Startup Profile: mHITs
By Gareth Rose on Tuesday, August 31st, 2010
mHITs Limited is a startup company based in ACT and specialising in Mobile Payment technology. They also span the Media & Entertainment, Telecommunications, Marketing & Advertising sectors. They are currently Experiencing Growth.
IPitch: What problem is your business or idea trying to solve?
mHITs: Making payments using your mobile phone – SIMPLY! (no smart phones, apps or SIM toolkits, just simple SMS payments)
IPitch: How long have you been in business for?
mHITs: mHITs was founded in 2004 (6 years), but total business experience is 25+ years
IPitch: Who are the founders and what are their backgrounds?
mHITs:
Harold Dimpel – Founder
Harold Dimpel is the founder and CEO of mHITs Limited. A serial entrepreneur, Harold has experience in the ICT industry across a broad range of sectors. This includes mobile data communications, mobile content service provisioning, application development, Internet Service Provision, Television, GPS telematics, location based technologies and fibre optic telecommunications systems. He is an active and respected member of the Australian mobile community and has recently presented at the Mobile Enterprise Growth Alliance (MEGA) industry education program.
See also http://au.linkedin.com/in/harolddimpel
IPitch: How much traction do you have in the market?
mHITs: We are moving from beta to commercial rollout in next 12 months. Our technology is being exported to developing countries (to service the so-called unbanked or people who do not have bank accounts). We are currently developing an export strategy and are in the early stages of exploring new export markets. Long term, it is possible that we might achieve greater traction in export markets (payments for the unbanked) than in our home market of Australia.
IPitch: What’s the end goal / exit strategy for your business?
mHITs: Goal is to be profitable! Preferred exit is a trade sale or IPO.
IPitch: Are you looking to raise money? What does an ideal investor look like to you?
mHITs: Yes. Investment range: Small V/C ($0.5M – 1M) or Angel(s) ($100 – $200k per share parcel).
While we receive regular investment inquiries, we find that over time, our ideal investor profile has changed. Several years ago, we were more reliant on investment than we are now. While we are willing to consider small investment parcels, ideally we are looking for more strategic investment, which will take us to the next level of growth. Ironically, as we grow and generate revenues, our dependence on investment has somewhat decreased
IPitch: What is the biggest setback or challenge the business has faced (and how did you get through it)?
mHITs : Biggest setback/challenge: Getting stuffed around by and wasting a lot of time chasing “potential investors” who don’t deliver. There are a lot of “wannabe Angel Investors” when it comes to parting with case, get scared at the last minute. We have found that most of these “investors” don’t understand our model and its potential or perceives it as too high risk – Australian investors are generally gutless – they all want low-risk deals.
Our solution was to develop a corporate structure that allows small investors to purchase shares without sacrificing too much equity. This pool of smaller shareholders created a momentum and an important level of physiological support and backing for the business. One investor putting in $10k of real cash speaks louder than an Angel or V/C “promising” to put in $250k.
We have learnt that “the value of advice is usually inversely proportionate to the price you pay for it”. The best advice we have received has been free and it has been often as a result of “throw-away” comments from individuals that have spurred on a whole new line of thinking and strategy.
Finally, be aware of “big gorilla investors”. If you need a huge sum of money to get your start-off the ground then you might have to include one. Often they want to protect their investment by controlling strategy. They often also have great advise so you need to balance this carefully. If you have a good, competent management team already, try and focus on investment which does not have a lot of strings attached – even if it means accepting less money. Better still – if you can – “boot strap” your start-up by funding through revenue from an initial customer or sale.
IPitch: Have the founders had any Startups in the past (either successes or failures)?
mHITs: Yes. 1 x profitable business – still operating and profitable.
3 x start-ups including mHITs. All three still operating and at various stages of growth.
1 x buy in and subsequent successful exit via a trade sale.
IPitch: Have you come across any resources that you think are just awesome, and you’d like to share with other Australian Startups. If so, what are they?
mHITs:
• ABC New Inventors (this kicked us off domestically)
• Low cost domestic and International networking – LinkedIn
• International market research – TradeStart/Austrade
• Mobile Mondays (Sydney/Melbourne/Brisbane)
NOTE – I would avoid seeking help from lawyers and accountants for business/start-up advice. While their detailed knowledge might be necessary in some cases for certain things, by their very nature, they are generally NOT risk takers and unlikely to share your vision for the start-up.
