led to a complete restructure of the business and the Heap brothers setting up H2 Ventures. Like AWI Ventures, H2 will not just make investments in the FinTech space, but will also run a FinTech focused accelerator program to feed its investment pipeline. In a model that mirrors AWI, H2 will invest $100,000 in each startup and will take 10% of equity in return, therefore valuing each startup going through the accelerator at $1 million. AWI Ventures ended up investing in nine companies and there are five of them currently going through the last ever AWI program - these include CurrencySpot, Piggy, PayHero, HashChing and Deposits. The other four startups from the initial program include Simply Wall Street, Equitise and Debtto10K. H2 Ventures currently operates out of the Stone and Chalk financial startup coworking space and also intends to open up offices in Auckland and Palo Alto. Stockspot has been one of Heap brothers' flagship investments, one that has seen steady growth since it first launched into the Australian market. Currently Brycki claims there are over 3,000 registered users on the platform; and client funds under management are up 300% since the beginning of the year, though Stockspot is not sharing the dollar figure that this equates to with the media. This particular round of funding will be used in two key areas of the business, according to Brycki. The first is to improve the product; and the second is for marketing activities to increase awareness around what Stockspot is doing. This will be one of the biggest challenges in terms of growth for the Sydney based startup who has found a surprise niche in Australian expats living overseas. "We found that we have a lot of Aussies working in the UK that have become early adopters of the platform," says Brycki. "Usually when people move overseas they just leave their money in an Australian bank account and they don't really know what to do with it. A lot of those people are getting frustrated because they don't gain much interest but then they can't go and set something up with a bank because they're overseas. Since we're the first completely online product, Aussies working overseas are able to set up an investment plan or investment service really easily. [Stockspot] is getting an unusually high number of expat customers." Another major way the company is looking to reach the wider community is via a solid content marketing strategy and in-depth insights. In fact, the insights are very much akin to the types of conversations and learnings you would gain from sitting down face-to-face with an advisor, with Stockspot almost being a 'digital-handholder' around financial literacy.

"Most people stuff themselves up when they invest because they invest according to their behavioural biases," says Brycki. "We make these types of bad decisions because our brain makes us think a certain way about investing when we shouldn't. A lot of our work around educating consumers is about improving the financial intellect of our clients and educating them about this sort of thing. That's why we're publishing a lot of research and writing a lot of content around helping people make better decisions."

"I guess the reason why we're putting a lot of this content and research out as well is because we want to be seen as the consumer champions in finance, the company that is actually standing up for all the little guys out there that seem to get ripped off."

This sentiment is evident when you analyse the type of research activities Stockspot has been undertaking. Last November the company released the Fat Cat Funds Report which highlighted dodgy activities in the sector. This was well received by customers and potential clients, but according to Brycki, the industry hated it. The advantage that Stockspot has over traditional players in the space is that it has no legacy business it needs to protect, and can therefore afford to be a little polarising with its marketing efforts.

Image: Chris Brycki, Founder, Stockspot. Source: Supplied.

The Typewriter

Journalism focused ventures are always fraught with tough times. In addition to being a highly competitive space dominated by two main players in Australia - that is, News Corp and Fairfax - reaching the tipping point where advertising and sponsorship dollars can become a meaningful support system is tough, especially when you are launching a media platform from scratch. The Typewriter, founded by UNSW student Benjamin Cheung in 2013, is a global 'citizen journalism' platform, which aims to give its readers opinionated content written from a local perspective from individuals on the ground. "What we are trying to do is make sure that whoever submits articles and whatever articles we produce will not be misrepresented," says Cheung. "We want to change the conversation so that people from overseas won't be reading something about Australia from say, the Chinese news. If a Chinese person wants to read about Australian news, they will just need to read what an Australian is going to say about Australia." The platform allows anyone from anywhere in the world to submit an article. However, The Typewriter also has a core writing team of global volunteers and editors for its continual content creation - at last count that was 200 volunteer writers globally. It produces around 15 news stories a day and between 2 and 3 opinion pieces. Majority of The Typewriter users are between the ages of 18 and 30 and comprise mostly of young professionals and students. Cheung claims to have a readership of 200,000 unique browsers per month and produces approximately 800,000 page views from those monthly readers. In addition to the site being written in English, there are also Chinese, German and French versions of the platform. Each site has a managing editor; and all articles are cross translated into the other applicable languages, meaning that an Australian writing about a local topic or issue will also have their article translated and published on the other versions of the platform in those applicable languages. At this point, The Typewriter is largely a student-driven platform, with Cheung and many of those working beside him all currently studying at university. This would perhaps explain why the writers would be willing to volunteer at this point, as students would be wanting to build up a portfolio of published work especially those studying within the journalism stream that wish to eventually end up in the industry. Others probably like the fact that their opinions are able to reach a global growing audience of 200,000+ people.

