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Nassim covers the accounting and tax rounds for BRW, as well as general business news. She previously worked for The Age newspaper covering general news, state politics and economics.

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Aussie start-up Omny’s plan to personalise radio around the globe

Published 05 November 2013 10:41, Updated 07 November 2013 07:53

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Aussie start-up Omny’s plan to personalise radio around the globe

Omny co-founders Long Zheng, Ed Hooper and Andrew Armstrong want to test any technical issues in Australia first, and then will look to launch in the United States and New Zealand. Photo: Arsineh Houspian

Like most Australians, my typical morning during the working week is a smartphone-reliant one. It goes something like this. Wake up at 6.30am, find out the weather on my iPhone, get dressed, leave home. On the car ride to the train station, tune into the radio news. On the train to work, check emails, view my calendar, read the latest headlines online. Jump on Facebook to peep on my friends, or read and share interesting articles that appear on my feed. Tweet, read more news headlines, and listen to my iTunes playlist. Now imagine I have an app that recognises my reading/viewing habits automatically. Instead of having to surf it intuitively knows what I want.

It reads out the day’s weather, my friends’ birthdays, appointment reminders, how many emails are in my inbox, who they are from and a brief summary. It broadcasts relevant news headlines (based on what news sites I am surfing). It plays my favourite songs or streams radio. This is just what Omny – a personalised radio app that’s been 18 months in the making – is doing. Launched in early October, Omny uses an algorithm that learns and updates your preferences as you use it.

Omny is currently designed for the Australian iOS app store, but it will also be available to Android users from early next year.

The product is the second to be designed by the founders of the Australian start-up 121cast, Andrew Armstrong, 27, Edward Hooper, 28, and Long Zheng, 25.

The first app was called SoundGecko, which basically read out news headlines. Omny builds on SoundGecko with more content and features.

“For decades people have listened to radio for news, weather, sport and music, but it’s one-size-fits-all,” Hooper says. “We’re delivering a personalised service that can be used anywhere on a range of devices.”

Updates are available without ever having to look at the smartphone screen again – which suits people walking, cycling or driving to work. In fact, this is how Hooper first came up with the idea.

When he moved within walking distance of his work he could no longer use his smartphone in the morning as easily as he did when he was commuting by train.

“I spoke to my friends who had the same problem – while you’re driving or walking you can’t stare at a smartphone and interact,” he says.

“We realised that there are millions of people that listen to radio and music podcasts, and constantly download content from their mobile phones. We decided that we would bring all these pieces together.”

Rookies who took a punt

Melbourne boys Armstrong, Hooper and Zheng are pretty confident of Omny’s growth potential. They’ve staked their jobs on it – the three of them quit their paid jobs in February 2012 to create the app.

“I was working at Groupon in Sydney doing strategy,” Hooper says. “Andrew worked at a consulting company called Mammoth Media, where he was contracted to Telstra, working on products such as Bigpond Music. Long was a professional blogger and worked on projects such as the Windows-based Twitter client MetroTwit.”

Hooper and Zheng were five years ago crowned winners of Imagine Cup, an international software design competition that is sponsored by Bill Gates’s Microsoft.

The competition, which in 2008 had the theme, “imagine a world where technology enables a sustainable environment”, each year attracts entries from 300,000 students from around the world.

These self-described Australian “rookie” entrepreneurs, who at the time worked with other students and went under the name Team SOAK, beat more than 200,000 others (that was the number of entrants that year) for the top award, with a software solution that helps farmers regulate the use of water on their properties.

As well as winning $US15,000 ($15,900) in prize money, Hooper and Zheng got an opportunity to pitch their idea to leading Silicon Valley venture capitalists.

“It gave us seed money and access to all these people in Silicon Valley,” Hooper says. “It was great. We were just a bunch of college guys that didn’t know how to run a business.”

Fast forward to today, and the 121cast co-founders are still navigating the challenges that start-ups face in their infancy.

So far they have received $550,000 in angel funding and grants. Their investors include Adventure Capital and SingTel Innov8. In addition, they have been awarded a grant from Commercialisation Australia. There is a team of nine staff, including a Cambridge alumna, an artificial intelligence specialist who previously worked at National Aeronautics and Space Administration (NASA), and an ex-Buzzfeed employee.