For ICT related start-ups, if funds are tight, don’t be diverted by developing a complex and costly IP strategy as this can hold you back from launching your product and achieving first mover advantage. In practice, having market share and revenue is of more value than IP protection. Once in the market, your IP is somewhat secured by default anyway (you cannot patent something that is in the public domain already).
IPitch: Is there an opportunity you’re looking for to bring your Startup to the next level? If so, what is it?
mHITs:
1st preference: Partners/Sales opportunities
2nd preference: joint-venture partners
3rd preference: Investors
Our biggest break would be signing a big deal. This would generate improved cash flows which would assist us to continue growing. Further investment would accelerate this process but might not be absolutely necessary, although it would be graciously received!
Startup Profile: Freally
By Gareth Rose on Tuesday, August 24th, 2010
Freally.com is a platform for giving away and receiving free items, in order to promote recycling and save the planet!
IPitch: What problem is your business or idea trying to solve?
Freally: Freally.com is a platform for giving away and receiving free items. We promote recycling and a green environment by encouraging our users to post items they no longer need. The primary objective of Freally is to reduce the amount of landfill and rubbish in the world! And thereby, make the world a cleaner place.
At the same time, we want to offer this service using the latest Web technologies, making the process the simplest and most user-friendly.
IPitch: How long have you been in business for?
Freally: We had 5 months of plan & development and 1 month of alpha testing, and we have been on our public beta testing currently for 3 months.
IPitch: Who are the founders and what are their backgrounds?
Freally:
Eric Bae
The founder, Eric Bae is a software engineer with a PhD in Computer Science (data mining and knowledge discovery) from the University of Melbourne. He has 5 years of industry experience and has been passionate about Internet & Web start-ups for more than 4 years.
Xiangwei Meng
Co-founder Xiangwei Meng is a software engineer currently working at a financial services research centre heavily involved in stock and capital markets.
IPitch: How much traction do you have in the market?
Freally: At our current public beta testing, we have registered users from almost 100 countries around the world. These users visit Freally often on a daily basis. Currently, we receive around 2 or 3 posted items per day on average. This is not much and we are working hard to market and promote Freally.com to a wider base of users around the world.
The most amount of traffic is derived from Australia. However, the second most traffic has been coming from South American region, which is quite interesting. In order to handle such a demand, we have launched Freally in Portuguese for catering for these users.
Our traction number is not so impressive for now and this is one critical area we are focusing on at the moment.
IPitch: What’s the end goal / exit strategy for your business?
Freally: The ultimate objective is to be the #1 site for promoting recycling and having the best features to provide such service. Since our users exchange items within their local areas only, our primary business model would be targeting local-specific business to advertise at an affordable rate.
Another possible exit route would be an acquisition by recycling management firms or businesses that are focused on environment and sustainability.
IPitch: Are you looking to raise money?
Freally: Yes, we are looking for investors who can help us market and promote Freally.com to local areas and also to expand world wide. Such an exposure can help us implement our business model and to start generating revenue.
IPitch: What does an ideal investor look like to you?
Freally: An ideal investor for us would be one who understands and is keenly interested in the concept of Freally. We expect the investor to understand the concern for the environment and the market potential it has where sites like Freally.com can not only create a successful business, but work to help our environment become sustainable. We would want a partnership where guidance and directions are provided, at the same time, provide flexibilities to develop and improve the current product according to our skill sets.
IPitch: Personally, (for the directors or employees) what challenges have you faced in establishing and running a startup?
Freally: I’ve found that finding and receiving business advice and mentorship from other entrepreneurs in Australia rather difficult. There is possibly not sufficient government support or many opportunities for different entrepreneurs to meet together. Such opportunities exist widely in US and Europe.
IPitch: Have you come across any resources that you think are just awesome, and you’d like to share with other Australian Startups. If so, what are they?
Freally: OpenCoffee - Entrepreneur meetups that occur every fortnight in Sydney.
IPitch: Is there an opportunity you’re looking for to bring your Startup to the next level? If so, what is it?
