Archive for Startup

Bugherd adds 500Startups to investor roster

// June 10th, 2011 // 0 Comments // Funding, My work, software, Startup

I’ve been working with Melbourne web startup founders Alan Downie and Matt Milosavljevic of Bugherd since they were accepted into the Startmate startup incubator program, in which I’ve been an investor and mentor. Bugherd graduated from the mentoring program with flying colours, securing additional investment backing from Startmate, and other investors, including me.

Bugherd experienced a brief outage early Friday morning AEST which apparently was unrelated to the fact that they’d been mentioned in the morning’s US tech press including TechCrunchGigaOmVentureBeatReadWriteWeb and AllThingsD.

Between getting servers back online and fielding a record volume of site visitors and beta signups, I barely had a chance to think about the significance of the news itself:  500Startups, arguably Silicon Valley’s leanest, coolest and most innovative startup incubator, has announced an investment in Bugherd.
Another 20 startups join the 500 Startups Accelerator — Tech News and Analysis

Some of the coverage on the investment announcement

It wasn’t news to me exactly, since there’s been talks with the 500Startups team since Alan and Matt pitched in the 500Startups Mountain View office with the Startmate crew back in April, but it was great to be able to talk about the deal finally, and especially gratifying to be mentioned alongside some other really promising startups.

Alan and Matt will be over in Mountain View in July and August, for demo days with the 500startups team and other meetings. But Bugherd’s not attending for the full incubator program because it’s further along in its journey towards hugeness.

500Startups’ decision to invest means they’re excited in the potential of the product and the company, particularly when it comes to delivering a service all early-stage web startups need: a great issue tracking tool. Interested enough that being on the other side of the Pacific isn’t too far away, even. Hope we can get Dave McClure and Christine Tsai out here soon to visit and meet some of the other great people in the startup community here.

I’ll keep track of any further coverage of the announcement at http://bit.ly/500startupsinvestsinbugherd

Try Bugherd now if you need the world’s simplest bug and issue tracker. I have it on good authority the free beta period is about to close, but beta users will get a big discount when pricing is announced in the near future.

You’re not selling software, you’re selling emotional engagement

// April 12th, 2011 // 0 Comments // Advertising, Branding, Startup

Those of us who are parents will know the pulling power of a good bait-and-switch campaign whenever we drive past McDonalds with the kids in the car.

Those blasted McHappy Meals usually go half-eaten so it’s not the few moments of fat, salt and sugar that makes them irresistable, it’s the movie tie-in, limited-time collectible nature of the bloody near-worthless-will-break-before-your-car-leaves-the-carpark toy included with the meal.

Believe it or not, what works for selling fast food also works for selling enterprise software products.

Mike Cannon-Brookes is a fellow mentor/investor in Startmate.com.au and also the co-founder of one of the most successful Australian software companies of this generation.

When Mike recently spoke at a Sydstart event in Sydney, he said he realised some time ago that Atlassian’s most effective marketing strategy was not to sell software, but to sell very witty, cool t-shirts that developers will kill to get their hands on. “We sell great t-shirts that you have to buy a software licence to get,” he said.

Most of the Sydstart audience thought he was joking, and he was funny, sure, but he was serious. By selling t-shirts individuals want and bundling them with software corporations need, Mike has been practicing the ‘good’ kind of bait-and-switch — the kind that creates a desire so powerful for one thing, you end up buying another just to get it.

Why bait-and-switch? Well, there’s nothing funny or exclusive about selling software that helps developers track bugs and publish internal wikis. So getting customers passionate about Atlassian and its products would be tough, if the company restricted itself to just marketing software.

But after trialling all sorts of give-aways and branded items, Mike and his team hit upon the ideal marketing medium for Atlassian: short runs of exclusive, clever and usually very funny t-shirts.

It’s impossible to underestimate the importance of clever t-shirts in developer culture, but if you are a developer, you likely have a problem expressing yourself in conversation, and a great t-shirt message makes a great warning signal, much like the yellow and black stripes on a poison dart frog, except, well, less cold and slimy. Usually.

A great developer t-shirt will include a message, graphic, or both that will leave passers-by in no doubt that they haven’t watched enough cult sci-fi movies, played enough cult XBOX games, listened to enough undiscovered bands, or compiled enough great code to really understand the person wearing this t-shirt. One of my favourites of all-time just had the message, “Of course you realise I could replace you with a shell script?”

You see, a shell script is… Oh, never mind.

