Category Archives: Entrepreneurship

Food for thought at #StartupVic’s #pitch night

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There was something of a different flavour at Startup Victoria‘s pitch night for September – including the new beverage sponsors! – which may have been helped by the large crowd, and the more polished presentations (judging by the feedback).

startupvic

Image sourced from Startup Vic’s Meetup page

I will comment on each pitch in order of appearance:

Studio Ninja

Studio Ninja is described as Client Management software for professional photographers. Aimed at the wedding industry, it also holds some appeal for other event planners, DJs, musicians, make-up artists, hairdressers, caterers and florists. But the primary focus is on weddings, and the specific needs of studio photographers, whose workflow is very particular (according to the founders).

Regular attendees at these pitch nights will recall similar CRM/project management tools for other sectors, such as architects and management consultants – which raises questions about how unique each profession really is?

In essence, the software handles lead management, invoicing and cashflow reporting. It is available via subscription, and integrates with payment systems such as Stripe and PayPal, and other service providers such as Uber, and will soon integrate with Xero.

With a reported 40 new sign-ups per day, and around 2,000 members (of which only 300 are currently paid subscriptions), the Studio Ninja team are aiming to grow to 10,000 users and revenue of $4m. Growth is being driven by strong SEO and organic discovery among photographers, and word of mouth referrals.

The panel of judges were interested to know how the software could be sold via peak bodies and professional associations, under a SaaS or white-labelling model, and what potential there is to integrate lead generation and referral solutions. The judges also thought that camera and photography equipment brands could offer a significant sales channel opportunity.

Deliciou

Something of a different pitch came from this bacon flavoured seasoning, which is actually bacon-free. (I should confess that I was once a vegetarian, but when I started to dream about bacon sandwiches, I realised I was missing out… Maybe if this product had been around all those years ago, things would have turned out different. But I digress.)

There was certainly no lack of passion in this pitch, and the founder had even made sure there were free samples to go around, so strongly does he feel about his product. With a 9% conversion rate from website visits, and 2,000 bottles sold this year, there is obviously a niche in the flavourings market for a “guilt-free” bacon experience.

A graduate of the Melbourne Accelerator Program, the founder has cleverly chosen to use a pop-up popcorn stall to generate market awareness, solicit customer feedback, and create visibility for a product that comes in a small jar, and will compete for valuable shelf space in supermarkets.

The business is seeking $100k in seed funding to expand the range of seasonings,
expand overseas, and to resolve issues with production lead times and logistics. But given the challenges in building consumer brands, especially in the food and beverage category, a better option might be to tie up with another snack food or convenience food brand, and use that vehicle for distribution and market reach.

Reground

Reground is another food-related startup, but this is all about recycling coffee grounds. The business turns coffee waste – which otherwise goes into landfill – into sustainable uses, thereby reducing the amount of methane gas released into the atmosphere.

With a waiting list of cafes who want to access the service (because cafe owners already pay their local council to take away the waste), Reground will divert part of those waste collection fees and can even help cafes save money. Reground also supplies community gardens with free material for their compost. Other uses for the coffee waste include mushroom production.

As well as offering waste assessment services and potential cost savings, Reground runs a newsletter and provides certification for participating cafes. There is also potential for this Melbourne-based business to go national and even to the USA.

They are also offering a customer app to support logistics around collection, and they operate their own van as there are council limitations on more waste trucks on our streets. Asked by the judges about scaling their business, the founders are considering to build their own waste processing plant. (After the event, I did a quick search, and found a similarly-named business in Canada.)

Allume Energy

Finally, Allume Energy, another sustainability business, this time in solar energy distribution. Or, in their own words, “Democratising access to renewable energy”.

As a social enterprise, Allume offers tenants easier access to cheaper solar energy. Basically, Allume contracts with the property landlord to provide initial funding to install and set up a solar system, and then tenants pay for their energy via a contract licensing system. In addition to working with community and social housing projects in remote locations, Allume also offers a shared system for apartment blocks.

