#StartupVic launches new-look #pitch event

The team at Startup Victoria have been working hard over the summer: not only have they brought on a whole bunch of new commercial sponsors, but they have also launched a new format for their pitch nights. The idea is to invite startup founders to register their interest in pitching to a panel of judges. The contestants get the opportunity to compete in front of a live audience, for a chance to win face time with local VC’s, along with some other startup goodies.

global_446720634It’s not Shark Tank (there’s no hard cash on offer), nor is it an open mic night (there is a pre-screening and audition process) – but it does enable entrepreneurs to test their pitch, get some early exposure, and receive some great feedback and advice. It also doesn’t matter what stage the startups are at, although businesses that already have some market traction or have built and tested an MVP are probably in a better position to compete.

The launch night saw pitches from four startups, who are at various stages of development. In no particular order they were:

Ad Hoc Media with Passenger Pad, a digital Out Of Home advertising medium for taxis, using interactive touch screens inside the cab. To date, there has been a low take-up rate of this technology by the taxi industry in Australia, mainly due to regulatory issues, but the landscape is changing. With a background in taxi electronics and hardware, the founders are about to launch with 400 taxis in Melbourne, and plan to expand to other cities. There is no doubt that using a combination of passenger, location and fare data (duration, time of day, pick-up and drop-off points), the screens will be able to offer brands and their media buyers targeted audiences and in-depth customer analytics. The challenge will be to offer advertisers a competitive rate card, especially as this is essentially a new medium: it offers viewer choice like TV, can serve up targeted content like web or mobile, and is ideal for special offers linked to location and time of day.

Global Patient Portal offers a free platform for e-health records. Having already launched in Kolkata, India with 40,000 users signed up in 11 weeks, GPP is aiming at lower socio-economic communities and emerging markets. The initial business goal is simple: to support ownership of e-health records by users. Using a combination of bootstrapping and NGO funding, GPP has been able to hire a team of “scribes” in India who sit in on patient consultations and capture the medical notes, which can then be referred to at the next consultation. (Currently, a lot of time and resource is wasted because patient records are captured on paper, which is easily lost once the patient leaves the clinic.) Commercial revenue will come from selling anonymized patient data (subject to legal compliance, privacy obligations and data accuracy) for research and policy planning purposes. In choosing to launch in Kolkata, GPP was aware that in some more affluent urban communities in India, the favoured means of patient communication is WhatsApp?, so they would be less likely to adopt a separate platform. Also, in Australia, having talked to GPs about the various government attempts to establish the e-health system for patient records, I am aware of a reluctance within the medical profession to buy in to the scheme: first, there is no financial incentive for them to capture patient data via a common e-health platform; second, why would they want to share patient data with their competitors?

prevyou is aiming to disrupt a large part of the recruitment and job ad market, by directly connecting students with job opportunities at SMEs. The two-sided market effectively crowdsources available jobs from SMEs, who typically do not have access to the hiring market or to full-time and dedicated HR resources. The goal is to streamline the hiring process, and to offer a mix of standard and premium services (e.g., video resumes, applicant screening, skills matching, personality profiling etc.) and later to add validation of applicant credentials and qualifications. In return, the business will take a commission once a job has been offered and/or candidate hired. While the focus is initially on capturing the market for casual and part-time jobs, the judges urged them to look at the enterprise HR market (under an outsourcing or white label model?). Looking ahead, there is the opportunity include student internships (although, like the legal issues with Year 10 work experience, internships and placements present additional challenges such as achieving student learning outcomes and other employment law issues).

OurHome is an app to help families manage, share and track household chores, so that children learn to take some responsibility around the house, and they can get rewarded for their contribution. It emerged out of an earlier app, Fairshare, that was aimed at shared houses. Apparently, people living in shared houses don’t care enough about whose turn it is to clean the bathroom, or are happy with paper charts and lists on the fridge door. Describing itself as “an integral household tool with indirect network effects (i.e., like Google, not Facebook)”, OurHome also claims to be the #1 chores app. Using advanced algorithms, and other features such as customisation and Dropbox integration, the app also introduces an element of gamification through rewards (intrinsic and extrinsic). For busy families, it replaces those fridge notes and task charts (although, as the judges noted, there’s no calendar yet). Of particular interest is the very positive feedback the team have had from families who have children with ADD.

