Start Up Blog

The infrastructure disadvantage

Posted in entrepreneurship by Steve Sammartino on November 29, 2010

I was really excited to read about the new Eday hatch electric car which will be launched in 2012. It’s very cool for a few reasons including: It’s price is under $10,000. It’s an Australian startup. They are IT focused, not automotive focused. All the major functions are controlled electronically. It’s also the first eco / electric car option which isn’t priced at a premium, so it’s a total game changer.

What I find most interesting in the article is the advantage of zero infrastructure. When industries go through significant change as the automotive industry is, existing infrastructure can be a major disadvantage. Not only can it define how things should be made, but it also has the added burden of it needing to be supported financially. It demands asset utilisation and so limits the potential for a real change in product output.

The only way to innovate in an industry is to re-imagine the best way to build something from scratch. To ignore what we know about the incumbent mode of operation and create a new one. It is examples like the Eday that should inspire entrepreneurs to believe that that no company or industry is all powerful.

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Borderless Venture Capital

Posted in entrepreneurship by Steve Sammartino on January 25, 2010

This is the third of my crowd sourced blog entry ideas as suggested by Aida_Lee. Aida wanted to get my thoughts on the following: In today’s cheap, quick and global market, what do you see as the blueprint for a border-less venture capital to work?

There is no doubt Venture Capital has been a bit of closed shop historically. And although we’ve seen some opening up of business funding in the USA with vehicles such as the techcrunch 50 and Paul Graham’s Y Combinator, other markets such as Australia are lagging behind quite significantly. My views are the opinion of someone who has raised venture and angel funding before for new ventures.

In my view a thing things need to happen for the traditional structure of Venture Capital to change:

  1. A startup community must evolve in a tight geographic region – this often facilitates events such as those mentioned above in Silicon Valley.
  2. Disruptive technology must become available which breaks down traditional access barriers to outsiders.

Number 1 has happened in only a few locations, namely S Valley, but number 2 has happened all over the world and this is where I see the major changes. The thing that new internet technology has done is brought entrepreneurial communities together. Now we can find each other without having to live near each other. But the funny thing about raising funds for what is considered risky investments, is that it isn’t nearly as much about the idea or revenue potential. It’s about the ability to the team raising to sell themselves. And all real selling requires lots of face time. It’s hard to do this on line, or across borders. So I think that large capital raising wont change a great deal in the future. But, I do see an important  capital raising revolution coming:

Crowd funding.

It’s been done already in a few markets, and some entrepreneurs and start ups have already used this technique to raise money for their venture. The idea has been well documented, but a true revolution, such as social networking  has yet to happen. The main thing holding it back has been government regulation from the likes of the SEC and ASIC in Australia. What I think the next iteration will be, is a web based business which takes micro payments / investments (a little bit like Kiva) from a large number of punters (for lack of a better word) to fund the new business. Method of which would be like an on-line float for startups. The investors who then would become digital evangelists for the new company. There would be a synchronized  ‘investment beta’

The key service of such a site would be to overcome the legal vagaries for all participants and be able to take investments in multiple currencies from multiple markets. There is no doubt this would leverage the quickly building on line entrepreneurial communities. It would also have an important impact the venture capital industry structure the same way digital freelancing websites like elance have respectively.

I’d be interested if there are any sites already doing pure crowd sourcing, and to hear what your thoughts are.

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Quote about design: Steve Jobs

Posted in entrepreneurship by Steve Sammartino on January 5, 2010

In preparation for teaching a Brand Management Class today at Melbourne University when I came across an important quote from Steve Jobs about the industrial design of the iPod. When the first generation iPod was finally complete and ready to be unveiled to the public Jobs looked back on the process of how the iPod was designed:

“Most people make the mistake of thinking design is what it looks like. People think it’s the veneer – that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it feels like and looks like. Design is how it works.”

Startup blog says: When it comes to design – it should facilitate function before fashion. After which time the human instinct takes over…. the function becomes the fashion.

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Outsourcing – little tips

Posted in entrepreneurship by Steve Sammartino on November 15, 2009

As a follow up to my last post on The White Collar Reality here is a simple Slide Share presentation as a thought starter of why it matters, and what is happening. This is a snippet from the syllabus at Startup School.

Startup School

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