Freally: Yes. We are always on the lookout for investors, partners and others who want to join and help Freally grow together.
Startup Profile: Platform46
By Gareth Rose on Wednesday, August 18th, 2010
Platform46 provides a real-time notification & collaboration framework, integrating an organisation’s IT applications with the employees preferred communication device – whether that is the Intranet, mail client, or mobile device.
IPitch: What problem is your business or idea trying to solve?
Platform46: A common flaw of organisations is that they cannot tell who the most productive people are, and often the employee’s don’t know either. Even an improvement of a few percent can make a huge difference. With Platform46 a company can break down previous Silo’s. In addition, staff can view everything that is happening about particular customers, employee’s, projects, and business units at a click of a button – anytime, anywhere.
IPitch: How long have you been in business for?
Platform46: Platform46 was founded in May 2009
IPitch: Who are the founders and what are their backgrounds?
Platform46:
Tim Ayling – CEO
Previously VP Asia-Pac Entrust Inc. Tim has an MSc in Secure E-Commerce & is undergoing an MBA from AGSM. He has global experience having worked in the software industry in Australia, Asia, UK, Scandinavia & South Africa.
Richard Atkinson – CTO
Richard has 12 years experience managing web projects and software development teams. He was the Web Technologies Manager at the Reserve Bank of Australia for 10 years.
IPitch How much traction do you have in the market? Have you had any ‘big wins’ so far?
Platform46: We have been concentrating on building a partner network. We are currently deploying over ten partners for their own use, with a view to them reselling to their customers. We’re not able to talk about our big wins at this stage, but happy to do under an NDA!
IPitch: What’s the end goal / exit strategy for your business?
Platform46: We’re looking firstly to build a successful money-making company. The end-goal is to either IPO or, more likely, be acquired by a company who can take our technology and take their solutions to a new level.
IPitch: Are you looking to raise money?
Platform46: The short answer is “Yes!” We are currently seeking approximately $250,000 of investment to enable us to drive the growth we need in a very fast-paced market. At this point we have enough capital to continue what we’re doing, but we are very keen to expand outside of Australia, especially the UK & US – even potentially Asia.
IPitch: What does an ideal investor look like to you?
Platform46: The ideal investor is someone who “gets” what we’re doing, and can add value outside of the money. Experience in foreign markets, for example, would be of huge value to us, especially given that’s where we want to be heading in 2011.
IPitch: Personally, (for the directors or employees) what challenges have you faced in establishing and running a Startup?
Platform46: Fund-raising was certainly a challenge, though we closed our first round of $200,000 in January. The most common obstacle in the sales cycle has been the fact that we are a startup, and hence we can be perceived as a risk. This is another reason to have our partners use the software for free – giving us immediate users.
IPitch: Have you come across any resources that you think are just awesome, and you’d like to share with other Australian Startups. If so, what are they?
Platform46: Well I’m no accountant, but I find SAASU hugely impressive. Free for twenty transactions a month – I tell everyone about them, including friends of mine who run their own 1-man bands. Zoho CRM is pretty good too, for startups… I’m not sure how it would scale as the team grows, but it’s free for three users & anything that’s free at startup level is a good thing
IPitch: Is there an opportunity you’re looking for to bring your Startup to the next level? If so, what is it?
Platform46: We are looking at two avenues to take our business to the next level:
1. OEM partners, where established software vendors white-label our software as a notification add-on to their products
2. New resellers, especially in the CRM & ERP markets
Startup Profile: Handle Your Own PR
By Gareth Rose on Tuesday, August 10th, 2010
Handle Your Own PR’ is a Do it Yourself PR alternative for small businesses who can’t afford agency fees.
IPitch: What problem is your business trying to solve?
Handle Your Own PR: We had a PR business that specialised in small businesses, start ups and entrepreneurs. Over the years we realised there were lost of businesses that had a great new product or service, they needed publicity and the media would probably love their idea, but they simply couldn’t afford agency fees. We decided to offer an online DIY PR alternative where we offer free advice as to how to run a PR campaign as well as selling downloadable media contact lists and offering a press release writing service.
IPitch: How long have you been in business for?
