In the News – 2009

NOVEMBER 2009

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Internet Startups Feature In Deloitte Fast 50 List (The Next Web) by Kim Heras – 30th November 2009

Every year, leading accounting and advisory firm, Deloitte, publish their Fast 50 list recognising the fastest growing technology companies in Australia. The list is  based on percentage revenue growth over the past 3 years.

This year a bunch of Internet startups has managed to feature in the awards, pushing their way in amongst the traditional biotech companies, systems integrators and hardware providers that normally feature.

Leading the charge in the main list were 3 startups which have featured in the Top 100 Aussie Web Startups List for some time now:http://www.getprice.com.au/

There was also some good news In the Rising Star category, which recognises potential in various categories rather than just pure revenue growth.

Local Startup Garage – Pollenizer came in at 1st runner up (2nd in normal language) and RedBubble was awarded 2nd runner up (or 3rd…).

Pollenizer’s award is a great sign for the industry as they rely on a certain degree of web startup industry strength in order to keep their advisory business going.

Pollenizer co-founder Mick Liubinskas had this to say about the company’s growth:

“We more than doubled revenue from last year and have tripled in team size from 4 to 12 this year in Australia and 15 to 43 in India.  We had 25 clients in 3 countries last year and now have 45 clients in 9 countries this year”

I also asked Liubinskas about the secret to Pollenizer’s growing global success:

“We’ve clearly seen that the web is now less about pure technology and more about business.  Globally, I’m leaving tomorrow to work with Seedcamp companies in London, talk to startups in Zurich and attend Le Web in Paris. That being said, so much of what we might apply overseas we learn from working with great Australian companies like Posse andBooking Angel.”

Click Here to access the full list.

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OCTOBER 2009

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Sammartino and Liubinskas discuss startup momentum (Anthill) by Paul Ryan – 29th October 2009

We love it when Anthill contributors get together to discuss startup strategy — especially when they do it off their own bat.

A couple of weeks ago Pollenizer’s Mick Liubinskas put in a video call to Rentoid’sSteve Sammartino to pick his brain about the concept of startup momentum. Fortunately, Mick recorded it for the benefit of us all. Watch Steve discuss his views on the important role iteration plays in emerging businesses.

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SEPTEMBER 2009

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Liubinskas at TechCrunch50: Aussie startup entrepreneurs from iPitch & spellr.us (Anthill) by Anthill Magazine – 16th September 2009

Pollenizer’s Mick Liubinskas, Anthill’s man on the ground at this week’s TechCrunch50conference in San Francisco, has been wandering around with his trusty video camera hunting down Aussie startup entrepreneurs to interview.

In this first video below, he interviews Green Lane Digital, the team behind iPitch, an online platform matching companies and investors. (Please excuse the poor sound quality… It’s guerrilla journalism, man!)

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Aussie-backed Xumii gets acquired (ZDNet) by Renai LeMay – 16th September 2009

in brief – Mobile technology specialist Myriad Group has acquired Xumii, a mobile social networking and instant messaging start-up with roots in Australia that also operates in the United States.

Details were scant and the purchase price was not disclosed, but Xumii will maintain a local office in North Sydney. With 17 staff, the company — which has utilised the services of local start-up consultancy Pollenizer in the past — has taken $4.3 million in funding from Australian venture capitalists CM Capital and Southern Cross and was formerly known as UiActive.

Xumii made use of cloud computing architecture to integrate a mobile user’s phone contacts, social networks and instant messaging services into a single phone book.

“The acquisition of Xumii further strengthens our position as the partner of choice for mobile operators and handset manufacturers seeking to add social networking features to mass market phones,” said Myriad chief executive Simon Wilkinson in a statement announcing the deal, which was also confirmed on Xumii’s blog.

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AUGUST 2009

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More than just a bright idea (Sydney Morning Herald) by Julia Talevski – 11th August 2009

Sleeping on the office floor to answer phone calls in the middle of the night hardly seems like the actions of a self-described serial entrepreneur.

On the other hand, perhaps it fits the role perfectly. To realise his small-business dream, this is exactly what Duncan Ross did in his early days to get his 24-hour telephone-answering service company off the ground.

“It’s very hard from day one to start a telephone-answering service when there’s just two blokes in the business,” Ross says. “For the first year, we would take turns sleeping at the office to answer the phone.”

Ross says it took a year before the company could employ its first five-nights-a-week staffer.