"I made it a founding principle that the initiative to speak up should be on the writer," says Cheung. "I don't force users of the platform to write, but rather hope that when they feel like there's injustice or misrepresentation around a particular issue or something ought to be heard, they will voice this opinion in a written piece and we will just edit it."

The long term vision for the startup is for it to be run as a social enterprise. Cheung believes that running a purely for profit media organisation eventually leads down a slippery slope where commercial interest takes over and the publication will just end up being like everyone else. Cheung has also been looking at seeking funding for the venture, enough to bring on 10 to 15 full time editorial staff to create the daily content in addition to the growing force of volunteer writers.

While it would be possible for a publication focused on social issues like The Typewriter to receive funding from a firm such as the Impact Investment fund, which is actively looking at potential media companies to invest in, I personally think that the overall business model of this publication needs a little bit of tweaking. The current revenue stream is advertising by using the Google platform. That will not be enough to create a sustainable operation whether it is a social enterprise or not; and even if the startup was able to get some social venture funding, it would still have to prove how it was going to turn a profit so that those investors would get their money back - socially focused investing is not charity, after all.

Other revenue ideas that have been discussed within the core team include partnering with universities to encourage international students to enrol in courses like MBAs, which actually could prove to be a very profitable model especially if they can negotiate a clip-of-the-ticket model with various educational institutions. However, nothing is a concrete plan at the moment. Cheung told Startup Daily the major focus for the company is building the platform and growing its user base and there is still some time before he would need to finalise these types of decisions.

BidzDirect

Bidz Direct's platform allows users to browse products listed by sellers - namely, retailers - and purchase those items, or set a price that they are willing to pay for a particular item. If a seller is able to match that pricing, then the user will be able to purchase that item instantly. In March, I wrote an article about Bidz Direct, in which I stated that the startup's biggest challenge was going to be the bad press surrounding another startup playing in the same space Alphatise. I also said that co-founders Phil Tran and Zaven Matevosian would face some tough questions as they prepared to launch their platform and raise funds. Today, the startup announced that it has secured a $400,000 round of seed funding led by angel Raghu Kanchi, a connected investor with a strong and far-reaching network in India. This brings the total amount of capital raised by Bidz Direct to $550,000. The funding will be used by the startup to launch its product into the Australian market and develop strategic plans to expand into the Asia Pacific region. BidzDirect is especially looking into online growth opportunities in India. “The online shopping trend is shifting towards instant gratification and we are excited that we have the technology to satisfy consumers who want things immediately,” saysTran. “Gone are the days where consumers are willing to waste 7 to 10 days for an auction to end only to find out at the last minute that they have been outbid by a bot." Both Tran and Matevosian are pricing experts, having worked in the special pricing division at IBM for the last 14 years. They realised that what they are trying to do - i.e. take on eBay - is no simple feat. "It’s a long journey ahead, but we already begun, and that to me is the start of success,” says Tran. At the moment BidzDirect is currently in its pre-launch phase; and now that it has reached its funding goals, intends to launch the platform in the coming months. The strong India focus is in line with Startup Daily's previous theory that the platform would end up having a rather strong Asian presence, perhaps with even more traction in that part of the world than Australia and the United States. As I mentioned earlier, the major problem that Bidz Direct was always going to face funding-wise was the fact that Sydney startup Alphatise, which officially ‘launched’ in August last year, had been dragged through the media and soured investors' taste for this vertical within the ecommerce sector. Rumours within the startup ecosystem are that Alphatise is currently trying to refinance for $1.5 million. However, if that is true, nothing is happening to keep the existing customer base engaged. At the time this article's publication, the Alphatise website doesn't exist and the application has been pulled from the app store. Unlike Alphatise, Bidz Direct does not sell false hope to its users. Bidz Direct mitigates this ever happening through technology and automation. Its approach is to take advantage and grab the sale while the opportunity is presenting itself. In fact, instant gratification is key to making things work in this space. The Bidz Direct platform has a unique pricing engine that sits behind everything and matches the price requests made by consumers with sellers that are willing to fulfil those purchases instantly. Unlike Alphatise, which then went out and tried to find a supplier, Bidz Direct has taken a page out of eBay’s playbook and already has an established network of ‘Bidz Direct Sellers’ using its platform. Most of these sellers are similar to the types of suppliers that you would already see selling items on the eBay platform as an additional sales channel for their bricks and mortar or retail businesses. On Bidz Direct, when entering products into the platform, sellers choose a ‘lowest price’ option for their items that ensures they still make money from the sale and if the pricing that users are searching for falls within that range for that product, then it is a match and hopefully a sale. No negotiation is necessary. Sellers have already predetermined in the system where they are willing to drop prices to and that process is automated via Bidz Direct's software. As far as revenue streams go, Bidz Direct is keeping things simple with a 5 percent flat fee on sales made across the platform - that is less than half the price of an eBay listing. Tran realises the potential there is for not-so-tech-savvy retailers to leverage off his technology as opposed to building their own site.

eugene

I have mentioned a number of times before that FitTech is starting to become a crowded marketplace in Australia; it feels very similar to the the group buying trend of 2011, which ended in a handful of acquisitions and a truckload of closures.

