Here We Go Again…

At the time of writing, Melbourne is once again under a COVID19-related lock down. Currently, we are three-quarters of the way through a 14-day “snap” lock down or “circuit breaker”. Variously known as #lockdown4, v4.0 (now v4.1 with the added week), or simply “The South Australian One”. Along with a prevailing sense of déja vu, much of the political, media and social coverage has a very familiar ring to it – like, here we go again!

Overall, I would much rather be in Australia at the moment, compared to many other places in the world that are still struggling to cope with the pandemic. But there is no doubt that this latest lock down is once again revealing some political and structural weaknesses in the Australian Federal and State system – and the people of Victoria (and especially Melbourne) are paying a heavy price for these combined failings.

The blame game between Federal and State politicians is becoming a farce – most of us would rather see some effective leadership and practical solutions, as well as a bit more owning up and taking responsibility for where and when things have gone wrong. After all, the first known case of COVID19 was reported in Australia in late January 2020, so our elected representatives at levels and of all persuasions have had nearly 18 months to sort this out. It doesn’t help that our Prime Minister is generally regarded as being absent whenever there is a crisis – on the other hand, does it help to have him turn up in hi-vis and hard hat for another photo opportunity? And sometimes when he does bother to make it, he’s often made to feel unwelcome.

Here are just a few of the disconnects between Federal and State roles and responsibilities when it comes to managing COVID19:

First, the Federal government is responsible for external border control (i.e., immigration and quarantine). It’s generally argued that the Feds have failed to deliver a workable quarantine solution for anyone coming to or returning to Australia. For whatever reason (and we’ll probably have to wait 20 years before the relevant papers are released), National Cabinet in March 2020 agreed to delegate the management of hotel quarantine (HQ) to the individual States and Territories. The big question is: why did the States agree? Where there incentives on offer, or did they do so because they could see no solution coming from the Federal government? At the same time, the States have applied inconsistent border controls as between each other, and at times, Victoria has been able to suspend in-bound international flights, putting more demand on the other States’ HQ programmes.

On the other hand, Melbourne still managed to host an international Grand Slam tennis event in the summer (notwithstanding some COVID scares and cases), and our nation’s softball players have already been vaccinated prior to heading off to Japan for the Tokyo Olympic Games (which many locals want to cancel for obvious reasons). Plus, AFL teams were somehow able to travel interstate from Melbourne immediately prior to the lock down (did they get a tip-off?). Yet, at least one AFL club has breached COVID regulations, when travelling on a domestic passenger flight. I’m so glad we have got our priorities right when it comes to professional sport!

Second, health services (along with education, aged care and social services) are a strange mix of Federal and State responsibilities, services and delivery. As a result, there is bound to be some overlap and double handling, as well as some obvious gaps. The Federal government is being blamed for failing to secure and distribute adequate vaccine supplies when and where they are needed, and for failing to meet their own aspirational targets in terms of vaccine roll-out. Yet, as with so many public services, there is a (confusing) dual delivery system. Victoria set up a number of vaccination hubs – only it still hasn’t deployed an online booking system: only phone bookings (or walk-ins) are available. But the Federal delivery is via health clinics and GPs, with each service provider offering different booking systems.

Third, the vaccination roll-out (by age and priority categories) has seen the criteria move around, somewhat arbitrarily. There is anecdotal evidence that due to low take-up rates in March and April, some people within one of the priority age categories (initially 60, it was suddenly moved to 50 in May) could access a jab at a clinic or hub at short notice, as otherwise those stocks were going to waste. It doesn’t help that there was/is confusion over the vaccine requirement for certain front line workers (e.g., in aged care) and who is responsible for administering those vaccinations. Of course, since the latest lock down in Victoria, demand is outstripping supply, and it is difficult to verify data on whether anyone who was in a priority category was initially unable to access a vaccine (or was denied access) at the time they became eligible and wanted a jab.

Fourth, hotel quarantine continues to be the key weak point in the transmission chain. I’m not going to dwell on the systemic failure that led to Victoria’s second (and lengthy) lock down last winter/spring – from which we were only just starting to recover when #lockdown4 was imposed. The fact that the latest lock down was triggered by an apparent breach in South Austalia’s HQ is of some significance, as it re-introduced the Kappa “Variant of Interest” into Victoria. More worrying is the presence of the Delta “Variant of Concern”, whose precise source in Victoria is still unknown, but likely to have come from our own troubled HQ system.