Despite a few technical glitches (concerning mics and audio quality), the first new-look pitch night was a success, and Global Patient Portal won the on-line audience vote. I was luck enough to meet with one of the teams a few days later. They thought it was a useful experience, but they hadn’t quite known what to expect, and they had anticipated more of a grilling from the judges and tougher questions from the audience.

Next week: More In The Moment

 

 

 

Is this The Conversation we should be having?

Here’s a barbecue topic for Australia Day: What is happening to the quality of public discourse? Over the holidays, I read The Conversation’s 2015 yearbook, “Politics, policy & the chance of change”. It’s a collection of individual articles from the past 12 months, grouped into broad themes, covering key issues of the day, at least among the academic and chattering classes. As a summary of the year in Australian political, economic, cultural and social reportage, it’s not a bad effort. With “news” increasingly bifurcated between a dominant commercial duopoly and a disintermediated social media maelstrom, The Conversation can offer a calm rational voice and an objective alternative.

Screen Shot 2016-01-24 at 6.43.50 PMThe title promises a new direction in political debate, and I went to the book’s Melbourne launch at the start of the summer, where Michelle Grattan, The Conversation’s Chief Political Correspondent held court in an audience Q&A. I was looking forward to the event, because part of The Conversation’s remit is to foster informed debate that is more than tabloid headlines, news soundbites and party room gossip. It has also positioned itself as a non-partisan, independent and authoritative source of news analysis.

I was hoping the Q&A would provide a considered discussion on some of the key policy issues facing the country – long-term tax reform, addressing climate change, updating Federation, dealing with the post-mining boom economy, improving the quality and efficiency of our education, health and infrastructure systems, etc.

Instead, the first three questions from the audience concerned Mal Brough, Ian Macfarlane and Tony Abbot. How demoralising. Haven’t we moved on from this cult of personality? Haven’t we learnt anything from the past 10 years or so? If the same event had been held during Julia Gillard’s term as PM, the names would have been different (Craig Thomson, Peter Slipper, Kevin Rudd?) – and for quite separate reasons, I hasten to add – but the context and implication would have been very similar: “Never mind policies, what’s the chance of (another) leadership spill? How are the numbers stacking up in Parliament? When’s the court case?”

Although I admire the aims of The Conversation, and I understand why it exists, I have some concerns about the type of discourse that The Conversation is actually fostering among its audience. As with many public institutions, I appreciate that it’s there (even though I am not a frequent reader), but like other news media, it risks confirming the bias and prejudices of its audience. It can also feel as if it is serving only the vested interests of its contributors, partners and sponsors.

So much of Australia’s recent political history has been dominated by self-delusional egos, nefarious party factions, insidious vested interests and character assassination (which I blame for giving us five prime ministers in as many years).

When it was my turn to ask a question, it concerned the recent bipartisan compromise between the Coalition and The Greens to publish the tax records of companies generating more than $200m in revenue (as a step towards tackling corporate tax avoidance). I asked, “Should we expect to see more of this seemingly new approach to politics?” Although Ms Grattan gave a detailed (and somewhat technical) explanation for this particular Parliamentary outcome and its likely implications, I felt that most of the audience were not interested. They would probably have preferred to be talking about the ins and outs of the party rooms. For me, this does not bode well for the level and quality of public debate we are having on (non-party) political issues that really matter.

