Some of the country’s top would-be entrepreneurs line up this month to pitch their ideas to potential investors at the latest Carnegie’s Den event in Sydney.
More than 100 people are expected to gather at the offices of investment banker Mark Carnegie in Sydney’s Paddington to hear pitches from a range of small start-ups wanting the funds to take their business to the next level.
This month’s Deal profiles four of the Australian based finalists- Pointsbuild, Productify, PerformanceCentre and ComWriter. Based in four different cities, each finalist company is using the internet to develop a highly-specialised niche business to fulfil needs in industries including education, sales and training.
Each company is at the early stages of development. The different ideas highlight how a small operator can create a business using technology to solve a structural problem or offer a better service.
The popularity of the cloud, with its lower-cost storage options, is also allowing small companies to offer internet-based services previously dominated by bigger companies.
The winner will get $15,000 in cash plus a potential investment of up to $1 million and a year’s worth of mentoring from MH Carnegie.
The winner of the last Carnegie’s Den event was Digiviser, a company that provides social media analytics to help generate sales leads and insights for companies. The company was co-founded by Emma Lo Russo who had never competed in a venture-capital pitch before but her five-minute spiel seriously impressed the judges.
Another finalist was Wollongong based Selera Labs which has devised next generation software to detect duplicate invoicing, a tool which can help companies save millions of dollars a year. The company’s pitch attracted attention of Hungry Jack’s founder Jack Cowin who was at the event and decided to trial the software. Each of the four finalists has their own good story to tell and will benefit from the exposure of the event. Getting the financial support they need to grow their business is the next big challenge.
Pointsbuild: Provider of online continuing professional development courses for the building industry.
Based: Young, NSW. Founded: 2006. Founder: Michael Tomlinson. State of business: Profitable for seven years. Provides more than 70 different online short courses. Delivers more than 1000 courses a month.
Michael Tomlinson was working in London for Microsoft when his mother in Sydney gave the IT consultant an idea for a new business. His mother, a lawyer, could see there were new regulations for people in the building industry to undertake compulsory annual professional development updates.
“I had always wanted to start my own business. But I was not 100 per cent sure how or when or what. The idea came up as a result of a conversation with my mum,” says Tomlinson. “There were a range of processes associated with reforming the building industry in New South Wales and the move from voluntary to compulsory CPD (continuing professional development) obligations on builders.”
Still in London, he worked with his mother in Sydney to produce six online courses covering basic legal and financial issues for builders. They approached the NSW Office of Fair Trading for approval and launched the business. “The feedback was positive,” he says. “There was no-one else in the market. The major industry associations were delivering classroom base training.” The online based training made it easy for people in the building industry, who work in all sorts of locations, to keep up their compulsory CPD training.
“For 18 months it was a part-time operation and then my wife and I moved home to Australia in 2009.” They moved to Young, some 380km southwest of Sydney, where his wife’s family came from. With an online business model their location was not an issue.
“We turned a part-time business into a full time operation with a team of five,” he says. “I had to learn a lot about the building and construction industry and the education they needed. We kept putting on more and more courses to keep the builders coming back. We grew from six to 30 courses in 2009 and now we have over 70 courses.” He expanded beyond NSW to ACT, Tasmania and Victoria and is extending the range of trades and professions catered for. These include building certifiers, architects, engineers, property developers and quantity surveyors.
He says company’s base in a regional centre resonates with people who have difficulty getting to the cities to update their qualifications. “If you live in Broken Hill you can’t down tools and drive to Sydney for a course,” he says. “With online courses you can get a better standard of training at any time you like.” He says the company delivers more than 1000 training courses a month and has quite a high percentage of repeat customers.
Tomlinson says the business has been profitable for many years but he is keen to take it to the next stage and is planning to expand into other professions where there are CPD requirements including the healthcare professions and accountants. “We are trying to identify industries where tech adoption has been lacking and there are not many entrants. There is a growing amount of compliance around professional development around the world. We have the platform to cater to that.”