Fifth, the calls for the Federal government to pay for dedicated and purpose-built quarantine facilities in each State are understandable – but I’m not sure why Victoria in particular didn’t just go ahead and build their own (and then later stick the Feds with the bill). It’s not as if there is a shortage of construction work going on at the moment in Victoria (much of it State-funded), so it would have been quite easy to pull that project together without waiting for the Feds to come to the party. After all, construction was one of the few industries to continue relatively unscathed during last winter’s lock down – and with the Federal job keeper and job maker subsidies available at the time, Victoria could easily have completed the task by now, especially with the support of a key developer such as the union-backed Cbus.

Sixth, Victoria has only just mandated a universal QR code system for checking visitors in at all business, commercial, retail and hospitality premises. Why it took so long, and why it allowed a mish-mash of third party apps and pen and paper systems is yet another example of poor IT implementation by government. (The Feds appear to be no better with their own COVID tracing app.)

Seventh, the Federal Government, via last week’s National Cabinet, appears to have established a common definition for a COVID19 “hot spot”. Again, it’s only taken the best part of 18 months, and we still don’t have consistent and national terms for defining “red zone”, “complex case”, “cluster”, “mystery case”, “complex case”, “unknown case”, “fleeting transmission”, “stranger to stranger transmission”, “primary contact”, “close contact” or “exposure site” tiers. Nor do we have a consistent framework for responding to a “hot spot”, especially when comparing Victoria to other States.

Finally, the latest lock down again reveals weaknesses and vulnerabilities in Australia’s manufacturing capabilities and supply chains (in terms of producing and distributing sufficient vaccines). It’s also shown up economic fragility with many people living pay cheque to pay cheque, and many small businesses, especially in retail, tourism and hospitality, will not manage to bounce back from a fourth shut down.

Next week: How about that AAA rating?

Intersekt FinTech Pitch Night

The opening event of the Intersekt 2021 Australian FinTech Conference was a startup pitch night, organised by FinTech Australia, hosted by YBF Ventures, and sponsored by Seed Money. The esteemed judging panel was drawn from a range of VC funds: Todd Forest (NAB Ventures), Nicole Small (Rampersand), Rohen Sood (Reinventure), Lynda Coker (SpeedSpace) and Lucinda Hankin (Grok Ventures).

The pitches in order of presentation (links are in the names):

Boulevard

A cloud-based share registry management platform for startups, founders and their employees. Designed to to be an exchange for unlisted securities, the platform also offers Investor Relations support and automated compliance solutions. Using Distributed Ledger Technology (which underpins Blockchain), the team are working with ASX DLT Solutions (responsible for the CHESS replacement) and deploying DAML, the programming language for modelling digital assets. They have also developed ASICLink, to automate company filings with the corporate regulator, plan to support corporate actions (including the verification of company financials), and are working with equity crowdfunding platforms. Boulevard has already on-boarded 30 companies, comprising 4,000 shareholders.

COGSflow

Describing itself as “Performance based finance”, this is essentially a merchant service offering cash-flow funding solutions for physical goods. This involves purchasing client inventory, and getting repaid on the sales performance. Using a funding ratio calculation as the basis of its credit risk model, the COGSflow will track sales data from the likes of eBay and Amazon (although both of these platforms, like PayPal, Alibaba etc. already offer SME financing of various forms). COGSflow will also analyze variable marketing and customer acquisition costs as inputs to its lending model, and plans to become a member of the Personal Property Securities Register (PPSR), as well as seeking B Corp certification.

Archa

Archa is solving the challenges many SMEs face when trying to access corporate credit cards – banks generally demand personal guarantees from owners or directors before they issue cards, and when they do the “product is awful”. As the pitch described it, many bank-issued corporate cards are really designed as “a line of credit to acquire air miles”. With a mobile app already in the market, Archa incorporates an administration and expense management solution. A major bug bear for many companies is managing corporate subscriptions – all those SaaS apps that are tied to individual employee cards; consolidating, renewing and cancelling those services can be time-consuming and painful. The account administrator can also manage each card’s credit limit. Archa itself has principal issuer membership with MasterCard. In addition to an equity raise, the team is seeking debt funding to offer lines of credit. Channels to market will include SME lenders, accountants and lawyers.

