Tag Archives: #startups

AngelCube15 – has your #startup got what it takes?

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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…

#Startup Victoria finds the human connection

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The team behind Startup Victoria held the inaugural Above All Human conference in Melbourne last week, co-directed by Susan Wu and Bronwen Clune, and MC’d by futurist Mark Pesce. If there was a single, overarching theme to the day, I would sum it up as: don’t overlook the human component in what you do.

Whether you are a startup founder or investor, defining your purpose is not enough; it also takes considerable self-awareness to build an innovative, successful, and sustainable business. It also requires curiosity, risk-taking, resourcefulness, empathy, creativity, resilience, perception, drive, reflection, vision, perseverance, passion, luck and critical thinking….

Featuring an interesting mix of established, experienced and emerging startup entrepreneurs and experts, we were treated to a broad range of themes including:

  • bringing financial services to the “unbanked” world;
  • the importance of design;
  • building startup platforms and ecosystems;
  • the power of storytelling;
  • challenging gender bias in the tech sector;
  • the potential of mass customisation;
  • understanding the value of an accelerator program;
  • the ethics of driverless cars;
  • changing minds with technology; and
  • the wisdom of knowing when to give up the dream and move on to the next opportunity.

Aside from the plenary, Q&A and panel sessions, there were product demos and startup pitches, and the whole event offered a valuable learning opportunity for anyone interested in engaging with the local startup community, or those curious about making connections between technology and the human condition.

Finally, it should be said that without Melbourne’s growing status as a global startup venue, the organisers would have been unable to attract such an impressive cohort of international speakers. This also reinforces Melbourne’s reputation as one of the world’s most livable cities (#1 or #11 depending on which list you are reading…).

 

What the *%@#? Dave McClure vents his spleen…

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The final Lean Start Melbourne event of 2014 was a Q&A with Dave McClure, tech entrepreneur, early-stage investor and founder of 500 Startups. It was certainly an ear-opening experience, as Dave laced his comments with enough expletives to fund a small start-up (if only the organisers had thought to provide a swear jar…).

But while he was vociferous in his refusal to answer questions like “what’s hot?”, or “where’s the next big thing?”, he did provide some refreshing insights on how founders and investors need to adjust their expectations on funding and returns.

The event was hosted by inspire9, with sponsorship from BlueChilli, General Assembly, and Loud & Clear. Adrian Stone from Investors’ Organisation was acknowledged for helping to bring Dave to Australia, and Amanda Gome was the MC for the evening.

Dave’s investing model is basically a numbers game – identify a large enough pool of startup opportunities, place smaller “bets” on each one, in the expectation that only 10% will succeed, and of those, only 10% will be really successful, and very, very few will reach an IPO – but the spread of successful bets should each return between 5x and 20x. Whereas, some investors still try to “bet on unicorns”, in the expectation of a 20x-25x exit every time. Such opportunities will be increasingly unlikely, as the technology costs of production continue to decrease, therefore startups don’t require the same level or type of funding.

Based on current trends, Dave sees huge potential in video commerce, mobile video, and anything that monetizes search – e.g., influencing followers via social media, and converting this traction to sales driven by personalised recommendations. He’s also big on Spanish- and Arabic-speaking markets, and “anything that arbitrages sexism and racism” – hence his interest in women and minority entrepreneurs.

Dave’s advice is pretty simple: get the product, market and revenue model right, and then build scale into the business as quickly as possible. As such, he hates people asking him his opinion on their startup ideas (“what do I know?”); instead, he emphasises the need to get paying (and profitable) end users plus building scale through marketing as the true proof of concept.

Throughout the evening, Dave talked a lot about unit economics – not just production costs, but the real cost of customer acquisition, and time to convert leads to sales. It was also interesting that unlike some speakers at previous Lean Startup events, he was not particularly negative towards startups developing enterprise solutions – rather, he prefers to segment clients based upon their decision-making and purchasing limits. So, he looks at revenues based on the respective number of end users, SME customers and enterprise clients, because of their different price points and procurement methods, as well as the different customer acquisition costs.

Finally, he encouraged potential startups to think of the “most boring and mindless” business activities or processes, and figure out ways to make them more interesting via apps that use gamification and social media tools.

 

Yet another #co-working space opens in #Melbourne – what’s going on?

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Co-working spaces continue to pop-up all over Melbourne. The latest I’ve heard about is LSX (aka Lennox Street Exchange, in the heart of Richmond’s startup zone), which opened in September.

I’ve not had the opportunity to visit all of these venues – but I’ve been able to spend some time in a few of them such as York Butter Factory, the Hub, inspire9, Launchpad and Queens Collective. The decor and ambience are usually New York loft conversion meets warehouse chic meets funky cafe meets London Free School. Some offer little more than a serviced office with some added startup appeal; several are closely linked to incubator programmes and angel investors; and a couple want to create a whole philosophical/spiritual experience around personal development, collaboration and sustainability.

A key attraction of co-working spaces for early-stage startups and budding entrepreneurs is the relatively low-cost business accommodation. Plus, if you are new to being self-employed/freelance, or if you are just starting your own business, going to an office (at least once a week) can instil some discipline, provide a change of scenery to the home office (or garage), help with networking contacts, and offer the chance to meet people who can offer skills you don’t have.

But, these spaces are mostly open plan, have an itinerant population that comes and goes, and the communal kitchens sometimes remind me of the worst shared houses I have lived in….. So, you have to enjoy that sort of vibe, and as we know, open plan offices are not always conducive to productivity or personal concentration.

There are some genuinely philanthropic values inherent in a number of these venues, but others are more commercial and seem only interested in getting investors through the door to nurture the “talent” they think they have uncovered.

If you are thinking of signing up to a co-working space, it pays to do your due diligence:

  • Commitment – not just the cost, but time and other contributions that may be expected of you
  • Values – it helps if your values generally align with those of the hosts and other members; if you’re not a creative type, or if 3-D gaming development is not your thing, maybe look elsewhere
  • Location – proximity to prospective clients and/or partners and collaborators may be more important than a cool hot-desking venue in a trendy part of town
  • Services – what’s included in the membership fees and/or rent? are there any hidden extras?
  • Insurance – make sure the premises are up to date with their building and other statutory insurances; do you still need to take out professional indemnity/public liability policies; are your personal belongings and equipment covered while they are on site?
  • Ownership – are you buying a membership or a “share” in a business? if the former, does this carry any voting rights at member meetings? if the latter, could you be taking on more legal risk or financial liability if the venue fails?

No doubt there are some vibrant co-working communities, that offer great support and service to the growing number of people who want to “do their own thing” rather than join a more corporate environment. Even some banks seem to be getting in on the act, as they recognise an opportunity to engage with their business customers via co-working spaces and startup facilities.

Next week: Who’s making money in financial data?