Tag Archives: #Melbourne

Gigster is coming to town….

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Melbourne’s Work Club recently hosted Gigster Senior Project Engineer, Catherine Waggoner, in conversation with Venture-Store’s George Tomeski. Part of Startup Victoria‘s Fireside Chats, it likely herald’s Gigster opening an office in Melbourne, to service local clients and to tap into the local developer community.

gigsterFor the uninitiated, Gigster describes itself as the “world’s engineering firm”, that helps clients scope, design and build software, apps and digital products. Using an established product development methodology, and drawing on the resources of a 1,000 strong network of freelance designers, developers and product managers, Gigster is taking much of the pain out of the costing and requirements process for new projects, as well as building a growing client base of enterprise customers.

Not mincing her words, Ms Waggoner opened her remarks by commenting, “The software development industry model is f*#$ed”, because:

  • Requirements are poorly defined
  • Scoping is laborious
  • Development costs blow out, and
  • The whole process is not very transparent and not very accessible.

As a case in point, she mentioned the significant cost disparity between what some digital design agencies or app studios might quote for building an iOS product compared to what Gigster would estimate. By: breaking projects down into the distinct stages of scoping, design and pre- and post-MVP; only engaging the “best of the best talent”; using proprietary tools both to estimate fixed rate costs (rather than billable hours) and to define and source solutions; and re-using content from a library of “Community Software” resources, Gigster is able to deliver quality projects in shorter time, and on more modest budgets. For example, based on the large number of projects that they have fulfilled, their “Gigulator” estimating tool incorporates 5,000 possible features.

From an investor perspective, Mr Tomeski mentioned that the “VC inflexion point is getting much earlier” in tech startups. Meaning, with lower development costs (and potentially, reduced valuation multiples), investors are looking to get in sooner, with lower exposure, but still generate reasonable returns on exit, thanks to cheaper establishment costs.

Of course, Gigster sits at the heart of the gig economy, a huge issue when it comes to discussing the Future of Work. Interestingly, many of Gigster’s contractors are themselves startup founders, who freelance while building their own businesses. But such is the strength of the network, something like 35%–40% of their contractors work full-time for Gigster – they like the flexibility combined with the continuity. Many of the contractors are referrals from existing team members, and a number of teams (known at Gigster as “houses” – presumably a frat thing?) have bonded to such an extent that they get allocated specific projects to work on together, even though they themselves may be working in different locations, based on previous projects.

Working for Gigster is probably a career choice for some contractors, because there is a variety of projects to work on, and the opportunity to be involved from start to finish. Which may be the opposite if working in a more corporate or enterprise environment, where work may be routine, repetitive and reasonably narrow in scope.

If Gigster does decide to set up shop in Melbourne (with encouragement from
InvestVictoria) they will be joining the likes of Slack, Stripe and Square, tempted by financial and other incentives. Such a move may challenge a number of local digital agencies, who will face even more competition for talent and customers.

According to Ms Waggoner, enterprise clients represent 40% of the business, and should comprise 60%-80% very soon. Not only that, but the average deal was initially $15k, now it’s more like $100k. However, enterprise clients have a much longer sales cycle. Plus, many innovation teams within enterprises are more like loosely formed groups of niche experts, so they need training on how to think like a startup. When you consider the greater dependency on legacy software by corporate clients (where it may make financial sense to retire some assets and build afresh, but the emotional disruption can be huge…), combined with the greater emphasis placed on after-sales service, Gigster has had to adapt its business model accordingly.

But Gigster must be doing something right. They’ve stopped outbound marketing and prospecting, relying on in-bound leads, repeat business and client referrals. There has been a shift from a sales focus to a customer focus, complete with a dedicated customer success team.

A number of audience questions related to getting VCs interested in your idea: What do they look for? How do they assess opportunities? How far should you go in building a product before you can attract funding? What’s the best way to validate an idea? etc. Much of this is about product/market fit, building the right team, getting customer traction, and executing on your strategy (aka Product Development 101.) As part of her closing comments, Ms Waggoner noted that unlike some of the high-profile VC funds (e.g, Y-Combinator, Techstars and 500 Startups) many VCs are becoming more sector specific, because they prefer to invest in what they know and understand.

Next week: Building a Global/Local Platform with Etsy

Life Lessons from the Techstars founders

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Melbourne’s startup community is very fortunate to host some of the leading names in the startup world, who are more than willing to share their experiences and insights in front of packed, eager (even adulatory) audiences. The most recent visitors were Brad Feld and David Cohen, renowned entrepreneurs, and co-founders of the global Techstars accelerator and startup programmes. By the sounds of David’s recent blog, they really liked Melbourne (may have something to do with tennis…). But aside from talking about startups and the local eco-system, they had plenty to say about “startup life” as well.

techstarslogoDuring a fireside chat and Q&A facilitated by Leni Mayo, hosted at inspire9, with the support of Innovation in the Wild in conjunction with Startup Victoria, we learned a lot about what it takes to build a startup community, the role of government, limitations of current VC funding models, plus lots of personal tips on work/life balance etc.

