Organic startup ideas – This article is by Paul Graham from y-combinator.

There are two types of startup ideas: those that grow organically out of your own life, and those that you decide, from afar, are going to be necessary to some class of users other than you.

I found it great to have the distinction drawn out in detail.

Mixergy Interview with Hiten Shah about Lean Startups – Love the lean startup idea. Creating assumptions, testing them, slowly building a product pretty much in unison with customers. The interview is one of my favourite Mixergy interviews.

Sample interview questions for product/customer development – This is a great set of questions for getting feedback on an app.

Startup Lessons Learned – A blog by Eric Ries – all about lean startups

If you’ve got any others, chuck them in the comments!

Related posts:

1. The differences in entrepreneurship and incubators between Australia and the USA
2. Recent reading: Thoughts on “Rework” and “Click”
3. Benchmarking is bogus

Feature requests

Feature requests come in all different ways.

Some are from existing customers that want to be able to do something that they currently can’t.

Some come from in my head. I recently bought some photos for my graduation, and the system that photographer used to sell photos was crap. (Paper/mail based). I was going to try sell Photography Orders to them, but then before I picked up the phone, I realised that I have no chance because Photography Orders lacks a feature that they would definitely need.

Some, and more often for Photography Orders, feature requests come in the form of pre-sales questions.

The most common one we get for Photography Orders is the ability to have packages. It’s been a common request from the start, and it’s been one that’s been very hard for me to figure out how to tackle.

Need to do research

It’s taken me a long time to figure out how I’m going to implement this feature. It’s a hard feature to add  because every photographer uses packages differently. It took me lots of feedback, and an experience buying photos myself for me to figure out how to do it well.

Some photographers (especially wedding photographers) presell a package to their client. The package might include 5 * 10 x 8 prints, 2 * 15 x 20 prints, and a CD. The customer pays upfront (or at least a deposit), the photographer takes the photos, then all the customers have to do is choose their photos.

The other way photographers use packages became clearly apparent to me recently when I was in the process of buying photos for my graduation. The way that photographer works is that you pay a sitting fee up front, then they send you out proofs with a price list. On the price list, you can order some packages. For example, order 3 * 10×8 prints and get $10 off.

It sounds like a straight forward feature, but actually it’s not.

In scenario one, the order has already been taken, and the customer just needs to choose photos. The sale has been made already. The best functionality for Photography Orders is to show what sizes still need to be chosen for their chosen package. Basically, it needs to have some sort of restrictions or guide on the cart.

In scenario two, packages are an up-sell. The idea is that people will buy more because they get better value. The best functionality for Photography Orders is to show what discounts are available if they purchase x more. Multiple packages need to be shown instead of one package being preselected as in the scenario above.

These conflicting goals are also made tougher by situations like, what if in scenario one, the customer wants to buy some extras. Or, how do you handle the customer buying multiple packages in scenario 2. Or, should the packages be at the client level or gallery level (a client can have many galleries). Well it sounds like packages should be at the client level, but that prices should still be on gallery level. If that’s the case, what if two galleries have different packages, and they conflict? It takes some severe modifications to the cart to be able to handle that sort of stuff.

The way many other photo order software places do it is to have it so customers can browse packages, add a package to their cart. Then they add photos to their package. I don’t want to go that way for a couple of reasons.

• For scenario 1, adding a package to their cart initially is counter-intuitive
• It complicates the interface and options for customers. I was checking out some competing software the other day, and I didn’t even understand how to work packages. If I can’t understand it, and I’m writing competing software, I don’t like the chances for someone without familiarity of the process.
• Once a package is added to a cart, there becomes an option for each photo to either “Add to Cart” or “Add to package”. It clutters everything up, it’s messy for the user and it’s messy to display. Also, it’s not intuitive. I can easily see situations where customers are confused about whether they should add something to their cart or their package.

You can’t please everyone

A system that pleases everyone is broken for everyone. You end up with a settings page with options like “Require the number of images be selected?”. Settings which, for new users, make absolutely no sense as to what they actually do. That’s something we definitely DON’T want in Photography Orders.

However, to have software without lots of settings, some photographers aren’t going to be able to do what they want to be able to do. To give an example, here’s how Photography Orders will handle packages.