Although there are massive opportunities when it comes to wearables and data-centric fitness technology, the trend towards building two-sided marketplaces that help connect gyms, trainers and classes with users is starting to get a little bit out of control. The main players right now in the space are FitUsIn, Classium, Classhopper (rumoured to be being bought out by K-Fit), FillMyClass, My Class Fit (acquired by Classhopper) and AnyClass - some of which have limited amounts of seed funding behind them.

The challenge of limited funds to support growth will become more apparent when Rocket Internet-backed SoMuchMore launches in Australia soon and if the very well-funded ClassPass decides to make its move into Australia. However, we should not be too quick to discount new players that have slightly different business models in the same space. Founders Eugene Downing and David Caskey just launched their startup Gym Click in February this year with a goal of helping out both sides of the fitness marketplace with a slightly new business take on the standard revenue model.

Gym Click is a free-to-list online aggregate platform that describes itself as being an 'impartial fitness advisory platform'. It allows users to search via postcode and radius to find gyms, trainers and classes, as well as compare them and redeem 'fitness deals' like many other startups that do the same thing. The difference is that Gym Click tries to remain 'performance' based, which is great for gyms and trainers as it means they only need to pay the platform when it has connected them with a new paying client.

Due to the rapid expansion of fitness providers throughout Australia, fitness enthusiasts have more options than ever before, yet there is no independent fitness marketplace in Australia that caters to the needs of fitness providers and consumers simultaneously. The structure of the Gyms and Fitness Centres industry has changed considerably over the five years through 2014-15, steering the industry towards healthy growth. A majority of this growth has been stimulated by the emergence of budget 24-hour gym chains. Franchises like Anytime Fitness and Jetts Fitness have grown exponentially over the past five years, attracting customers with their affordability and accessibility. Rising health awareness and obesity levels have triggered further uptakes of gym memberships. However, the substitution by many consumers of their expensive full-service gym memberships for more affordable 24-hour gym memberships has limited the industry's revenue growth potential during this period. These factors have all contributed to the industry being worth an estimated $1.31 billion in 2014-15, after growing at a compound annual rate of 3.3% over the past five years. Health consciousness has grown over the past five years, with consumers becoming more aware of the effectiveness and benefits of physical activity. Popular TV shows like The Biggest Loser demonstrate the achievement of weight loss goals and improved fitness levels, providing an incentive for consumers to attend gyms. Further growth has occurred through the expansion of more affordable gyms, which offset the discretionary spending decline during the economic downturn. Budget 24-hour gyms generally operate unstaffed, with the wage savings flowing down to consumers in the form of cheaper membership prices. However, increasing market saturation and the continuing shift in consumer preferences towards cheaper 24-hour gym memberships is projected to result in a 0.8% revenue decline this financial year. "Market saturation is expected to play a major part in the projected slight industry decline over the five years through 2019-20," says Downing. "Membership uptake is expected to fall as most consumer markets have already been tapped by niche gyms catering to all segments of the population. These include full-service gyms, women-only gyms and budget 24-hour gyms. Our philosophy embraces the way Australians prefer to search for fitness solutions. All listed fitness businesses will have equal opportunity to showcase their brand locally and nationally no matter how big or small the fitness business."

Other than the fact that it is entering a very crowded marketplace with well-established vendor relationships, I fear that Gym Click may also run into challenges when it comes to engaging the public due to its basic UI and UX in comparison to its competitors. The look and feel of the site could be much more appealing; at the moment, the colours and patterns don't really translate to "health and fitness" and the navigation layout is not visually appealing ,nor is the navigation process through the listings. If Gym Click is serious about building a global business like ClassPass, it is going to have to start emulating the same type of simple yet sophisticated presence that ClassPass has.

