I went to the Young Entrepreneurs Unconvention on Saturday Sept 18th 2011 in Sydney which was my 2nd Unconvention and had a big turnout with around 350+ young entrepreneurs attending.
Massive props to all the speakers for taking time out to connect with and inspire young people – especially Andrew Morello who made time to speak even though he had to run to an auction straight after. Most busy business people would have done their speech and left but Morello came straight back and spent the rest of the day connecting with all the Young Entrepreneurs at the conference – respect!!
The Young Entrepreneur’s Unconventions are held a few times a year in Sydney and Melbourne so look forward to catching you guys at the next one!
Here are some key points from the speakers:
Matt Barrie – The Future of Entrepreneurship
Matt Barrie is CEO and Founder of Freelancer which is the world’s largest outsourcing platform and also the most highly trafficked website in the world that is owned by an Australian. Matt was also the BRW Entrepreneur of the Year 2011.
Matt talked about how the global labour market is disrupting, with online outsourcing offering huge opportunities for small businesses in the West to outsource tasks to the developing world often at 1/10th of the cost locally, and there is also a huge opportunity for people in developing countries to now earn their months wage in a few hours.
Matt also talked about the massive opportunity with approximately 2 billion people connected to the internet – but that means there are 5 billion people on the planet NOT already connected to the internet and many of them are connecting at rapid pace right now. And the first thing many of these people want to do (especially since they are in developing countries) is increase their economic status and earn money online!
Matt pointed out the tremendous opportunity for small businesses as so much stuff out there is FREE for businesses to use, things like Gmail, Skype, WordPress.
There are also so many services that are extremely cheap for small businesses to use, things like Amazon Web Services, PayPal, eBay, Facebook, Freelancer, Moneybookers, Shopify, PR Newswire, Kissmetrics, LinkedIn.
Matt said there is no better time to start a business and gave some examples:
- Digg – was started for $60 and got an offer for $200m from Google 4 years later – Was on the cover of Business Week “How This Kid Made $60 Million in 18 Months”.
- Omnisio – Initially funded $20,000 by Y Combinator, no further funding, Sold to Youtube for $15 million just 4 months later
- PC Tools – free anti-virus that started with $1000 and sold to Symantec for $300m
- Twitter – 200m users in 5 years
- Facebook – 750m users in 7 years
- Cityville – reached 100m users in 45 days
- Zynga – Makes flash games on Facebook – Founded in July 2007, in 2010 made $850m revenue
- Groupon – Founded Nov 2008, “made $1 billion in sales faster than any other business, ever” (according to the WSJ)
- Linkedin IPO – Listed @ $45, Opened @ $83 and has stayed high and currently @ $88 – shows the public has an appetite for tech again
Matt Barrie said there should be a stampede of IPO’s coming up – such as Groupon, Zynga, Living Social, Etsy, Gilt Group, Yelp, Jive, Angie’s List, eHarmony, Etsy, Zoosk, Twitter and Facebook.
Jack Delosa – Capital Raising for High Growth Ventures
Jack Delosa is a Gen Y Investor and Entrepreneur and founder of The Entourage.
Rule #1 – Only bring on smart money, half the value investors being is non-financial – e.g. their network and experience
22% of Business Owners in Australia are aged > 60, so many are looking to sell and it is a buyers market
Typical business in Australia sells for 1.5x profit
Businesses can sell for 4-6x even 8x earnings multiple if it has been prepared for exit and worked with advisors
In a survey of 10,000 investors by Wholesale Investor Magazine, 90.5% of investors said yes, they would invest in a business in their space that was pre-revenue if there were good people at the helm
Rule #2 – Have an advisory board – meet mentors who have been there and done that, it can start with a few informal chats over coffee, if it goes well just ask if they would like to attend a few board meetings and be on your advisory board
Stuart Cook from Zambero – asked 70 of the CEOs from the BRW Fastest Growing 100 out to lunch – Guess how many said no? Zero. And the next year Zambero was the fastest growing franchise in BRW.
Tip for getting mentors and contacts – help them first. Find out what they need and give it to them for free, such as helping hand out flyers or disclaimers at their conferences or events.
Rule #3 with Capital Raising – stage it. That way you give away less of your business as if you only raise the funds you need for Year 1, then when Year 2 comes your company should have a higher valuation and you should be able to raise more capital by giving away a smaller % of your company.
Rule #4 – Understand how to value a business. No.1 biggest factor is people, No.2 is Market opportunity – how are you solving the problem? How will you make money off it?
Also understand Strategic Value – ask who can make more money from my business than I can? This way you can sell your business for a price WAY above any calculations from earnings multiples.
A great example of this is Nullsoft WinAmp which was started by a 16 year old kid from Arizona. It was freeware software and not making profits so any businesses buying it based on earnings multiples would not be offering much at all (infact a gentleman at the Unconvention talked about how he flew to Arizona and offered $50,000 for the business). But the massive database of registered WinAMP users was of great strategic value to other players and AOL bought Nullsoft Winamp for $80 million.
Andrew Morello – Unconventional Strategies for Business Development
Andrew Morello won the first season of The Apprentice Australia and is now works alongside Mark Bouris as BDM at Yellow Brick Road.
Although I don’t usually watch TV, I did watch the entire first season of The Apprentice and was a huge fan of Morello and was thrilled to see him win! I could see straight away he had amazing people skills and the ability to connect with people and I thought that was a main reason why he was chosen by Mark Bouris as the winner. It was great to see Morello in person and he certainly has a great warmth and energy about him.
Morello talked about treating all people with respect, and said have a genuine authentic conversation with people. Some tips were the FORD points:
e.g. Morello listens to BBC World News on 936AM Radio, that way when he meets people he knows what is happening in their culture and can have authentic conversations. He gave an example how he heard some of the latest news from Pakistan, then when he gets in a cab and the driver is from Pakistan, Morello is able to talk about the latest news that just happened, especially when you know what has happened in someone’s home country before they do and can tell them about it – it helps built a connection if you have a genuine interest about their culture.
Ruslan Kogan – Told the Kogan story
Ruslan Kogan is the founder of Kogan Technologies and has been listed on the BRW Young Rich List and also the BRW Fast 100
As long as there is demand, whether you start an auction at $0.01 does not matter it will finish at the same price. And actually starting ebay listings at $0.01 for his LCD TV’s meant they gained momentum and got around 500 watchers.
Kogan’s No 1 Business lesson – Look for win/win, otherwise it’s not sustainable for the long term
Wayne Gretsky was asked “Why are you a good hockey player?” He said “I don’t skate to where the puck is, I skate to where the puck is going” and that applies to Business.
E.g. Kodak denied the digital revolution as they had a foothold on cameras and prints, but as Digital Cameras have taken over Canon/Nikon have grabbed 95% of the market and Kogan believes Kodak will not be around in 5 years.
Kogan said “business is all about servicing demand” and played around with Google Insights – which is a fantastic tool I also recommend to entrepreneurs. Some interesting examples he showed were:
When would be a good time to sell Michael Jackson T-shirts?
“Air Conditioners” vs “Heaters”
You can see what time of the year would you need lots of air conditioners in stock, and you can see demand peaks at the exact opposite times to heaters:
Ask what is your value-add to the consumer? Why would people buy from you? What can you do better than any other business?
Example of a successful viral PR campaign was “Kevin37” when Kevin Rudd’s government announced a $900 economic stimulus package, Kogan released a $900 TV and it got on every single news channel.
Let me know what were your key takeaways?
Would love your thoughts and comments!