The David and Goliath of #Startup #Pitching

Anyone wanting to follow the startup scene in Melbourne will quickly discover that there are meetups, hackathons and user groups nearly every night of the week. Who needs a social life when we’ve got startup happenings to keep us entertained, busy and off the streets! The frequency and close proximity of these events can lead to some interesting contrasts; one such example came when Oxygen Ventures‘ annual splash The Big Pitch was held the same week as UpWork‘s more modest Networking & Pitch Night (part of The Pulse Meetup). It was almost a case of David and Goliath…

Screen Shot 2015-06-19 at 5.58.28 pmScreen Shot 2015-06-19 at 5.58.57 pmThe biggest difference between the two events was the prize on offer – the Big Pitch offers the winners up to $5m in venture capital funding; The Pulse offers $500 in Upwork credits (and high fives all round). No doubt, the application, screening and selection process is more onerous for the former than the latter. And as was frequently pointed out once The Big Pitch gala proceedings got underway, this competition is “serious” and “adult”. But that’s not to say that the entrepreneurs pitching at The Pulse weren’t equally passionate or serious. Most of the finalists at The Big Pitch had already launched products and were gaining market traction, as had several of those presenting at The Pulse.

So, in the interest of objectivity (and pure entertainment), here are the 10 pitches I watched across the two competitions, in no particular order, with my personal comments on each. Without going to the respective websites, can you work out which startup finalists belong to which competition?

LaundryRun

Too little time, long day at work, or just can’t be bothered doing your washing? Let LaundryRun pick up your dirty clothes at a time of your choosing, and bring them back when you need them all nice and clean. Tapping into the trend for concierge services for busy inner city hipsters, hackers and hustlers, LaundryRun is joining the likes of YourGrocer to outsource domestic services.

Given that the founders already have a traditional laundry and dry-cleaning business, one assumes they know to make the economics work (they claim the customer pricing is comparable to walk-in trade). Plus they have had some early media coverage, and it makes sense to focus on higher-density neighbourhoods, especially if they can establish regular pick-up and drop-off schedules.

But the problem will be in getting enough repeat business, although if most of the collection and delivery is done in the evenings, maybe that addresses the need for consolidation (and gets round peak traffic hours).

Gamurs

As I have confessed before, gaming is not my thing. I don’t see the appeal, I barely understand the jargon, and I certainly don’t have any aesthetic appreciation for the advertising, graphics and branding that goes into these products. But I accept that it’s a big business, and that the gamers of today are possibly the software geniuses of tomorrow.

Gamurs claims to be the ultimate social network for all things gaming. It has had some user interest (probably because it is a free platform), but it felt that there was nothing really new here. Despite a dedicated team, and some impressive growth projections (albeit only for Australia) it was difficult to see where the revenue would come from as there are competing channels, and the games industry is built around platform and brand verticals.

The pitch mentioned “content consumption” a lot, but I had no idea what that meant, and I was left thinking this was simply an on-line magazine for enthusiasts and hobbyists.

EpicCatch

I’ve seen this exact same pitch before. It’s cute, and has an interesting angle on the online dating model. Sort of MeetUp meets Tinder, with a focus on curated dating experiences. But other than some neat one-liners, this presentation was really an in-person advert designed to drive customer usage.

I’m sure the business will do well among its target demographic (although not quite sure they have this totally figured out), but unsurprisingly it did not win because according to some recent research, VC’s don’t like the dating business model.

  Biteable

This self-serve provider of templates for animated videos presents a very neat idea, and was established to fill the gap between expensive agency services, complicated pro tools and clunky DIY apps. It’s free to use, but for $99 you can remove the Biteable watermark.

There are limited options for changing some aspects of the template content, but maybe this will form part of the up-sell model. However, the numbers look questionable – how many repeat users would there be, and wouldn’t frequent users go for professional solutions anyway?

Perhaps there are strong niches or use cases that Biteable could explore, rather than trying to gain traction across a wide market?

CoreCool

Referring to the number of fatalities in India’s recent heat wave, CoreCool demonstrated a human need for their simple low-energy heating and cooling solution, especially for the elderly and the infirm. Using tested technology to regulate core body temperature (in essence, a contact heat exchange unit), CoreCool also sees a market in the recreational and well-being sectors.

If the product makes any claims as to its medical or health care benefits, it may need to comply with the relevant class of therapeutic goods regulations. It was not clear whether any clinical trials have been undertaken or whether the product is subject to any patents. However, there was lots of support for the idea among the audience.