Handle Your Own PR: We launched the site www.handleyourownpr.com.au in March 2009 but it was a very simple site at that stage. Over the last 12 months we have reinvested in the site and have had a new design, extensive CMS and a data management system put in place. The site was effectively relaunched in March 2010.
IPitch: Who are the founders and what are their backgrounds?
Handle Your Own PR: HYOPR was created by Simone Heydon and Jules Brooke in Melbourne and later joined by Rod Brandenburg and Larry Hedges. Rod is the ex CFO of Webjet and Atex and Larry Hedges is the ex-Chairman and founding partner of www.brewtopia.com.au.
Jules Brooke
Jules spent ten years in advertising sales (press) before moving into the graphic design industry where she was a founding partner in a successful graphic design company before going on to hold senior management positions in Australia (Sydney and Melbourne) and in London.
Now she is an entrepreneur. Jules set up the ‘traditional’ PR agency, Handle Communications in 2003 and was joined by Simone in 2005. After many years working with small clients, the two women set up Handle Your Own PR in 2009 for people who need PR but may not have the funds to employ an agency and are happy to do the hard work themselves.
Simone Heydon
Simone began her career working at DDB Needham on many ‘below the line’ projects including sales promotion, sampling and events for companies like Cadbury Schweppes, Bertolli, Cottees and The Australian Dairy Corporation.
In 1998 Simone joined Communicado Marketing Communications. For four years she managed sales promotions, point of sale and marketing material production and public relations campaigns for blue chip companies. Simone became a partner at Handle Communications in 2005 and works across all clients and facets of the business.
IPitch: How much traction do you have in the market?
Handle Your Own PR: We have definitely made some noise in the market place. Our PR experience has allowed us to ‘PR the DIY PR business’ quite a bit. We’ve had a lot of exposure in business press over the last year.
The site is now live and trading successfully with sales in its first four months ahead of expectations. We have approx 50 lists available with an average of 20 – 25 contacts per list. We are looking to build this inventory. We have minimal fixed costs other than site and list maintenance and have already achieved No 1 Google position on the search term DIY PR and are growing in other key word categories.
The most exciting development has been our launch in the US. The HandleYourOwnPR.com site went live a couple of weeks ago. We have found a great business partner in the States, Jennifer Finke, who is running the US arm. This in turn allows us to sell US media lists to Australians and Aussie lists to Americans. We are very excited about the potential growth of this business. We are looking at expanding to the UK next and are in negotiations with a potential partner.
In 2011 we hope to increase the number of international partners, and we are looking to expand into Canada, South Africa and perhaps India.
IPitch: What’s the end goal / exit strategy for your business?
Handle Your Own PR: Our clear intention is to build up a global business that will be bought out by either a large PR firm (this model picks up those businesses that it is not cost effective to service) or some other business in a media-related field. The HYOPR model provides pretty much passive/hands free income as long as the site is marketed and the media contacts are kept up to date. It would be easy for it to be transferred to another owner.
IPitch: Are you looking to raise money?
Handle Your Own PR: Yes. We need funds to develop the website further, help us with global expansion and pay marketing and social media agency fees.
IPitch: What does an ideal investor look like to you?
Handle Your Own PR: Our investor will ideally love the business concept and offer advice if requested but otherwise they leave us to get on with the job of building the business. Media or IT background would be a positive but is not necessary. The opportunities are extensive as the model is rolled out globally.
IPitch: What is the biggest lesson you’ve learnt OR ‘one piece of advice’ – you have about running a Startup?
Handle Your Own PR: You need to have a passion and determination for the business that will drive you when things aren’t turning out the way you expect. The journey will often twist and turn in totally unexpected and unpredictable ways but if you have your eye firmly focused on the end goal, you will get there in the end. There may also be people who don’t like your idea or think it won’t work and you have to ignore them and keep persevering!
IPitch: Have you come across any resources that you think are just awesome, and you’d like to share with other Australian Startups. If so, what are they?
Handle Your Own PR: Well, obviously we would like to suggest www.handleyourownpr.com.au for people wanting cost effective marketing! We also LOVE www.sourcebottle.com.au where the media post requests for interview subjects or products to review (and it’s free!). I highly recommend involvement with www.pitchclub.com and www.thehive.org.au for entrepreneurial networking and investor pitching opportunities in the flesh. And of course, ipitch!
