Your start-up sucks…

Having recently moved up to Sydney from Melbourne to take on a new opportunity, one of the first ports of call on my list was visiting arguably Australia’s largest start-up conference, Sydstart.

Now you have probably seen and read enough about this landmark event so I won’t bother you with the details, but one observation I will make is that startup folk, be it in Melbourne or Sydney, are a really friendly bunch.

I mean, it doesn’t matter how bad or doomed to fail your idea is, we exchange handshakes, smile politely and proceed with predictable niceties such as the tried and true “so what are you working on?”, “really…hmm, that’s interesting, tell me more” and after a few minutes of repetitive and more times than not, uninspiring idle chit chat, we exchange business cards, wish each other all the best with our respective endeavors and move on to the next visible approachable person to do it all again!

Like a single bloke at a bar playing the numbers game, we do this in vain, hoping that we will come across a co-founder, a strategic partner, a developer, an investor or a lead to any of the aforementioned.

Now, don’t get me wrong. This is what it’s all about. Networking, exchanging ideas and gaining a different perspective. If I didn’t believe in the merit of it I would not attend such events.

However, what seems all too obvious is that most folk are too quick to seek out those relationships at the expense honesty. We are reluctant to tell our new friend what we really think about their idea and provide some insight or a different perspective that may not be easy on the ears.

Are we better people for it? Probably not. Our talents should be spent on scalable ideas that will generate revenue, jobs and make a difference.

If an idea has already been done, lacks market demand or is plain crap should we not say something?

Bluechilli, the fledgling start-up incubator, received 2,664 pitches in 2012 while less than 1% made it to the development stage. There are numerous reasons for this but I’m willing to bet that more often than not, ideas fell slightly short of the mark.

We aren’t the judge, jury and executioner – whatever we say won’t result in our new friend dropping everything right there and then and joining the Army, but it may give them something to think about. And thinking about your concept objectively is a lot better than living with sparkling elves on Mars, sipping mushy shakes while playing Super Mario Bros 3.

Oh so you quit your job and mortgaged your house to make a yoga app did you? How is that app any different to the hundreds of yoga apps in the iTunes store not making any money? No it’s not interesting. It’s stupid. Say something. But be nice about it.

Objectively break down the idea, not the person. Angellist founder Ash Fontana kindly reminded us at Sydstart that we are not our idea. Once we can draw a line between the two only then can we objectively assess our and other people’s ideas without coming across like we’re having a go at the person.

The concept of failing fast is touted by many and in some cases it may be best that the budding entrepreneur learns from their own mistakes. But we’re all in this together. We’re all learning. And the best way to get ahead in the game is to leverage and stand on the shoulders of giants.

PwC’s recent Google commissioned start-up report reminds us that we could be generating $109B for our economy and creating over half a million jobs by 2033, so let’s not waste our time sweating the small stuff and let’s think big. Airbnb is a great example of this. Joe Gebbia and Brian Chesky’s platform was initially a housing service, focused around conferences. It wasn’t until the conference part of this equation was dropped that the company’s revenue chart went from resembling a barbell to a hockey stick and is now the envy of the tech and startup world.

So next time you’re mingling at a start-up event, be honest, you just might provide the spark that lights the fire… and who knows, you might be lucky enough to be taken along for the ride.

 

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Reinventing the radio with 121Cast

Melbourne-based 121Cast, founded exactly a year ago in February 2012, have been making waves with the release of SoundGecko.

The brainchild of Long Zheng (24), Andrew Armstrong (26) and Ed Hooper (27), the app that lets you listen to any website and article on the go, whether on a website or smart-phone. It also allows you to synchronise with your Dropbox for easy listening later.

While one might be forgiven for thinking that the founders of the Melbourne based 121Cast might have faced some challenges based on their age, Ed Hooper, who we caught up with, insists that that this was never an issue due to their previous involvement in successful start-ups.

Long created istartedsomething.com at the tender age of 17, a blog about Microsoft technologies that went on to reach over half a million hits per month. The feather in Andrew’s cap was the design of Telstra’s Bigpond Music website while Ed had been involved with several start-ups including rome2rio and SOAK.

Riding this wave of momentum, SoundGecko, the beta of which was launched in mid-2012, has gone on to attract more than 75,000 users and the attention of Melbourne’s Adventure Capital and Innov8, the seed funding partnership between SingTel and Optus.

121Cast was the first Australian start-up, along with VenueMob, to receive investment from seed program Optus-Innov8 back in November. Optus-Innov8, which represents a partnership between SingTel and the Australian telco, also opens doors to mentorship and gives 121Cast exposure to both telecommunications networks huge subscriber base.

