Antler Demo Day – Rewired

As with the recent Startupbootcamp Virtual Demo Day, the Antler incubator program also ran its Demo Day Rewired as a live webcast. Both online events were an opportunity to see what their respective startup teams could achieve in less than 3 months, and a chance to interact in real-time with the founders themselves. The main difference was that Antler decided to stream the event live (rather than broadcast pre-recorded presentations) which worked surprisingly well in the circumstances – and not just the technology; it must have been really challenging to pitch to an empty room, with no ability to “read” the audience.

Like Startupbootcamp, the majority of teams were only formed at the start of this cohort, and to do this during the current pandemic lock-down must have been especially challenging.

Of the 12 teams to present, half were SaaS solutions, two were curated marketplaces, two were related to carbon offsets, while the remaining pitches offered a support platform for people suffering addiction, and an investment solution aimed at Millennials.

All of the SaaS teams, deal in some way with managing other SaaS applications, as follows:

Intalayer – streamlining software development and product management tools

motiveOS – streamlining CRM, accounting and billing systems to track sales commissions

meetric – streamlining productivity and collaboration tools

Elenta – streamlining workplace L&D services

CloudOlive and Hudled – streamlining the procurement, provisioning and management of SaaS stacks themselves

Given the similar nature of these concepts, there was some commonality in their approach to problem identification, solution design, and market sizing. A number of the audience questions also asked why existing incumbents in each of the specific verticals wouldn’t simply come up with their own solution (even if it was simply to offer 3rd party plug-ins, which leading SaaS platforms such as Xero and Salesforce already do)?

Both Pathzero and Trace aim to make it easier/cheaper to go carbon neutral (via carbon credits and offsets) for SMEs and consumers respectively. Both solutions are essentially curated services, to help customers access, evaluate and verify carbon offsets and make informed decisions about going carbon neutral. Other traditional solutions involve repackaging wholesale schemes (often expensive to administer, since they are not designed for small businesses and retail consumers), or they lack transparent reporting and certification. Blockchain (as a form of immutable distributed ledger) and tokenisation (to streamline the origination, structuring and distribution of carbon offset assets) are also concepts that are being explored.

In the curated marketplaces, Mys Tyler is a platform for women’s fashion, and RightPaw is designed to help dog breeders connect with prospective dog owners. The former may find an opening now that Amazon has decided to decommission the Echo Look (an AI-supported camera offering fashion advice) although Amazon claims most of the features have been incorporated into the main Amazon Shopping app. While the latter made the point that during Covid19 lock-down in April, online pet scams increased 5-fold.

Combining clinical research, community networking and self-help solutions, Aurelius is designing an online support system for people who suffer from addiction, or living with family and friend who do. It’s quite an ambitious goal, given the value will be in providing highly personalized, proven and achievable outcomes for their users, but the team are not, and do not claim to be, medically qualified professionals. It was not clear from the pitch how the service will be funded.

Finally, Yolo ex is designed to be an investment platform aimed at Millennials. On the one hand, it was suggested that younger people don’t have access to investment products and services suited to their needs, since current solutions are geared towards older investors. On the other, Millennials are said to be more likely to research and do their own analysis on investment choices and opportunities. Part of me thinks that if it was that easy, superannuation brands and financial planners would find it easy to engage with this demographic (remember those colourful ads for Kinetic Super, before it ended up merging with Sun Super?). Another part of me is encouraged by what I have seen after more than four years working in the Blockchain and crypto space – the adoption of Bitcoin and other  digital assets by younger people demonstrates that they looking for alternatives to what the major banks and traditional wealth management providers offer them. And not all of them are looking to make a quick buck via RobinHood and Hertz….

Next week: Music during lock-down

 

 

 

 

 

 

 

 

“There’s a gap in the market, but is there a market in the gap?”

As a follow up to last week’s post on business strategy, this week’s theme is product development – in particular, the perennial debate over “product-market fit” that start-up businesses and incumbents both struggle with.