The company eventually grew to become New Zealand’s second-largest telephone-answering service and employed more than 60 staff, Ross says.

Finding the right staff is always a big issue, he says.

“You take on a high proportion of an HR role within business and that has a negative effect of taking you out of the front line of the business,” Ross says.

Even though the economic climate is particularly tough, he says now is a good time to start a business.

“If you can survive now, just think of how good it will be in the good times,” he says. “But my advice would be to watch your costs – and persistence.”

Let’s work together

A key part of a successful business is making sure you’ve got your research right about what type of business you’re trying to establish, the product or service you’re providing and the type of markets you’re trying to reach out to.

Web strategist Mick Liubinskas has quite a history of starting up small enterprises and is now working on his fourth venture, Pollenizer, which focuses on helping people build online and mobile businesses. Liubinskas says some of the difficulties with starting up is that nobody knows who you are or what you do and you don’t have any customer references.

“We found our first 10 clients were the hardest,” he says. “You need to be a great salesman and be good with customer and client support.”

Doing business with friends, either as co-founders or as clients, can create a risk and a challenge for some, as Tom Howard, the co-founder of flight destination search engine Adioso, found out.

“It’s very easy to start business relationships with friends assuming that it will all work out well for everyone but when times get tough or disputes arise, relationships can be damaged or even destroyed,” he says.

“A great friendship should be able to transcend such threats but you do need to think carefully about just whether you’re willing to strain your friendships by introducing business pressures and what action you’ll take to avoid major fallout if things get difficult.”

Howard’s main client was a friend and they had experienced some problems that involved disagreements over money owed and work deliverables, which nearly ended up in legal action.

“It was resolved amicably after a lengthy meeting to work through all the issues but a huge amount of stress and lost productivity could have been avoided through better documentation and communication from the start and throughout the process,” Howard says.

“We’re actually good friends again. In the long term, it’s been a great outcome because we all learnt from the experience.”

Concentrating all your business effort into a few clients can also be a strain on small business. Through experience, Howard realised there were too many overheads in managing large numbers of small clients, so he decided to focus on a small number of lucrative ones.

He emphasises that while it was a more efficient way of working, it left the company far too heavily exposed to the business decisions and fortunes of the clients.

“We found that there were a number of clients we could live off happily without spending the time to find new ones,” he says. “What happened was one of those companies providing about half of our income at that time had hit their own financial difficulties, they changed their plans and we were stuck.”

When business grows and times are looking good, confident assumptions on continuous growth can land businesses in situations of crippling debt when things aren’t looking their best.

“In our early days, no sooner had we picked up a few lucrative clients that we confidently assumed that things would just keep going well, so we kitted ourselves out with brand new computers and specialised equipment, finding finance companies all too happy to accommodate,” Howard says.

“Not only did this add to the pressure when the revenue declined but when we realised that [was] the business path we were on, ideally we would have stopped to collect ourselves and started again with a new direction but due to the the several thousand dollars in monthly repayments, this really wasn’t an option.”

Get product out there

Solar-Gem is a Sydney-based company that produces solar lighting and energy products. It makes all its goods in Australia and has started trading overseas to countries such as India.

Its solar-powered LED technology will be used to help light up Elephanta Caves, a small Indian village just off the coast of Mumbai. But before the company was established in April this year, chief executive Khimji Vaghjiani conducted extensive research into whether or not a market existed for these products.

Six months before officially registering the company, Vaghjiani explains, was a difficult period because the staff still had their previous jobs to do and there was a lack of cash flow. Explaining the technology and the value of it was also quite a task, along with getting the right electronic circuitry ready, housing the technology and making it work.

Besides cash flow, another challenge Vaghjiani faced was getting the actual technology into production, along with finding people who were willing to work without being paid straight away.

“It’s hard to get people to work with you when you have no money,” Vaghjiani says. “What we did was offer them a piece of the business and should it grow, they get a piece of the action.”

Having valuable contacts in the market also worked in Vaghjiani’s favour and he says he would not have been able to get this far without networking and persistence. Besides India, Solar-Gem products are starting to make their way into other underdeveloped communities, in places such as the Middle East, Indonesia, Fiji and Africa.

“I tapped into my Indian contacts and networks and we now have a Memorandum of Understanding in government to trial this technology,” Vaghjiani says. “It’s a monumental step forward for a small-business start-up. The fact that we’ve got an agreement with an Indian government department is really down to the contacts I’ve had in the market.”

