Update: Health, AusPost, eTaskr and Slow School

Over recent months, I have blogged about health and the digital economy, the challenges facing AusPost, the progress of eTaskr and the birth of Slow School of Business. Here are some updates on each of these topics:

IMG_0211Apple launches developer platform for health apps

On top of launching “Health” with iOS8, Apple has released a software tool called ResearchKit designed to help researchers and developers build and test new health apps.

I think that while we hear a lot about the Internet of Things (#IoT), health is one area where the connection of the physical and the digital will really deliver tangible benefits (not just a fridge with a screen…).

Australia Post plans to raise the cost of sending letters

In the wake of declining letter volumes (and poorer financial performance), AusPost is considering jacking up the price of letter postage, and introducing a 2-speed letter service.

While this is not a surprising move, it does seem shortsighted. Given the increase in parcel volumes, especially from e-commerce and small online purchases, I reckon AusPost would be better off with more refined domestic parcel rates. For example, using exactly the same dimensions and weight, I can either send an item as a “large letter” for $2.10 (which is perhaps too cheap?), or as a “small parcel” for $7.45 (which is incredibly expensive for an item that might cost no more than $25). Maybe different band rates of 50g, from 100g up to 500g (the current weight limit for a small parcel/large letter) or even 1kg  might be a better option, coupled with improved payment and lodgment automation? Just saying…

etaskr secures seed funding

Described as a “private label elance”, etaskr is a graduate of the AngelCube accelerator program, and was a finalist at last year’s Big Pitch organised by Oxygen Ventures.

Following their appearance at the Big Pitch, etaskr have recently closed $1.3m in seed funding from Oxygen Ventures. As mentioned in an earlier blog, etaskr is starting to see traction among corporate clients, including overseas markets, but the nature of the B2B sales cycle has meant that investors, incubators and accelerators are traditionally wary of such startups. Hopefully, this latest development will start to change market perception.

Slow School founder in the news

Finally, Carolyn Tate, the founder of Slow School of Business has been busy launching a new program of short courses (including Three of the Best) a new website and a new book. Oh, and she’s also become a B Corp. (Declaration of interest: I am a participant in, and adviser to, Slow School.)

Previously featured in Slow Living (required reading for the Slow Movement), Carolyn has taken a simple idea based on collaborative and peer-to-peer learning, and created a potentially disruptive platform for professional development and corporate training. Slow School is also tapping into the growing trend for people to work as independent contractors, freelancers and consultants (rather than permanent employees), and the dynamics of the digital economy where participants are also looking to make deep, personal connections rather than just online “friends”.

The new normal?

Post GFC, we’ve been told to expect a low/slow/no growth environment – that this is the “new normal”. I would add to that digital disruption, non-traditional commercial models and emergent ecosystems as being the other key influences on how we do business in this new environment. From what I have skim-read of the latest Intergenerational Report, the language is still couched in traditional terms of “jobs”, “productivity” and “industries”. Yes, there is mention of innovation, demographics, technology and flexible workplaces (i.e., deferring retirement?), but nothing that inspires me to think our political leaders understand what is really going on within the startup economy and the broader digital movement.

Next week: How to survive a Startup Weekend

AngelCube15 – has your #startup got what it takes?

Startup Victoria‘s first Lean Startup meeting of the year heralded the launch of AngelCube‘s 2015 accelerator program (#AC15), for which applications are now open. A good opportunity to check in with previous successful applicants, and find out if your startup is made of the right stuff.

Screen Shot 2015-02-25 at 10.03.58 amThe info evening was hosted by inspire9, and supported by PwC, and Nathan from AngelCube kicked off proceedings by giving a run down on the accelerator program, the application process, and the type of startups that are more likely to be accepted.

What does the program offer?

  • A 3-month intensive learning and development experience
  • $20k in funding (in return for 10% of the business)
  • Co-working facilities
  • Working with Lean methodology (focus on Product-Market fit)
  • Access to great mentors and advisers, and early-stage investors
  • Participation in a fundraising roadshow (including time in the US)

There is an application form via AngelList, and the closing date is May 10 (but the sooner you can submit the better). From the hundreds of applications, AngelCube puts together a shortlist of 20, of which no more than 10 will likely be accepted.

What is AngelCube looking for?

  • Globally scalable tech startups (think beyond Australia!)
  • In-house tech skills/resources (it’s not really a matching service)
  • Great teams (more than the ideas themselves)
  • Customer traction (ideally revenue-generating)
  • Consumer-oriented solutions (rather than B2B)

What has the experience been like for successful graduates?

Three alumni of previous AngelCube programs offered some personal insights, and then participated in a Q&A with the audience of 400:

Screen Shot 2015-02-25 at 10.02.34 amFirst up was Peter from Ediply, a service that matches students to the course or university of their choice. Given the growth in education and lifelong learning, and the increasing numbers of students (especially from Asia) looking to study overseas, the business seemed like a natural fit for AngelCube. However, it was still a relatively new or unknown sector in terms of end-user or independent services (rather than in-house marketing and enrollment efforts) – which sort of broke one of AngelCube’s rules for acceptance: no established market. Peter stressed that the main reasons for applying were the need to overcome some development barriers, and to get out of a “Melbourne mindset”.

 

Screen Shot 2015-02-25 at 10.03.01 amAsh from Tablo (“YouTube for books”) probably broke another AngelCube rule, in that he was a sole applicant (not part of a team) and he had limited tech resources. AngelCube made him work harder, think big, and keep going – and helped him to become a disruptive force in publishing, with customers in 130 countries collectively publishing 1 million words a day. He’s also closed a C-round of funding, and has some impressive investors on his share register.