Claiming to provide a 30-50% saving to tenants, Allume requires landlords to commit to a 15 year contract, with a 50% break fee (based on the initial installation and set up costs). Given some of the current challenges in renewable energy (weather events, phasing out of government rebates, and reduction in feed-in tariffs), this scheme to implement very local solar systems will no doubt appeal to landlords and bodies corporate.

And on the night, Reground was the people’s choice – probably because it was a simple but effective proposition, and it appealed to Melbourne’s environmentalists and coffee lovers alike!

Next week: A Tale of Two #FinTech Cities – Part 2

101 #Startup Pitches – What have we learned?

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During the past 3 years of writing this blog, I have probably heard more than 100 startup founders pitch, present or share their insights. Most of these pitch nights have been hosted by Startup Victoria, with a few on the side run by the Melbourne FinTech Meetup and elsewhere.

Image sourced from Startup Victoria Meetup

Image sourced from Startup Victoria Meetup

Based on all these presentations, I have collated a simple directory of each startup or pitch event I have covered or mentioned in this blog, as well as a few key accelerators and crowdfunding platforms.

What have we learned over that time?

First, apart from the constant stream of new startups pitching each month, it’s been impressive to witness the Melbourne startup community collaborate and support one another.

Second, some of the international founders who have spoken are among the rock stars of startups – and we are fortunate that they have been willing to spend time in Melbourne.

Third, a number of the local startups who have pitched during this time have become well-established and well-known businesses in their own right.

This all means that besides creating great products and services, and being willing to share their experiences, the founders have helped aspiring founders and entrepreneurs to appreciate the importance of:

  • product-market fit;
  • working with agile processes and lean startup models;
  • tackling prototyping and launching MVPs;
  • learning what to measure via key metrics;
  • figuring out funding; and
  • knowing when to pivot or fold.

Looking at the cross section of pitch nights, panel discussions and guest speakers, there are some significant trends and notable startups to have emerged:

Industry focus: Not surprisingly, the pitches are heavily biased towards FinTech, MedTech, Education, Digital Media, Enterprise Services and Consumer Services. There are a some key startups focused on devices (e.g., SwatchMate and LIFX); a smattering in recruitment, fashion, gaming, health and well-being, property services, social media and even logistics. But there are surprisingly few in environmental technology or services.

Business models: Two-sided market places abound, as do customer aggregators, sharing platforms (“the Uber for X”, or “the AirbnB of Y”), freemium apps and subscription services (as opposed to purely transactional businesses). There are also some great social enterprise startups, but surprisingly no co-operative models (apart from THINC).

Emerging stars:  Looking through the directory of startups, some of the star names to have come through during this time, based on their public profile, funding success, awards (and ubiquity at startup events….) include:

CoinJar, LIFX, Tablo, SwatchMate, etaskr, DragonBill, Culture Amp, Eyenaemia, Timelio, Moula, nuraloop,  Konnective, OutTrippin and SweetHawk.

Acknowledgments: Some of the startups and pitches in the list are just ideas, some don’t even have a website, and some didn’t get any further than a landing page. However, I have not been able to include all the startups that turned up at Startup Alley, nor the many more startup founders I have met through these events (but whom I didn’t get to see pitch or present), nor the startup ideas that were hatched during the hackathons I have participated in. And there are a few startups that I could not include because I heard them pitch at closed investor events. Finally, I am and have been very fortunate to work with a number of the startups listed, in various capacities: Brave New Coin, Ebla, Re-Imagi, Slow School of Business and Timelio. To these startups and their founders, I am extremely grateful for the opportunities they have given me.

Next week: Putting a Price on Value

 

Another #pitch night in Melbourne…

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If there is one basic theme emerging from Startup Victoria‘s monthly pitch nights, it is this: whatever market you are in, regardless of your business model, and however disruptive you are trying to be, if you don’t know how to engage or reach your customers your idea is far less likely to succeed. This message came across loud and clear during last week’s event where four startup hopefuls pitched their business ideas to a panel of judges in front of a packed audience.

