With thanks to my very good friends at SlatteryIT, I headed off to Tech Connect 2013 in Brisbane this week to network with the Brisbane startup community.
Brisbane Lord Mayor Graham Quirk kicked off the day by reaffirming the Digital Brisbane strategy which already has seen the appointment of a Chief Digital Officer, a visiting entrepreneurs program and a strategy to attract more startups in Brisbane. He was keen to see more success stories in Brisbane, following on from start ups like Halfbrick, the inventors of Fruit Ninja.
Here are my notes from the sessions.
Tyler Crowley is the first speaker to be brought to Brisbane as part of the visiting entrepreneurs program. Tyler is a well known and respected entrepreneur, best known to me as the co-host of the This Week in Startups podcast. I am not sure if there was meant to be any direction to this session, but it turned out to be a rambling question and answer session.
- bring awareness to the community by getting people to tweet for being at an event – you will be surprised how quickly the city will get recognised
- startups tend to congregate in the same area – in San Francisco it is around the Twitter office, in Palo Alto it is around University Avenue and in Los Angeles it is around Santa Monica, places that have startup centres benefit due to the cluster effect, cities like Stockholm are suffering because of a lack of this
- River City Labs is probably currently the nexus of the community in Brisbane
- the crowd funding model is still on the horizon and should be awesome for startups outside Silicon Valley, AngelList just got approval to have a crowd funding model from the SEC in the last week
- another company getting acquired in the next 6 months will really put Brisbane on the map
- attracting VCs – LA does content very well, San Francisco does social networking very well, so attract the kind of startups to the industry that you do well and get that message out
- Brisbane has incubators like River City Labs (private) and ilab (government / university)
- documentarians are important – TechZulu in LA and Scobleizer in San Francisco – provides a window to everyone outside, TechZulu is a great model, it took two years as a labour of love until it became profitable, the mainstream media follows when it becomes popular and it will explode
- Brisbane is in the frustration phase of funding and media coverage – they will take notice when they become embarrassed by the success of startups and documentarians – currently at the tipping point, it is inevitable!
- if your city had a blank canvas – getting a nest is important, support the documentarian, support angel events, support local meetups and events!, hold regular monthly events, calendars and job boards, strategy to attract outsiders to get the “Apple Store effect”
- This Week in Startups – is the global meeting place to inspire people
- build a startup map of Brisbane, one exists of Australia, maintain a database like CrunchBase
- it is time for the banks to wake up and support startups like Silicon Valley Bank who are now spreading as the major banks are asleep at the wheel, there are opportunities for supporting industries to step up
Matt Barrie is the creator of Freelancer, which is the worlds largest outsourcing marketplace. I was really looking forward to seeing this talk and it did not disappoint! His presentation is also available online.
- software is eating the world – the biggest bookstore in the world is digital (Amazon), Scrapbooking (Pinterest), Evernote, maps, music, yellow pages, fashion, money, real estate, jobs, etc, etc, etc…
- 66% of the worlds population are yet to join the Internet
- demographics are changing and aging – lots of opportunities in this space as well
- lots of online learning opportunities – you can design logos easily via Envato, Stanford University had 170,000 online students enrolled in an Artificial Intleligence course that normally attracted 250 people and the highest achievers were outside Harvard, there are also options like Coursera and Khan Academy amongst others
- created Freelancer.com – we are now a service economy, the world is becoming very globalised, crowd sourcing (outsourcing has now turned to crowd sourcing eg. logo design)
- Exposé the Freelancer.com logo! – crazy pushing the boundaries of crowd sourcing, also Kickstarter and the Pebble Watch – wanted $100,000 to build, raised $10 million!
- Kickstarter funds more projects in arts than the US government, the next big thing is musc
- The World is Flat
- parabolic growth comes from distribution firehoses eg CityVille growth in Facebook, Viddy for reading news in Facebook, Google, Reddit
- you need to strike early, before the idea gets crowded eg. games in the AppStore like Angry Birds who owned the market early
- the new metric is growth – referrals are extremely important – see Startup Metrics for Pirates
- all the software you need is free or cheap
- Reddit.com ha a sub-site for everything
- sites like RetailMeNot started with $30, Digg started with $60
- the first dotcom bust was due to bad business models and a strong reliance on advertising, but in reality we are still in the original boom
- Zynga – 96% of users don’t buy anything, the 4% that bought a cow to impress thir friends raised them $1.2 billion
- many companies are not ready for growth, a mess internally and financially
- there is lots of potential to replace people with algorithms and insights
- in Australia we need to find a way to build technical businesses in the financial sector, like we do for mining
- enrolments in engineering is down 60% in the middle of a technology boom, we need to start seeding interest back at school level
- any job that can be described by an algorithm can be turned into software
- Australia is a good place to base a startup, easier to hire people and start a network, but our exchange rate is crippling and if it rises it could become a major problem
- you can build a big business targeted at the local market (eg Realestate.com.au), but always think global
- Mary Meeker presentations should be used more in presentations
Money To Grow
This panel included John Hummelstad (Ephox and Concept Safety Systems), Sean Teahan (Nimble) and Doron Ben-Meir (Commercialisation Australia).