IPitch: Is there an opportunity you’re looking for to bring your Startup to the next level?
Handle Your Own PR: We need an investor. We are seeking $150,000 - $250,000 in exchange for 10 – 20% of the business. Based on current forecasts the business has a 5 year NPV of over $7 million based on a 20% return and thus the investment is currently discounted significantly. The cash raised is to be used to accelerate off and online marketing and PR of the business, development of further list inventory and costs associated with the completion of the international agreements.
Upon signing an NDA a complete business plan including financial forecasts can be provided to facilitate further discussions.
Check out Handle Your Own PR’s IPitch profile and follow them here
Startup Profile: ODI Modular Computers
By Gareth Rose on Wednesday, August 4th, 2010
ODI-MC (O’Dwyer Innovations – Modular Computers) is a subsidiary of O’Dwyer Innovations and was incorporated in March 2010. It has the purpose of creating a next-generation Modular Computer platform that will allow end-users to easily construct and upgrade computing and home entertainment devices using stackable modules.
IPitch: What problem is your business trying to solve?
ODI-MC: When people upgrade PC’s they tend to throw the whole ‘box’ out and get a new one. “I need a faster processor” often results in an entire PC ‘box’ in the bin.
ODI-MC aims to reduce unnecessary electronics redundancy and hence e-waste as well as provide a more efficient solution to the average persons electronics needs by creating one platform for use as a home entertainment, home office, office and portable electronics solution – including a phone, tablet, netbook - and wherein the tablet is part of the netbook (see below). ODI-MC achieves this by taking all the components inside of a conventional PC ‘box’ and making each component a module of its own. Modules are then vertically stacked to form an ODI Modular Computer.
ODI-MC aims to deliver the next evolution of the ‘Personal Computer’ architecture and in doing so, merging the PC and consumer electronics industry by providing the first true ‘living room computer.’
IPitch: Who are the founders and what are their backgrounds?
ODI-MC:
Sean O’Dwyer – Managing Director
After graduating from the ANU with Bachelor of Laws, in 2002, Sean was employed by Metal Storm Limited, the company his father (Mike O’Dwyer) created and floated on the Australian Stock Exchange and NASDAQ.
Throughout his time with Metal Storm, Sean invented the technology for and co-wrote a winning SBIR application for the US Missile Defence Agency, took over managing the company’s intellectual property portfolio where he invented the second generation of Metal Storms core technology, and worked with DARPA (USA), Defence Science and Technology Organisation (DSTO), Northrop Grumman, Boeing, Lockheed Martin, Raytheon, General Dynamics and many more before leaving the company in 2007 to pursue his own interests.
In 2008, Sean started O’Dwyer Innovations (ODI) and now heads the operation at the ODI’s office in Alexandria where the core focus is on producing the Company’s patented Modular Computer technology.
Philip Cadell – Chief Technology Officer
Graduating from university and with previous work experience, Phil joined Metal Storm in 2006, where he began bringing the technical side of the company’s intellectual property in-house from its previously subcontracted base. After leaving Metal Storm in mid-2009 Phil began a Research Masters in the area of Robotic Communication Systems which was put on hold when the opportunity to head the technological development of the ODI Modular Computer platform presented itself.
Ben Bishop – Senior Mechanical Engineer
After graduating from university, Ben had a 3 year stint with Defence Science and Technology Organisation (DSTO), then took up a position at Metal Storm Ltd as Senior Design and Ballistics Engineer. Leaving Metal Storm in mid-2009 Ben later joined ODI-MC and now works as Head of ODI’s Mechanical Engineering and Industrial Design team.
IPitch: How much traction do you have in the market?
We believe we have a lot of traction in the market. This is for two reasons:
- Everywhere we turn, everyone loves our tech and we have found immediate support from anyone we have asked. This includes the likes of LX Innovations, Intel, Pixel Qi as well as a number of our component suppliers.
Everyone seems to also very much like the idea that their computer will always be synchronized. To the user, the phone, tablet, netbook, PC etc will appear to be THE SAME COMPUTER because they are in constant synchronization - ODI-MC takes a big step towards making the PC and consumer electronics industries ‘more green.’ ODI-MC provides a solution that reduces e-waste, extends the lifetime of components and requires less energy in-use due to its novel resource sharing.
