Final StartupVic Pitch Night of 2016

Posted on December 13, 2016 by Content in Context

There was something of a festive mood in the room for StartupVic‘s final pitch night of 2016, hosted at inspire9. It certainly had an end of term feel, as a number of the long-term Startup Vic team members said their farewells before moving on to new ventures. So it will be interesting to see how these monthly events continue to evolve in 2017.

Continuing the theme of recent pitch nights, diversity was the key – this month’s startup hopefuls came from the energy, AI, environmental and consumer sectors. As usual, I will comment on each pitch in the order that they presented:

BioFuel Innovations

With the simple aim of turning waste into fuel, BioFuel Innovations uses an enzyme, as opposed to a more caustic chemical catalyst, to convert used cooking oil from restaurant kitchens into biodiesel. Given this greener and more sustainable process, the company can use lower quality feedstock, consume less energy and reduce the amount of waste water.

Having built a pilot plant in Dandenong, the founders are currently developing a containerised “turnkey solution” comprising a pilot micro-refinery, which can be financed by 3rd party lenders (a bit like some solar energy schemes). However, they are seeking funding to gain access to a startup accelerator program.

With a number of existing service providers that collect used cooking oil from restaurants and food processing plants, BioFuel Innovations only plan to produce their own fuel on a small scale. Rather, their business model is to sell micro-refineries for biodiesel production.

Asked by the judges why they are focusing on biodiesel rather than other higher-yield fuels, the team pointed out that some of those products require high temperature processing, and therefore consume more energy. Also, in concentrating on this type of biodiesel production, the founders believe they are helping to solve the problem of disposing of waste oils. However, longer term, they may explore even more sustainable energy derivatives and regeneratives. And in Asia Pacific, for example, there is a need to re-process palm oil residues.

Finally, a key to their success will be streamlined manufacturing processes and logistics, such as building supply chain partnerships for the shipping containers that hold the micro-refineries.

Breathable

This is an environmental design concept that aims to use plants to replace air ventilation systems in offices and homes. Based on research from Maastricht University in the Netherlands, Breathable uses an algorithm based design solution. Taking into account the building dimensions, natural light, air flow, number of people, amount of mechanical and electrical equipment, etc., the team can design the right combination and layout of plants for each given location.

Established as a bootstrapped social enterprise, whose profits go to helping asthma sufferers and patients with respiratory complaints, Breathable is hoping to make a large and sustainable impact.

The first question from the judges was, why set up in Australia? The team explained that given certain plants are not allowed here, the underlying algorithm has to be reconfigured for native plants, by a local team.

This was a very timely comment, given the recent episode of “thunderstorm asthma” in Melbourne. However, the judges were a little concerned that while there was a clear connection between purpose and passion, they wondered whether it is more of a lifestyle business for the founders, especially as thus far, no IP has been registered or protected. (On this specific point, the team simply said, “we challenge people to do it better”.)

There is an expansion plan, to develop fully self-sustaining eco-systems – such as using plants to power lights that help generate photosynthesis. But big goals need big marketing budgets, and with an active waiting list of 20 corporate clients, the challenge for the business is in how to scale.

MagicPi

I should say upfront that based on what I had read in advance on their website, this pitch was not what I had expected. Instead of a presentation on artificial intelligence, we got a pitch about Australia’s Chinese tourism “problem”. Namely that, based on a 2016 report from Bloomberg, by 2020 Australia will host 5 million Chinese visitors a year, representing a $13bn market. (And as I know from having worked with the founders at China Digital, many tourist destinations in Australia are far from China ready.)

Using natural language AI (cognitive, cloud, machine learning – “Siri with a human touch”) MagicPi is targeting Destination Marketing Organisations (conventions, conferences, local tourism boards). They plan to create content and solutions for client websites, and then take a commission on bookings. With a presence on both WeChat (including a voice recognition bot) and AliPay, MagicPi has a long-term vision of being the “intelligent interface for everything”.

However, the judges questioned whether the solution works or even exists. They felt that there was currently no visibility for investors or consumers. Claiming to have built a demo app, the team stated that there is a lack of quality information for Chinese tourists, and people are willing to pay for premium content – and to distinguish mere “recommendations” from the visitor “reality”.

Despite adopting a deliberate enterprise solution, the judges felt that the pitch needed to stress the “why”, rather than focusing on the problem.

The Cider Link

I should mention that I first met the team from The Cider Link about a year ago, and was intrigued by their mission to build an online craft cider market that connects makers with customers. (So much so, that I connected them to local wine producer, Richard Stockman, who invited them to appear as guests on his weekly food and drink radio program.)

The Cider Link is challenging both the market duopoly for cider retailing, and the ubiquity of “commercial” cider, much of which is produced from bulk juice mixed with alcohol – rather than being fomented from freshly pressed fruit, as is the case with craft ciders.