Third Party Trade

FinTech is fast becoming one of the most popular sectors in Australia to launch a business in. Stockspot, which announced a $1.25 million funding round last week for its automated investment advisory and fund management platform, is one of the first startups of its kind to enter the Australian market. Based on data we've analysed here at Startup Daily, online brokerage style startups will likely dominate the FinTech space, especially once would-be startup founders discover new platform Third Party Trade. Third Party Trade describes itself as a new kind of online broker. Traditionally, if you were to use an online brokerage platform, a user would go to that company's website or mobile application. Whereas Third Party Trade has taken all the core features of what it means to be an online brokerage platform and broken it down into an API platform. This way, anyone - whether they're an existing online broker or an Australian startup founder looking to launch a new business - can integrate with its service and instantly tap into the US market. Essentially the API based platform adds a US trading capability and US brokerage capability to any new FinTech platform. Third Part Trade was founded by Michael Giles, who began his career in online brokerage in 2004. After spending some time in the space learning the ropes, he eventually got his own financial services license and launched his first company Robo Invest, which in reality was most likely one of the first local iterations of what a startup like Stockspot is today. In 2010, Giles discovered there were a lot of features he wanted to add to the Robo Invest platform that he was unable to, purely because he couldn't gain the access to them. That was until another FinTech startup e-trade released an API that Giles was able to then use to access markets and features he needed in order to grow Robo Invest. It was during this time that the early idea for Third Party Trade crept into his mind. He recognised an opportunity to become a platform, rather than just a service in the FinTech space - essentially becoming a brokerage infrastructure service that other financial technologies could leverage off, without people having to rebuild this portion of infrastructure every time a new company or project launched within the space.

Eventually, Robo Invest was acquired and merged with a US-based business Pentrade, owned by the Idaho-based Pennaluna & Company.

Although Giles has based himself and Third Party Trade out of New York City, the startup has a real Australian focus.

"Australia is our focus market and it's an exciting place to be at the moment. I would be very happy if we were even just a US company servicing Australia, because clearly being Australian, I have this desire to provide our services to that market, but more importantly, there is a need for what we have in Australia. There is currently no easy, low-cost way to set up an account and make an investment into a US-listed company. It's just not there," he said.

The Third Party Trade business model is perhaps one of the simplest in the world. Eventually, people will be referring to it as the "Stripe" or "Braintree" for online brokerage. When someone does a trade, the startup charges a commission on that trade. However, because part of the FinTech brokerage movement operates with a 'commission-free' USP for their clients, the Third Party Trade platform has the ability to customise its offering for those companies. They have the option to pay a monthly fee for access to the TPT infrastructure. Giles told Startup Daily that coming up with these customised solutions is becoming quite a popular alternative to the traditional clip-of-the-ticket business model that makes up the bulk of the business. The startup is beginning to gain some significant early stage traction across Australia, especially amongst existing online brokers and established startups. While these types of businesses offer valuable products and have a growing number of users, the challenge they face is that they are not licensed broker-dealers in the US. As such, they cannot deal in securities, and have no way of adding this to their offering unless they piggyback off a platform like Third Party Trade.

While Giles admitted to raising a small amount of capital for Third Party Trade, he said he wants to bootstrap the company as much as possible and grow via sales.

"I am keeping this one very lean," said Giles. "I put all of the key pieces in place before I really needed much capital, and now we've got it to the point where it's launched and we have sufficient funds to continue to build out the business."

"It's also the type of company where there's no ambiguity around the business model: someone opens an account and they pay for trade, which generates revenue. So it's not the same as other sites where they have to search for a business model."

Dennis Woodside

Startup Daily founder Mat Beeche sat down with International Chief Operating Officer for Dropbox, Dennis Woodside recently for a fireside chat about the company, its new partnerships within the Australian startup ecosystem and how founders can leverage the Dropbox API.

