This Silicon Beach event was organised by Steve Dalton – Co-Founder and President of the Gold Coast TechSpace and sponsored by the City of Gold Coast as a part of the Gold Coast’s Visiting Entrepreneur Program.
The tips and the insights which Marcus Schappi has picked up along the way are priceless. He identified a few important factors for us to think about in case we want to take our ideas or our company to the next level:
Marcus shared his conclusions based on personal experience: “The first thing you need to know is what you want to achieve. Do you really need funding? Have a good look at yourself and check if you really need funding and if you really do need funding than I have a little advice for you. Instead of raising funds to develop a product, have a finished product and then raise the funds to sell the product and get distribution. Funds have a downside in that you lose a bit of a control and plays on your mind because you will think that you have to impress the investors; it will be at the back of your mind all the time.”
Crowd sourcing can help you as a proof that there are some customers who are interested in the product which can help in attracting more serious investors such as Angel Investors. Could be a good decision but Marcus dwelled upon a serious question – should you do crowd sourcing through Kickstarter for an example in Australia or seek some other options…
Marcus said: “Not in Australia. In Australia we have a very small market. You can still remain an Australian company but it is better to seek funding in America.” Market size is of course a very important factor for a business. However, the most interesting information came as an unpleasant surprise – the real hurdles of running a Kickstarter project in Australia if you are not living in America. Apparently it goes like this – to get your money from Kickstarter you need an Amazon payment account; to get your money from the Amazon payment account you need an American bank account; to get an American bank account you need a Social Security number or Employee Identification Number (known as a Federal Tax Identification Number) which you can get by opening an American Limited Liability Company. To open an American Limited Liability Company you need a US address. So, just work the system or get a mentor from the Aussie Mafia (you can also join them on Facebook) in San-Francisco.
The fees in using Kickstarter straight of the top will vary but from Marcus Schappi’s personal experience they are about 8%-10%, including Amazon fees.
So, should you use Kickstarter? “Yes, right now. It is the golden era of Kickstarter but before you do that you should have a finished product,” concluded Marcus Schappi. He also warned us about not assuming anything but testing everything: production and manufacturing systems, how to do shipping right, knowing everything about your product, taking a lean startup approach and learning when it is time to pivot. Also, be prepared for pitching to the venture capitalists who will ask a lot of questions.
THE TOP VENTURE CAPITALISTS’ QUESTIONS OUTLINED by MARCUS SCHAPPI (the questions are re-blogged from his startup co-host):
Who is your real customer? [“Who Cares?”]
Why can’t they live without it?
How will the venture reach all the identified customer segments?
How much does it cost (in time and resources) to acquire a customer?
How long before the customer sends the business a check?
How many Widgets do you need to sell to break even?
What are the key customer tangible and intangible factors that anyone has to provide in order to succeed? [What is the “whole product”?] What are your customers’ values?
How are pricing decisions made?
What are your unfair or sustainable competitive advantages? What are the barriers to entry?
What are the strengths and weaknesses of your competitors?
What else do you have besides technology? What do you do better than any other company? Is this a product or a business?
What do you consider to be your Company’s greatest weakness? What has the key management team accomplished in the past? Who else needs to be on the team?
“Answers all this questions and you are in a good place,” said Marcus Schappi and moved to questions from the audience.
(PHOTO taken by Nick Hortovanyi)
WE RECOMMEND YOU TO VISIT FOLLOWING WEBSITES:
- BLOGS - Best blogs by category
- Des Walsh - Get the Social Edge for Your Business
- Dr Clarence Tan - Australian and Malaysian ambassador for Singularity University
- Dr Michael Rees - Linking the crowd with the cloud
- eBOOKS ONLINE DIRECTORY - Online directory for eBooks
- ELENA ORNIG - Professional Portfolio
- GOLD COAST TECHSPACE - Gold Coast TechSpace is a physical place where people come to hack around with and learn about technology
- GOLD COAST WRITERS ASSOCIATION - The Gold Coast Writers Association (GCWA) encourages and supports writers from all genres, age groups and levels of writing to grow, learn and excel in their craft.
- HELENSVALE WRITERS; GROUP - A very diverse group of writers, writing in both fictional and non-fiction categories.
- INTERVIEWS - Interviews with authors, business people, musicians and fascinating individuals
- PUBLISHING HOME - Publishing company Julia Sophistique Pty Ltd