Picture sourced from Startup Victoria Meetup page

Picture sourced from Startup Victoria Meetup page

So let’s look at this specific issue in respect to each of the pitches:

First came JobPokes, an online recruitment service designed to help candidates match job opportunities to their career preferences. Because it claims to be addressing the hidden job market, candidates aren’t applying for specific roles – instead, it’s a form of reverse enquiry, where recruiters target potential applicants via their registered profiles. I applaud the focus on the non-advertised job market, but while it may well offer an additional channel for recruiters, I’m not sure there was a clear strategy to reach job candidates who need to create a user account, and who are probably already using platforms like LinkedIn and Seek.

Next was Airly, which is sort of “Uber for private aircraft”. The business model involves signing up a minimum number of customers (who pay a monthly subscription fee, entitling them to unlimited flights), and securing sufficient seat capacity via scheduled charter contracts. There is no doubt that the idea of flight flexibility, and an element of passenger exclusivity met with audience approval (Airly took out the people’s choice vote on the night). Also, the PR around Airly has generated in-bound enquiries, suggesting there is demand. But how does this market interest convert to individual customers, when many corporate travel policies rely on wholesale and bulk-purchase models (i.e., aggregation, consolidation, vendor discounts, agency rebates, preferred airlines) rather than catering for individual travel needs or preferences? Unless the target customers are business travelers that manage and pay for their own tickets?

If Airly was about the Uberisation of air travel, RagRaider revealed another aspect of the shared economy model. Squarely aimed at fashion- and budget-conscious women, RagRaider offers a peer-to-peer service whereby customers can hire clothes for one-time use. No doubt there is a market (high school formal, spring carnival, wedding reception…) but the question is how to connect with actual lenders and hirers? We know that the per customer cost of acquisition for 2-sided markets is a key metric, and it wasn’t clear how the founders were addressing this, other than a pre-launch website and some social media. As one observer has commented, the “model is focusing on the ‘product’ part first which is the reverse of how it should be”, and another commented that despite a defined market, the barriers to entry are considerable. The judges also questioned some of the proposed pricing, commission rates and logistics.

Finally, Rounded is another FinTech startup looking to service the SME sector, specifically sole traders, freelancers, sub-contractors and tradies. Another spin on the invoice solution when suppliers need to get paid efficiently, Rounded does not claim to be a full-service accounting software – but, as one attendee commented, key to success will be reaching and educating the end-user market.  Also, they are entering a competitive space, where a new entrant like Xero has already disrupted incumbents like QuickBooks, Reckon and MYOB. I wasn’t able to stay for the pitch, but I did have the opportunity to speak with the founders beforehand. Clearly driven by their own experience and needs, there is a solid but simple idea here – but as Xero and others are increasingly able to serve similar customers, Rounded will find it really difficult to compete.

If anything, these latest pitches showed how hard it is to compare apples with oranges, although the voting criteria (market traction, product viability, team composition, pitch presentation, and responses to judges’ questions) are designed to deliver a consistent evaluation. It was also apparent that these pitches divided audience opinion more so than previous contestants – which is probably a good thing as variety is the spice of life….

Acknowledgments: thanks to Graphican, Marlene M., Cornell and Dale G. for their input.

Next week: Re-Imagining Human-led #Innovation

 

Startup Victoria’s #Pitch Night for #Startup Week

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The grand finale of Melbourne Startup Week was Startup Victoria‘s regular pitch night held at inspire9. Six months in, and this new monthly format has become a major fixture on the startup calendar, judging by the audience size, and the range of startups applying to pitch. There are still a few teething problems (the AV quality is a bit variable, and some of the judging panels are probably too “soft”…), but it’s established something of a benchmark against which other pitch nights might be compared. This month’s cohort covered medtech, wellness and the greetings industry.

StartUp Vic 240616

Cardly

Cardly is an online service that allows users to send personalized greetings cards to friends and loved ones. Under the banner of “you write, we post”, customers can choose from a range of artist-designed cards, add their own message, and Cardly will then print and send the card from a location as close as possible to the recipient (currently London, Sydney and New York).