Cider is currently enjoying 10% annual growth by volume (based on bottle shop sales alone). So, online, cider and craft are all “on trend”. The founders have built a commission-based market place, and with connections to producers who are members of industry body Cider Australia, The Cider Link is also appearing at festivals and related events.

In the Q&A with judges, the team explained that success for them would be sales of 1000 cases a month, making it a $1m business. They also plan to take the model to the UK, which has the largest cider market in the world.

In addition to attracting more customers, the founders are seeking investment to improve sales conversions and support some advertising.

Given the mix of pitches, and the range of business models and sectors, based on judging criteria and audience votes, the winner was Breathable.

Next week: End of Year Reflection

Banksy – an artist for our times?

Posted on December 6, 2016 by Content in Context

Is Banksy the most contemporary of artists? The main medium he works in (spray paint) and the primary format he uses (street art) are synonymous with urban graffiti art. His re-appropriation and re-contextualisation of images and icons tend to both support and subvert traditional notions of art production, the commercial gallery system and copyright law. These same concepts are likewise being challenged via the use of digital technology, social media platforms and creative commons licensing.

Banksy: Laugh Now (2005) [Photo by Rory Manchee]

The current retrospective of Banksy’s art in Melbourne is an intriguing exhibition – part homage, part entertainment, part circus sideshow, part social event. It’s nevertheless a calculated commercial venture, given the local veneration of street artists and their work in the city’s laneways (including some of Banksy’s which have been destroyed in recent times…). Plus, on the way out, there is the gallery shop with mass-produced copies of Banksy’s art, souvenirs and street wear.*

Everything Banksy does is designed to provoke a reaction – even if it’s just a snigger at some of the rather obvious visual gags. Even his (or her?) anonymity is used to reinforce the enigma of the artist as outsider (and sometime outlaw), while potentially allowing multiple artists to operate behind the assumed identity of “Banksy”.

Banksy’s use of a corporate-style logo creates the impression of a brand, and as one of my colleagues noted, it also acts as a meme which spurs both imitators and detractors. Using a distinctive and standardised logo as a signature also suggests there may be a production line process behind the scenes, some factory or warehouse where either minions or wannabe Banksys manufacture art to a predetermined design or theme.

For all his rebellious intentions, Banksy echoes the work of established artists – Andy Warhol, Keith Haring, Marcel Duchamp, Damien Hirst, Barbara Kruger, Jenny Holzer etc. He parodies, repurposes or references iconic images such as Warhol’s “Marilyn” screen print portraits, Joe Rosenthal’s photo of the US flag being raised on Imo Jiwa in WWII, and the infamous addition of a green mohican hairstyle to Winston Churchill’s statue. And he obviously has an affection for the sayings of Oscar Wilde, going by the aphorisms and witticisms that decorate the walls:

“Art should comfort the disturbed, and disturb the comfortable”

There is every reason to suspect that even this exhibition will somehow be considered just another Banksy art prank, rather than a critical assessment of his work. I suspect that there were hidden cameras and other means to capture the audience engagement and reaction. The website is careful to state that the exhibition is “100% Unauthorised – Guaranteed”, thereby allowing Banksy to disassociate himself with the event.

The exhibition’s public face is Steve Lazarides’s (Banksy’s former dealer and curator), who possibly still owns much of the work (or likely knows the people who do). There are other statements that Banksy does not directly benefit from sales of his work in the secondary market, and in any event, copyright in many of the works is in the public domain – meaning Banksy has either formally assigned his copyright to the public, or does not wish to claim or exercise any copyright over it. In theory, anyone can make copies of the original pieces (there being no copyright protection) but no-body can claim copyright in the resulting image or work. So, for some of Banksy’s prints, t-shirts and other multiples, it begs the question, what is an “original” Banksy – the ones in the gallery, or the ones in the gift shop?

*Not surprising, given the title of a notorious Banksy documentary, “Exit Through The Gift Shop”

Next week: Final Startup Vic Pitch Night of 2016

The Startup of You v2.0

Posted on November 29, 2016 by Content in Context

Through my blogs on startups, meetups and portfolio careers, I was recently interviewed by Peter Judd from News Corp., who is trying to bring the discussion on entrepreneurship, startups and innovation to a wider audience, particularly people who may be looking at a career change. (We both agree that the National Innovation and Science Agenda is not cutting through to the general public.) Apart from being an advocate for portfolio careers, I also pointed out that entrepreneurship or working with startups is not for everyone. Instead, it may be possible to change your current role to the one you want. Alternatively, taking a new look at your current circumstances can provide some fresh perspective on finding your dream career.

Francis Kenna: The Unbearable Lightness of Seeing (2016) [Photo by Rory Manchee]

The impetus following the 2012 publication of “The Startup of You” has done much to fuel the current entrepreneurial phenomenon, combined with lean startup business models and agile product development processes. The drive for innovation in response to digital disruption and lowering technology costs also means that launching your own venture can be increasingly de-risked.