Screen Shot 2015-02-25 at 10.03.28 amLastly, David from etaskr (“a private label elance”) had to quit a full-time job with one week’s notice once he got accepted into AngelCube. He even had to Google how to pitch. Plus he came into the program with a totally different idea, got slammed, failed to get customer traction, and ended up pivoting to an enterprise software solution (and broke another AngelCube rule in the process – no B2B, because of the longer sales cycle). Despite having to live on very little money for 6 months (less than $200 pw) the team persevered, and are now starting to get traction, including overseas markets like Holland. His final words were “risk is not something to fear, but to overcome”.

Q&A with the audience

Most of the questions were about the application process for AngelCube, and how it helped the successful startups, particularly with going global. In large part, this due to some great networks, access to high-profile connections (“we got to meet the first employees at Yammer!”) and links to some influential investors. There was also some discussion about how to secure your first customers (mainly via social marketing techniques), and the challenge of enterprise sales (“it sucks, because you need 100 different minds to all say ‘Yes!'”).

Finally, for more insights, please visit these links to previous posts about AngelCube and some of the successful applicants.)

Next week: Help! I need to get some perspective…

Oxygen Ventures brings some fresh air to Australia’s #Startup Community

Last week, Larry Kestelman’s new investment vehicle, Oxygen Ventures gave 5 local startups the opportunity to bid for a share of A$5 million in funding at the inaugural Big Pitch night in Melbourne (#thebigpitchAUS).

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The Judges at the Big Pitch

 

The #Startup Contenders

Drawn from over 300 applicants, the hopeful candidates (in alphabetical order) were:

Bluesky  Shopping portal for leading fashion and lifestyle brands.

ECAL On-line event and brand marketing calendar launched by E-DIARY.

etaskr Enterprise productivity solution that allows employees to ‘bid’ for in-house projects based on their expertise.

KartSim New go-kart game for PCs, from developer Black Delta.

WeTeachMe Booking platform for short-courses and special interest classes.

After each contestant made a short presentation, they were questioned by a panel of judges, comprising CEOs, entrepreneurs, corporate advisers and business development experts from a range of well-known organizations. Most of the questions related to the startups’ revenue projections, funding requirements and growth opportunities – but some were grilled in more detail about their business models and financial performance to date.

How did the participants fare on the night?

The Joint Winners were ECAL and WeTeachMe – with the People’s Choice Award (based on audience votes) going to KartSim.

My sense is that ECAL came out on top (with A$2.5m of funding) on account of their early success in signing up a number of high-profile sporting franchises in the USA and Australia, demonstrating their growth potential – otherwise with 1 million users, but only $440,000 in revenues, you’d have to think the business model would struggle.

WeTeachMe was successful in attracting A$2m in funding because the business model is simple, it falls into the growth category of lifelong learning, and the platform had already achieved significant productivity gains for its commercial clients. Plus it has the potential to scale up and go international.

With KartSim, I admit I have no interest in computer games, but it would seem to me that with a headful of (virtual) Steam behind it, the developers might be better off tapping into crowdfunding opportunities, as the early interest suggests ready and eager buyers out there, enabling a successful commercial launch without giving up any of the equity.

Feedback from the panel on Bluesky suggested that despite offering a ‘one-stop-shop’ for consumers, the margins generated from the sales commission model would be insufficient to cover fulfilment costs (so it would only ever be a transactional purchasing platform); nor would the retailer aggregation model ever be allowed to encroach on brand or retailer loyalty schemes, thereby limiting the options to develop added-value services for customers.

As for etaskr (which I have featured before), it is still one of the few B2B startups that I have seen, which may make it appear less attractive to potential investors, since there seems to be some wariness around anything that is not consumer-focussed, or that does not play in a 2-sided market. Personally, I think this type of productivity tool is just the sort of tech startup that we need as it taps into the technological, organisational and demographic changes facing the modern workplace, and current attitudes towards job structures, collaboration and employee engagement and retention.

Footnote: What is ‘Disruptive’?


Interestingly, one of the Big Pitch sponsors was Uber (current darling of the startup community – if not of taxi drivers) which has been making presentations around town on what it takes to market a disruptive startup.

For me, there are three key attributes to a #disruptive startup:

  • Technology
  • Business model
  • Market engagement

A business like Uber ticks all three boxes – its proprietary technology comes in the form of the algorithms that track things like customer usage and vehicle capacity (not so much the apps which are similar to other peer-to-peer and #sharedeconomy solutions); the business model is rather like a network of city franchises (a common global platform with local autonomy); and the disruptive market entry strategy is designed to by-pass highly regulated industry structures – although Uber also likes to stress that it is working with taxi regulators.

Of the five startups that competed at the Big Pitch, only etaskr brings an element of disruption, because it is using a technology solution to challenge traditional notions of what a job is, and allows companies to tap into in-house resources that they might not otherwise be aware of. KartSim has some proprietary programming, but at the end of the day is just another computer game. WeTeachMe and Bluesky are trying to bring operational efficiencies to disparate markets, but they are both broker-aggregators, and don’t appear to have proprietary technology or unique business models. And ECAL is a neat content management solution to a problem that companies have been aiming to solve in other sectors – such as travel, education and health services – although it is not trying to break the existing market nexus between suppliers and customers.

But full marks to Oxygen Ventures, its partners, sponsors and the participants themselves for bringing a fresh perspective to the startup pitch night experience.