metarand

Seasons Greetings from Metarand

Designing for Data-Driven Health and Wellness

Earlier this week John Doerr, Bing Gordon and Mark Pincus took the stage at TechCrunch Disrupt in San Francisco to talk about Internet treasures [an Internet-related company that makes us all proud to be alive now, a company that should be nourished and curated and that brings to life products that we can't imagine life without].

In the course of the discussion Mark revealed an interesting insight into his social gaming company, Zynga. In essence they are data junkies–they’ve taken a different approach to games and are very data-driven rather than hit-based.  For example, they monitor in real-time each user’s net promoter score–a measure of value that the companies bring to their users, based on a standardized survey of the user base measuring whether each user will promote or detract from one of their games at any given moment.

You might be wondering at this stage what this has to do with health and wellness? As the conversation progressed between the two Kleiner Perkins partners and the CEO of one of their portfolio companies, a really interesting point emerged:

“Health is waiting for someone to turn it into a product that’s useful.”

This comment, together with the emphasis that Mark’s business places on data really got me thinking. We are so data-driven in so many areas of our lives, but when it comes to US, as Individuals, we know next to zero about our bodies, our health and wellness, how we are tracking, how what we do or don’t do impacts on how our body operates and how our minds feel–this is a major issue.

It is good to see, however, that activity is starting to emerge where the meaning [from a design point of view] within health and wellness is taking the individual more into account. Take for example the video below, in which Worrell brings together a doctor and a patient to discuss the future for health.

[Via Fastcodesign]

Atlassian Accels: Raising a $60m First Round

Sydney-based enterprise software developer Atlassian has closed a $60 million first round of funding from tier one Silicon Valley VC firm, Accel Partners.

This is really great news firstly for the Australian entrepreneurial ecosystem as it shows the calibre of the folks we are spawning and secondly for one of the most savvy young entrepreneurs I’ve had the pleasure of interacting with – Mike Cannon-Brookes. He has a bright future ahead!

I first wrote about Atlassian back in 2006, at which point they were doing about $15m in annual revenue. For the last financial year this had increase to $59 million.

You can listen to a talk Mike did in 2008 at Innovation Bay here.

More coverage: TechCrunch, Sydney Morning Herald

How To Successfully Pitch Angel Investors

Last week Innovation Bay Angels met for their quarterly dinner to hear pitches from a chosen few entrepreneurs. This was the fourth dinner of the year, a year in which we’ve assessed over 50 Australian companies and by the end of the evening we had heard live pitches from 14 entrepreneurs seeking angel investment this year.

As active angel investors (the group has invested multi millions of dollars to date), we see a lot of deals in different contexts and one thing we value above all is a quality pitch from entrepreneurs who are passionate and who have done their homework on their industry.

Our modus has been to ask entrepreneurs to submit an initial 90-second video pitch. That may not seem like a lot of time, but remember that most television ads only run for 29 seconds!

Those entrepreneurs who are chosen to actually present to the group at the quarterly dinners are given six minutes to pitch and may answer questions from the room for another six minutes.

Why all these time constraints and formats?

We’ve tried the unstructured, open ended approach and it simply does not work. Anyone can bang together a business plan or executive summary on a word processor and make it look good – but getting a message across via video in 90 seconds takes skill.

Standing in front of a room of 40 successful businesspeople and selling a business in six minutes takes further skill, discipline and practice.

Besides, investors have only so much bandwidth to hear from an individual entrepreneur and rattling on for 15 – 20 minutes won’t solidify your investment case, nor would it be fair on others who also want to garner the group’s attention.

What should your video be aiming to achieve?

One of the best comments made recently by one of our angels sums this up succintly:

“Short, sharp, punchy. Gives enough to establish credentials. There is enough in this quick summary to make me want to found our more.”

The videos we receive are placed on a private forum and members of the group are able to ask questions of the entrepreneurs who submitted them, and they have the ability to respond. From these comments (for the last round there were well over 300 comments) and the questions asked at the dinners, we’ve collated a set of Frequently Asked Questions, which I’ve set out below.