First, based on the so-called “Boulder thesis”, there are four key elements to building a successful startup community:

  1. Entrepreneurs must act like leaders
  2. There has to be a long-term perspective (20 year horizon)
  3. The community has to be inclusive of anyone who wants to participate, and
  4. The leaders have to create activities for everyone to engage

There was also a discussion on why they chose Boulder as their base – which was slightly harder to explain. There was mention of the size of the population, the critical mass of wealthy investors and successful entrepreneurs, the liberal attitudes and culture, and the proximity to Denver (but at the same time, it’s not Denver?). Perhaps it’s something in the water?

Second, the community must rely on network effects, and not attempt to impose structure. That can be particularly hard when trying to co-ordinate scarce resources, attract potential investors, and win the ear of government. But I understand that a community should be capable of being a self-organising entity, as long as there is a clear and shared purpose?

Third, the role of government should be to get engaged (but stay out of the way?). The best thing our elected representatives and their bureaucrats can do is “shine a light on success”. This was particularly pertinent when our guests talked about some of the startups based in the same building where we were meeting: despite being very familiar with these companies in the USA, they had little idea that they were based in Melbourne.

Fourth, the community members have to “act what you want to be” (sort of, “be the change you want to see”?). I take this to be about being authentic, acting with integrity, giving back, and affording people due respect and recognition. Part of this is about having the right settings on culture, and taking responsibility for setting the tone of the community.

Fifth, given that some aspects of the current VC funding model are broken (fewer unicorns, fewer simple but big ideas emerging, too many short-term investment horizons, over-ambitious expectations on returns?), and if we want investors to behave in a certain way (especially if we need them to take a longer-term perspective), we have to educate them, engage them, bring them on the journey.

Finally, it was with remarkable candour that both guests spoke about achieving work/life balance, maintaining healthy relationships with their spouses, families and friends, and learning how/when to switch off. Mostly, they make specific time to take breaks, schedule date nights, compensate for the quality family time when they will be on the road, reflect on what is and isn’t working in all aspects of their lives, and continue to question/challenge themselves. The use of personal coaches and business mentors was also discussed, and it was refreshing to hear that such successful people acknowledge that sometimes they need help, and they certainly don’t have all the answers themselves.

Next week: Talking Innovation with Dr Kate Cornick, CEO of LaunchVic

 

Banksy – an artist for our times?

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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]

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

Richmond 3121

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What makes a great suburb? Location? Infrastructure? Public transport? Affordable housing? Great coffee? Schools, shops, restaurants and amenities? Probably all these and more…. Although housing costs are comparatively high, Melbourne is frequently rated as one of the world’s most livable cities. I would argue that part of its success lies in the distinct personalities of many of its key suburbs, such as Richmond (postcode 3121).

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I have lived in this inner city suburb for the past 14 years, which is by far the longest time I lived in one place. I love the convenience (within walking distance to the CBD, close to the river and parks, and well served by trains and trams) and the diversity (it’s comfortable yet retains a somewhat grungy character). I must admit to feeling spoiled at times, because I don’t need a car, and often take for granted the proximity to Melbourne’s cultural and sporting precincts.

Although there have been some enormous changes in the past 10 years, mainly thanks to more apartment developments that have brought in high-end restaurants, hipster bars and cafes, and artisan food outlets, even I was surprised when a new branch of Avenue Bookstore opened on Swan Street a few months ago. Maybe this was the missing ingredient? It turns out that the most popular categories are cooking titles (inspired by all the new eateries?) and children’s books (a result of the recent influx of younger couples starting families?). In any event, this probably plays up Richmond’s aspirations to being a bit intellectual – after all, it is within the administrative boundaries of the People’s Republic of Yarra…

A while back, in a Saturday newspaper article on Melbourne’s trendier suburbs, Richmond was described as being like Switzerland: neutral territory between the hipster-filled Bo-Bo* land of Fitzroy and Collingwood to the north, and the fashionista playground of South Yarra and Toorak to the south. And although in the Corner Hotel, Richmond has one of the best live music venues in Australia, it no longer has any record stores (which are now clustered in Collingwood’s Johnson Street, and Fitzroy’s Brunswick Street).

In recent times, Richmond (along with the adjacent suburb of Cremorne) has also become an epicentre for Melbourne’s thriving startup community and co-working culture. Co-working spaces such as Inspire9, Lennox Street Exchange and Launchpad, along with a multitude of shared creative spaces, have helped to host, incubate or entice local and global startups like LIFX, Stripe, Culture Amp, Uber, Tablo, CareMonkey, RomeToRio, etaskr and CoinJar to set up in Melbourne. Much of this activity has grown to occupy the factories, warehouses and light-industrial spaces once home to the local textile industry – and along with the increased apartment living has been a spur to the area’s urban renewal. So, for an increasing number of people, Richmond is both home and workplace.

Finally, while Richmond’s median property prices have maintained pace with recent growth rates for Melbourne’s established suburbs, they are still more favourable than some of the leafier neighbouring suburbs. True, plots and properties here are generally smaller, and you would be hard placed to find any McMansions – but I think this just adds to the area’s appeal.

*Bo-Bo = Bourgeois-Bohemian

Next week: Summing up the FinTech summit