T-shirts are also great because they make the fashion decision for you — wear a business shirt to work and you need to decide between stripes or plain, tie or no tie, etc. A t-shirt is a t-shirt and a developer can pull one out, tug it on and be one pair of jeans and one pair of shoes away from being ready for work. That’s how stereotypical developers roll.

Atlassian’s newest promotion, playing off the popularity of the iOS/Android game Angry Birds is wonderful marketing. See how it plays off a current meme, borrows from exactly the kind of landing page design that nearly every web business other than Atlassian uses these days, and most important of all, stacks on the developer in-jokes that only they will truly understand (or will believe that’s the case).

The key to good bait-and-switch marketing (and all subculture marketing) is to make your audience feel like you are peers in the same subculture, and this promotion achieves that beautifully. There’s even what I think is a clever stab at Mike and his fellow co-founder Scott under “The Founder” (at least, I think it is, after all I’m not truly a member of the Atlassian customer subculture). You can’t be peers with Mike and Scott unless they are brought down a couple of pegs.

Finally, this may look like a promotion for what might be the lowest-selling iPad game of the year, but it isn’t. It isn’t even an ad for Atlassian software (see their products, or any of their features, or benefits, mentioned anywhere on the page? No.)

Instead, it’s an opportunity to buy a witty/cool t-shirt or plush toy. A  t-shirt or plush toy that, had you not read this, you would not be cool enough to understand. Which would make developers wearing the t-shirt very happy, and more likely to feel that Atlassian was a brand that understands them.

If I were Mike, I’d make sure I had very limited stock of this merchandise, and I’d make it clear that if you’ve missed out, there will be no reprints. You’ll just have to pay closer attention to Atlassian, act faster next time, spend less time considering the purchase decision rationally and get used to making emotional decisions about Atlassian products.

Because Mike’s clever enough to know he’s not selling software, he’s selling emotional engagement, in XS, S, M, L, XL and XXL.

Atlassian Angry Nerds

Joining Pollenizer Ventures: Australia’s newest tech seed fund

// December 18th, 2010 // 0 Comments // Funding, Industry, My work, Startup

Pollenizer Ventures process

Mick Liubinskas at Pollenizer is “Mr Focus” — much of the value he brings to clients is his ability to create and maintain laser-like focus; on the problem a startup needs to solve, on finding customers, on raising capital, on recruiting the right team.

Me? I’m more “Mr Shutterspeed”, “Mr Aperture”… basically, anything but “Mr Focus”. I wield my firehose-like lack-of-focus on many projects, many products, many problems and many ideas. Not all of them at once, either, it’s more of a wild spray across from the first to the last and back again.  Sometimes this frustrates me, I know it can frustrate Mick when we work on something together. But it’s who I’ve always been and I’m making progress, really I am.

But enough about me, let’s talk about what I’ve been doing lately…

Earlier this year I snuck in as one of the mentor/investors participating in the early-stage tech startup seed fund Startmate.com.au but, since I’m Mr Shutterspeed, how could I possibly stop at just one early-stage tech startup seed fund? So now I’m delighted to say I’m also a mentor/investor in Pollenizer’s new Pollenizer Ventures fund (no separate website for it but here’s Pollenizer’s announcement).

The $500k seed fund is made up of some of Australia’s most experienced technology veterans including:

Scott FarquharAtlassian
Mike Cannon-BrookesAtlassian
Matt Macfarlane
Stuart Richardson, Adventure Capital
Adrian Vanzyl, Adventure Capital
Matt DickinsonGrowth Angel
David CooperDeloitte
Mark Greig via Elevation Capital
Adam Broadway
Rob AntulovNick Gonios via 3eep Ventures
Chris HitchenGetprice.com.au
Domenic CarosaDominet Digital
Phaedon StoughMitchell Lake
Tony Faure

…and yours truly, Mr Shutterspeed.

Whereas Startmate is a seed fund for technical founders looking for business advice, Pollenizer Ventures is a seed fund for business founders looking for technical advice, so the two ventures are quite different and compliment each other nicely. After all, how else could Mr Focus also be involved in both funds?
;-)

Missed Groupon deal could be Google’s Stalingrad

// December 6th, 2010 // 0 Comments // Industry, Startup, strategy

The news today is that Google’s attempt to acquire GroupOn for a massive US$6B has failed. Ten years ago, I was working for an industry-dominating technology giant when a similar thing happened to us: we tried to buy our way into a smokin’ hot new web startup category way too late, only to be roughed-up and shown the door by a team of young punks a couple of years out of college. Why did this deal fail, and what could it mean for Google? It could mean the beginning of the decline.

