What are the basic online tools for business? Here’s a quick list on what small and startup businesses can use to get online quickly and cheaply. This list will be updated regularly and please let us know if there’s anything we should add.
Google Hangouts (being depreciated)
What does one of the biggest Chinese backed investment funds look for in prospective companies? During their recent visit to Sydney China Rock Capital Management’s Venture Capital‘s Toby Zhang and Matt Lee spoke about the company’s investment philosophy.
“In general we invest in very early stage investments – we focus on seed to Series A,” says Zhang, one of the company’s partners. “At these stage of development we’re looking at a combination of talent, technology and market.”
“We like to bring these early technology companies to the markets like China and west coast US where we’re familiar, a lot of the companies partner with us because we can help overseas.”
Zhang and Lee were in Sydney for the announcement of their investment into a local VR video capture company, Humense, the fund’s first foray into Australia.
“When we first started CRCM we only invested in Chinese internet companies,” explained Zhang. “While we’re based in Silicon Valley we were looking at what’s going on in mainland China. We’ve launched three additional funds, all three of these are early stage and cross border. We not only invest in China but also in the US, Israel and now in Australia.
“We spend more than fifty percent of our time understanding the entrepreneurs and who’s behind the company. When we form a financial partnership it’s kind of like a marriage where getting a divorce is really difficult so you have to really understand the entrepreneurs.”
“Secondly we look for businesses which can easily pivot if they have to. A good example is a company we invested in recently called Music.ly. We were a fifth stage investor in Music.ly while they still in Shanghai, we saw entrepreneurs who we knew from their previous jobs so we knew how talented they were and we were prepared to back them.”
“More importantly though was their business’ focus on social media particularly with the age group that the existing platforms were losing traction with.”
“Finally with technology we’re looking for companies that can create barriers early that allows them to outcompete their competitors.”
Humense’s volumetric capture relies on an array of cheap, commercially available cameras to collect the images, something that appeals to Zhang’s investment philosophy.
“We spent a lot of time looking at the VR space, particularly volumetric capture,” says Matt Lee who originally hails from Sydney. “we felt in Australia with the background of special effects and animation so we felt there was a strong talent base we could leverage.”
Toby Zhang sees the fund making more investments into the augmented and virtual reality sectors. “We think AR/VR is a global tech movement,” he says. “Although historically we’ve been mostly investing in Silicon Valley and China, we have been constantly looking for opportunities to get to know start-ups, entrepreneurs, and investors from all around the world.”
It’s notable the Chinese backed fund is now looking around the world for investment opportunities and focusing on VR and AR technologies.
That strategy makes sense as the barriers to entry fall and the tech industry’s focus moves beyond Silicon Valley and into new markets. Where the US investment funds go will be the big pointer of future opportunities.
Last year the Sydney startup and business communities were stunned by the SydStart startup conference announcing it was rebranding itself as StartCon and moving to Melbourne after the Victorian government had offered to fund the event.
At the time StartCon’s Matt Barrie and the Victorian government were most certainly in love with Barrie describing how Melbourne was well placed to be Australia’s startup centre and highlighting the lack of support from the City of Sydney and the New South Wales state government.
In Sydney, the announcement caused a great deal of hand wringing as the city startup and tech communities worried that government neglect would see the more proactive Victorian government attract businesses and talent.
Now the friendship with Melbourne is over with Barrie publishing a scathing blogpost on the inertia and duplicity of the Victorian state government.
The tale of StartCon and its falling out of love with Victoria holds a number of lessons for businesses being tempted by the siren call of government incentives and the risks to taxpayers.
The announceable culture is endemic in Australian politics. Having announceables is absolutely critical part a ministers’ life and their careers can defined just as much by not having enough good news to announce as being victims of bad press.
In the last NSW Labor government, ministers had hard KPIs they were held to in cabinet which gave rise to Chatswood-Parramatta railway line probably being the most announced infrastructure project in history.
While the current Victorian government may not have those formal measures, Small Business Minister Phillip Daladakis is a very good player of the announceable game. He’s a man with a future in state politics.
The mistake of the StartCon organisers was to agree to public announcement before they had secured the money.
I’d never heard of Dr Pradeep Phillip prior to his appointment to run LaunchVic but his previous position as secretary of Victoria’s Department of Health and Human Services doesn’t seem to immediately qualify him to run the state’s startup development agency.
His conduct, and that of his staff, in the published correspondence chain are those of classic risk averse public servants. Not a bad thing when you’re dealing hospital procurement practices but when you’re dealing with startups and new businesses it would be nice to have someone with more relevant private sector experience.