IPitch: What’s the end goal / exit strategy for your business?
ODI-MC: Either to IPO and go into production or acquisition by/merger with a Company who already has production facilities available.
IPitch: Are you looking to raise money?
ODI-MC: Yes. We are currently seeking approximately $400,000 of investment (distributed across 16 $25,000 parcels). At this point we have enough capital to be at the Consumer Electronics Show (CES) in Las Vegas in January, however we are seeking funds to maximise our impact at the CES and to piggy-back off any media exposure at the CES in order to IPO.
IPitch: What does an ideal investor look like to you?
ODI-MC: Incentive is the key here - and yes, an investor is surely incentivized to see the company succeed if they own shares in it. To me however, the ideal investor also believes in the technology and wants to contribute to it (get their hands dirty) as well by becoming involved in its success, for example by using their contacts to arrange meetings with interested parties or suitable manufacturing concerns.
IPitch: Personally, (for the directors or employees) what challenges have you faced in establishing and running a Startup?
ODI-MC: I think the biggest challenge as an entrepreneur is people. An awesome product just isn’t enough – I have seen a number of great ideas fail to reach fruition – you need to gather momentum and have other people believe in what you are doing.
My biggest tactic in business is incentive. People will work a lot harder for their own benefit (for example, if they own shares in the company) rather than working for a salary. Under their own steam people also tend to require less guidance and are generally more innovative and productive.
IPitch: Have the founders had any Startups in the past (either successes or failures)?
ODI-MC: All employees of ODI-MC were previously employees of Metal Storm Ltd. Sean “got the band back together” in order to push the idea forward. Both Phil and Ben believe in the idea to the point where they have both currently moved from Brisbane to work on ODI-MC for no pay; their only incentive - shares in the company. More engineers are soon to join the team under similar incentives. I think this makes quite a statement to potential investors – it shows that certainly the people working for the Company believe it to be of significant value.
IPitch: Is there an opportunity you’re looking for to bring your Startup to the next level?
ODI-MC: ODI-MC and O’Dwyer Innovations are currently working under a joint venture with LX Innovations and also have the privilege of support from Intel. At the moment everything is about getting the prototype to the CES in January, nothing says more about a concept than the prototype - “A prototype is worth 1,000 presentations.” We would however like to engage with games console manufactures, cable TV companies and consumer electronics companies in order to provide modules for the system so that in the future every box that currently sits under your TV can be replaced by an ODI-MC module and share resources to perform the various functions.
TechCrunch Meetups in Australia
By Mitchell Page on Tuesday, June 1st, 2010
On June 11, the popular online technology blog TechCrunch will be turning 5 years old. To celebrate, they are organising meetups all over the world where like-mind people can ‘meetup’.
Several events have already been penciled in for Australian cities on June 11. Click the link below for the city nearest you and register your interest now.
If your city isn’t mentioned, don’t fret. You can create your own meetup at a city near you.
Will you be attending? Post a comment and let others know. Many of the Australian meetup venues are TBC, so perhaps some of our friendly IPitch startups may be willing to share their space for night (as Yext have done in New York).
Read more about TechCrunch’s 5th Birthday Meetups here
Bootstrapping a startup for under $1,000 - Technology, Cloud Hosting & Sweat Equity
By Guest Author on Thursday, May 6th, 2010
This is a guest article from an iPitch member, Jason Kotchoff. He is Co-Founder of FinancialModelTraining.com, which offers online financial modelling courses for careers in Finance & Banking.
So every programmer with a touch of entrepreneur in them has heard how easy it is to bootstrap a startup from their garage, grow it out real quick and hand it over to google for a cool billion (nice job Chad & Steve). The truth is, for every guy who made it big (and I have met quite a few of them), there are loads and loads of us out there devoting countless hours to projects that will and do fail.
Luckily, trying and failing doesn’t cost much more than the sweat equity involved these days and if you have the right skillset and a great idea, there’s no reason you can’t shift quadrants and build it yourself on the cheap!