frank-arrigo

There are many companies around the globe that attribute some of their growth and success to having a public Application Programming Interface (API). Companies like Facebook, Twitter and Foursquare have all benefited a great deal from their public APIs because the feature is a powerful customer acquisition tool - it also means that these APIs form an important technology framework for companies that utilise them to solve other problems. In turn, these companies that own the base API become relied upon by hundreds of thousands, if not millions, of businesses and companies that enter the market, which makes the provider of an API a powerful company. A simple change in the ability to access the "mother" company technology can cause a crushing blow to any fast-growth startup. Just look at the destruction Twitter caused to viral application Meerkat when it decided to choke off access to its API. Companies like Apple and Google that are the foundation partners for millions of companies because of their App Store and Android APIs have become billion dollar businesses because of the popularity of their APIs. Would people be willing to invest in such expensive hardware if apps didn't exist? Australian enterprises using APIs Large companies like Telstra in Australia have begun to realise the importance an API plays in the growth of the local technology ecosystem. In fact, in January 2014, Telstra appointed Frank Arrigo as the company's API Evangelist, guiding the software group in developing its overall API strategy. Prior to Telstra, Arrigo held a similar role with Microsoft where he worked for a little over 22 years across various projects both in Australia and the United States. It was in 2001, around the same time as the birth of '.net', when Arrigo began managing Mircosoft's global evangelism globally. Arrigo told Startup Daily that part of the reason he decided to come on board with Telstra was to help create a strong local ecosystem, showing people how they could plug into Telstra's various APIs to be more efficient and more competitive. For those who are unfamiliar with APIs, at its most basic level, an API allows applications to talk to each other - it's essentially software talking to software. An example is how mobile devices connect to services like Facebook or Twitter; they are using APIs to 'talk' to those services. APIs power websites, mobile apps and devices; and today, everyone is using APIs simply by having a smartphone. In fact, we use so many APIs that half the time we don't even realise that we are doing so. "APIs are really the digital glue that connects all these different services to one another," says Arrigo. In Australia there is no stand out company that is using APIs as a growth mechanism to grow their business. Even Arrigo says Telstra has a way to go before it really begins to hit its stride in this area. Having said that, there are local companies that are API-driven to a certain extent like REA Group and SEEK; and New Zealand founded accounting software startup Xero is an example of a relatively new company that has been able to scale globally off the back its public API. Over 300 organisations have built entire companies or features off the back of Xero's API and in turn have been pivotal to driving the platform to attract over 500,000 subscribers. As far as enterprises like Telstra go, investing in accelerator programs like muru-D which it owns and financially backs is a very important strategy in order for them to win in this space. They are also not the only enterprise to do this; companies like AMP, Qantas and Newscorp conduct their own internal hackathons in order to help create innovative new solutions. NRMA, RACV and even the nation's large mining companies are now running accelerator programs in a bid to create the next big platform that 'everyone' will want to use and 'every new company' will want to build something off the back of. The role evangelists play in Australia's startup ecosystem When it comes to the Australian startup ecosystem, evangelists actually play a fairly important role in educating founders on what is available to them and how they can use certain features like an API to help strengthen their startup's offering. Companies like Dropbox, Survey Monkey, AOL, Amazon Web Services and even homegrown Canva all have evangelist roles within their workforce. While not all of these roles are API-centric, they are designed to drive users to integrate a particular feature or set of features from their platform into the everyday operations of the companies they have founded. APIs are kind of where social media was in 2009 in terms of Australian companies firstly understanding it and secondly embracing it. "A lot of API adoption is change management," says Arrigo. "It's about helping an organisation drive change and a lot of Australian corporates are really intrigued to see how Telstra is doing it, so I just talk [to them] about the process as well as explain what the APIs are and how people can use them." API Evangelists play an important role when it comes to customer acquisition for a company. This is because companies that have a public API are able to solve a wider range of issues with its underlying technology. When a business has an API, it essentially has two sets of customers: the ones that are loyal to the product or service being sold by that company; and developers who use the company's API to build brilliant new products. Those with roles similar to Arrigo mainly focus on the latter in that equation, essentially assisting with the scalability potential of a tech product. The rise of API-ification If we go back to 1997, companies having a "www" address or any kind of web presence was not even a thing. However, in less than 20 years, advances in digital technologies have happened so fast that we have gone from not just having domain names for businesses, but also mobile apps. "In five years time, I believe every organisation will have an API," says Arrigo. "It's an inevitable outcome, but I don't think Australian businesses realise that yet. But it's inevitable, especially for businesses that are cloud based; if you're cloud based you have to have an API, because otherwise how are folks going to consume your services?" This forecast seems logical; it's the natural progression of future companies, particularly in the technology sector. It is understandable why companies like Telstra, Qantas, Dropbox, AMP, NRMA and others want to start getting this area of growth ingrained into their company infrastructure so immediately. Rather than sit back and allow new businesses to eat away at them, there is a massive opportunity for them to provide these new businesses with underlying software that supports them but on the flip-side continues to grow and strengthen their own operations.

