The art of #pitching – the long and the short of it… Pt.1

Posted on September 15, 2015 by Content in Context

Pitch nights are popping up all over the place. So far this year, I have participated in two startup competitions where pitching was a core component, and attended at least half-a-dozen other pitch events. Some sessions were designed to help early-stage ideas find co-founders, some to showcase the results of accelerator programs, while others were full-on “show me the money” extravaganzas, where term sheets were put in front of the winning teams. The latest events represented two approaches to the format, organised by Startup Victoria (long form) and General Assembly (short form).

This week, the short-form – next week, the long-form.

General Assembly’s “Out of the Garage” Pitch Fest Party was not quite rapid fire, but the 15 teams only had 2 minutes each to present, faced some strict rules around format, and had no Q&A with the judges or the audience. The five winners each received a modest $1,000, plus some other perks to help them on their journey.

It’s impossible to do justice to the wide range of ideas that were pitched (and many of them were just ideas at this stage…), so here are my verbatim notes from the night, in the order of the pitches:

Animatly – DIY solution for making animated videos – “Canva for animated videos”
FolkFeast – good food more cheaply – “AirBnB for dining out”
RightClick – Intergenerational tech transfer – “young people teach old people how to use PC’s, tablets and smart phones”
Auug – Hardware device plus app that turns an iPhone into a motion-based MIDI controller and synth (as already featured in Apple ads)*
YearOutClub – “GoCompare for the gap year” – courses, content & accommodation
CareConnect – matching carers with clients, customised and personalised – Tech-driven. Big market: $13.5bn spent each year on care services
Good Packages – bio-degradable packaging
PetalBox – Single flower vending machines
VibeDate – “the best date you’ve never had” – curated dating experiences
NatureAtWork – re-connecting with nature, wellbeing and productivity
Wonderhood – market place for novel experiences
Project_O – “disrupting bottled water market” – art meets public water fountains
Joyality – Eco-psychology program for humans
Dunnit – “learn from someone who’s done it” – mentoring platform for creatives
LeanFilmmaking – agile process for creating video – technology is easy, finding audiences is hard… Idea to Audience: Fast – Accelerator program for story/audience fit

With limited exposure, it was difficult to know which pitches had real substance, but a couple are already in business, and a few have at least created a web profile. Several ideas sounded very similar to other new projects I’ve seen or heard of recently, and I would also recommend that all of the aspiring founders research their startup names before trying to register their companies. The winners were: Wonderhood, PetalBox, RightClick, Project_O and VibeDate.

Next week: Pt.2 – The Long Form

* Declaration of interest: I purchased one of the first units via their crowdfunding campaign, so I’m already a customer…

#FinTech – using data to disintermediate banks?

Posted on September 8, 2015 by Content in Context

At a recent #FinTechMelb meetup event, Aris Allegos, co-founder and CEO of Moula, talked about how the on-line SME lender had raised $30m in investor funding from Liberty Financial within 9 months of launch, as evidence that their concept worked. In addition, Moula has access to warehouse financing facilities to underwrite unsecured loans of up to $100k, and has strategic partnerships with Xero (cloud accounting software) and Tyro (payments platform).

Moula is yet one more example of how #FinTech startups are using a combination of “big data” (and proprietary algorithms) to disrupt and disintermediate traditional bank lending, both personal and business. Initially, Moula is drawing on e-commerce and social media data (sales volumes, account transactions, customer feedback, etc.). Combined with the borrower’s cashflow and accounting data, plus its own “secret sauce” credit analysis, Moula is able to process on-line loan applications within minutes, rather than the usual days or weeks that banks can take to approve SME loans – and the latter often require some form of security, such as property or other assets.

So far, in the peer-to-peer (P2P) market there are about half-a-dozen providers, across personal and business loans, offering secured and unsecured products, to either retail or sophisticated investors, via direct matching or pooled lending solutions. Along with Moula, the likes of SocietyOne, RateSetter, DirectMoney, Spotcap, ThinCats and the forthcoming MoneyPlace are all vying for a share of the roughly $90bn personal loan and $400bn commercial loan market, the bulk of which is serviced by Australia’s traditional banks. (Although no doubt the latter are waking up to this threat, with Westpac, for example, investing in SocietyOne.)