Think before you leap

The NSW Government’s Small Business website, smallbiz.nsw.gov.au, has an entire section devoted to starting a business and provides tips on areas including business planning, obtaining finance, marketing and innovation.

For instance, it advises prospective business starters that, before doing anything else, you need to consider three important aspects:

* Do you have a sound business proposition?

* Do you have enough skills to run the business?

* Will it satisfy your needs?

Top tips on starting a small business

* Learn as much as you can about your proposed business. Use networks such as business associations and ask questions.

* Be realistic about the effort, time and money it will take.

* Develop a proper, well-researched business plan.

* Keep accurate financial and customer records from the start.

* Find yourself a good accountant, lawyer, banker and insurance agent.

Government assistance can expand your horizons

THROUGH the Department of State and Regional Development, the NSW Government provides a range of programs and services to support business and jobs growth.

They are designed to develop and improve enterprise skills, increase innovation and encourage exporting. Programs include business advisory services, mentoring programs for growing businesses and assistance for entering new export markets.

The NSW Government does not provide direct financial assistance to small-business starters or to established businesses for working capital, some financial assistance is provided for established businesses to participate in mentoring programs and in export-promotion activities such as trade missions and market visits.

The NSW Government’s Business Advisory Service can be used as a point of contact and assistance for a small business starter. The service can provide advice and guidance on a range of operational and business management issues, including business planning, obtaining finance, marketing strategies and forms of government assistance for businesses.

The government website, smallbiz.nsw.gov.au, has the locations of Business Advisory Service providers.

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JULY 2009

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Future direction trapped in halt state (ZDNet) by Renai LeMay – 15th July 2009

commentary The location of the launch of Stephen Conroy’s Digital Economy: Future Directions paper last night could not have been more appropriate, considering the report’s content.

Those who’ve been to the Powerhouse Museum will know it holds such wonderfully modern examples of technology as steam trains and even a horse-drawn pump engine.

Likewise, Conroy’s opus has done a fantastic job of curating well-known Australian technology success stories, without doing much at all to demonstrate how more such wonders of the world could be brought into being. Just noting existing government policies is not going to do it.

The report, disappointingly, does not constitute, as Conroy claimed, a strategic roadmap on how to transform Australia’s digital economy from one of the developed world’s weakest into anything even faintly resembling a powerhouse of innovation like the capabilities possessed by Israel, Japan, Silicon Valley or Korea.

As Stuart Corner, one of Australia’s most experienced technology journalists, notes:

“It’s full of motherhood statements, case studies on successful Australian digital entrepreneurs that are without doubt inspirational and it repeats ad nauseam the importance of the digital economy and the need for all sections of industry to get on board.”

Having forced myself through the whole 103 pages … I wholeheartedly agree. The release of such a self-congratulatory report does much to demonstrate that the Rudd Government’s approach to developing Australia’s digital economy is very similar to that of its Coalition predecessor and most of Australia’s state governments.

With the exception of Victoria, Australia’s governments have done very little over the past two decades to foster ICT innovation within their fiefdoms

With the exception of Victoria, Australia’s governments have done very little over the past two decades to foster ICT innovation within their fiefdoms, preferring to concentrate instead on the resources, agricultural and even manufacturing sectors. Long-standing Queensland ICT Minister Robert Schwarten went so far in June as to declare that a mammoth and intense lobbying effort by the state’s entire ICT industry during the recent state election had “no effect whatsoever”.

Yet, as the report itself highlights, in the next several decades, it is technological and content supremacy that could allow Australia to take a much stronger position on the world stage.

The few areas in which the report does suggest new policies to tackle the digital economy appear to be sideline cases or actually to take the debate backward.

It is unclear, for example, whether there is widespread demand for new regulations to target illegal file-sharing or to include new platforms such as social networking sites under “safe harbour” laws that limit liability in intellectual property theft cases, as the Future Directions report proposes.

Ten years of working in and writing about Australia’s ICT industry leads your writer to believe that much stronger incentives are needed if Australia is truly to develop a digital economy. And by incentives, I mean money.

Australia needs to create extremely desirable taxation situations for multinational technology, content production (film, TV, new media and especially computer gaming) giants to set up shop within our borders.

We need to lure these firms one by one, with sweet promises of honey.

Australia needs to set up similar taxation schemes to incentivise local technology start-ups of any flavour to get their operations off the ground, and similar regulations that would make it attractive for venture capital and early stage investors to find a home down under. We need to nurture these companies as carefully as we would new-born babies.