Entrepreneurs should know the answers to as many of these as possible and while they may not be able to cover off on each and every one in their videos, we would expect them to do so by the time they finish their six minute pitch.

THE ANGEL FAQs

PROBLEM/SOLUTION
How big is the problem you are trying to solve

What is your core value proposition

MARKET/CUSTOMERS
What is your customer make up – geographically and by industry

What is the return on investment (ROI) for customers

Can you give a bottom up outline of the market size rather than “a % of a $bn market”

How do you define your target segment, how many potential customers are there in this segment and what are they willing to pay for your product or service

What is the cost to acquire customers

If you are initially targeting a niche of early adopters, how will you get across to mass market adoption

Are there any regulatory or entrenched business practice barriers you need to overcome

Is there something about your space that means we need a local solution rather than a modified US solution

Are there any analogies you can use to explain your product, eg “the Farmville of Health Education” or “Groupon meets Zynga”

If you are initially targeting a niche of early adopters, how will you get across to mass market adoption

Are there any regulatory or entrenched business practice barriers you need to overcome

COMPETITION
What is your sustainable competitive advantage

Which are your major competitors and what do you do different

Not for everyone but: why are you best placed to win in this torturously overcrowded and undifferentiated space

While your product may in fact be different from others in the market, how do you get around the perception that it is the same as other products out there

TEAM/THE BUSINESS
Who owns the IP

Who will be on the team for executing

What are your views on the LeanStartup Model

What are the backgrounds of the founders

What is your backstory – how did you come to tackle this problem/market

Does your product exist already – if so, will you be able to demo it

BUSINESS MODEL
Outline some key figures – revenue predictions, staff

How do you make money, what is your revenue model

What is your distribution strategy

Are revenues primarily from product or services. How will that change in the future.

What are your plans for scaling the business (what are the requirements and obstacles to scale)

How are/will you handle the huge amounts of data that you need to gather

THE FUNDING NEED
How will you spend the money

What your investors should contribute in addition to money

THE DEAL
How much equity are you offering to Angels

What will equity split be

EXIT STRATEGY
What’s your exit strategy

One final point – don’t go asking investors to sign a non disclosure agreement. You’ll likely get short shrift.

I hope these pointers assist you in your quest for funding and good luck growing your businesses!

Early Morning Stand Up Paddlesurfing

French Bread

Posted via web from metarand’s posterous

My first attempt at baking french bread. Smells sooo good!

Tribalizing Business: Steps To Changing The Game

Humans are genetically predisposed to commune. When they do so within socially optimized corporate environments this results in exponential amplification across return on engagement metrics.

The results of a recent Deloitte survey of over 400 organizations, 2009 Tribalization of Business Study, provide a solid baseline for exploring where business is at with respect to providing such socially optimized environments.

First up, the survey found that over 50% of enterprises that had previously made some investment in social media were planning on maintaining this community-status quo. Over 40% planned to increase their investment in this area and only 6% were decreasing their involvement.

This tells us that business tribalization is becoming a reality. Or does it? Not so fast – there remains a lot of work to be done before we can comfortably declare enterprise engagement as being widespread.

Across 36% of companies surveyed, social media continues to be deployed out of the marketing function. While it is good to see that multiple departments are managing social media in as many as 15% of survey respondents, this can be problematic depending on the way in which management takes place. Clear decision-making processes need to be put in place that match the real time nature of social media.

Methods for monitoring and measuring success are currently predominantly based on participation-related analytics. The downside of doing so is that it can create a false view on how enterprises are benefitting from being more social.

Remember, that higher quality engagement trumps quantity and will lead to more sustainable inbound and outbound engagement. This is highly relevant as evidenced from the responses to the survey. Respondents indicated that the biggest obstacles they faced were getting people to participate regularly.

By better formulating their goals, and by aligning measurement with the achievement of these goals, companies will know how their investment into such areas as employing more staff to manage social media activities are faring.

The current staffing trend is to have 2-5 people, but interestingly almost 5% of those surveyed have more than 10 staff in such roles.

The survey concluded that “new management strategies and practices” are going to be critical for extracting “true business value” from social integration.