People are already taking the courses in 14 countries. The company also offers courses in Korean, Arabic and Cantonese.
Productify: Open-source platform that allows retailers, suppliers and manufacturers to exchange product information such as product, size, colour and images, more easily. Allows information to be uploaded onto websites quicker with fewer errors.
Based: Sydney. Founded: June 2012. Founders: Dean Steingold and Doron Ostrin. State of business: Since it was founded it has enjoyed year-on-year growth of more than 80 per cent. After working with nearly all of Australia’s largest online retailers, including Westfield, the company is preparing to launch into the US market in early 2015.
When South African-born Dean Steingold and Sydney based IT specialist, Doron Ostrin, met over dinner a few years ago there was an instant rapport. Ostrin had been working for a company that supplied uniforms and chefs’ jackets that were being sold online. But he found the whole process of getting the right images and specifications from the supplier and uploading them onto the website, often from an Excel spreadsheet, repetitive and painstaking.
As they talked into the night, the two decided to go into business with each other. They could both see that Ostrin’s experience was part of a broader problem with e-commerce in handling data and images from thousands of different suppliers which needed to be uploaded onto a retailers’ website. “We sat there the whole night,” says Steingold who was returning to Australia after a few years working in property in San Francisco. “I was looking to get into something and Doron had this great tech idea.”
In June 2012 the company they called Productify was born to supply a service which would help streamline the whole process. The two initially started the business using Ostrin’s family contacts in Israel to help design the software for their product. But they found that too difficult and hired Chilean-born IT specialist, Daniel Reyes, the former chief technology officer of online retailer brandsExclusive to join them 18 months ago.
Their business was given a major boost when Westfield asked them to help provide the product feeds for their online store from the different retail tenants. “They launched a new online store and wanted all their retailers’ products to appear on their website,” Steingold says. “In order to do that you have to deal with all the retailers who all have their product information in a different way.”
“We help them get their products onto the website,” he says. “It doesn’t matter what format the products are in or whether the images are in different sizes. We automatically convert it to the format for the Westfield online marketplace.”
The deal gave Productify profile in the market for their niche services and access to the up-market retailers based in Westfield stores, including David Jones. “DJs is a big name and we have great contacts with the retailers now,” says Steingold. “We now deal with DJs and Best and Less and Bonds.” The deal also gave them their first outside investment with two unnamed high-net worth individuals putting money into the business.
The company is pitching at Carnegie’s Den in the hope of getting another level of investment. “The Westfield deal was good for us but now we have to keep the momentum going,” says Steingold. He says the focus of the business is changing as it grows. When it started it focused on the links between product suppliers and online retailers. Now it has more ambitious goals to provide applications which can help link up the whole supply chain — from manufacturing to supplier to retailer — to supply the product information needed for online retailing.
“We are trying to solve the whole flow of product information,” says Steingold.
PerformanceCentre: Cloud-based applications for sales people to track performance.
Based: Melbourne. Founded: 2006. Co-founder: David Marshall. State of business: Customers include SingTel Optus, Suncorp, Foxtel, Vodafone, Sensis, Johnson & Johnson Medical, Fuji Xerox. Launching extyension “freemium” product called SalesGrid to provide sales tools and sales tips this month.
'Make Every Day, Game Day' is one of the themes of David Marshall’s PerformanceCentre, a business aimed at helping companies boost their sales performance. Founded in Melbourne in 2006, the company has developed a cloud-based program to help sales people track their commissions and incentives and help organisations better manage their sales incentive programs.
Marshall says part of the goal of any company in the sales business should be to get the message out that selling is something that needs to be done — and tracked — every day. “Great sales teams set an intent for the day and then deliver to it. Why is it that most sales incentive programs are still tracking monthly, quarterly or even annually?” he says.
Marshall worked in sales incentive compensation for Optus in the nineties before setting up his own incentive marketing agency. He looked at reselling US programs aimed at helping companies track and incentivise their sales people, but decided they were too expensive and too inflexible for the Australian market.