A variant on the familiar 2-sided market model, Cardly has built a community of independent artists who supply the card designs. Artists are charged a sales commission on each order, and they get their own store front on Cardly. And for anyone struggling for words, there’s a range of predefined texts and doodles.

Because this is a print-on-demand model, using digital printing, there is zero wastage (unlike the traditional greeting card industry where over-production and limited distribution are commercial headaches). However, even with some “handwriting” fonts, there are some design and user limitations, which something like the Sensel Morph touch-sensitive track-pad may be able to address?

Cardly is aiming to take a chunk of the retail market and disrupt the global greetings card industry. The judges took a slightly different view. Based on the founders’ own data, consumer customers will probably send an average of 12 cards per annum, and at $6.45 per card, it’s a tough sell. However, by looking at a lower cost per acquisition, addressing the corporate market and offering a white label solution, the business would be in a better position to scale. There was also a suggestion for an engineered viral solution to drive traction through collaborative cards, and other ideas for partnerships (e.g., gift buying services and gift cards).

Cardihab

Cardihab (“Get Back To Life”) has appeared in this blog before, and is a CSIRO spin-out that has developed a mobile support solution for cardiac patients via an app and a patient/GP portal. As someone whose father is recovering from major heart surgery, this pitch got my personal vote!

The success rate is staggering – patients using the app are 70% more likely to complete rehab. So far, four hospitals have signed up, with three more in the pipeline. As well publishing their research, the founders see Cardihab as being a broader platform for managing chronic illnesses.

Currently in the process of getting investor ready, the proposed business model will charge an annual license for hospitals, plus a per patient fee.

The judges had some questions about the potential market (“Anyone with heart disease”) and wanted to know a bit more about the bench strength of the team.

Black

Staying with the medtech and after-care theme, Black‘s modest goal is to “revolutionise healthcare”, via an in-home observation solution that scans patient movement and analyses interaction with their helpers. The scanner strips out personal data (features, attire) using skeleton tracking to monitor movement and falls, while learning from patient gestures. It can use real-time alerts to contact helpers, carers and emergency services.

The scanning software is currently trialing in casinos to refine the machine-learning algorithms, and all trials are subject to ethical approval.

Although still at a conceptual stage (in terms of health care applications), and notwithstanding privacy concerns, this project demonstrates that predictive tools will be vital to helping the elderly and the infirm to continue living independently in their own homes, which will have significant advantages to the cost of long-term care, preventative health services, patient rehabilitation and after-care services. There are doubtless other, similar solutions in development, and the outcome will likely be a mix of blended services based on ease of use, cost of roll-out, system interoperability and patient efficacy.

Honee

Last to present was the team from Honee which is bringing digital connectivity to the wellness, fitness and beauty industry. The solution they offer is designed to make it easier to discover and book an appointment for a treatment, consultation or workout session, by connecting merchants and users.

With previous international experience at Delivery Hero, Quandoo and Zomato, the founders have strong startup business credentials in adjacent markets – connecting consumers to service providers via search discovery, customer reviews, personal recommendations and proximity.  Of particular interest in this sector is the growing “wellness travel market”.

There are undoubtedly competitors already working on similar solutions; and it may just be that I’ve seen far too many pitches in the past few years, but I’m sure there was a startup out there offering a “just in time” service to help find and book appointments for personal services – Fit Me In? – and I recall another comparable startup idea for restaurants to offer last-minute menu specials via a location-based app.

Nevertheless, as we know, execution is key, and the judges asked about the huge cost to build a consumer brand – hence Honee is focusing on service providers to get their brands on line. There is an MVP in pre-launch, and Honee has built a mobile responsive website, with a grant from the Melbourne Accelerator Program.

After the vote (and thanks to technology, the results of which were available in minutes….) Cardly was declared the night’s winner.

Next week: Moving #innovation from “permitted” to “possible”