I also have a few other niggles about The Conversation and the 2015 Yearbook:

  1. By only sourcing content from “recognised” academic experts and policy wonks, I think this overlooks contributions from commercial and industry experts which are just as valid. As long as such authors also declare any interests, it should ensure balanced commentary – but to exclude them from the debate just because they don’t have academic, public or research tenure is self-limiting.
  2. The site as a whole (and the book in particular) is rather thin on actual data references, and when research data is included in articles, there are rarely any charts, tables or infographics. I think this is a shame and a missed opportunity.
  3. The book hardly mentions the critical issue of tax reform (which barely merits half a dozen pages). Whereas, reform of the education system (including academic research funding) gets around 40 pages – which rather smacks of self-interest (and bias?) on the part of the academic authors

Finally, The Conversation provides a valuable (and from what I have seen, an impartial) service via its factcheck section, which in tandem with the ABC’s Fact Check is doing a sterling job of trying to keep our pollies honest (at least in Parliament…). More power to it.

Next week: David Bowie Was – “It’s a god-awful small affair”

 

Taxing the Intangibles – coming soon to a screen near you!

No sooner had Netflix launched in Australia than Treasurer Joe Hockey announced the imposition of GST on “intangibles” purchased from overseas vendors. The Treasurer has also indicated that the GST-free threshold for on-line imports will be lowered from the current $1,000. Dubbed the “Netflix tax”, Australian consumers should now expect to pay more for their digital content such as video, music, software and e-books, even though on most evidence, we are already charged more for comparable products than in other markets.

Geo-blocking is already an obstacle for Australian consumers…

Backdrop

We all know why the Treasurer has proposed this scheme: the Government has to make up for declining tax receipts, and appease the States who are squabbling over the allocation of GST revenue between them. Plus the current Senate inquiry into corporate tax avoidance by companies like Apple, Google and Microsoft (who divert locally sourced income to offshore entities to reduce their income tax liability in Australia) is driving the public and political agenda on global tax minimization schemes (which are nothing new, of course).*

But it’s not as simple as slapping an extra 10% on the price of a movie download, even though GST is a relatively easy and cost-effective way of generating tax revenue. For one thing, there is little consistency in how vendors currently sell their digital products in Australia. Secondly, geo-blocking is already an obstacle for Australian consumers, leading to the sort of content piracy infringement that will now make local ISP’s and their subscribers more vulnerable to legal action, following the recent “Dallas Buyers Club” court ruling. Thirdly, local retailers who have long campaigned to have the GST-free threshold removed or lowered fail to acknowledge why customers prefer to shop from overseas vendors.

Goods & Services Tax

GST (similar to VAT in Europe) is a simple consumption tax. It applies to the sale or supply of most items (except things like fresh food and health services) at a flat rate of 10%.

Even better, the Government and the tax authorities rely on businesses to collect, report and remit GST receipts, making it relatively cheap to administer (when compared to other taxes) via the Business Activity Statement process managed by the Australian Taxation Office.

The GST is a key topic of the current review of the tax system – likely to result in a higher rate (or different rates), and/or broader application to items not currently included.

Vendor Inconsistency

In principle, I don’t have a problem in paying GST on digital items I buy from overseas vendors – but there is so much inconsistency that there is a risk of consumers having to pay two lots of sales tax.

For example, every iTunes receipt issued by Apple Pty Ltd (an Australian entity) states that the sale amount already includes GST – in which case, Apple should be remitting that component to the ATO, and no need for a price increase.

However, Adobe chooses to invoice me from Ireland, and as such no GST (or VAT) is applied, but I am charged forex fees, even though the invoice amount is expressed in Australian dollars, because my bank treats this as a foreign transaction.

Meanwhile, although some UK vendors I buy from direct do not apply GST/VAT on my orders (Amazon UK included), others do – meaning I risk having to pay both the GST and VAT. As a further sign of vendor inconsistency, Amazon’s US store does not appear to deduct US sales tax for foreign customers; neither the UK or US Amazon stores sell music downloads to Australian customers; and Amazon’s Australian store only sells e-books and apps.

Geo-blocking

The decision in the “Dallas Buyers Club” IP infringement case brought by Voltage Films, has again drawn attention to Australia’s poor reputation for copyright piracy as evidenced by the number and frequency of illegal downloads.

Some journalists have commented that distributors often delay the local release of imported content (for various reasons) although this was not seen as a justification for piracy (and quite rightly so).

