Venture forth unto the web
PUBLISHED : 30 Nov 2011 12:22:20 | Jeanne-Vida Douglas
A university technology venture course seeds some promising technology start-ups.
Most business people are well into their 40s before they join the boardroom ranks; however, at just 25, Gareth Robinson has stepped out of university and into the role of chief executive of his own company, Leasate.
Web start-up Leasate was one of three companies born during the inaugural technology venture class offered to final-year computer science students at the University of Sydney in 2010. Robinson has now secured funding to take his idea out of the classroom and develop it further. He is at the point where he can even take on customers.
The 2011 BRW Entrepreneur of the Year, and CEO of Freelancer.com Matt Barrie, founded the course based on a class he attended over a decade ago at Stanford University.
“I did a class similar to this in the dotcom boom and, believe it or not, in that class PayPal started, along with a whole host of other companies,” Barrie says. “If I could add up the market capitalisation of all the companies that were started in that class over the last 10 years, it’s about $10 billion. That’s a hell of a lot of value and job creation.”
During the class, 40 students are divided into 10 groups of four and required to develop a business plan around their idea.
Throughout the course, they receive lectures from entrepreneurs, venture capitalists and angel investors, and the final class is a pitch day, where they present their idea to would-be investors.
This year, the three winning pitches have all built their ideas into web-based services in the gaming and education field. Robinson’s Leasate could be described as an eBay for the property industry. It will allow owners to list their properties at the site, so that potential tenants can make bids on rental prices.
Three of the companies from last year’s class are still operating 12 months later, including Leasate, which has managed to attract an investor.
Robinson says the class certainly caused a radical shift in his post-university plans, as he had assumed he’d take a graduate role and become an employee before he began working on the Leasate business plan with three other students.
“The idea came from us looking for houses to rent as students, and the fact that sometimes you’re willing to pay a little more than the advertised rental price to secure a property,” Robinson says. “The class’s first reaction was that I was a terrible person because I would make tenants compete against each other, but once you think about it a little, there’s a massive potential for disruption in this market.”
His idea now is to keep his costs low and develop an initial customer base by reaching out to individual landlords via the internet.
“We’re not planning a massive launch. We’ll let it go live in mid-December and test it out for a time among family and friends,” Robinson says. “The idea is for the software to do all the services usually provided by the real-estate agent, so it’s easier for owners to manage their properties.”
There are dozens of groups providing support and limited funding to nascent businesses, especially in the realms of information technology, where entrepreneurialism reigns and rapid progression depends on “Ramen profitability” (see “Using your noodle”, page 40) and finding the right advice early on.
“There’s a huge amount of momentum behind what’s happening right now with technology entrepreneurs,” Barrie says. “Lots of entrepreneurs are starting up incubator programs. And if you look at the businesses that are really doing well, they’re the ones where the entrepreneurs boot-strapped their own business from early on.
“There are start-ups all over the place and they are capital efficient compared with previous times.”
While he’s busy helping in the formation of other businesses, Barrie says being named BRW Entrepreneur of the Year in 2011 provided a tremendous fillip for his own enterprise, Freelancer.com, especially in the access it gave him to other finalists.
“It was great to meet all the other entrepreneurs, and to raise awareness of the Freelancer.com business in Australia.” Barrie says. “And I’d advise anyone who nominates to be prepared for the extra media attention following the award. It was a bit of a whirlwind.”
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Entrepreneur of the Year
| Jeanne-Vida DouglasNow in its second year, BRW’s Entrepreneur of the Year 2012 Award is open for nominations as of December 1, 2011.
To be considered, nominees must be directly involved in an innovative business that has been successfully running for a minimum of three years.
Nominees can be drawn from any sector of the economy but will need to be able to demonstrate innovation in terms of product development, service delivery or fulfilment and be able to clearly state how their business has changed the market.
Nominations must include market share, customer base, industry influence and any alliances, as well as examples of the nominee’s entrepreneurial attributes.
The judges will take particular note of performance, entrepreneurship and innovation during the current financial year and in some cases nominees will be required to provide additional information as part of the judging process.
If selected as a finalist, nominees must be willing to provide revenue and profit growth for the previous two financial years, as well as current year targets.
Successful finalists will need to be available to travel to Sydney at their own expense to attend an interview with the judging panel on March 1, 2012.
Entries should be no longer than 1000 words and emailed to Samantha Hutchinson shutchinson@ fairfaxmedia.com.au at BRW magazine by 5pm, February 16, 2012.
The 2012 Entrepreneur of the Year will be announced at a function on March 29, 2012, and all finalists will be profiled in BRW.
Using your noodle to attract investment
| Jeanne-Vida DouglasThe age of profligacy in the tech world that came with the dotcom boom of the late 1990s is markedly absent from the current dotcom boom. Instead it’s all about “ramen profitability”. This is a phrase coined by computer programmer and venture capitalist Paul Graham, who founded US-based seed funding group Y Combinator.
It refers to entrepreneurs who manage to take their businesses organically to the point where it covers their living expenses before attempting to raise capital from venture capitalists or angel investors, even if living expenses are confined to a diet of instant noodles and sleeping on a friend’s couch.
This is in contrast to the 1990s where businesses that were losing money could still attract huge investment.
Nutritionists should rest assured that forums discussing ramen profitability often also feature “wantrapreneurs” swapping recipes for more nutritious meal options,
which include lentil soup and dahl.
They also extol the virtues of cooking as a form of stress relief for highly strung business builders.
BRW
Jeanne-Vida Douglas
BRW.com.au EditorSydney
Jeanne-Vida Douglas is a multi-award winning business journalist with a decade's experience covering the information technology sector. She holds tertiary qualifications in linguistics and literature, economics and IT, was named MediaConnect’s IT Journalist of the year for 2009 and has recently published The Profit Principle a book aimed at turning smart ideas into great businesses.
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