Launch it and they will drink it….. (image sourced from Adelaide Remember When via Facebook)

The link between business strategy and product development is two-fold: first, the business strategy defines what markets you are in (industry sectors, customer segments, geographic locations etc.), and therefore what products and services you offer; second, to engage target customers, you need to provide them with the solutions they want and are willing to pay for.

The “product-market fit” is a core challenge that many start-ups struggle to solve or articulate. A great product concept is worth nothing unless there are customers who want it, in the way that you intend to offer it, and which aligns with your go-to-market strategy.

I appreciate that there is an element of chicken and egg involved in product development – unless you can show customers an actual product it can be difficult to engage them; and unless you can engage them, how can they tell you what they want (assuming they already know the answer to that question)? How often do customers really say, “I didn’t know I needed that until I saw it”? (Mind you, a quick scan across various crowd-funding platforms, or TV shopping channels, can reveal thousands of amazing products you didn’t know you couldn’t live without!) Of course, if your product development team can successfully anticipate unmet or unforeseen needs, then they should be on to a winner every time! In fact, being ahead of the curve, and understanding or even predicting the market direction is a key aspect of business strategy and product development for medium and long-term planning and forecasting.

Then there is the “build it and they will come” strategy. A bold move in most cases, as it involves upfront deployment of capital and resources before a single customer walks through the door. The image above is the only visual record I can find of a soft drink marketed in South Australia during the late 1960s and early 1970s. And you read the label correctly – a chocolate flavoured carbonated beverage (not a chocolate milk or soy concoction). It was introduced when the local manufacturer faced strong competition from international soft drink brands. No doubt it was designed to “corner the market” in a hitherto under-served category and to diversify against the competitor strongholds over other product lines. Likewise, is was launched on the assumption that people like fizzy drinks and people like chocolate, so hey presto, we have a winning combination! It was short-lived, of course, but ironically this was also around the time that soft drink company Schweppes merged with confectionery business Cadbury, and commentators joked that they would launch a chocolate soda, or a fizzy bar of chocolate….

With data analysis and market research, it may be possible to predict likely successes, based on past experience (sales history), customer feedback (solicited and unsolicited) and market scans (what are the social, business and technology trends). But obviously, past performance is no guarantee of future returns. In my early days as a product manager in publishing, we had monthly commissioning committees where we each presented our proposals for front list titles. Financial forecasts for the new products were largely based on sales of relevant back catalogue, and customer surveys. As product managers, we got very good at how to “read” the data, and presenting the facts that best suited our proposals. In fact, the Chairman used to say we were almost too convincing, that it became difficult to second guess our predictions. With limited production capacity, it nevertheless became imperative to prioritise resources and even reject some titles, however “convincing” they seemed.

Then there is the need to have a constant pipeline of new products, to refresh the range, retire under-performing products, and to respond to changing market conditions and tastes. In the heyday of the popular music industry from the 1960s to the late 1990s, the major record labels reckoned they needed to release 20 new song titles for every hit recording. And of course, being able to identify those 20 releases in the first place was a work of art in itself. For many software companies, the pipeline is now based on scheduled releases and regular updates to existing products, including additional features and new enhancements (particularly subscription services).

An important role of product managers is knowing when to retire an existing service, especially in the face of declining or flat sales. Usually, this involves migrating existing customers to a new or improved platform, with the expectation of generating new revenue and/or improving margins. But convincing your colleagues to give up an established product (and potentially upset current customers) can sometimes be challenging, leading to reluctance, uncertainty and indecision. In a previous role, I was tasked with retiring a long-established product, and move the existing clients to a better (but more expensive) platform. Despite the naysayers, our team managed to retire the legacy product (resulting in substantial cost savings), and although some clients chose not to migrate, the overall revenue (and margin) increased.

Finally, reduced costs of technology and the abundance of data analytics means it should be easier to market test new prototypes, running proofs-of-concept or A/B testing different business models. But what that can mean for some start-ups is that they end up trying to replicate a winning formula, simply in order to capture market share (and therefore raise capital), and in pursuit of customers, they sacrifice revenue and profit.

Next week: Who fact-checks the fact-checkers?