Sherlok

According to the founders, most people paying too much on their mortgages – based on their home loan rate. Because mortgage brokers have 60% of the market, and rely on trailing commissions, there is little incentive for brokers to help their clients find a better rate or provider. However, 15% of brokers’ clients are leaving each year. Sherlok is an SaaS platform that uses AI to help brokers reprice and refinance their existing mortgage book. Using a broker subscription model, Sherlok is aiming to offer “single click refinancing”, although there was some equivocation about becoming a virtual brokerage itself. The founders feel that mortgage broking is still a relationship based business, and requires a human touch.

Axichain

Axichain is building a blockchain-based agricultural supply chain – a digital trading solution for cross-border commodities trading, with an initial focus on red meat. The founders are addressing three main supply chain pain points – market access, paperwork and payment.
Axichain combines smart contracts, an escrow solution and traceability linked to legal processes. Overall, the platform envisages multiple products and revenue streams. The team are seeking both equity and debt funding, the latter to provide lines of credit lines.

Parpera

The meaning of “Parpera” is “fair wallet”. By that, the founders mean they want to offer a range of banking and related services aimed at SME owners, sole traders and freelances. This could include business registration and set-up, better financial insights, and access to smarter banking products etc. It will include card services, payments and invoicing. The plan is to target customers who are about to set up a business, and to promote the service at the start/end of the financial year, hence the intention to use accountants as a channel to market.

Next week: Monash University Virtual Demo Day

Victorian Tech Startup Week – Pitch Night

As part of the recent Victorian Tech Startup Week, Silicon Beach Melbourne and YBF Melbourne hosted the city’s first in-person pitch night for over a year (thanks to the 3 lock-downs we have had in that time). Compered by Karen Finch of Legally Yours, and supported by OVHcloud, the esteemed judges for the evening were Farley Blackman (YBF), Yian Ling Tan (OVHcloud) and David Hauser (Silicon Beach).

The usual Silicon Beach rules applied – Round One featured 90-second pitches from each founder (and no slide decks), from which the judges shortlisted 3 startups for Round Two. The Round One presentations in order of appearance were (as usual, website links are embedded in the names):

TwistedXeros.com

Using “emotional phase shifting to accelerate personal growth and transformation through Insight, Manifestation and Neuroscience”, the impetus for this startup came about from the founder’s own experience. Designed to help overcome certain mental health issues associated with anxiety, the founder claims his technique can help practitioners overcome events such as panic attacks within 6 seconds (as opposed to 600 seconds with traditional CBT methods). Had been accepted into the Founders’ Institute, then COVID came along.

The Leaf Protein Co.

There is a growing demand for plant-based foods, both as a source of sustainable protein, and in response to the increased prevalence of food-based allergies (e.g., gluten and soy). Add concerns about GMOs, unsustainable agriculture and climate change, the founder is looking to develop a scalable process for extracting specific types of leaf protein, including arid-climate plants and Australian natives such as saltbush to counter soil salination. Currently seeking funding to pay for a CSIRO pilot to scale the protein extraction.

E-Toy Library

Essentially a toy-lending app, that provides an end-to-end process (source, distribute, cleanse, circulate) via a subscription model. In trials, already secured 50 customers and over 100 subscribers. Estimates there is a $2.4bn toy market in Australia – but it wasn’t clear how much of this market the founders aim to capture.

Kido Paint

This app aims to bring childrens’ drawings to life, using AI/ML to scan a photo of the drawing, and convert it into an animated 3-D digital file that can be rendered within the app using augmented reality.

Thorium Data

Using the oft-heard tag line “data is the new oil”, this B2B solution is designed to help companies organise, manage and extract more value from their data. It does this by resolving issues of data inconsistency, privacy, risk and governance. It also derives and assigns numerical factors to to individual datasets to assess the “value” of this data, and uses indices to benchmark that value.

QuestionID

This product feels like a cross between a wiki for academic research papers, and an open text search tool to find answers within the wiki database. I know from experience that repositories of published research reports (especially refereed and peer reviewed papers) are highly structured and tagged, with the emphasis being on classification, authorship and citation. Often, you sort of need to know in advance the rough answer to the question you want to pose. Significant resources are already allocated to maintaining and commercialising these existing databases, so I’m not sure how QuestionID will deal with IP and other rights associated with these reference resources.