Admin view:

• Packages will have a new tab in the admin section (I was thinking about putting them in the prices tab)
• Packages will be assigned to clients (not galleries)
• When creating a client, photographers will be able to tick what packages a client gets access to
• When creating a client, photographers will be able to preselect a package
• When creating a package, the photographer selects the sizes, quantities, and discount amount of the package

Customer view:

• If packages are enabled, there’ll be a bar on the top of the content panel that they can expand to view all packages
• If a package is selected, there’ll be an indicator above the cart as to what still needs to be chosen to fill up the package
• When choosing a photo, sizes that are still needed in the package will be highlighted

Tradeoffs:

• Customers can only purchase one package at a time. If a customer wants multiple packages, they’re going to have to submit multiple orders
• Customers can purchase photos above and beyond their package (I can’t see photographers complaining about this, but other photo carts have this option so who knows?)
• Any other options apart from size/qty/discount
• Different prices in different price lists don’t affect the discount of the package

Hopefully it will give enough flexibility to photographers, while still making it easy (minimal settings) for the photographer, and intuitive for their customers.

Related posts:

1. Why you should be saying Happy Birthday to your customers
2. Collecting testimonials
3. Negativity in business. A poison that corrodes money

I was also listening to PennSays – the video blog of Penn from Penn & Teller (the Vegas magicians). Penn is a libertarian that thinks government should stay out of pretty much everything. Not to say libertarians are any less in number here, because I have no idea if that’s true or not, but I certainly have never met one, and very rarely see them in the media. That got me thinking about different political attitudes in the USA, and how they effect entrepreneurs.

And finally, I was watching a video interview by Jason  Calcanis with David Heinemeier Hansson (37 Signals), where they briefly talked about the differences between entrepreneurship in Europe and the USA. More specifically about taking on personal liability for finance in Europe.

Finally, for the purposes of this article, I’m talking about start-ups that aren’t seeking substantial outside funding to start up.

In Australia

I’m not claiming to know much about the entrepreneurship community in Australia. I’m not part it, and there’s probably way more going on than I could ever know. Regardless, here’s some of the things I know about the support for entrepreneurs in Australia.

NEIS

Firstly, we have the government backed NEIS (New Enterprise Incentive Scheme). NEIS is a program whereby eligible people can be supported on government welfare and receive training, mentorship and support.

To enter NEIS, you have to be currently receiving welfare. That pretty much means, you can’t have a job or assets over a certain amount.

The NEIS scheme puts you through a training course that goes for about a month, where you learn about the basics of business. At the end of the course, you receive a certificate 4 in business.

During the course you learn about writing a business plan. Then, over the next month or so, you make up your business plan in consultation with the “business specialist” who takes the course.

Then you go off and start your business and check in on a quarterly basis with some reports.

So from NEIS you get:

• $10-15k for living expenses over the course of 1 year
• Training and a formal qualification
• Write up a business plan with someone who knows about business
• Mentorship

The NEIS scheme is kinda cool, but it has a few drawbacks.

The teachers get paid sweet f*ck all. The guy I spoke to was on 40k/year + a car. That’s a pissant wage. You can get the equivalent of that straight out of uni. How on earth can they expect to get good teachers if they get paid like entry level accountants?

There is a NEIS course running out of the office complex I have my office in. The teacher was really awesome. He had run 2 businesses, was very experienced, very smart, and one of those people who are just born to be a teacher. Unfortunately, he left when he got offered a job that paid 6x more. I haven’t met the new teacher yet, and hopefully she’s really good, but when first year grade 1 teachers get paid somewhere between 50-60k straight out of uni, you’ve almost got to question why does anyone even take the job? And more importantly, the people that are taking these jobs, and presumably the pay cuts that come with it, are they the best people to be mentoring a startup?

It’s really focused on small businesses. Local businesses. Perfect for if you want to start a freelancing business (unfortunately I couldn’t qualify for the scheme), but if you’re idea is something bigger, the mentors will be useless to you. In fact, they’d probably be harmful to you because they work in an environment where they help small (and limited) businesses start, and their advice would be totally off.