While foreign films are frequently released later in Australia, it’s interesting that TV (even free to air channels) has woken up to this, and now broadcasters rush to fast-track imported shows to keep audiences happy.

It’s also interesting to note that the Productivity Commission, as part of its competition policy review of IP laws, has suggested that if local rights holders and distributors choose not to exercise their commercial rights, under a “use it or lose it” model, third-party distributors would be able to step in. This also has the potential to undermine the archaic industry practice of geo-blocking, whereby sales of music, film and TV content (physical and digital) are restricted by territory.

Local retailers and distributors need to lift their game

Does the absence of GST really encourage consumers to buy from offshore retailers? I would beg to differ.

Local rights holders often do not bother to make content and products available in Australia. And local retailers won’t usually stock products if they are not readily available from wholesalers or distributors.

I recently had to contact an overseas artist, the UK record label and its Australian distributor several times to make their music available online in Australia. The local distributor had not bothered to release the content, even though they had the rights, but geo-blocking prevented me from accessing it legally from overseas suppliers.

It’s the combination of inadequate local distribution, non-availability, higher prices and lacklustre service that encourages Australian consumers to buy from overseas, even if that means circumventing geo-blocking. In many cases, I doubt the addition of GST will be a serious deterrent to online overseas shopping.

In my own case, I once found that the local branches of a global retail brand chose not to stock the item I wanted, and their US parent geo-blocked me from ordering on-line. So I resorted to buying in the “grey” or parallel imports market, from an offshore vendor willing to ship direct to Australia. It was still cheaper, even after shipping costs, and even if GST had been added (I probably paid US sales tax on the transaction anyway), than if I had bought from a local retailer (assuming they bothered to stock the item).

Hopefully, this debate on GST and the Productivity Commission’s review of competition policy will finally give local retailers an incentive to do a better job of serving their customers.

* The debate on corporate tax minimization might want to look at where “value” is created, and where the revenue is booked, that gives rise to a tax on the resulting profits. For me, the retail value of intangibles such as digital products is created when someone pays to download them, at the point of sale – i.e., in the consumer’s geographic location.  Although the vendor may argue that the IP is owned by an offshore entity to whom they must pay royalties, the individual download itself does not have any standalone value, until it is accessed by the consumer. Even a high rate of royalty repatriation could not be more than the retail price, so logic might suggest that local profits should be taxed accordingly.

Next week: What can we learn from the music industry?

C-Suite in a quandry: To Blog or Not To Blog…

Should CEO’s be on social media? That is the question many boards, PR advisers, marketeers and C-Suite occupants are faced with these days. Partly driven by existentialist angst (“I Tweet therefore I am”), partly a desperate act of “me too”, many CEOs are in a dilemma about how to engage with the new media.

While it might sound like a good idea to have a CEO blog, in the wrong hands or used inappropriately, it can come across as inauthentic, too corporate, or just crass.

The use of CEOs as “personal brands” is nothing new – think of Richard Branson, Anita Roddick, Steve Jobs, Jack Welch etc. And while social media has the potential to extend the CEO’s reach to customers, shareholders and employees, it also abhors a vacuum. If companies do not take control of their public persona, their customers and employees (supporters and detractors alike) will fill the void for them.

I am seeing this debate play out in different ways:

First, there is a difference between a personal brand and a business brand, so it is important to establish boundaries while recognising how the CEO’s personal standing can be used effectively to complement the corporate presence.

Second, having the CEO recognised as an expert can enhance personal influence but may not directly benefit the company if it is not relevant to the business – does Warren Buffet’s prowess on the ukulele boost instrument sales, or help the share price of Berkshire-Hathaway?

Third, if CEOs do choose to outsource their blog content, make sure it is genuine and aligns not only with the CEO’s personal values but also with those of the company, customers, shareholders and employees.

Finally, CEOs or Boards struggling with this topic, or those worried about whether to take the plunge into social media would be advised to consult Dionne Kasian Lew‘s new book, “The Social Executive”, which is sure to become an essential guide on the subject.