HiveKeepers

HiveKeepers is designed to support beekeepers by helping them to establish and maintain healthier hives, and enhance their own livelihoods at a time when the industry is facing numerous challenges. At its core is a smart phone app that monitors IoT sensors (temperature, weather, weight, motion, sound, etc.) attached to the hive itself. Over time, the data will enable predictive analytics. With the launch of its MVP, HiveKeepers has already attarcted 700 customers globally.

Round Two

The three finalists selected from Round One were KidoPaint, LeafProtein and HiveKeepers. Each founder made a longer pitch, and then answered questions from the judges:

Kido Paint – The Q&A discussion centred on the commercial model (B2B/C, gift cards, in-app vouchers), the file conversion process (turnaround time can be 24- 48 hours), options for scaling, and getting the right price pint for user prices. So it’s not an instant result (which may disappoint some impatient younger users), and the 3-D rendering and animation is somewhat limited to the imagination of the AI/ML algorithms used in the conversion process.

LeafProtein – There was a further discussion on the approach to producing sustainable and allergen free plant proteins. For example, the attraction of pereskia is two-fold – a higher protein ratio, and an arid climate plant. Also, the aim is to counter mono-culture and GMO crops. A D2C brand has been launched (using small-scale production processes), while the CSIRO project is to designed to scale protein extraction, as well as develop an emulsifier for use in the food industry.

HiveKeepers – The founder talked more about the need to address climatic and environmental impact on hives. Having benefited from support from the La Trobe University and SVG Thrive AgriFood accelerator programs, this startup is seeking funding for product development – current price point is $105 USD per smart hive per annum. While the industry is seeing a 2% growth in new hives, it is also suffering significant hive losses due to parasites and diseases.

The overall winner on the night was LeafProtein.

Next week: From R&D to P&L

Victorian Tech Startup Week

Last week, I mentioned that Australia’s headline employment numbers appeared to be making a strong post-lockdown recovery – however, the latest ABS data shows that while the unemployment rate has declined, the overall participation rate has remained the same, and the underemployment rate has actually increased. “Underemployed” is defined by the ABS as the number of “employed people who would prefer, and are available for, more hours of work than they currently have”. For many people, the traditional solution to bridging the gap between the amount of work they have, and the amount they want, is to juggle multiple part-time jobs, while others may choose to seek freelance work. Another approach is to create your own role, by becoming a startup founder, or joining a startup.

Of course, as I have written elsewhere, startups might not be for everyone. But until you try (or at least explore the idea), how will you know? This was one theme to have emerged from the recent Victorian Tech Startup Week, hosted by YBF Melbourne, with support from OVHcloud, AirTree Ventures, Silicon Beach Melbourne, the Victorian Government and YBF’s network of mentors, programme partners and community of members.

In part an effort to rekindle the local community of startups, in part a celebration of YBF’s Startup Immersion Programme, the week also showcased the benefits of co-working, and included sessions on startup funding, R&D grants, engaging with corporate clients, and a pitch night (more on that next week).

Of course, as a YBF member, and having worked with startups and founders for more than 10 years, I’m naturally biased. I have been working from their Melbourne co-working facility for the past two years (lock-down permitting), and I have been attending events and workshops there for many years (including participating in my very first hackathon….). I have also worked with some of their earliest startup founders.

Even though I am used to working from home and working remotely, the value of being on-site with other startup teams and founders within a supportive environment cannot be overestimated. And it’s not just about access to great facilities, and the many benefits that YBF offers. For one thing, as a member I get invited to meetings and events not open to the wider public. For another, I can host clients and other visitors without having to maintain my own office. But most of all, it’s the opportunity for chance encounters with potential clients, partners and suppliers, often triggered by casual conversations by the coffee machine or during other networking sessions.

A few years ago, it was reported that there were over 300 co-working spaces in Australia, and more then 80 of them in the Melbourne area alone. I’m not sure what those numbers are now, post-pandemic, especially as offices in Melbourne are still not back to full operating capacity. Nevertheless, co-working spaces are in demand again as (ex-)employees consider their future career options in light of the COVID recession, and as startups and their founders are expected to support the anticipated economic growth in areas like new technology, sustainability, smart manufacturing, healthcare and financial services. Of course, before making a decision on where to locate your new business or where to start co-working, it pays to do your due diligence.

Next week: Victorian Tech Startup Week – Pitch Night