IR23 :: THE LAND IS NOT FOR SALE

All the tell-tale signs are there: Google, whose next-biggest acquisition was for online advertising powerhouse DoubleClick for a mere US$3.1B back in 2007, has US$33.4B in cash and securities with which to rule the world, and yet was prepared to throw a reported US$6B at the deal. That’s 18% of Google’s money pile. For a startup only three years old which earned an estimated US$350M in the past year. A 12x valuation. Why? (more…)

How do startups avoid running out of money?

// December 2nd, 2010 // 0 Comments // Planning, Startup

How much money did your business earn last week? How much did it spend? What’s your bank balance? How long can you go on with that pattern of earning and spending? Critical questions for any business, particularly so when you’re a small startup with $25,000 and a lot to get done in a short time. But when you’re all busy coding or designing or cutting deals, who’s got time to track every dollar?

Many great startup ideas fail because they ‘run out of runway’ — they find out too late that they’re nearly out of cash, and there just isn’t enough time to raise some more money. Even larger startups with more money can crash at the end of the runway, if the CEO isn’t getting the truth from the person managing the finances, because that person is trying to hide the bad news in the hope things might improve.

Here’s a great, quick solution that’ll keep CEOs and startup co-founders directly in-touch with exactly where you are on the ‘runway’ — how many days you have left on your current earning/spending rates. It’s InDinero.com. (more…)

Startmate seeks startups: apply now!

// October 16th, 2010 // 0 Comments // Industry, Me, My work, Startup

Start by @boetter

Start, by @boetter

Are you a technically-focused startup founder looking for a little funding and a lot of advice to help you get to that crucial point of a Minimum Viable Product and then on to an introduction to investors in Australia and Silicon Valley? Startmate.com.au wants you (or someone just like you).

Startmate is a new early-stage startup seed fund initiated by Niki Scevak. I’m an investor and mentor in the program, and there’s many more impressive names than mine on the roster.

Our first program will fund five startups and begin in January, 2011 in Sydney. We’ll spend three months helping you launch your company and win your first customers.

Applications are open now and interest has been very strong so far, so please do your best work and give us all you’ve got.

Drop me a tweet if you have any questions. They better be good ones…

Turn a small step into no step at all

// October 15th, 2010 // 0 Comments // strategy

The superbright and always working Dave Cheong and I were talking about converting visitors to customers and he asked me if I thought Traindom needed some help with its homepage copywriting. Well, yes, I think “your information marketing business” is about as obtuse and unemotional as copy can get. With the exception of the headline, the rest of the homepage is cluttered with product features and details instead of engaging you with benefits — examples of how the product can change your work/life.

Information Marketing Business in Minutes - Traindom

Still, my gut says the biggest problem is not homepage conversion rates but actual use of the product. I bet they find too few new signups get all the way to creating and marketing something they’ve made using Traindom. In fact, I think I could build a bigger business teaching people *how* to make this kind of material and inspiring them with examples they can cut up and use as templates.

Here’s what I mean:

Another friend, Yorke Hinds, started Bed And Breakfast Institute, selling an online course for people who’ve always wanted to own/operate a bed-and-breakfast. He’s smart: he could try and build a web platform to help people operate their B&B, but because there’s so many steps of investing commitment and time in those sorts of decisions, a tiny percentage of the people who dream about doing a B&B ever actually start one.

The principle is: avoid business models that depend on convincing people to take a big step. Until they take that big step you’re either waiting to bill them, or you’ve billed them for something they haven’t used and so won’t pay for when their free trial expires in 30 days.

Even if you’re taking that big step down a few notches by giving them a web platform, it’s still a big step and you can spend a lot of time waiting for them. If you can build a platform that lowers the height of stairs, then apply those skills to lowering the height of a low stair, so that you’re taking it away altogether. Then there’s no barrier, no hurdle, no reason not to, no reason to wait until you’ve thought about it some more, and every reason to come back and back again.

Steps by Jan Tik

'Steps' by Jan Tik

Yorke’s online education course addresses a small step: it helps people decide whether they really want to start a B&B by teaching them about what it’s really like. It’s marketed as a course that will teach you the insider secrets of the most successful operators in the B&B industry but that’s the justification the customer needs to sign up. The benefit he’s offering his customers is to help them make a big decision, so he’s not waiting for them to make that big decision before he’s able to sell them something. He’s grinding down that small step so it’s level with the ground, so you don’t even pause before you decide to buy.

Lowering the conversion step

If you want no barriers to conversion, start with a smaller barrier.