We should be careful to distinguish between the P2P market and the raft of so-called “payday” lenders, who lend direct to consumers, often at much higher interest rates than either bank loans or standard credit cards, and who have recently leveraged web and mobile technology to bring new brands and products to market. Amid broad allegations of predatory lending practices, exorbitant interest rates and specific cases of unconscionable conduct, payday lenders are facing something of a backlash as some banks decide to withdraw their funding support from such providers.

However, opportunities to disintermediate banks from their traditional areas of business is not confined to personal and business loans: point-to-point payment services, stored-value apps, point of sale platforms and foreign currency tools are just some of the disruptive and data-driven startup solutions to emerge. That’s not to say that the banks themselves are not joining in, either through strategic partnerships, direct investments or in-house innovation – as well as launching on-line brands, expanded mobile banking apps and new product distribution models.

But what about the data? In Australia, a recent report from Roy Morgan Research reveals that we are increasingly using solely our mobile devices to access banking services (albeit at a low overall engagement level). But expect this usage to really take off when ApplePay comes to the market. Various public bodies are also embracing the hackathon spirit to open up (limited) access to their data to see what new and innovative client solutions developers and designers can come up with. Added to this is the positive consumer credit reporting regime which means more data sources can be used for personal credit scoring, and to provide even more detailed profiles about customers.

As one seasoned banker told me recently as he outlined his vision for a new startup bank, one of the “five C’s of credit” is Character (the others being Capacity – ability to pay based on cashflow and interest coverage; Capital – how much the borrower is willing to contribute/risk; Collateral – what assets can be secured against the loan; and Conditions – the purpose of the loan, the market environment, and loan terms). “Character” is not simply “my word is my bond”, but takes into account reputation, integrity and relationships – and increasingly this data is easily discoverable via social media monitoring and search tools. It stills needs to be validated, but using cross-referencing and triangulation techniques, it’s not that difficult to build up a risk profile that is not wholly reliant on bank account data or payment records.

Imagine a scenario where your academic records, club memberships, professional qualifications, social media profiles and LinkedIn account could say more about you and your potential creditworthiness than how much money you have in your bank account, or how much you spend on your credit card.

Declaration of interest: The author currently consults to Roy Morgan Research. These comments are made in a personal capacity.

Next week: Rapid-fire pitching competitions hot up…..

#AngelCube favours B2B #startups…

Posted on September 1, 2015 by Content in Context

The latest intake to AngelCube‘s accelerator program presented at the recent Startup Victoria meetup event. It was interesting to see that all 6 pitches were aimed at B2B audiences, since I have heard several angel investors and startup advisers express a strong preference for end-consumer products (or those with 2-sided markets). Perhaps there is more appetite for enterprise solutions, despite the longer lead times for sales, and the challenge of strategies required to displace incumbant products.

Whether there is a new interest in B2B startups, or whether more founders are identifying B2B opportunities, there’s probably some further analysis to be done. Meanwhile, here are the 6 fledgling startups in the order they pitched on the night:

1. Peer Academy

Peer Academy aims to “change the way professionals learn”. It does this by offering students access to open enrollment classes via an online market place. The classes are conducted by facilitators and experts (“hosts”) who have been “screened” for quality by Peer Academy, with a focus on “soft” management and leadership skills.

Peer Academy hopes that students will act as “warm leads” for corporate sales, by taking their classroom experience back into their organisations, and acting as champions or brand advocates. With follow-up introductions to training and HR managers, Peer Academy then curates programs for corporate clients, by matching training needs to individual users.

I like the notion of “peer-to-peer” learning (although I presume that the hosts are expected to have more advanced and developed skills than their students), and there is certainly a trend for alternative learning platforms. At least one major bank has expressed interest in sourcing corporate training via Peer Academy, who take a 30% commission on course sales.

A huge challenge will be to engage corporate clients who already have established relationships with trusted training providers, or who have existing panels of approved organisations, or who outsource training procurement to third parties.

2. Jack

Workplace wellbeing is becoming big business ($5bn and counting?), and in the process, sedentary workers are in the firing line. According to Apple CEO TIM Cook, “Sitting is the new cancer”, and hence the recent fad/trend/fashion for sit-stand desks which is driving market interest in ergonomic solutions. The team at Jack have built a device that can monitor how much time people are sitting or standing, and even provide some feedback on user posture.