Qualifying for the scheme isn’t based on merit, but based on your situation. If you have a job, or have assets over a certain amount, you don’t qualify. The scheme is more of a scheme to help unemployed people get work than to help entrepreneurs succeed.

NEIS boasts that about 80% of their participants is still in business in 5 years. I would like to see what they mean by “in business”.

This scheme seems to be more geared at the unemployed, and reducing the governments long term welfare burden, than actually being setup for entrepreneurs, and the type of people that are constantly motivated and will find a way to start a business no matter what they’re given.

Innovation grants

There are a number of innovation grants in Australia for entrepreneurs.

Firstly, there is the R & D tax credit. Basically you can claim 150% of your R&D as an expense.

Then there are business grants. There are different grants at local, state and federal level, that offer a wide variety of amounts for a wide variety of things. There are so many different ones for different approved activities. I just took their quick tool to find out if I was eligible for grants and based on my answers, I got this:

Based on your responses, you may be eligible to apply to government programs that could give you:

• up to $200,000 in grants representing up to 50% of your export market development costs
• up to $250,000 in non-repayable Proof of Concept grants, with a further $2 million in repayable grants to bring your product to market
• up to $15,000 in non-repayable grants

So basically, there’s quite a lot of this sort of stuff. Having said that, I don’t know how hard it is to apply and get the money, I’m guessing it would be fairly hard. And I’m also guessing once you do it, they’d check up on it as well. If someone knows better, please correct me.

Private courses

As far as I can tell, and I did a little bit but not a lot of research on this, there aren’t any programs like TechStars and DreamIt Ventures where the program takes a percentage of the business and helps you launch your startup.

The closest I could find was a great program called Startup School. This program is run by Steve Sammartino, who writes the excellent Startup blog, has a startup of his own Rentoid, and lectures on marketing subjects at RMIT university.

The Startup School program costs about $1k and is a crash course in things that actually matter to a startup (unlike NEIS and most university courses). Then there is an ongoing mentorship part as well.

In America

I’m definitely no expert in the situation in America. Absolutely everything I know is from reading about it on the internet. If I’m wrong about anything, please correct me in the comments. In the meantime, I’m going to be an idiot and write about my observations.

Belief in the market

I can’t find anything anywhere about a program similar to NEIS in America. Instead, this gap has been filled by the invisible hand.

As a result, we get programs like TechStars, DreamIt Ventures and YCombinator. These companies take a piece of the startup, give a little bit of money, a lot of mentorship and advice, facilitate a buzzing community, and help the business become successful.

Once again, if a program like this exists in Australia, I haven’t heard about it, and would love to be made to eat my words here.

I believe there’s several benefits in a system like this compared to Australia’s system.

The people that run these programs, are fucking awesome. They have lots of experience in launching companies, they have lots of contacts with potential customers, potential investors, mentors, etc. The benefits for a startup to be involved with these people is immense.

In Australia, as mentioned above, the teachers are paid poorly, and the turnover is high (The program in my office complex has had 3 teachers in the last 2 years). The quality of the teachers aren’t as high. Rather than mentors who have created successful businesses, you have teachers who are teachers (They can’t do, so they teach). I’m generalising here, the last guy who taught this program was absolutely awesome.

The program improves to society. The businesses that go through these programs, are there because they have value and are likely to give a return to the incubator. The selection process is rigorous. Both the incubator and the businesses that start are going to hire people and pay taxes.

Compare that to Australia where the government is sinking tens of thousands of dollars into businesses that are (mostly) going to stay small. It will take years for the government to get that money back in taxes.

In Australia, the selection process of the government scheme, is basically “if you don’t have a job or existing assets, you’re in”.

Summary

I think this is a great example of the differences in how a system works with or without the government stepping in.

In Australia, the startup incubators serve a bigger number of people, creates smaller businesses, and costs far more to society.

In America, the market forces means that less companies are created, but they’re bigger companies, most often tech related, and has immediate benefits to society.

I don’t know whether it’s the size of the population, the culture, the regulations or whatever, but from my point of view, the American way of doing things is better here. Several programs like Startup School are starting to bridge the gap, and hopefully we’ll see them grow.

Related posts:

1. A few cool software startup links
2. Ideas for small business in a difficult environment
3. Top 5 reasons to turn down a client