Ed tells us that the three key factors that got them on board with Optus-Innov8 were the traction of the existing SoundGecko beta, strong strategic alignment with both Optus and SingTel and the quality of the team, who, as indicated earlier, are no newbies to the start-up game.

While it is true that time poor people might prefer to quickly skim articles and extract only what’s relevant to them (as opposed to listen to an entire article,) SoundGecko affords the same time poor people the opportunity to listen to articles and stay on top of things when they usually can’t read – in the car, on a morning jog, while walking to a client site or perhaps when preparing dinner…

The width and breadth of opportunity presented by SoundGecko also saw 121Cast get green-lighted for a place in the Melbourne Accelerator Program (MAP), the University of Melbourne’s new program set up to assist start-ups with a connection to the University, be it as existing students or alumni.

“Being part of the MAP was a fantastic opportunity that I would recommend all start-ups with a connection to the University pursue”, says Ed. “One of the benefits that I really found helpful was connecting with alumni who gave us advice on key challenges our business was facing.”

The first iteration of the program turned out to be more successful than anybody anticipated with two teams raising investment and one winning a competitive award (out of four in total).

It no doubt helped that the trio have a strong connection to higher learning, having completed degrees and courses at Stanford University and the universities of Monash and Melbourne. While the high college drop-out story is a popular one with tech start-ups, Ed feels that in his case, university was very useful on his start-up journey and gave him great insights, experience and connections. However, he maintains the choice of whether to study or not depends on the individual.

“Hungry entrepreneurs should focus on which of the opportunities available to them will provide the best learning experiences. For some it will be study and for others it will be a hands-on opportunity.”

Despite what appears to be an impressive run of good fortune, built on a foundation of hard work, start-up life has not been without its challenges for the young trio.

“The technology behind our platform is very complex which made it really hard to create an accurate prototype quickly.” This was a primary reason for releasing the SoundGecko beta, says Ed.

In addition to wrestling with technology, a lifestyle shift also presented challenges. “Transitioning from high paying salaries to living off our own personal savings was a tough change to make. We all agreed that the team and idea were solid and that going all out was the best way to move forward which meant quitting our jobs. After raising two rounds of capital we’ve started paying ourselves however the amount is very low to cover basics like rent and food.”

The aforementioned high paying salaries came in enterprise at the likes of banking behemoth ANZ and it no doubt took a lot of courage to leave the security of a salary behind and roll the dice on a business idea.

Ed says that the fast pace of start-ups, working on a broad set of tasks and being in control of his destiny are what attracted him to entrepreneurship and got him to graciously jump off the corporate ladder. “When I worked in Corporate at ANZ, I was exposed to great projects but got frustrated that they took years to implement and were controlled by politics”, says Ed.

Demonstrating the foresight of many a successful entrepreneur, he laments that “I still to this day remember getting chewed out in late 2009 for saying Android was going to be huge and that we needed to start working on a personal banking app right away”.

Sure enough, fast forward four years and banks are now jostling for position in the Android (and iOS) markets, on a quest to provide the best integrated online and mobile user experience.

It’s blatantly obvious to anybody who has seen the 121Cast team present, such as at the recent Innov8 seed funding information session at Melbourne’s York Butter Factory co-working space, that they all have distinctly different personalities. Ed sees this as a positive. “We all have our own perception on things which makes the collective stronger. It also comes in handy as some tasks are performed better by certain personalities”.

Like most, when pressed on the threats and challenges facing Australian startups, Ed sees funding as the number one hurdle. “Australians (are) moving off-shore because they are unable to locally raise capital or do not view Australia as a viable location for starting a company”.

These hurdles have hardly stopped 121Cast from chasing their dreams though, and if the performance of a company still in its relative infancy is anything to go by, we should be hearing a lot more from them in the coming months and years.

Could the SoundGecko widget become a staple on websites, right next to Facebook, Twitter and LinkedIn share buttons? Maybe, but the trio have loftier ambitions.

121Cast ultimately seek to redefine the radio with personalised information and entertainment for all. Imagine turning on the radio, hearing about how your stock portfolio has performed, listening to news that directly relates to your interests and profession and then banging out a brand new track from your favourite artist? I’d tune into that.

To find out more head to www.121cast.com

Key learnings

 1.     Traction in the shape of existing customers (preferably paying ones), a quality team and strategic alignment are almost critical to being considered by serious investors

2.     Entrepreneurs should focus on the best learning opportunities available to them, whether study or hands-on experience opportunity.”