Thirdly, we need to immediately cut any barrier to entry to students entering technology courses at a tertiary level and dramatically raise lecturer conditions as well as increasing their numbers. We need to make students want to study technology. Desperately.

The report, disappointingly, does not constitute, as Conroy claimed, a strategic roadmap on how to transform Australia’s digital economy

There are very few mentions in Conroy’s report of any of these kind of measures.

Now, I’m not sure how much time the minister or his staff have spent out on the road in recent times talking to the Australian technology community about the problems it faces. ButZDNet.com.au has, and there’s a few facts we’d like to pass back up the ladder.

Mick Liubinskas and Phil Morle’s merry band at Pollenizer and the guys behind Startup Camp are probably doing more in real terms to build Australia’s technology start-up community than the entire NICTA and CSIRO groups are. The fact that the CSIRO is currently suing every Wi-Fi provider in existence isn’t garnering Australia a great reputation, and NICTA has long been viewed by the industry as a token effort.

Australian start-up RedBubble generated almost as much buzz as the entire Future Directions launch last night during its event at the same time at the Hive in Melbourne. The company told the audience it’s almost impossible to get venture capital in Australia as an internet company. That’s how bad it is. Great juxtaposition there.

Furthermore, it’s a fact that large technology companies like CA and NEC are actively pulling their research and development efforts out of Australia, as we have reported.

To add insult to injury, one of Conroy’s own backbenchers, Kate Lundy, has single-handedly galvanised a massive wave of development in using technology to improve government collaboration and improve citizen engagement. Her effort — from the back bench — is dwarfing Conroy’s own, from the position of minister.

Now the obvious rejoinder to all of this is that the Federal Government is in fact investing a massive amount in the Australian technology scene. I refer to the $43 billion being ploughed into the National Broadband Network.

The NBN does have the potential to create a lot of jobs, as Conroy has pointed out. However, these will in the short term be jobs in the construction industry as the fibre rolls out, and later on, in the internet service provider industry.

It is drawing a long bow indeed to state as a bald fact that the creation of a strong network like the NBN will automatically lead to the creation of a vast swatch of companies in the higher levels of the technology and content stack that the NBN sits at the bottom of.

The NBN is a content transmission platform; not an investment incentive scheme.

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Reaction round-up: Conroy’s digital economy opus (ZDNet) by Suzanne Tindal – 14th July 2009

Digital Economy Minister Stephen Conroy will be releasing the government’s roadmap for Australia’s participation in the digital economy today, but what does the industry expect from it?


The goal of the paper was to outline the key areas of focus for Government, industry and the community, according to the Minister.

“Australia needs a digitally aware and enabling government, a digitally confident, innovative and skilled industry and a digitally literate and empowered community. The paper explores the actions we need to advance to enhance these key factors for success,” Conroy has previously said of the effort. “It is time now for government, industry and the community to work together to foster and harness the benefits on offer in the digital economy.”

The big gun
Microsoft Australia chief technology Greg Stone said that although he welcomed the paper, he didn’t believe it was about laying out strategies for the future, but more about creating a picture of what current conditions were and what was being done so the industry could reflect.

“This is part of the government laying the building blocks for enablement,” he said. “If these things are referred to in that paper, then that paper becomes a useful point for the reflections of society.” He didn’t believe the paper was supposed to be prescriptive, but more a milestone to mark the government’s progress — an opportunity for the industry to pause and think about the future.

“In many ways what people are looking to in this whole thing is not the paper,” he said. “We see the paper as a signal. We see it as part of the process … I’m certainly not looking to it for where we should be placing our bets.”

The government had recently removed an enormous stumbling block in promising to create widespread broadband connectivity, Stone said. The executive believed it was now up to the industry to use its own levers to make the best of that.

The start-ups
Martin Hosking, chairman of Aussie start-ups RedBubble and Aconex and Looksmart co-founder, said that he hoped the final version went past the grab bag of issues which was the draft paper. “The draft paper has 500 different things. That’s all well and good, but you have to focus on a number of small things so you can win,” he said.

Australia has poor performance in the digital economy sphere, according to Hosking. “There’s not a single Australian company in the top 500 internet companies in the world,” he said, noting Australia needed to focus on why that has happened.

Three main issues Hosking picked out were a lack of recognition of Australia’s distance from the global markets, the very low numbers of engineers and computer science graduates coming from universities and the difficulty of getting capital for internet ventures. “If you need $25 to start the next Google in Australia, you can’t,” he said.