Bill Veghte

Online survey platform SurveyMonkey announced overnight that Senior Executive at HP, Bill Veghte will become the new CEO of the company from August 3rd. According to the board, there were 75 candidates that were looked at for the job. In addition to assuming this position, Veghte will also take a place on the SurveyMonkey board joining newly appointed board members Sheryl Sandberg, COO of Facebook, and former Facebook CFO David Ebersman. In a statement put out by SurveyMonkey last night, the company noted that when the board was looking for a candidate to succeed former CEO, David Goldberg who suddenly passed earlier this year, that it was important to find an individual that could continue to deliver SurveyMonkey's expansion, something Goldberg was renowned for, having taken the business from a team of just over 50 to 500 in a very short period of time. “The board found in Bill Veghte an insightful and energetic leader who will leverage SurveyMonkey’s global scale and profitability into a much larger business,” said Zander Lurie, the company’s board chairman. “We believe Bill’s stellar track record in both consumer and enterprise markets makes him the ideal candidate to succeed Dave Goldberg. Bill will continue to deliver on SurveyMonkey’s expansion from a survey tool to an insights platform" the statement read. Veghte comes to SurveyMonkey with a strong track record, having taken up various roles in the technology space, including a 20-year stint with Microsoft. More recently, he was the COO and then leader of the Enterprise Group within HP. On the appointment, Veghte said he was excited to be building on the strong foundations that Goldberg and the SurveyMonkey leadership team had put in place. “SurveyMonkey is a special company with a wonderful opportunity in front of it,” said Veghte. “I am excited to build upon the strong foundation that Dave and the leadership team have in place. It is a great group of people with a platform today that helps millions of customers make better decisions faster and more economically. There is huge potential to grow the business and I am looking forward to helping deliver on the opportunity.” Silicon Valley journalist and co-founder of Re/code, Kara Swisher pointed out in an article that Goldberg and Veghte had been friends since college, and that Goldberg had been somewhat of a mentor to Veghte throughout the years. The article also stated that Goldberg had in fact been trying to get Veghte to join the board of SurveyMonkey for some time, with Veghte telling Swisher he and Goldberg had talked a lot about the future of SurveyMonkey. “We brainstormed a lot about the future of SurveyMonkey when we were talking about the board, and the opportunities to take this company from surveys to a broader insights platform and a core decision-making tool,” Veghte told Swisher from Re/code. “Dave had a real vision that I hope I can help deliver with this amazing team.” On the appointment, new board member and Goldberg's widow Sandberg said the common thread in Veghte's work is his skill in working with teams to increase the global reach of a great business. "He joins an incredibly strong and effective team at SurveyMonkey and together they will help the world use data to make better decisions," she said. SurveyMonkey transformed the traditional survey and market research industries when it introduced its online platform in 1999; and today, the company is the market leader in online surveys with over 25 million customers, including 99% of the Fortune 500, academic institutions, organisations and neighbourhood soccer leagues everywhere. SurveyMonkey also generates more than 3 million survey responses every day. In April 2015, it launched SurveyMonkey Benchmarks, a powerful data offering that organisations of all sizes can use to understand how their performance stacks up to peers, competitors and companies of similar size. SurveyMonkey's investors include Tiger Global Management, T. Rowe Price, Morgan Stanley Asset Management, Baillie Gifford, Spectrum Equity, Google Capital, and Social + Capital. Although nothing has been discussed publicly yet, it wouldn't be surprising if Veghte's role involved taking SurveyMonkey to an IPO, something that Goldberg was passionate about making happen. [caption id="attachment_42507" align="aligncenter" width="960"]

Sheryl Sandberg (Dave Goldberg's wife) and new SurveyMonkey board member, and executives and employees wear #makedaveproud T-shirts

Sheryl Sandberg and new SurveyMonkey board member, and executives and employees wear #makedaveproud T-shirts[/caption]