3.     Start-ups should pay themselves only a modest salary to ensure funds are invested in the growth of the business and its founders stay hungry

4.     If feasible and you truly believe in your idea and team, consider quitting your day-job so you can focus on your start-up fulltime (lifestyle shift imminent!)

5.     Don’t let geography, funding or age limit your ambitions, actions or success

6.     Different personalities provide different perspectives and can help drive business forward

7.     Overcome technology hurdles by focusing on lean functional versions and subsequently make iterative improvements

8.     Be aware of and seek out start-up programs that are available to you

9.     Seek mentorship (121Cast receive formal advice from Adventure Capital which brings experience and expertise to the table that the core team doesn’t have)

 

Breaking through the trough of despair with Adioso’s Tom Howard

The article below reflects the writers interpretation of a talk given by Adioso founder Tom Howard, facilitated by Dreampushers’ Chris Joannou at Startup Grind Melbourne’s 2012 Christmas Party event at York Butter Factory.

–Dealbreakers.

We’ve all been there.  You come up with a seemingly awesome idea but after going through the motions in your head you refuse to pursue it further. You call dealbreaker. For some reason or another, you felt that the idea would not be worth the time, effort or money involved and would probably not scale.

Complex engineering? Lack of industry knowledge? Red tape a minefield? Whatever the case, the story of Adioso is one that will resonate with many and may cause you to reconsider that idea you shelved a few months back.

Adioso is the brainchild of Melbourne lads Tom Howard and Fenn Bailey, the latter responsible with building the world’s first mp3 encoding app in 1996.

Presenting at Startup Grind Melbourne’s Christmas party, Tom recounted the Adioso tale and it is at first a familiar one when it comes to dot com business – university buddies, computer programmers, bored and unchallenged by the school’s curriculum, told not to bother by their lecturers and (almost) forever pondering how to apply their talents for good instead of evil.

It wasn’t until Fenn came up with the idea for Adioso – a travel website designed to map out the best vacation possible based on your interests and specs – that the duo developed a sense of direction.

Having no knowledge of the travel industry and lacking the necessary relationships or data within the business, Tom was at first not convinced. Add to this the unique search model, radically different to modern travel search engines like Webjet and Expedia, and the enormously complex coding required to build it, it is no wonder why he felt the idea would be unlikely to grow wings.

However, it was that or nothing at the time so Tom decided to team up with Fenn and give it a crack, if nothing else than for the experience.

A minimum viable product (MVP) was developed to test the market and it was this MVP as well as numerous customer testimonials which scored the pair a place at the now prestigious Y-Combinator in Silicon Valley. This gave Adioso access to valuable networks, seed funding, travel route data, media exposure on websites such as TechCrunch and the additional investment required to make a run at things. A testament to the power of being invited to what is essentially the Harvard of incubators. Adioso graduated in the winter class of ’09 along with online travel startup poster-child AirBNB.

However, just as the jet engines were beginning to make some noise, Adioso would instead taxi for a good three years or so.

Confronted with the inability to scale, the pair went through some dark times and almost threw in the towel. Tom refers to this period as the “trough of despair”. Some key staff changes a last ditch decision to hire outside employees gave the company the pivot it needed to emerge from the trough.

While they could not then pay employees, instead opting for a future benefit realisation model, the reinvigoration of Adioso was built on a shared vision of passionate coders and a spirit of entrepreneurship. It wasn’t about the money – it was about belief in the product.

The company is now starting to make good as a profitable business, but is not yet out of the woods in what is a highly competitive and ever evolving online travel landscape.

When questioned about the decision to run the business out of Melbourne, Tom insists that as far as online travel goes, Australia’s startup scene is amongst the best in the world, home to Lonely Planet and StaTravel. Therefore, there was no reason to look overseas – score one for the ongoing Australia v Silicon Valley debate.

He also stresses that when faced with the adversity that Adioso was confronted with, one must ask the question of execution and concept. Is your idea failing because the concept is simply not scalable or is it a matter of execution? Does the problem lie in the marketing, the coding, the pitch? It is a difficult question, particularly when it comes to a product you are emotionally invested in, but at some point or another, it is a question that needs asking.

What we learn from the story is that those inhibitions of yours about why you shouldn’t give that idea a go are probably true – this shit ain’t easy. It’s been almost five years since Tom and Fenn started Adioso and Startup Grind Melbourne founder and event host Chris Joannou made a point of reminding everybody that as little as 18 months ago he was concerned for Tom’s health and whereabouts.

The fact is that you will need to work hard and you will need to make personal sacrifices – whether they are worth it is up to you to find out.

Written by @steveglaveski – Australian IT Risk professional, aspiring entrepreneur, start-up and fitness enthusiast.