Development challenges include scaling production to achieve retail pricing, and maximizing battery life.

FLEET

This was a project that proved very popular with the audience, even though it is still at concept stage – quite literally, it has not yet got off the ground. FLEET plans to bring cheap satellite internet to the estimated 60% of the world’s population that are not connected, or don’t have access.

With impressive scientific credentials, a passionate presenter and market research to back her case, it was easy to see why this pitch was many people’s favourite. But without the co-operation of incumbant telcos and their willingness to trade with a third-party platform, FLEET may struggle to establish a business case, unless they can hook into alternative distribution technology and supply chains.

At the very least, FLEET could provide a shot in the arm for Australia’s satellite industry.

Blinxel

Pitches always look better when the presenter can provide a product demo. Such was the case with Blinxel, a startup that is looking to bring simple and low-cost AR/VR video and hologram-like content to your smart phone or tablet.

Using a dedicated depth camera, Blinxel can capture video content, then upload the file via the cloud to your device. The team behind Blinxel is a bunch of enthusiastic 3-D content producers who want to disrupt the current high-cost model, which is also wasteful, as little content is recycled and OEM’s are apparently locked into proprietary technology.

I can see many uses, from education to tourism, as long as the content creation process is scalable, the need for stand-alone technologies can be minimised, and the price/speed/quality equation makes sense.

SocialStatus

Aiming straight for the marketer’s heart, SocialStatus aims to provide social media analytics on steroids – although only supporting Facebook pages at present. With a focus on peer and industry benchmarking, SocialStatus is building its expertise around the key metrics of engagement, growth and click-thru rates.

Adopting a freemium model (plus a 2-tier subscription price) and using simplified tools (canned reports and automated data from streamlined metrics), SocialStatus looks clean, easy to use and speaks directly to content marketers and community managers.

Unless they can protect their analytical IP, and extend coverage to other social media platforms, I think SocialStatus may find it difficult to defend their position.

Meet&Trip

A simple pitch: if you are travelling overseas, and want to connect with fellow travellers who might be interested in planning and sharing a road trip, this is the solution for you. Claiming that Facebook and other social networks don’t allow you to create time and location-based forums that are both moderated, curated and for a specific purpose, Meet&Trip aims to connect users with similar interests and lifestyles.

It’s a nice idea, but other than being specialist bulletin/message board, I can’t see what else Meet&Trip has planned, or how it intends to fund itself.

In the analogue world, most major cities and tourist destinations used to publish magazines dedicated to the interests of travellers, backpackers and itinerant expats. They had classified adverts of the kind: “planning a trip to Uluru; share expenses and driving; no boofheads”. Maybe this still happens? As an aside, London’s Antipodean community used to park and trade their dormobiles along the Thames Southbank – so anyone looking to buy a VW Combi and “do” Europe with like-minded travellers knew exactly where to go.

Storie

I have to admit, when I heard this pitch, my immediate reaction was, “Oh. Yet more video content that I don’t have time to watch (or care about).” And despite the apparent novelty of being able to capture, edit and share content from within the same app (i.e., build a series of scenes into a story before you hit “publish”), it felt like yet another social media pitch in search of a business solution.

Kudos to the young team for bringing their idea to our attention – but to me it felt like it was trying to take the best bits of YouTube, Vine, Instagram, Facebook and Tumblr without adding anything radically new.

As with Biteable (above), my recommendation to Storie would be to explore commercial opportunities among deep or niche content-rich markets, rather than trying to scale across shallow, thin and widely dispersed public audiences.

Conclusions

  • The winners in their respective competitions were SocialStatus and CoreCool, with honourable mentions for LaundryRun, FLEET and Blinxel.
  • We are starting to see some further variegation among startup pitches – more firmware, hardware, B2B – but the bulk are still pushing consumer-based, ad-backed products targeting the (over)crowded markets for sharing social, mobile and video content.
  • Reflecting Melbourne’s ethnically diverse startup scene, a significant number of these pitches were made by recent migrants to Australia.
  • Several pitches confined their growth potential to the domestic market – which is understandable, but self-limiting. Despite its reputation as a relatively early adopter of new technology, by and large Australia is still quite conservative, with a tendency to favour incumbant brands that operate in semi-protected duopolies and oligopolies (supermarkets, telcos, banks, newspapers, automotive).
  • I don’t believe in disruption for its own sake, but few of the pitches offered truly disruptive business models, other than through pricing (i.e., charge nothing and hope that advertising will cover the costs) or via self-service solutions. I would like to have seen more disruptive intent around supply chains, distribution and channels to market.