As you would expect, Jack uses cloud connectivity to monitor user activity, and to relay data via cross-platform apps and dashboards. It also uses elements of social media engagement and gamification, and has already launched a pilot scheme with several desk suppliers, as well as a paid beta at a well-known payments provider.

Customers will buy the device plus pay for a monthly subscription service. There is a direct competitor, but Jack claim their device can be retrofitted to any sit-stand desk. The unit price is much higher than, say a Fitbit, but since this is not a consumer product, Jack is confident it can sustain current pricing.

Finally, with the data it aims to collect, Jack reckons it may even be able to help reduce insurance premiums, although this will no doubt be subject to actuarial scrutiny, Work Cover and OH&S requirements, as well as data privacy issues.

3. Coin-Craft

In the professional services and consulting sectors, tracking project costs and resourcing have become highly demanding activities – witness the plethora of project management, costing, billing, ERP and time-tracking solutions on the market. Based on personal experience, the founders of Coin-Craft have identified a specific need among architects, and have built an all-in-one tool for Project Management, Cashflow Analysis and Resource Planning. Built “for architects by architects”, Coin-Craft is designed to help clients stay optimal, by managing staff over/under utilisation, and tracking cashflow projections.

The system also claims to integrate with third-party accounting software, and has around a dozen firms using the service, with another 30 in the pipeline. Although Coin-Craft have chosen a niche client base to protect their market entry, they claim the solution can also be adopted by engineering practices, graphic art studios and project management firms.

However, feedback from the audience suggested there are already similar, mature products that are tracking individual billable hours against specific projects, so Coin-Craft may need to work on their value proposition and differentiation.

4. CurveUp!

As social media and content marketing become more ubiquitous (if not more sophisticated), companies need to understand the value of their direct marketing spend. Mostly, they can do this via web analytics, e-commerce tracking, campaign conversions, and cost of customer acquisition. According to CurveUp! however, measuring the ROI of your PR activity is not so easy using “conventional” social media monitoring tools. For example, CurveUp! claim they can deliver tailored reports to show which blog post or article converted to a ticket sale for a concert or event.

Currently using web and online sources only, CurveUp! track mentions and link this to customer data. Some platforms, such as Instagram, are harder to track, and even via a possible API solution, it will only be possible to monitor the number of views and shares, but otherwise little or no data will be available.

However, at least one online market place has expressed interest, and CurveUp! has the potential to integrate with Facebook and Google, so that clients could possibly use campaign codes to track referral activity from mention to firm sale. Overall, the service will need to align itself with the ROI outcomes linked to PR campaign goals – which will vary between clients and markets, depending on organisational KPIs around brand advocacy, share of wallet, products per customer and customer satisfaction.

5. TribeGrowth

In a similar vein, the team at TribeGrowth claim to have built “artificial intelligence for social media marketing“. Their goal is to help clients build an audience and get customers, via the use of “intelligent engagement” to generate conversions.

Initially targeting startups, professional service providers and the hospitality sector, TribeGrowth offers a tiered monthly subscription service, and claims to be a (cheaper) alternative to agencies or even Twitter ads.

Currently in private beta (and so far, only designed for Twitter and Instagram), TribeGrowth focuses on audience growth by careful selection of connections and influencers. According to the founders, this is not “pay & spray”, but uses machine learning to refine audience outreach and engagement.

6. SweetHawk

Finally, and in what was probably the most technical presentation of the evening, came SweetHawk, which is building “voice for e-commerce”. I have to confess that, although I had previously heard about this product, I’m still not totally clear how it works.

In essence, it’s an outbound platform that enables companies to have more focused/targeted real-time conversations with warm sales prospects, namely people who are visiting their websites. Personally, I would find that a bit spooky, if I was browsing a site and suddenly a widget popped up asking me if I wanted to receive a call right there and then. Isn’t it a bit like stalking?

The business model is designed to offer tiered services in return for monthly subscription fees – depending on call volumes and functionality, such as workflow tools. I would see it as sitting somewhere between an outbound sales call centre and a SaaS-style inbound helpdesk solution.