These days, web platform design and development is so cheap and fast to do, there’s  not much downside if a startup idea doesn’t get traction. And we know it’s possible to test many startup ideas without doing much coding at all. It’s worth building an MVP and seeing what testers think of it. But test a MVP as soon as you can so you can test whether you’re trying to shave a few centimetres off the top of a huge step, or whether you’re levelling a step only a few centimetres high.

Why I don’t sign NDAs

// September 29th, 2010 // 0 Comments // Industry, people, Startup

Perry Belmont, Library of Congress lawyer

Not my lawyer, but a dead-ringer.

I don’t do NDAs, for a few reasons:

  • I’ve learned not to sign things without my lawyer reading it first. He’s a great lawyer, so he’s not cheap. Spending a couple of hundred dollars before I’m able to have a coffee with someone isn’t a viable operating model.
  • I work with too many businesses every year to be able to manage and abide by the aggregate terms of an archive of NDAs.
  • You may be trying to protect the wrong thing. If your idea’s awesome, it’s probably not unique. The value is not in your idea, it’s in your execution.
  • If I couldn’t be trusted with your ideas, a quick web search would make that clear, since I’ve been doing this since 1995.
  • A big part of the value I bring is my communication skills and the network of people I know. When the time is right, you need me to be able to talk about this.

I have signed NDAs in the past, and I wish I hadn’t, because I have no idea where my copy is now. I take comfort in the knowledge that the other party has almost certainly mislaid their copy too. Making the whole exercise expensive and pointless. Who wants to do expensive and pointless?

Corporates and big brands, that’s who — they specialise in expensive and pointless, many of them devoting whole departments of people to making things more expensive and pointless. I will sign NDAs when I work for corporates and big brands because they will pay me good money and I know I’ll get paid.

Whereas you with the great idea, the back of a napkin and a sharpie pen? I want to like you, and you want to like me. Don’t ask me to sign something that can best be summarised as “we don’t trust you” before we even get to know each other.

I will, however, abide by the terms of a FriendDA.

Do you have what it takes to be a Micro-Venture Capitalist?

// September 24th, 2010 // 0 Comments // Industry, Startup


Think it takes millions of dollars, an MBA and a few board seats to become a VC? You’d be wrong to think so. I’ll tell you why, but first, answer this question: what is a startup?

We’d probably agree that startups are lean, cash-poor, energy-rich adventures, that startup founders are mavericks, dreamers and misfits, driven by the belief that there must be A Better Way. But do startups have to involve new technology or new business models? Do they have to be built on the hope of massive profits at some future date? Can we scale the whole model down and still be talking startups?

I bet the husband and wife who decide to leave their corporate careers to start the bed-and-breakfast they’ve dreamed about feel like they’re on a lean, cash-poor adventure, doing something they’ve never done before. In my book they’re startup entrepreneurs just as much as, say, the pair of software engineers with a new web platform.

The sums invested might be smaller but the financial risk is likely to be huge. The business plan will seem just as unfamiliar and full of holes. And they’re doing it because they have a passion for something. They feel like misfits, renegades and dreamers.

So it doesn’t take the promise of $50 million to make it a startup, and it doesn’t require some new gizmo. We’ve proven a B&B can be a startup. Can we scale it down further?

(more…)

Startmate: Australia gets a new kind of startup capital

// August 19th, 2010 // 0 Comments // Industry, My work, Startup

I’m part of a new technology venture launching today at Sydney’s Tech23 conference. I’m one of many startup founders who’ve bemoaned the lack of Y-Combinator-style investment in Australia, so when Niki Scevak asked if I’d like to get involved in something similar (with tweaks for the local market) and told me how he’d already done the bulk of the difficult strategic thinking, I was keen to get on-board.

Startmate wants to help technically-focused founders get started, with a small amount of capital, advice and a mission to Silicon Valley.

Word cluster

Startmate is a pool of funds and a roster of mentors who’ve all built hands-on successful web startups that began in Australia. We’ve been where you’re going and most of us are still on the journey, so we think we bring some useful perspective and experience to the challenges of getting an Australian tech startup up-and-running.

Our first program will fund five startups and begin in January, 2011 in Sydney. We’ll spend three months helping you launch your company and win your first customers.

Startmate is a bit different because:

  • It’s brings together a group of Australia’s best-known web startup founders (and also me);
  • It’s designed to help startups through the process of building a business that solves real customer problems
  • It’s designed to prepare Australia’s best new startups to be ready for venture capital investment in Australia and the US
Enough from me, I’ll see you during the application process!