A notable part of the Victorian public service’s risk aversion is the language of the convoluted grant agreement where the state government may provide support. This, along with the classic attempt of shifting all responsibility away from the agencies, opens a lot of wriggle room for the government to get out of paying the publicly stated amounts.
Equally the use of registered mail after weeks of ignoring emails smacks of institutional backside covering. This underscores the disconnect between public servants and the business world, particularly with smaller organisations, events and startups.
For StartCon’s organisers their embarrassing and terrible Melbourne experience underscores the futility of depending upon government incentives to site your business or event.
In choosing where to base a business important factors are the access to markets, labour and capital with affordable office space being another key issue. For event organisers, the access to reasonably priced venues and accomodation for the attendees – two factors where Melbourne has a real advantage over Sydney – are equally critical.
Government incentives are almost irrelevant to those consideration and really only become the deciding factor if the competing locations are equal in the other respects.
The real damage though is to StartCon’s credibility – having made the public decision to move to Melbourne with much fanfare the climb down is a humiliation – but, more importantly the event is compromised in the eyes of its Sydney supporters. The chase for government money also draws a scent of hypocrisy among a group known for its Libertarian leanings.
Equally however the Victorian taxpayers should be concerned at how their government is announcing support for businesses and events without real substance. One suspects that a fair proportion of Mr Dalidakis’ announceables have similar backstories.
More importantly Victorian taxpayers should be questioning the nature of support – with the SydStart announcement there was widespread irritation in the Melbourne tech community that a Sydney based event should get such government backing and similarly funding foreign multinationals to setup Australian sales offices in the southern state’s capital is going to do much to build the state’s tech sector.
Something all Australian taxpayers and businesses should be concerned about is the unreliability of governments of both complexions at state and Federal level. Too frequently promises are broken leaving companies and communities out of pocket.
The shutting down of the COMET scheme under the new Federal Labor government in 2007 and then the incoming Liberal government replacing the ALPs Commercialisation Australia program in 2013 are good examples of sovereign risk where entrepreneurs spent thousands of dollars and hours only to have the grants pulled without notice.
Innovation schemes are only one example, almost every program is at risk when a new minister, let alone government, is appointed. It would be a foolish manager or business owner who would base their financial forecasts on any Australian government policy.
As we saw in the City of Sydney elections, the real key to developing industry is to have an attractive, well serviced location with access to capital, skills and markets. Melbourne may well do that better than Sydney but it won’t be achieved by ministers bearing gifts.
“In a world where stupidity dominates, looking good is more important than being right,” writes Professor André Spicer of London’s City University in Aeon Magazine.
Spicer and his fellow author Mats Alvesson described their results of studying dozens of organisations for their book The Stupidity Paradox.
What they found is the smartest don’t get ahead in most organisations, but those who conform with the prevailing culture which usually sets a low bar.
We started out thinking it is likely to be the smartest who got ahead. But we discovered this wasn’t the case.
Organisations hire smart people, but then positively encourage them not to use their intelligence. Asking difficult questions or thinking in greater depth is seen as a dangerous waste. Talented employees quickly learn to use their significant intellectual gifts only in the most narrow and myopic ways.
The tragedy is these organisations squander the talent of those working for them. In many respects management is destroying value rather than adding to it.
Probably the most dangerous type of organisation though are those run by managers who want to be leaders.
They see their role as not just running their business but also transforming their followers. They talk about ‘vision’, ‘belief’ and ‘authenticity’ with great verve. All this sounds like our office buildings are brimming with would-be Nelson Mandelas. However, when you take a closer look at what these self-declared leaders spend their days doing, the story is quite different.
Spicer’s article is well worth a read, if only to nod in agreement with many of the organisations and managers you’ve had to deal with in the past.
It’s worth reflecting how organisations are changing in an information rich age. While it’s tempting to think better access to data will improve their collective intelligence, it may be that algorithms only further entrench poor management practices.
One of the notable things about the 2008 financial crisis was how people stopped setting up businesses. Faced with economic uncertainty, it seemed most folk decided starting new ventures was just too risky.
The OECD’s Entrepreneurship at a Glance report shows just how dramatic that fall in small business creation since the financial crisis has been with United States’ current new business formation rates at 15% below 2008 levels, Italy’s at 35% and Germany’s at 23%.
Even in Australia, which largely escaped the 2008 crisis, business formations are twenty percent lower. This is despite interest rates being close to zero for the last five years.
Those statistics are telling – despite the talk about tech startups, people are not starting new ventures at the rates they were ten years ago. That’s a worrying aspect for economies and future growth prospects.