For example, I recently saw some data by Ian Gardner from Amazon Web Services, that showed the “cost of failure” has come down from $5m to $5k, in just 15 years. This is based on a comparison between what it typically cost to launch a new business at the height of the dot.com boom/bust in 2000, and what it costs today. With a mix of open source tools, cloud computing, APIs, SDKs and social media platforms, launching a new business has never been cheaper or easier.

Of course, there is a paradox here: if an increasing number of people, especially younger graduates and new entrants to the workforce, are more interested in doing their own thing and less interested in joining large or established organisations, it’s going to get harder for employers to attract and retain the best talent; on the other hand, without appropriate experience, on-the-job training and personal development, how do these aspiring entrepreneurs acquire the necessary business, technical and leadership skills to succeed in their own ventures?

For some people, it may be appropriate to take their entrepreneurial spirit of adventure into a “traditional” role to test some of their ideas, as well as build networks and get some practical experience. Equally, I can see a huge opportunity for companies to create the right opportunities to engage employees for flexible roles aligned with specific projects or objectives (rather than plugging them into org charts). Companies are also finding new ways of tapping into their existing workforce to identify hitherto hidden and unknown skills and knowledge. Many employers also recognise that leadership roles will increasingly be filled by people who are comfortable with rapid change, increasing complexity and heightened uncertainty, as well as having enhanced soft skills. (There’s even some current thinking that utilising “rebel talent” is a good thing.)

Whether you are starting out on your entrepreneurial journey, looking to reboot your career, or searching for meaningful work that aligns with your values and purpose, there are numerous opportunities (via meetups, hackathons, pitch nights and networking forums) to explore your options before you make a decision. And for companies looking to re-invigorate your workforce and unleash hidden talent, there are many ways to experiment through taking informed risks, by building in-house innovation hubs, running consultative and collaborative workshops, and inviting ideas and inspiration from your existing people, who are familiar with the challenges you face.

Next week: Banksy – an artist for our times?

Summing up the #FinTech summit

Posted on November 22, 2016 by Content in Context

Coinciding with the launch of the inaugural EY FinTech Australia Census 2016*, FinTech Australia’s first industry summit Collab/Collide was a major beneficiary of the initial round of funding from the Victorian government’s LaunchVic program. The summit provided a useful opportunity to survey the global landscape, to compare notes and of course, to network. But did we learn anything new?

The summit was programmed around key FinTech themes of payment services, alternative funding, robo-advice, Blockchain, data and regulation. Participation by some key industry figures from Asia, Europe and the USA (both founders and investors) also provided some international perspective.

While Australia appears to be maintaining a top 5 position in the global FinTech rankings, our focus on things like P2P lending, payments and robo-advice risks losing sight of bigger opportunities in Blockchain assets, enterprise solutions and institutional services.

And although it was good to see a team from the Treasury Corporation of Victoria in the audience, as well some of their colleagues from DEDJTR, it was surprising that there was hardly any representation from among institutional investors (superannuation funds, asset managers, insurance industry), major financial institutions, or the traditional financial markets (exchanges, intermediaries, brokers, vendors)**.

Some of the best sessions were the comparative panels on Blockchain, regulation and funding. In particular, there was an interesting discussion on whether Australia should be worried or concerned about UK opportunities post-Brexit, or focus more on Asian markets. But with the development of reciprocal financial licensing arrangements between Australia and the UK, and Australia and Singapore (and between the UK and Singapore), ASIC is clearly trying to engage with both markets.

The Federal Treasurer, Scott Morrison also took time out of his busy schedule to address the audience on the topic of Open Banking Standards, following on from the Productivity Commission’s Draft Report on Data Availability and Use. The overall goal is to have a system of FinTech data and operating standards that is “regulatory match fit”, that delivers frictionless inter-party transactions and enhanced industry participation and collaboration. For example: once the New Payment Platform launches in 2017, we should have more open access to transaction data; the ATO is implementing a “single-touch” payroll process; and ASIC is due to publish recommendations for the financial services Regulatory Sandbox by the end of 2016.

Unfortunately, given the changes in venue and content, the program struggled to stretch to a second full day, as audience numbers dwindled. Something for the organisers to think about next time? I would also advocate organising specific sessions, e.g., for B2B and B2C, or for vendors and institutions.

Finally, speaking to a member of the DEDJTR team, there is a clear desire on the part of the State government that the FinTech community will come together along with other market participants to figure out how to scale this emerging sector. In other words, how to turn the growing number of FinTech startups (often with directly competing products and services), hubs, incubators, accelerators and VC funds into a sustainable industry?

* For a handy summary of the EY survey, check out Lucinda de Jong’s blog for Timelio

** In the interests of full disclosure, a FinTech startup I work with, Brave New Coin (a market data vendor for Blockchain assets) was a Strategic Partner for the Summit

Next week: The Startup of Me v2.0