Tribalizing business in a game changing way requires an all-of-enterprise commitment and sustained ecosystem-wide engagement.

San Francisco Innovation Storm

Ok, not quite an innovation storm, but it’s kinda cool to imagine that with all the awesome thinking going on in this wonderful part of the world that there would be a few brainsparks from time to time.

As this amazing picture shows, a thunderstorm came rolling through early morning …

[pic courtesy of fgfathome]

A Model for the Commonwealth Commercialisation Institute

I’ve prepared a paper on the issues facing Australian commercialisation and on how I believe the nascent Commonwealth Commercialisation Institute can solve them. The paper was submitted to the Australian Federal Department of Innovation, Industry, Science & Research in July 2009 and I’ve set the bulk of it out below.

EXECUTIVE SUMMARY

The aim of the paper is to put forward a proposal regarding the role of the Institute and how it can add continuing value to the Australian entrepreneurial ecosystem.

The Gap
While Australia has an abundance of intellectual property raw materials and an entrepreneurial culture, it severely lacks a sustainable entrepreneurial ecosystem for translating these resources into refined products.
The set of market failures facing Australian entrepreneurs and start-ups, collectively termed ‘the Gap’, include  lack of funding mechanisms and business building skills. Over the past decade this Gap has grown wider and the demand for a resolution has increased exponentially.

Minding the Gap: The CCI
The CCI can significantly address these market failures and create a solid bridge across the Gap by providing a concerted solution set designed to establish and maintain an Australian entrepreneurial ecosystem.

This paper recommends that the CCI focus on three key initiatives to maximise its impact:

1. Entrepreneurship Conservatory:- developing a results-based set of training programs for upskilling entrepreneurs using a real time, interactive pedagogy that will form the basis for a ‘science of startups’;

2. Advanced Commercialisation Unit:- developing a suite of grants, mentoring and funding activities designed to derisk and progress the development of IP and startups; and

3. Entrepreneurship Research & Policy Unity:- conducting research and informing policy that broadens Australia’s understanding of the drivers of innovation and that advances entrepreneurship.

Together, these three initiatives will create a virtuous circle, an ecosystem, of entrepreneurship that will lead to a step change improvement in the success of Australian entrepreneurs and high growth, scale companies.

DECLARATION OF INTERESTS AND AFFILIATIONS

This paper has been prepared by Randal Leeb-du Toit in his private capacity. His interests, affiliations and experience are set out for the purposes of transparency and to provide context for the submissions being made.

Randal, a qualified lawyer, is a multi-faceted entrepreneur and seasoned technology investor. He has had over twenty years first-hand involvement in strategy, investment oversight and operations with over a dozen high technology ventures and multinationals in Australia, USA, Europe, Asia and Africa. He has recently returned to Australia after a stint as CEO of a software company headquartered in Silicon Valley. He currently commercialises technology from, inter alia, the Australian School for Advanced Medicine and the Institute of Human Cognition and Brain Science and is a co-founder of Innovation Bay, an invite-only business network.

Randal was the executive charged with commercialising research from NICTA, a flagship ARC Centre of Excellence backed by the Federal Government, with six universities and four state government partners. He created an entrepreneurial culture and put in place a stage gated commercialisation process and IP management system, which included a proof of concept grant scheme, internal fund and Entrepreneur in Residence Program. He spun out a number of venture-backed companies that collectively employ close to 100 staff globally.

He was also CEO of an early stage venture capital and incubation firm, an intrapreneur within one of the world’s largest business publishing houses, an adviser to News Corporation’s Fox Interactive Media and has been chairman and on the board of numerous companies.

THE AUSTRALIAN COMMERCIALISATION LANDSCAPE

The Australian commercialisation landscape is rich in the basic resources required to achieve results. Australians are curious by nature and driven to create solutions to problems. This culture of entrepreneurship has resulted in a rich tapestry of invention over the years.

Fueled by this culture, the government has been fantastically supportive of fundamental research with organisations such as the Australian Research Council providing many millions of dollars towards furthering research. The country has 37 universities and a number of major public research institutes such as the CSIRO, centres of excellence like NICTA and 48 Cooperative Research Centres.