Marshall said he was also “infuriated” to see how much money some Australian companies were spending trying to set up their own sales-tracking programs. “So we built our own solution with a focus on agility and value for money in the cloud.” After a slow start for the first few years, the business has taken off with more than 10,000 sales people in Australia using PerformanceCentre software.
Its big customers include SingTel Optus, Suncorp, Foxtel, Bankwest, Vodafone, Johnson & Johnson, Sensis, Fuji Xerox and GlaxoSmithKline. “We developed the product locally and host on Amazon Web Services,” says Marshall.
Marshall says the company is also expanding into the US where it sees there is a potential $1 billion market for its products. While the business is profitable and still debt free, Marshall and his co-founders, David Jackson and Sue Jackson, are keen to take the company to the next level.
While the company’s basic product helps companies track sales and incentivise their sales force, SalesGrid is a tool which aimed to help individual sales people with the selling process itself. It includes sales tips and tools and ideas to help give them more momentum in their selling and closing deals.
The SalesGrid module, which is being launched by PerformanceCentre this month, is being sold on a “freemium” basis. The basic product is free but it has options for customers to pay to upgrade with more features. Marshall says the aim is to generate more revenue but also expand the potential base of new customers for its basic product.
ComWriter: Cloud-based writing program for academics and students.
Based: Sunshine Coast, Queensland; IT group in Sydney (Blue Chilli Technology). Founded: 2011. Founder: Linda Glassop (former accountant, IT executive and academic). State of business: Test product released in June 2014 with 4400 users from 41 countries. Still testing business model.
Linda Glassop did not finish high school. But that didn’t stop her getting an MBA, a Graduate Certificate of Higher Education, a Master of Philosophy and a PhD. But coming to academia later in life, in her early 30s, she could see both the opportunity to put the skills she learned in her career in the IT business, to tackling some of the challenges of academic life.
Queensland-based Glassop founded ComWriter in 2011. The company offers a cloud-based writing platform for academic work which includes word processing and bibliographic tools. “ComWriter makes writing a very simple and stress-free process,” Glassop says. “It focuses on preparing academic writing and citing references to academic standards using defined styles to format all the text and references.” She promises that her program “will send the archaic concept of ‘word processor’ straight to the trash where it belongs”.
Glassop left school at 16. She trained as an accountant and worked for a range of multinational corporations, including Digital Equipment Corporation, in a variety of areas including operations management, process re-engineering, information systems design and quality and change management.
She finished an MBA at Macquarie University 1992. Then there was a Graduate Certificate of Higher Education from University of NSW in 1999, a Master of Philosophy (Commerce) from ANU in 2000, and a PhD from Deakin University in 2007.
She worked in higher education for 14 years, lecturing for seven Australian universities and supervising more than 40 executive MBAs. During her teaching career, Glassop gave her students many tips and tricks for essay writing. When she left academia, she started to design an iPad app to help students with their academic essays, but the project soon expanded into a much more ambitious venture — setting up a whole new platform for academic writing. The ComWriter program includes an online library, a full-featured referencing capabilities, a personal resources data base, task management and pre-drafted style guides.
“Writing to academic standards has never been so efficient and easy,” says Glassop who says her goal is to help academics and students to “work smarter”. “We let the computer do all the grunt work.”
The business is still very much in its early days. “We are currently testing our business and marketing model,” says Glasson. The company did a “soft launch” of its product in June this year as part of a trial involving more than 4000 users from about 25 universities, colleges and government organisations.
Glasson says her potential market in Australia includes the 1.2 million people in higher education and then high school students. “Students can lose 15 to 25 per cent of an assignment mark for poor references,” she says. “Not so when they use ComWriter.”
She says there has already been interest from a number of high school districts in the US for the program and the company is also in discussions with an educational organisation in India. She sees the product also having a broader use for people doing structured writing such as business plans, marketing plans and consultants’ reports. “Who would have thought I would have failed my first university assignment,” she says.
This story was first published in The Australian Business Review.