Australia Post

Reports in the media of late would have you believe that Australia Post is going through some kind of crisis right now - talks of massive losses in particular departments of the organisation and, in turn, the pending voluntary redundancies that will be occurring as a result are, in some ways, painting a picture that a giant company is injured and in desperate need of assistance. The truth however is that Australia Post is anything but helpless; in fact, I would go out on a limb and say that the company will end up playing a major role in the growth of Australia's startup ecosystem throughout the next ten years and vice versa, particularly in the ecommerce space. A Legacy Business The roots of Australia Post can be traced back to 1809, when ex-convict Isaac Nichols assumed the role of "postmaster" operating the service from his home in George Street, Sydney. His role was introduced largely to curb crowds of people rushing to the ships to collect letters when they arrived in port from the United Kingdom. In 1825 The Postal Act was bought into existence, which allowed the Governor General to appoint "postmasters" in different communities and areas, as well as being able to affix pricing for the delivery of mail, creating the first organised postal service in the country. It was in 1901 that all the colonial mail systems merged under one umbrella known as the Postmaster-General's Department, which was responsible for the delivery and systems for all letter, telegraph, and telephony communications across the country. In 1967 the 4 digit postcode system was introduced and later in 1975 the Postmaster-General's department was separated into two separate commissions: one of those was the Australian Postal Commission (now Australian Postal Corporation), which was officially corporatised in 1989. Indeed, Australia Post has a long and embedded history in our country. It also happens to be consistently named as one of Australia's most trusted brands. While Australia Post may have been built off the back of "letters" - which are globally a declining communication medium in today's tech-savvy society - the presumption that the losses the organisation is experiencing across this area are somewhat skewed. It is fact that Australia Post had a 15.2 percent increase in losses across its mail services business in the 2014 financial year, however its parcel business experienced a 20.8 percent increase in profits. While overall profits after tax saw a 34.5 percent decrease in profit, we need to note that Australia Post is currently in a state of transition where it needs to plug the leaks in its non-profitable mail business before it can really focus and drive growth across its strategies within the ecommerce and digital space. Australia Post CEO (since 2010), Ahmed Fahour is tasked with driving the business to ensure that this happens. Australia Post and the Startup Ecosystem Although Australia Post is clearly being innovative with new products such as its digital mailbox, the communication and community buy-in surrounding these products are a serious issue. It has created a perception that the organisation is perhaps not as innovative or forward thinking as it genuinely is. Like Telstra, Australia Post is in a unique position where it has a lot of infrastructure already in place, almost like a "physical" version of an API that startups creating new innovations in the delivery and communications space can "tap into" in order to give end-users competitively priced solutions. Australia Post has begun - albeit slowly - to embrace the new tech startup culture that has made its way into corporate Australia. Clear examples of this are the two year partnership that the organisation signed with mobile charity platform GiveEasy in 2013 and, more recently, the company's integration of local startup Bugwolf into its strategy in order to accelerate the Australia Post digital quality and product release timelines. Though the relationship with Bugwolf has been in place for a while now, it was only recently that Australia Post decided that it wished to make the news public. So far the partnership with Bugwolf has enabled Australia Post to transform its entire testing methodologies and accelerate the go to market strategies across many of its new digital products. The entire focus has been on increasing quality and fostering innovation. It would actually be quite naive to think that the above two examples are the only thing that Australia Post has up its sleeve when it comes to working with startups or thinking about new products "like a startup" does. There is evidence to support this statement when you look at some of its newer products like ShopMate, a service born out of Australia Post identifying the trend that many Australians were ordering clothing and other items from ecommerce stores based out of countries in the United States and needed a more systemised way of getting those items to their door. For a company that is supposedly "backwards" according to a variety of mainstream media reports, ShopMate is a clear example of not only a clear example of how Australia Post is thinking in a more innovative way, but also shows us that it has the ability and infrastructure - particularly in the delivery space - to compete aggressively with other startups, in this case another venture called MyUS. A long and prosperous future together? When you look at the bigger picture, Australia Post is not a "struggling business" - it is a growing business (averaging 23 per cent growth YoY in revenue) that happens to have "struggling parts" that overall do affect metrics like profitability and EBIT. The fact that Australia Post is now starting to instigate media coverage regarding partnerships with tech startups means that, like many other companies such as the NRMA, Telstra, and Commonwealth Bank to name a few - Australia Post is now in a position where it has obviously laid down the foundations for its "Future Strategy" and is ready to begin changing the public perception of its brand from being a trusted legacy player to a company that fosters innovative thinking, especially when it comes to the digital realm. Australia's startup ecosystem will play a pivotal role in the survival of Australia Post, that is certain. However the million dollar question is, what will that role actually be. There are two significant opportunities: the first is around education, support, and collaboration with the startup scene, similar to the way that companies like Telstra and NRMA are doing it via accelerator programs, mentorship, and strategic partnerships. The second is via acquisitions and incubation of local startups that are solving problems aligned with the Australia Post "Future Ready" strategy. In an ideal world, I suppose it would be a little from column A and a little from column B.

Disrupt

Disrupt, which was part of the most recent muru-D class two intake, creates 100% unique customised sports equipment that performs better for users and also has a unique look. Being keen surfers themselves, the founders Gary Elphick and Jason Rogers chose surfboards as the first product line to launch and test, hence the first iteration of their brand prior to muru-D, Disrupt Surfing. What sits behind this is a platform that uses data to help users develop the unique shape and size of the equipment – on a surfboard that would be features like the size and volume of the board. On other equipment, like a cricket bat (which Disrupt will be beginning to offer soon), a user’s arm length would be vital data allowing a customer to see how good their trajectory will be in hitting the ball based on the bat they have created. Everything about the design and artwork of Disrupt equipment is customisable; users are able to upload their own images or they can collaborate with one of the local artists the startup works with. Yesterday, Disrupt announced that it had officially launched into the European market after finding success in Australia and within the Asian region. It had already created 1,500 surfboards for customers in Australia, Sri Lanka and Hong Kong. Disrupt is setting up its European headquarters in the United Kingdom and has already signed marketing partnerships with popular outdoor sports brands like WaveLength and Animal. Distribution agreements with three retailers have also been formed; and Disrupt is currently setting up partnerships with several of the major British University surf teams including Bournemouth, Plymouth, Exeter and Oxford. “The UK has a strong surfing scene and we’re very excited to launch here to expand across Europe," said Elphick. "Jason and I are both surf enthusiasts who found there wasn’t a means of expressing our individuality on our surfboards, without it costing a small fortune. That was the inspiration to set up Disrupt and it’s gone from strength to strength. For us the benefits are three-fold: it’s about educating people about how sports equipment is made and designed, innovating in a sector that badly needs it and celebrating peoples’ expression of creativity." Prior to entering the muru-D accelerator programme, Disrupt had some very early customers and revenue coming through the door. Elphick previously told Startup Daily that this allowed the team to make mistakes early on, which in turn allowed them to learn a lot quicker than if they were starting from a zero customer base. This is because as soon as someone pays for something, they are a lot more vocal about what they think, and the feedback certainly came in handy. This speed to market enabled Disrupt to bring in north of $600,000 in revenue and execute its expansion into international markets a lot quicker. According to the founders, it is the only company that allows users to directly upload a particular design or photos from Instagram, and work with local artists on the platform to create customised equipment. However, at the moment there are at least two other players operating in the same space such as CiSurfboards and BoardLams. To be fair though, the technology and design boundaries are completely sup par to what Disrupt is offering to its users. The vision around the technology powering Disrupt is a big one. Right now, the platform uses a mix of technology and manual input to feed data into its system. Eventually, the plan will be to have a platform that is able to read people and their metrics in 3D as well as tap into other data, in a Internet-of-Things type play. Recently the company launched Smart Surf, the world's first socially integrated surfboard, which has embedded microchips providing information about the lifecycle of each board. The company is currently in the process of rolling out a full eCommerce platform for different types of sports equipment. It will introduce customisable snow sports gear over the next 12 months, and is working on 160 other lines including cricket, rugby and yoga.