However, it is in translating this research to market that Australia has been somewhat less successful to date and where there is a strong need for a concerted solution. The federal government and various state governments have supported initiatives in this area – the Building IT Strengths incubator program, Pre-Seed Funds, Innovation Investment Fund program, COMET and the Commercial Ready Program have all produced an array of positive results. The main issue is that these programs have been ad hoc, applied disparately, and as a result they have not sufficiently produced a sustainable entrepreneurial ecosystem.

Take for example the Innovation Investment Fund Program. Initially, under this program there were a number of venture capital firms operating in Australia. Over the years though the number of funds has dwindled, with most funds either ceasing to operate all together or moving off into the private equity sector. Only a few of those that have remained have been able to achieve sufficient return on investment from their portfolios to enable them to raise subsequent funds and increase their funds under management. This has lead to a severe shortage of venture capital in Australia.

The universities and research institutes have received mixed results from their efforts in commercialising their research. The shining light, in having created a sustained and expanding infrastructure, is Uniquest, the technology transfer vehicle for the University of Queensland. Not only has Uniquest created a healthy pipeline of spin out companies and licensing deals, but they have applied their hub and spoke model into other institutions, such as the University of Wollongong.

All too often however, researchers are not sufficiently motivated and incentivised to progress their outputs further than academic papers or conference proceedings. When they do, there are insufficient mechanisms to assist in achieving market validation or delivering proof of concept – essential gates towards receiving meaningful commercialisation funding and ultimately productising their intellectual property.

When researchers and entrepreneurs are able to sufficiently progress their ideas to the point where they would be ready to secure external funding this is for the most part, not obtainable due to a lack of viable funding operators. As mentioned above, there are not many venture capital funds currently operating in Australia.

Another potential source of funds is via high net worth angels. While there is some activity in increasing the number, sophistication and firepower of angel investors, this is still a largely untapped resource for early stage funding in Australia.

Similarly, there is minimal upskilling of entrepreneurs in the country and where such education is carried out it follows an outdated pedagogy that does not accord with the nature of entrepreneurial endeavors, and achieves lacklustre results as a consequence.

Within this landscape, there are a number of pain points that have been exhaustively discussed by others. Collectively these market failures add up to what is called the Gap that yaws wide between early stage ideation and funding and more established venture capital and development.

Acknowledging this collective Gap, this paper posits the view that a concerted solution set is required to create a sustainable entrepreneurial ecosystem in Australia. Providing this concerted approach via one organisation, the Commonwealth Commercialisation Institute will greatly increase the probability of success in this endeavour.

THE COMMONWEALTH COMMERCIALISATION INSTITUTE

In essence, the mission of the CCI is:-   To improve entrenpreneurship.

By tackling the following goals in a concerted way, the CCI will achieve its mission:
1. Increasing the understanding within Australia of entrepreneurship and commercialisation;
2. Substantially advancing commercialisation and entrepreneurship education and training pedagogy and content;
3. Fostering a culture of commercialisation and promoting entrepreneurship-friendly policies; and
4. Creating a sustainable and concerted approach to facilitating the commercialisation of new and advanced technologies by entrepreneurs and others, which show great promise for improving the economic, environmental and social welfare of Australia.

It is the core submission of this Paper, that the CCI can most effectively achieve its goals and mission by focusing its activities within three key initiatives:
A.  Entrepreneurship Conservatory
B.  Advanced Commercialisation Unit
C.  Entrepreneurship Research & Policy Unit

A. Entrepreneurship Conservatory

Akin to the concept of a conservatory of music, the aim of the Entrepreneurship Conservatory is to provide a unique and dynamic environment within which entrepreneurs can collectively and collaboratively learn while and by doing as they perform and produce their art of entrepreneurship.

This immersive, integrated, iterative and networked pedagogy fits within the fundamental design principle of the Conservatory, namely to establish a program calibrated to the real life, real time entrepreneurial process, rather than following traditional, static forms of instruction.

The Conservatory is results-based and its goal is to assist Australia prepare more entrepreneurs who anticipate the highest possible rates of success measured, in part, by the creation of larger numbers of new businesses that foster wholly new industries.