Next week: Deconstructing #Digital Obsolescence

 

Oxygen Ventures brings some fresh air to Australia’s #Startup Community

Last week, Larry Kestelman’s new investment vehicle, Oxygen Ventures gave 5 local startups the opportunity to bid for a share of A$5 million in funding at the inaugural Big Pitch night in Melbourne (#thebigpitchAUS).

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The Judges at the Big Pitch

 

The #Startup Contenders

Drawn from over 300 applicants, the hopeful candidates (in alphabetical order) were:

Bluesky  Shopping portal for leading fashion and lifestyle brands.

ECAL On-line event and brand marketing calendar launched by E-DIARY.

etaskr Enterprise productivity solution that allows employees to ‘bid’ for in-house projects based on their expertise.

KartSim New go-kart game for PCs, from developer Black Delta.

WeTeachMe Booking platform for short-courses and special interest classes.

After each contestant made a short presentation, they were questioned by a panel of judges, comprising CEOs, entrepreneurs, corporate advisers and business development experts from a range of well-known organizations. Most of the questions related to the startups’ revenue projections, funding requirements and growth opportunities – but some were grilled in more detail about their business models and financial performance to date.

How did the participants fare on the night?

The Joint Winners were ECAL and WeTeachMe – with the People’s Choice Award (based on audience votes) going to KartSim.

My sense is that ECAL came out on top (with A$2.5m of funding) on account of their early success in signing up a number of high-profile sporting franchises in the USA and Australia, demonstrating their growth potential – otherwise with 1 million users, but only $440,000 in revenues, you’d have to think the business model would struggle.

WeTeachMe was successful in attracting A$2m in funding because the business model is simple, it falls into the growth category of lifelong learning, and the platform had already achieved significant productivity gains for its commercial clients. Plus it has the potential to scale up and go international.

With KartSim, I admit I have no interest in computer games, but it would seem to me that with a headful of (virtual) Steam behind it, the developers might be better off tapping into crowdfunding opportunities, as the early interest suggests ready and eager buyers out there, enabling a successful commercial launch without giving up any of the equity.

Feedback from the panel on Bluesky suggested that despite offering a ‘one-stop-shop’ for consumers, the margins generated from the sales commission model would be insufficient to cover fulfilment costs (so it would only ever be a transactional purchasing platform); nor would the retailer aggregation model ever be allowed to encroach on brand or retailer loyalty schemes, thereby limiting the options to develop added-value services for customers.

As for etaskr (which I have featured before), it is still one of the few B2B startups that I have seen, which may make it appear less attractive to potential investors, since there seems to be some wariness around anything that is not consumer-focussed, or that does not play in a 2-sided market. Personally, I think this type of productivity tool is just the sort of tech startup that we need as it taps into the technological, organisational and demographic changes facing the modern workplace, and current attitudes towards job structures, collaboration and employee engagement and retention.

Footnote: What is ‘Disruptive’?


Interestingly, one of the Big Pitch sponsors was Uber (current darling of the startup community – if not of taxi drivers) which has been making presentations around town on what it takes to market a disruptive startup.

For me, there are three key attributes to a #disruptive startup:

  • Technology
  • Business model
  • Market engagement

A business like Uber ticks all three boxes – its proprietary technology comes in the form of the algorithms that track things like customer usage and vehicle capacity (not so much the apps which are similar to other peer-to-peer and #sharedeconomy solutions); the business model is rather like a network of city franchises (a common global platform with local autonomy); and the disruptive market entry strategy is designed to by-pass highly regulated industry structures – although Uber also likes to stress that it is working with taxi regulators.

Of the five startups that competed at the Big Pitch, only etaskr brings an element of disruption, because it is using a technology solution to challenge traditional notions of what a job is, and allows companies to tap into in-house resources that they might not otherwise be aware of. KartSim has some proprietary programming, but at the end of the day is just another computer game. WeTeachMe and Bluesky are trying to bring operational efficiencies to disparate markets, but they are both broker-aggregators, and don’t appear to have proprietary technology or unique business models. And ECAL is a neat content management solution to a problem that companies have been aiming to solve in other sectors – such as travel, education and health services – although it is not trying to break the existing market nexus between suppliers and customers.

But full marks to Oxygen Ventures, its partners, sponsors and the participants themselves for bringing a fresh perspective to the startup pitch night experience.