Thanks to maturing web frameworks like Ruby on Rails and cheap hosting like EC2, my most recent venture (shameless plug - FinancialModelTraining.com), has an actual financial cost of launching that could be broken down as:
- $680 Shelcom Australian Company Purchase
- $50 Business Cards
- $15 Domain name registration (financialmodeltraining.com from GoDaddy)
- $2 Image & video file asset hosting (S3 on Amazon Web Services)
- $0 Application monitoring and tracking (Hoptoad, New Relic, Google Analytics)
- $0 Email, spreadsheet hosting (Google Apps for Domain)
- $0 Application hosting (Heroku Blossom on Amazon Web Services)
- $0 Software libraries, Paypal integration & testing framework (Open source Cucumber/Rspec, Rails gems etc.)
Total = $747
Hang on, let me repeat that… FinancialModelTraining.com was financially launched for under one thousand dollars!! Well Guy Kawasaki, it seems like the Alltop.com bootstrapping approach can actually work!
Now hang on a second, I know what you might be thinking…”hmmm, that’s a pretty fancy piece of technology for under a thousand bucks - I wonder how long much ’sweat equity’ was involved?”. And the truth is, when you factor the lost opportunity cost of the labour Paul (Mason) and I devoted to building this technology and business (think six months of unpaid work) and then factor the years of labour devoted to previous ventures that didn’t get off the ground for whatever reason (eg. mappedrealestate.com.au), we are all of a sudden looking at a new equation:
- $747 Launch Cost of FinancialModelTraining.com
- $200,000 Potential earnings if we had committed bootstrapping time to paid contract work
Total = ouch… let’s hope there are a lot of graduate bankers going into financial modelling roles this year!
This brings me to the next consideration that all entrepreneurs face - “Do I sell some equity to an Angel or a Vulture Capitalist and pay myself a salary here?”. This is really a question of ones propensity towards risk ie. “How confident am I that this venture will turn a profit and support me and how quickly will that happen?”. Of course to be fair, an investor may bring other experience and contacts to the table which you would not otherwise have access to.
A lot of great programmers I know in Silicon Valley are risk averse and instead choose to accept paid-salary roles at early-stage venture backed startups where their equity stake can range between 0.1% - 2% of the business (or much, much less if they are bamboozled with offers of ‘thousands’ of shares and don’t ask how many shares have actually been issued). This is often also subject to dilution upon subsequent rounds of funding and some engineers I know who have accepted the first few roles at very successful companies have ended up making little more then a reasonable end of year bonus post-acquisition when dilution, tax and vesting are factored.
So you want to be the next Levchin/Hurley/Zuckerberg huh? Truth be told, once you start entrepreneuring it’s hard to look back but be careful - you need a money-making plan and you need to execute it better and faster than your competition (and if it’s a good idea, there -will- be competition).
There’s a million and one startups out there doomed to failure - just search craigslist-sf bayarea-internet engineers for plenty of silly examples, don’t become one of them!
Check out FinancialModelTraining.com’s IPitch profile and follow them here
Startups are far less risky than traditional employment
By Todd Sullivan on Tuesday, April 27th, 2010
This is a guest article from an iPitch member, Todd Sullivan. He is Co-Founder of Globetrooper.com, a social platform for people wanting to travel the globe together.
There are countless studies, debates and blog posts that suggest it takes a large risk appetite to even consider launching a startup. To the average person, it seems completely irrational to leave a stable job for the remote chance of entrepreneurial success. Yet, despite these observations, the startup scene is alive and flourishing (just look at the popularity of iPitch). So why do entrepreneurs continue to take these seemingly excessive risks?
Risk is subjective; we don’t all value the same risk factors equally. For example, many people wouldn’t travel to Afghanistan due to the ensuing war. But others, rightly or wrongly, couldn’t bare to pass up the opportunity because they see a nation of invaluable lessons and cultural treasures. We could write an entire book debating the two viewpoints, but that would be futile because we’d be debating the essence of human nature.
The same goes for startups. There’s no denying that leaving stable employment places pressure on income. But just like the previous analogy, people place different levels of importance on different risk factors. Some are terrified by the potential loss of income, while others can’t bear the thought of passing up opportunity. And that was certainly my experience.