- options include borrowing from friends, earning a buck first and investing your own money, earning from the bank (usually $2 million and up), funding by credit card, selling something, grants and R&D concessions, pay in 60 / collect in 30 days, angel network, information memorandum by getting close to OEM’s particularly those who you might potentially sell to, Venture Capital but this is decling, crowdsourcing
- fund like minded companies to work closely with you
- relationships at a strategic level are hard, but can bring rewards in the long term
- CFIMITYM – “cash flow is more important than your mother”, business owners are awake at 2am worrying about cash
- lean startups work very well for technology types of businesses, cash hungrier models need to exist because we still need to build products like iPads
- figure out who in the supply chain cares about your type of business – they are good areas to look for investors
- the large amount of successful businesses do not have venture capital funding – should only consider this if it brings value
- essential that you break every rule in private funding that you can’t break in the public market
- Australian Government has uncapped 45c / dollar R&D tax incentives (quarterly in arrears), then you move to incentives from Commercialisation Australia
- Enterprise Connect is great way to take your business through the washing machine – your business needs to be able to stand up to audit
- getting a commercialisation grant – it is your onus to prove that your invention works, once that is proved the commercialisation then needs to be tested
- make sure when meeting potential funders that you can answer how you are going to solve their problem, also make sure you know all about them, use tools like LinkedIn and be educated, it is just courtesy
- important to have front foot sales to fuel the fire but most importantly to get validation from the customer base, it also builds credibility by reinvesting your profits, biggest issue with technical companies in Australia is there an aversion to being a saleman, it is all about selling and if you are not prepared to do this then don’t start!, you are selling yourself not the product
- selling is learning – you need to learn what your customer wants and your value proposition
This panel included Natasha Rawlings (StreetHawk), Ric Richardson (inventor of software activation amongst many other thing) and Steve Baxter (River City Labs). Ric mentioned that he gets lots of attention from his appearances on Australian Story (The Big Deal and A Done Deal).
- your first role is not to be the CEO but the Chairman of the Board (looks at the business to ensure they have the ideal CEO and are delivering to plan)
- find the right people and partner with people who have done his before and hold them to their agreements
- the right investors can bring you the introductions to partners, even if they decide not to invest in you
- always deliver a good product and don’t piss the customer off – service is still important
- raising equity starts with a plan – do this only when you need the funds, it should be the last resort, ensure you have a capitalisation (cap) table so you can understand what will happen to your equity – start with 30% for founders, 30% for management and 30% for investors
- always start a business by looking at what it will look like when it is finished
- Stanford University has a useful entrepreneurial course, be disciplined when following the Lean Startup model and have a plan
- build a better prototype and often it will sell itself, other people will tell you quickly what it is worth
- network deeply, meet people twice, ask questions even the ridiculous ones
- investors are there to support and provide leadership, when you start pulling out agreements you know things are going wrong, like to know that they have listened
Setting Up for Global Success
This panel included Brendan O’Kane (OtherLevels), Jeremy Colless (Artesian Venture Partners, which was spun out of ANZ) and David Israel (UniQuest)
- base yourself close to your prospects
- important to think global from day one, particularly in the technical field, be worlds best rather than Australia’s best
- take advantage of the Australian talent spread across the world, utilise international students particularly those from north of Australia
This final panel included Anne-Marie Birkill (OneVentures), Bob Waldie (Opengear) and Steve Baxter.
- people are cheap – premium prices do not work, people care about price
- service is key – give good service
- businesses are not charities, lifestyle is not a sustainable currency, you need to make money
- ideas are not traction – get off your arse and learn what you don’t know
- when looking for value, you are looking to triple an investment
- success is building a valuable, non-charitable business, a second round of investment is not success
- don’t think you can take a great technology idea to a crappy service industry eg taxis – they are not interested
- make sure you formalise arrangements, in case things go bad, write down the exit conditions and make sure you are aligned
Overall a great day of presentations, panels and meeting new and interesting people in Brisbane technical and startup community.
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