If you need $25 to start the next Google in Australia, you can’t

Start-up veteran Martin Hosking

Austrade was often helpful on the first issue, he believed, but he thought there could be more done to ameliorate the concern. On the graduates, Hosking suggested making certain degrees free for bright students. The capital issue was a hard one to resolve, he said, needing a long-term commitment from the government.

Bart Jellema, the director of all things cool and wonderful at coupon discovery start-up Tjoos and active organiser of community start-up initiatives such as Startup Camp and BootUpCamp said that first he thought the government needed to do something about the price of international bandwidth to make its National Broadband Network investment worthwhile.

He also said it took too much effort to wade through the red tape to get government grants: “When you’re doing a start-up, there’s so many other things you have to learn. There’s so many programs out there. Sometimes it’s more trouble than it’s worth.”

Jellema thought that there should be a general tax cut for all starting businesses to make it simple and help companies right from the start, when it could be just two people in a garage.

Mick Liubinskas, web strategist, co-founder of start-up consultant Pollenizer and start-up veteran also called for more funding to be invested in digital technologies. He said that funding prototypes had been made necessary because of the sinking economy, which had meant that money from the usual sources — family, friends and fools — had dried up.

The internet provider
iiNet regulatory officer Steve Dalby said he hoped to see government support for the development of new applications to drive take up of the National Broadband Network. “100Mbps might be cool to brag about, but an export industry based in Australia that exploits that bandwidth, with productivity and lifestyle-enhancing applications, is much more exciting,” he said.

Investment in Australian software and hardware development that could be traded to the rest of the world was needed. It would be great if there was an iPhone apps store-like model for the National Broadband Network, Dalby said.

The support could come in increased funding for the private sector, as well as universities, TAFEs, CSIRO — anyone who wanted to get creative. “The NBN should put Australia at the cutting edge in this world. Generalities about ‘e-Health’ and ‘smart grids’ just doesn’t cut it anymore, it needs to be driven by incentives aimed at developing real applications,” he said.

The opposition
Conroy’s opposite Nick Minchin was not impressed by the report, because he saw it as a summary of where Australia was at, as opposed to providing any clarity on how the government intended to deal with the issues the industry faced.

He singled out convergence as one issue he believed required more clarity — those areas where boundaries were blurred between broadcasters, content providers and telcos.

He agreed with the paper’s points on the dangers of badly constructed regulation, but pointed out the hypocrisy of saying that the digital economy was market-led while supporting an enormous government owned investment in it — the National Broadband Network.

“The reality is there is currently a great deal of uncertainty in the sector and most of that has been caused by the government’s mishandling of broadband policy since coming to office,” Minchin said.

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JUNE 2009

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The difference between a ‘functioning product’ and a ‘working business’ (Anthill) by Paul Ryan – 25th June 2009

Anthill contributor and web marketing extraordinaire Mick Liubinskas recently posted this short vlog on the Pollenizer blog. In it, he highlights the difference between having a web product that works (all the widgets and clicks behave as they should) and having a web business that works – i.e. one that can win and retain customers and staff.

Too often, technologists and inventors are so bedazzled by the pure genius of their product creations that they neglect the critical steps required to secure a successful path to market. Liubinskas concludes with a useful breakdown of how he thinks a new web business’s budget should be allocated.

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FEBRUARY 2009

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PR flacks beware! Your product campaigns are subject to video review (Anthill) by Paul Ryan – 18th February 2009

I get plenty of PR pitches every day. Some of them are interesting and relevant. Many of them are off the mark. I’m often sent unsolicited samples and gifts. All part of the bump and grind – I get it. It can be wearying, but it goes with the territory.

Then, I saw the below video in a post entitled Lessons from Community Fickleness by Anthill contributor and Aussie digital media maestro, Mick Liubinskas.

Mick used to run marketing for peer-to-peer files-sharing upstart Kazaa, then Zapr andTangler. He’s now running strategic web consultancy Pollenizer, which he co-founded with Kazaa colleague Phil Morle. He’s also a prominent blogger, which is why Publicis Mojo targeted him out of the blue with a marketing campaign for Metamucil.

Mick and other bloggers weren’t impressed with this “spammy” contact, and made that clear. So Publicis Mojo had another crack, sending him a package.

Mick deceided to capture his impressions of this second marketing effort by videoing the grand opening in the form of a review.

Promotion always precedes the product. Check out Mick’s PR review below