 

 

 

Startupbootcamp’s Virtual Demo Day

Not to be defeated by the Victorian government’s Stage 3 Covid19 restrictions, Startupbootcamp decided to stream the latest Energy Australia Demo Day online. It was a bold move given that a key value of these events is the opportunity to see and meet the startup founders in person. But to the organizers’ credit, and with support from their corporate sponsors and mentors, as well as the founders themselves, it was an impressive event, and managed to connect the teams with their audience effectively.

The nine projects in the order they presented (website links embedded in the names) were:

17TeraWatts

Focused on “meeting the demands of the new solar customer”, 17TeraWatts monitors residential solar energy systems via a combination of data automation and behavioral science. It achieves this via “Bodhi 2.0”, a digital assistant for modern energy companies, designed to be the “heart and brains of home energy systems”. Once installed, it is forecast to to generate a recurring revenue stream for the 25-year life of a solar system, by delivering reporting and customer leads. At the other end, solar consumers are willing to pay for more information about, awareness of and control over their energy systems ans consumption. Currently exploring a partnership with DiUS, Bodhi 2 is also being deployed by a Victorian electricity retailer.

Renbloc

Another team addressing energy efficiency management, Renbloc provide a solution to help consumers by bringing transparency to the verification of renewable energy sources. For a monthly fee, it brings real-time monitoring and optimization to consumer energy consumption. Renbloc are also working with companies such as Asahi and Energy Australia to provide verification “certification”, a form of energy labelling that can be applied to a wide range of consumer products.

Machine Dreams

The founders at Machine Dream are deploying machine learning and data analytics to monitor equipment failure, by detecting defective power assets owned and managed by energy distribution networks. Using system-generated photos to train the algorithm, Machine Dream claim significant reduction in the time and cost it traditionally takes to monitor network equipment, and with higher accuracy rates. The overall effect is to enable the frequency of assessment, and the reduce the cost of assessment. Currently in trials with Ausnet to monitor the “poles and wires”, Machine Dream can also be used for other infrastructure assets such as bridges, railway tracks and roads. The team plan to offer licensing and SaaS business models to asset managers and manufacturers.

GenGame

This is a customer engagement platform, delivering consumer apps for energy retailers to help their customers track retail energy bills (optimization, rewards, incentives, etc.) using customized profiles. The founders claim that customer relationships become stickier, via the low cost/low touch engagement. The team comprises a mix of creatives, energy industry experts and software developers to license client solutions which are priced on the set-up costs and the number of end users. Apparently, only 10 out of 40 energy retailers in Australia have a mobile app, and GenGame has two pilot projects with Energy Australia.

Energy Master

Another solution for energy efficiency, Energy Master is focused on helping corporate clients manage their utility bills. Essentially a business information platform, the application reviews consumption, taxes and fees, tariffs and off-sets, carbon reduction and water savings. It charges 0.5% of managed energy costs as a recurring fee, and does not require any hardware investment by clients. Currently running clients trials with Energy Australia.

ELDO MeterStack

This team is also addressing energy data analysis, but at the level of the grid, particularly at the fringe end of the distribution network. Their thesis is that consumers are not engaged, and don’t know how to understand their utility data or how to value it; meanwhile, energy companies cannot access consumer data. Positioned as a data market place between consumers and energy service providers, it offers a turnkey solution for the new breed of “digital utility” companies, and is working with DiUS and MHC to support distributors and the fringe of the grid.

Energos

Describing its solution as “intelligent nodes for distributed energy systems”, Energos is using AI for energy monitoring, management and optimization. Focused on business and industrial clients, the system can operate across multiple sites and in multiple countries, ideal for multinational corporations. Adopting a monthly subscription fee model, Energos is working with Energy Australia on a pilot solution for a business client.

BEAD

Using a combination of sensors and software, the team at BEAD are delivering intelligence solutions to help building owners, managers and occupants to manage “over heating, over cooling, over lighting”. With tag lines such as “listening to your building”, and “intelligent buildings you deserve”, BEAD is aimed at telcos, smart cities and BMS & HVAC vendors. Their system analyses occupancy flow, and develops digital models of buildings to track body heat (an important consideration in the Covid19 era, as well as events such as building fires, floods and earthquakes). They also work with building insurers to deliver real-time monitoring via Blockchain and smart contracts. Claiming to deliver 30% savings in energy optimization and efficiency, BEAD is working with Energy Australia, Hydro Tasmania and Asahi.