After conceiving the concept of a social travel platform, I never once hesitated for lack of employment or income. But that doesn’t mean I had a large appetite for risk. Quite the contrary, I was more risk averse than ever. But my focus wasn’t on what might go wrong, it was on the risk of not making the most of what was standing right in front of me.
And that’s the clincher, you simply cannot buy back time. No matter how likely or unlikely you are to succeed, time spent is time spent forever. That’s why I wholeheartedly believe startups are less risky than traditional employment. Because even if it goes so badly that you need to search the streets for food and shelter, at least you’ll know you tried. Which is something you’ll never be able to say otherwise. And for me, the risk of that is much more terrifying than the risk of losing an esoteric job title.
Todd will continue to share his startup experience as Globetrooper.com matures. This is his fourth business venture, but first product-only startup. He previously worked with other startup founders as a private equiteer and software engineer.
Pitchworthy News: QMCODES, SXSW, Startup Bus, Spellr, 99 Designs
By Rachel Youens on Thursday, March 11th, 2010
• I’m sure there are higher compliments in this world than having TechCrunch call your startup product a “must use”, but I can’t image what those could be. Aussie startup Melon Media have been plugging away with lots of products that make life just a little bit better, including website spell check with Spellr.Us, and their newest product is getting lauded by the likes of the renowned US tech blog. ManageTwitter helps to weed out all your quiet Twitter pals, those who don’t choose to follow you, those who are inactive. You can test out the service on your own Twitter account (just make sure you don’t unfollow @ipitchAU)
• There’s presently a bus rumbling its way to Austin, Texas loaded with entrepreneurs and techies with mobile wifi using the trip from California to Texas to create startups. This crew is headed by a name familiar to the Australian startup scene: Silicon Beach leader Elias Bizannes. The “Startup Bus” has already made appearances on TechCrunch and Read Write Web and the “buspreneurs” are just presenting companies created on the trip are just starting to emerge including sites like DateBrowser. The companies and Elias will present to investors upon arriving in Austin for the SXSW interactive festival.
• In further SXSW news, Melbourne-based company and Tech 23 presenter QMCODES will be providing QR codes on all the attendees badges at the premiere tech event. Last year CEO Antony McGregor Dey was a panelist at the event and this year he will be moderating a panel on QR code technology featuring representatives from publisher Harper Collins and Google.
• And in even further SXSW news, Australian company 99Designs joins a prestigious group that includes Hulu, Flicker, Foursquare and Gowalla as finalists for the SXSW Web Awards. 99Designs, which crowdsources design, is nominated for the community awards, recognizing sites that have “developed an extraordinarily active multi-user community and an exceptional following of users who assist with content development.” 99Designs will be at SXSW as part of the Victorian trade mission.
Pitchworthy: New Coworking Space, Innovation Bay, Effective Measures sees funding, myTVR
By Rachel Youens on Monday, February 22nd, 2010
• A new coworking office has opened in Sydney and is inviting the city’s techies and creatives to come sample the space March 5. CO-WORKA is located in Dee Why and was founded by Aly McAuley, who uses a bear as the spaces logo symbolizing the urge for small businesses and contractors to come out from hibernation and socialise.
• On Australian Gizmodo last week, it was announced online DVR system myTVR has is now capable of working on Blackberries. The service started out only working with PCs, macs, iPhones and iPod Touches and Symbian but has since opened up the service to Android and most recently Blackberry Bold. This service is only available in Sydney and Melbourne but allows viewing of DVR television over a 3G connection.
• Australian startup Effective Measure, which provides online audience measurement technology, has just raised $4 million in capital from American VC Fund Rho Ventures. Although the startup is based and created in Australia, they have offices globally and focus much of their effort on the Middle East. Last year, Effective Measure went head to head with Nielsen, the global leader in market research, over the Middle East.
• Time is running out to get involved with the next Innovation Bay dinner. You can read more in past posts on this event, but the dinner brings fresh young tech startups in front of specifically tech investors and has been a fruitful endeavor for companies like Posse. The event is hosted largely by MitchelLake, who are currently helping to cook up a major upcoming tech even for Australia. If you are interested in pitching at the event, contact Phaedon Stough here.