On the plus side, I do see the opportunity to deliver superior and more responsive customer service, except that SweetHawk appears to be a sales and prospecting platform, not an after-sales or support solution. I’m also used to live chat tools that pop up on various software and other service sites I use, so I would probably engage with a similar offering if I was browsing to purchase.

Final Thoughts

While none of these pitches has so far demonstrated anything truly disruptive (but let’s not criticise them for that), they all seem reasonably sensible and logical solutions using a mix of digitally-driven technologies (cloud, mobile, social, peer-to-peer, data analytics) that we are all increasingly familiar with. So, rather than major game changers, I see each of them building on established platforms. By refining the potential that new technologies and business models are creating, they are tapping into better-defined client needs rather than taking a “build it and they will come” approach.

In conclusion, I was generally impressed by the 6 pitches on offer, although some of the presentations will no doubt be reworked in light of the audience feedback and Q&A, and before the plucky founders hit the investor road show organised by AngelCube.

The event was hosted by inspire9, and sponsored by BlueChilli and PwC.

Next week: More on FinTech – another look at data and disintermediation

It’s not enough to be #disruptive – you also have to #collaborate

Posted on August 9, 2015 by Content in Context

For most tech #startups, especially in #fintech, it’s no longer just about being #disruptive – there’s a growing realization that entrepreneurs also have to be #collaborative.

One year on from his last visit to Melbourne, Stripe co-founder John Collison was back in conversation with Paul Bassat from Square Peg Capital, courtesy of Startup Victoria and sponsors Envato, LIFX, BlueChilli, Bank of Melbourne and PwC. Previously, John spoke about the need to be “disruptive rather than incumbent”, yet it seems that Stripe’s growing success can be attributed to relationships with other providers in the payments industry, such as AliPay and VISA, plus deals with retail sites such as Catch Of The Day and RedBalloon. Oh, and it probably helps that most U.S. presidential candidates are using Stripe for campaign donations….

Stripe has already launched an SDK platform for developers, and is planning to launch StripeConnect, a market place platform. The point being, the more users (upstream and downstream) you can plug into your platform, the greater the traction, but also the deeper the collaboration. Why would you want to annoy your potential partners, vendors and suppliers?

Meanwhile, Australia is now Stripe’s 4th largest market, and close to being its 3rd largest.

Going forward, despite some criticism (e.g., it’s still not rolled out in Australia), ApplePay has huge potential. It has an estimated 800m credit cards registered with iTunes (making it 5x bigger than PayPal), and with people currently paying as little as $1.69 per song download, ApplePay could crack the market for broader micropayments (e.g., the $2 on-line daily newspaper?).

However, Stripe stills sees that there are disconnects between traditional credit card application processes, account registration forms, payment solutions, merchant set-up and downstream payments for low-value (but high volume) transactions.

Looking ahead, Collison is talking up opportunities in same-day delivery for e-commerce (hard to see this happening outside of Australia’s main metro areas – unless the infrastructure is there…), and better video-conferencing services (again, in Australia this is hampered by poor broadband services).

A few days later, and Adrian Stone from AngelCube was in conversation with StartUpGrind‘s Melbourne convener, Chris Joannou. Adrian restated the sentiment that angel investors tend to back founders rather than ideas, which can seen by some of the ventures AngelCube has backed so far, including Tablo, LIFX and CoinJar. Each venture has been successful in raising early-stage funding (despite some teething problems and much pivoting), although AngelCube itself has not yet completed an exit.

Rather like his associate Dave McClure from 500 Startups, Adrian recognizes that for various reasons, VCs are having to make smaller, multiple bets, rather than betting the farm on single or a few ideas.

Perhaps this gives further credibility to the proposition that every portfolio (including individual members in retail and industry superannuation funds?) should have a discretionary 1-2% allocation to startups, but you still need an investment vehicle or platform to screen and manage opportunities. Sadly, we see that there is still a disconnect between institutional investors and startup founders. The former are having to get bigger to reduce operating costs, yet this means they have what one friend of mine has defined as the “Allocation Gap”. And of course, founders far outnumber the available sources of VC funding. Time for a rethink on how investors can collaborate to access startup opportunities?

Next week: Cultural Overload

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Category Archives: Startups

The art of #pitching – the long and the short of it… Pt.1

#FinTech – using data to disintermediate banks?

It’s not enough to be #disruptive – you also have to #collaborate