Liquidstar

This startup deploys Blockchain enabled apps to monitor their partners’ IoT connected hardware (batteries and container charging stations). Liquidstar is an IoT solution designed to build a “wire-less grid”, with the aim of removing diesel and methane power from communities that do not have access to grid networks. One potential use case could be in battery management for Covid19 quarantine centres.

Next week: Can we come out now?

Sola.io – changing the way renewable energy is financed

Late last year, I had the privilege to be one of the judges for the PitchX competition for start-ups. The overall winner was Sola, a new investment platform to fund solar power using a virtual power plant structure to bring together investors and producers, who might not otherwise have access to the financial and production benefits of this renewable energy resource.

I had the opportunity to catch up with Alan Hunter, Founding Team member of Sola while he was in Melbourne earlier this month. He was busy in the middle of a series of investor meetings and finalising arrangements for their energy retailing licensing.

Prior to Sola, Alan had established a fleet company that leased cars to Uber drivers. Recognising that some immigrants lacked relevant qualifications for advertised jobs, but lacked the finance to buy a car, the business joined the dots and enabled many people with a driver’s license to secure employment. It told him a lot about about helping those less fortunate by building a business designed to remove inequalities and lower barriers to entry.

With that experience, an interest in renewable energy, and a desire to help consumers reduce their power bills Sola was launched. Starting out as CEC-approved Solar Retailer, Sola offers consumers a subscription service to electricity (at a cheaper rate than users pay today).

Sola is now planning to offer the same subscription service with a solar system, for a cheaper monthly payment. It is able to achieve this though the development of an innovative investment and infrastructure platform, that will serve three main types of clients:

1. Home-owners who want to install solar energy, reduce their own power bills, and even generate additional benefits as rebates or credits from feed-in tariffs

2. Retail investors, who may not have access to solar energy (renters, apartment residents, or those in dwellings ill-placed for panels)

3. Wholesale investors and self-managed superannuation funds looking for an alternative fixed income asset

In short, Sola underwrites the cost of panel installation on consumers’ homes. In return, Sola acquires 100% of the energy generated, and the customer subscribes to Sola for their monthly usage. Consumers become subscription members of Sola’s network, via the latter’s retailer license.

For retail investors, Sola will present them with an opportunity to access fractional ownership of a virtual power plant, for as little as $100. These investors then receive a dividend from the energy sales generated by the network.

For wholesale investors, and for a larger stake, they will be part of a closed end capped fund, which will generate a dividend from the energy sales. Sola has an energy off-take entitlement over the panels, and over time, panels which are replaced may still be sold into secondary markets, such as in developing countries, if they have a remaining useful life.

Some of the benefits of this structure include a more equitable arrangement for access to, ownership, and distribution of solar energy assets. It also removes the need for unsecured lending to finance panels and systems which may soon become obsolete. Plus, it enables people who might not have direct access to solar panels to benefit from this asset.

The complex issue of Federal and State rebates came up in our discussion. According to Alan, the former are useful in supporting the roll-out of Sola’s virtual power plant model, and in accessing the carbon credit marketplace via the Small-scale Technology Certificates (STC). Whereas, State rebates are better for end-users, who can engage Sola direct to install their panels, and then join the Sola retail network.

Then there is the issue of inverters, and batteries. It’s generally the former that are rendered obsolete before the panels, but the costs mean that customers tend to end up replacing the whole system. And the latter will not become economic until purchase costs reduce, and feed-in tariffs are phased out.

Finally, Alan wanted to make sure he got this point across – Sola will shortly be launching campaigns in seven locations, to sign-up 180-230 homes, in areas impacted by bush fires. The aim is to give participants a 35-40% saving on their energy bills, as well as establishing the first phase of the virtual power plant network.

Next week: Australia’s Blockchain Roadmap