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!
Check out mHITs’ IPitch profile and follow them here