oscar_razor

One of the more memorable launches within the subscription service space in the last five years was that of Dollar Shave Club, whose now famous viral pitch video was seen by millions and ultimately attracted over $1 million in funding for the company. Over the years there have been many copy cat companies with varying degrees of success. What you may not have realised is that back in 2008 there was an Australian company called OSCAR RAZOR that was already doing a similar thing, however without the international acclaim and funding that Dollar Shave Club received four years later. OSCAR RAZOR was founded by Sydney based Oscar de Vries, an entrepreneur with over 13 years of experience in the shaving product industry; he also has an additional range of shaving oils and gels under the brand name OSCAR Natural. However unlike its US counterpart, OSCAR RAZOR prides itself on using German-made razor blades, giving what it claims is a superior razor to that of Dollar Shave Club. The pricing also sits quite neatly between the cheaper DSC and Gillette. For the last seven years, OSCAR RAZOR has gone to market with a duel sales strategy: online and retail. The retail has by far been the most successful, with OSCAR RAZOR being stocked in Coles, Woolworths and Priceline for majority of that time. However this month has seen a drastic change for the growing company with De Vries choosing to sever ties completely with the two biggest powerhouses in the men's toiletry and lifestyle product space after a series of disagreements and what De Vries describes as complete disconnection between Coles and Woolworths and their suppliers (i.e. the little guys). The troubled times in retail really began with Coles when a new buyer entered the picture. De Vries told Startup Daily, "A new buyer came along and put the price up of our product. When I noticed this, I asked them if they could please refrain from doing so as the product was now being sold above the recommended retail price. However Coles would not do this. When you are dealing with a competitor on the shelf next to you in the same space, this is a problem. The price of our product should have been $10 however Coles had pushed it over that." As predicted by De Vries, this led to a drop in sales across the supermarket chain. In turn, this sparked a conversation with OSCAR RAZOR about its products not selling the volumes that it should be, followed by even more frustrating conversations.

"Well, hello? That's what I've been telling you," said De Vries during the heated discussion, which eventually led to one of his products being delisted. Although De Vries said he tried to challenge this decision, he concedes that ultimately in the end he knew the door was closed and it would take too much time and money to fight the decision properly.

Instead, De Vries has turned all his attention and energy into redeveloping and relaunching the brands as an online subscription service with the hope of beating Coles, Woolworths and to a certain degree, Gillette (by far the brand with the most shelf space in that vertical) at their own game.

The immediate focus for OSCAR RAZOR is to build up its subscriber base to an ambitious 100,000 within the next couple of years. With an aggressive number like that comes an equally aggressive marketing strategy. De Vries has begun working on a television campaign for the brand to kick things off. While he agrees that a robust online campaign is also critical especially when attracting a younger audience, De Vries has looked at the data from other similar campaigns run by the likes of Dollar Shave Club and sees that a television campaign in addition to an online strategy should deliver him the cut-through and return on investment he is after for it to be a viable strategy.

Though De Vries is under no illusions that scrapping his retail ties completely has caused him to take a hit and that this will continue in the short term, he told Startup Daily that he remains confident that the online route is the right direction for his company to be heading in. He is the first to admit he is a "late-bloomer" when it comes to technology, however he has more than embraced it.

"I was probably a late bloomer when it comes to the tech space, but I've really embraced it now and I love the fact that as a brand owner you're more in control," De Vries said. "You can deal directly with your customers and deal with feedback in real-time, which is critical when it comes to building a brand that we hope will [compete with industry stalwarts in the vertical]."

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