#Startup Victoria’s Pitch Night – @ParentPaperwork takes the honours…

The repositioning of Lean Startup Melbourne as Startup Victoria continues apace, with a formal Pitch Night hosted by Inspire9, sponsored by Bank of Melbourne, Bluechilli and The X Gene, and featuring an expert panel.

The 5 plucky pitchers were (in order of appearance):

  • Arts ‘n Smarts – An early childhood learning platform, offering a subscription service comprising monthly home deliveries of craft materials for use in structured play activities. The business has identified strong channel potential via play groups, partnerships with content providers and craft suppliers, and cross-over sales from the gift and baby/toddler markets. However, the panel felt that the subscription revenue model needed more analysis, and there was a risk that they were “pitching to the converted” – that informed parents would already be engaged in their children’s learning activities.
  • CreoLud – Custom 3-D printing for Dungeons & Dragons figurines which aims to fill the design gap between concept and production. Given the somewhat esoteric nature of fantasy board games, it was unsurprising that the panel were a little perplexed by this pitch. However, quoting some McKinsey research suggesting there is a $16.2bn global market for broader physical gaming and figures markets, this pitch could represent just the start of a growth trend in customisation and personalization, leveraging 3-D printing technology.
  • ParentPaperwork – Online student consent form service for schools that uses standard e-mail templates, a secure website and real-time reporting. By adopting a SaaS model, the business eliminates the need for software installation, app downloads, or social network registration processes. Although each State education system has different purchasing models for schools, the panel clearly recognised the potential to scale the product and take it overseas. However, there were concerns about privacy and confidentiality issues; and while there may be a crossover to the school enrolment process, another similar local startup, CareMonkey is already gaining traction and incorporates permission slips into its solution.
  • YourGrocer – This home delivery service for local suppliers has been featured in my blog before and continues to grow its customer base and weekly revenues at a steady rate. The combination of local shopping with added convenience is very appealing, but the panel quickly challenged the business to specify how it will grow out of its single-suburb service, currently based on a sole delivery van and driver. There appears to be some “creative tension” about how to expand the business beyond the borders of Brunswick – the choices being either to hire more full-time drivers, to build a franchise network, or to establish a marketplace of independent owner-drivers.
  • StageLabel – Describing itself as “a crowd-funded label bringing democracy to fashion…“, this online venture recognises the high failure rate for new designer labels, but is banking on its market disruption strategy for success. The business model is to test and validate new designs in pre-production, then gain funding to go into production. The business will also offer strategy sessions on pricing and production, and take a lower sales commission on successful projects when compared to the traditional retail mark-up. With over 80 designers already signed up, partnerships with fashion schools and launch events at Melbourne Spring Fashion Week, the business is hoping to outmanoeuvre competitor betabrand which only produces own-label designs. In their feedback, the panel concluded that the idea represented “high effort, low volumes”.

On the night, the audience voted ParentPaperwork as the winning pitch, earning them a chat with Square Peg Capital, mentoring from two panel members of their choice, and temporary co-working space at Queens Collective. The successful team graciously acknowledged that all 5 teams had collaborated to help each other hone their respective pitches, and no doubt there has been a huge amount of individual effort and collective goodwill in helping to bring these startups to a wider audience.

FOOTNOTE:

This meetup was just the latest in a growing number of pitch nights coming out of the local startup scene (in the wake of similar events such as the AngelCube graduation nights, Melbourne University’s Accelerator Program, and Oxygen Venture’s BIG Pitch). If you don’t happen to live in Melbourne, or can’t get out in the evening, you could always tune into “That Start Up Show”.

 

 

 

 

Are Start-Ups a young persons’ game?

Last week’s Lean StartUp Melbourne meeting was devoted to the AngelCube accelerator program. Given some of the high-profile start-ups that have come through this process, it was hardly surprising that nearly 400 people turned up to hear various AngelCube alumni share their personal experience (as well as to enjoy some free beer and pizza, courtesy of the evening’s sponsors: inspire9, BlueChilli, Kussowski Brothers and PwC).

First up, there were lightning talks by 3 successful program graduates: the team behind fantasy sports app developer C8 Apps, Ash Davies from self-publishing platform Tablo, and Phil Bosua, the technical genius at LIFX who designed the WiFi-controlled LED bulb. All of them vouched for the benefits of the AngelCube program, and offered key learnings – such as “fail hard, fail fast, fail forward”, and the value of having a disciplined weekly cycle of iterative product builds. Access to quality mentors was also a key factor.

Then Indi from OutTrippin joined the guys for a Q&A panel session, facilitated by AngelCube co-founder Nathan Sampimon.

Some of the accelerator program insights on the night were quite revealing –

  • it’s all about product-market fit
  • a solo founder will usually struggle on their own
  • be prepared to either pitch or pivot at the weekly program reviews
  • the $20,000 seed funding (for 10% of your business) doesn’t go far…
  • a B2B concept is less likely to be accepted to the program (due to longer sales cycles)
  • the model is founded on lean methodologies, frequent iteration and getting to an MVP
  • people with at least one start-up project behind them tend to do better
  • the AngelCube angels are investing in the team as much as the idea

But are start-ups really only for young(er) people? This question has been posed by Dan Mumby, from Melbourne’s StartUp Foundation, which offers a different sort of program aimed at would-be entrepreneurs who may have all the trappings of middle age: family, job, mortgage…. which means they have different personal and financial risks to consider.

On the other hand, as at least one AngelCube participant said, if you are serious about founding a start-up, “your first job is to quit your job”.

Another, broader challenge facing the local start-up community is a lack of serious investor interest. According to one panel member, “In Australia, getting funding is a joke unless you are literally digging for gold”. This may change with the launch of VentureCrowd an early-stage equity funding platform. (But it looks like it will be a struggle – at the time of writing, none of the 20 or so deals publicly showing up on VentureCrowd’s website have attracted any funding.)

An alternative funding model, based on the sweat equity principle, is a venture bank, like New Enterprise Services that essentially matches ideas with expertise through a risk-sharing process.

I always recall the advice I was given by one serial entrepreneur when I asked him whether start-ups are for everyone (regardless of age). He replied: “Unless you can afford to invest at least $20,000 in your idea, and support yourself for at least 6 months while you develop it, then maybe it’s not for you.”