The Conservatory will draw from innovative models such as the Kauffman Foundation’s Laboratory for Enterprise Creation, private sector accelerators and a range of programs that support entrepreneurs like Y Combinator, Seedcamp and the Founder’s Institute.

In doing so the Conservatory will build up a comprehensive and cohesive set of programs. The Conservatory will also act as a test bed for the CCI to formulate a fundamental knowledge base for teaching and progressing entrepreneurship in Australia that will become a referenceable ‘science of startups’ and will lead to an acceleration in the number and success of high growth, scale companies.

B. Advanced Commercialisation Unit

The Advanced Commercialisation Unit is focused on derisking and progressing the development of intellectual property and startups through various forms of grants, mentoring and funding mechanisms such as increasing the number of sophisticated angel investors and experienced early stage funds.

B.1 Public Research
The CCI explores ways to enable higher levels of entrepreneurship through the commercialisation of university and public research institute-based technologies by partnering with these institutions, industry and philanthropists to ensure more effective translation of research to market.

One of the methods the CCI will employ is to create Proof of Concept centres attached to various public research institutes. These centres recognise the significant lack of funding and expertise available for early stage entrepreneurs within such institutes to prove the concepts of their innovations as a precursor to progressing to market.

The centres will provide:
* expert assistance; and
* seed funding, in the form of market validation grants and proof of concept grants that can be used towards creating a working prototype.

Not only will the CCI establish such centres in partnership with public research institutes, but it will also crystallise best practices, monitor outcomes and facilitate networking amongst the centres.

B.2 Private Funding
The CCI will work with high net worth individuals and various angel networks and associations to formulate a program of accreditation and deeper sophistication amongst this essential element of the entrepreneurial ecosystem.

The aim is to deepen the pool of active angels, create better efficiencies in their funding methods and ultimately assist them to deliver better return on investment for the private capital they are deploying, while also increasing the pool of mentors for nascent entrepreneurs.

B.3 Institutional Funding
The CCI’s aim with regards to institutional funding is to get well trained managers into the market so that they produce higher return on investment, and give potential institutional limited partners, such as superannuation funds greater comfort in deploying capital into the venture capital sector of the alternative assets arena.

The first mechanism the CCI will utilise is the creation of a Fund of Seed Funds. Suitable managers will be identified who can create a series of seed funds. It is anticipated that partnerships will be formed with well established funds in Silicon Valley who can provide an initial impetus of experience into these funds.

In addition, the CCI will implement a fellowship program through which recipients will undertake a 24 month educational program of immersive training with partner venture capital firms. As the Australian seed funds gain track record and experience, the fellows will spend an increasing portion of their time immersed in these funds as well. This program is designed to educate and train emerging leaders in venture capital and will feature a structured curriculum that includes a tailored learning plan, mentoring, peer learning and industry-specific development.

C. Entrepreneurship Research & Policy Unit

The CCI will conduct and fund research that contributes to a broader understanding of the drivers of innovation and that best advances entrepreneurship.

This unit will be informed by activities in both the Conservatory and the Advanced Commercialisation Unit and, in turn, as a ‘science of startups’ crystallises, the unit will be able to guide these two units.

In addition, the unit will provide funding for and manage a number of post doctoral research grants to further Australian research in the ‘science of startups’.

The unit will also formulate empirical data and findings that can be used by the Federal Government as the basis upon which to set policy in the areas of innovation and commercialisation.

Silicon Valley: Secret Weapon For The US Economy

I once took Kevin Maney for a flight over Sydney in a seaplane. He didn’t blink when we buzzed low over the Sydney Harbor Bridge. Similarly his steel nerves shine through in an absolutely awesome piece he has written for Portfolio.

Silicon Valley thrives in times like these. True entrepreneurs rise to the challenge and innovation and, subsequently, the economy as a whole benefits. As he says:

During a recession, Silicon Valley doesn’t curl up into a fetal position and pout. It continues to take chances, throwing sparks at kindling, knowing that something will catch fire. It’s the U.S. economy’s secret weapon.