The “soft launch” in Australia is just the beginning. The founders want to resolve any technical issues here first, and once they’ve got it working smoothly, they will look to launch in the United States and New Zealand.

That should be within the next six months. “Truth be told, we’re a small team and we wanted to make sure it at least works awesomely for some people, rather than not-so-well for a lot of people,” Zheng says.

Chasing 1 million users

SoundGecko got more than 200,000 downloads and peaked at more than 50,000 users per month. Hooper says they expect Omny will exceed that because it offers more content and functionality.

“We expect [to attract] in excess of a million users in the first 12 months,” he says. “We want to be able to revolutionise the distribution of audio content, much like YouTube changed the way video content is consumed.”

The 121cast founders will raise anywhere between $1 million and $3 million in the Series A round, which will kick off soon.

“We are targeting Australian investors, as well as international investors who are based in the USA,” Hooper says.

If the founders get through this first funding round, they will use the money to hire more engineering staff in Australia, as well as a US-based business development manager.

But before the 121cast team goes to the global venture capital market, they must ensure the app works properly. The aim is to attract as many users as they can, and learn about them.

Investment depends on how the trio differentiates the app from the competition, as well as how many Australians download their app and keep using it. There’s already a host of music-streaming platforms like Spotify, Pandora and iHeartRadio.

Hooper says the difference is Omny is more like a radio station, only one that’s targeted to the individual. “Now that it’s live, we’re able to see the product in action and how users are responding to it,” he says.

“Based on what we learn from our Australian launch, we will then be in a position to tackle other markets.” A big part of this is about discovering what extra features users want.

“There’s no point filling a leaky bucket,” he says. “We are trying to patch holes at the moment. Some users are not coming back, so we’re trying to work out why.”

Currently the iOS app is powered by an algorithm that learns user preferences over time. It also pulls data from an individual’s Facebook news feed. “We perform all the services integration – fetching Facebook feeds and notifications, emails from Gmail and Outlook, calendar from Google Calendar and weather – in the cloud as well as algorithmically picking the best content that each user might like,” Long says.“Right now, the app has access to a decent range of content across all topics and integration to some third party services, but we plan on continuously expanding and improving the library,” Long says.

He says radio content comes from a selection of popular stations including the ABC, NPR and BBC. News headlines are also available from a range of Australian and international news publications. “Additional radio and news providers are being added weekly,” Long says.

While it’s a smart app, it’s not perfect. First, Omny needs Wi-Fi or mobile data connection to get the latest content. Second, users need to have music on their mobile phone or a Omny-supported music-streaming account such as Spotify, Rdio, or Songl.

“Omny streams content through the phone’s mobile data connection, similar to popular audio apps like Spotify and Pandora,” Hooper says. “When available, it will connect to Wi-Fi to save on mobile data usage. When connected to Wi-Fi, it also buffers more content in advance, so that it uses less data when moving back to a mobile data connection.

“For music, Omny can use the music already stored on the phone, or be connected to streaming services like Spotify, Rdio, or Songl if they have a premium subscription to those services. For users who don’t have a streaming music account, we have a free 30-day trial of Songl built into the app, which gives full access to millions of songs.”

How to make money

As yet, Omny’s founders haven’t made money from their app. Of course, they want to – and soon.

“We plan to offer a premium subscription,” Hooper says, adding that this will cost about $3 a month, although the exact price has not yet been determined. “Premium subscriptions, which will be available early next year, will remove advertising and unlock additional features,” Hooper says.

It’s not finalised yet, but the founders have carried out early testing of celebrity voices that read out updates in the app for premium users.

Just as with mainstream radio, non-premium users won’t be able to escape ads. They will hear advertisements every 20 minutes or so during their personalised radio broadcast.

Hooper says they will be introducing ad-supported content for the free version, also by next year. “Omny does not contain its own advertising at the moment – some shows contain their own advertising, but we are unable to remove this,” he says.

Hooper thinks they will be able to entice SMEs to advertise on Omny. Companies like CocaCola, he says, may be able to pay top dollar for radio ads targeting a mass audience, but small businesses want to spend less and be more targeted.

“If you’re a small coffee shop that wants to target a certain demographic, we are able to factor in a person’s location, gender and content preferences,” he says.

The founders are already meeting with local and overseas investors.

“At this stage we’re definitely more focused on growth, rather than the revenue,” Hooper says.

“The more people we have using the app, the better it scales.”

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