Last Wednesday I attended VC Connect ACT 2007 and was impressed by the impressive line up of speakers considering this was a Canberra event. Anyone who lives in Sydney will tell you how boring Canberra is and how it is purely a city built around Government infrastructure, but seriously, so much of that is changing. Yes, we even have our own local VCs.

What was even more impressive at VC Connect was that many people in the room had just jumped off planes from New York City and the UK, destined for Canberra. There is genuinely a lot of keen interest to invest in Australian innovation particularly in the fields of ICT and Biotech. As Doron Ben-Meir (Principal VC from Jagen) mentioned, one of the reasons that ICT companies more often than not receive venture capital funding, is because technology makes them so scalable. This scalability allows the business to rapidly multiply profits because its basically a write once sell many scenario, as with most forms of technology. This is not to say that traditional businesses are not suitable for venture capital funding. Doron sat at my table, so we got to have a brief chat. Doron seemed highly driven and knew exactly what he looked for in entrepreneurs, he was also quite young to be in the position of handing out money to others for their promising ideas, which was also inspiring.

Rachel Slattery from Slattery IT (The event organiser) ate lunch with us to find out about Rate the PLATE. It was great to meet her and I will simply say she is pretty passionate about the whole VC/startup scene in Australia and knows just about everyone in this field. She publishes a weekly newsletter about the ways in which Australian companies are using technology and about happenings in the Australian technology space - go and subscribe if you haven’t already.

Then there was Bill Bartee - a prominent entrepreneur turned VC who moved to Australia from the US. Bill backed SEEK during the early days as well as Looksmart just to name a couple. Bill made a big point that so often entrepreneurs that he has backed don’t proactively come to him asking for help and that they should. Basically, a VC provides much more than capital - they are a jackpot resource of knowledge and experience that the entrepreneur can call upon to help make the best decisions. Bill did say that when he worked with the SEEK founders, they were basically perfect in anticipating just about everything that he was going to recommend to them. I was going to approach Bill and have a chat, however after his speech, he had to leave straight away.

Also inspiring was seeing Nick McNaughton from Blue Cove Ventures giving his advice. I also caught an interview with Nick in last Sunday’s Canberra Times. Basically, during the past year, Nick has looked at 65 businesses and rejected 62 of them. Another statistic to drum home to entrepreneurs that they must do their homework before approaching a VC. Just because you are passionate about your idea and have a dream like the other ten million people will not convince someone to invest in you. Nick has some excellent dot points outlining roughly what he is looking for. You’ll notice one of the points “Clear ownership of any IP” - Intellectual Property was one of the main things that almost all of the VCs were adamant about. However, John Riedl made a very strong point that IP is one thing, but if you had the choice, don’t spend all your energy protecting your IP, simply build the product. John said that there were two main ways to protect IP. The first being legally through patents etc but the second one being by actually building the product and getting out there and creating a reputation around it so that it is in peoples’ minds. Being first to market was a massive point that John repeatedly kept driving - and other VCs in the room backed this up with examples. If you are not first to market, you can spend the next 2-3 years in overdrive trying to play catchup. John had to be the biggest character in the room, he had a classic grandfather sense of humour and just had a fantastic presence about him.

David Landers from Allen & Buckeridge also had a wealth of experience. He mentioned that once a Term sheet had been signed between the entrepreneur and VC, he can’t remember any instances where the deal was actually abandoned. Basically, this means that if you get to the signed term sheet stage, you have a pretty good guarantee of completing the deal, but not quite 100%. Mike Zimmerman from TVP also said about 80% of his signed term sheets had progressed into completed deals.

Roger Price openly contributed stories from his own learnings about Australians rushing too fast into the US market. He made the analogy that Australia is basically a single, large US state and that you are far better off focusing on getting business locally before committing to the huge effort required to succeed in the US market. Roger said that it takes an Aussie 2-3 years to properly understand the US market after moving to the US and that you are far better off hiring a ‘yank’ to do that job for you. Roger learnt this the best way, first hand, where he lost about $6 million going down this path with a previous company. Although its a big figure, that kind of loss almost directly adds the same amount of value to Roger’s experience. You just can’t beat learning things first hand and you can guarantee he knows exactly what to do next time, while so many others not having gone down the same path may go off and make the same mistake. Mistakes are the way to success.

Matthew Michalewic from SolveIT reinforced the point that there has to be complete transparency between the entrepreneur and VC at all times. Even when something small happens to not go in your favour, you must be totally up front in telling your VC about this straight away. Eventually it is going to all come out in the wash anyway and it takes 2 seconds to ruin your reputation which always precedes you. Tell them the good with the bad at all times and you will always have their full faith and support. Part of running a startup is facing the huge number of challenges and working with the VC to overcome them, the VC probably has experience in overcoming a similar problem anyway. Matthew was inspiringly young for his achievements to date also.

All of the other speakers were very knowledgable, I learnt something from all of them. Overall it a was a great way to get inside the minds of a room full of experienced VCs and entrepreneurs and see what makes them tick and what they are looking for. I would definitely attend again next year and it has influenced our approach with Rate the PLATE.

The more I use Ebay lately, the more I realise it has become the Pasha Bulker of web applications. It is a bulk freighter, burdened by its own cumbersome mass, unable to quickly change direction to avoid trouble before running aground.

I had a laptop listed on Ebay for the past ten days. During most of that period, a legitimate looking Aussie buyer held the winning big. Yesterday, the final day, I received a dodgy message asking “Hi, will you send to Indonesia?”. I immediately suspected it was a dodgy scam, not really standing out among the other 20 or so fraudulent messages I’d received during the 10 day listing duration. So I ignored the message.

However, within the final 30 seconds of the auction, this same dodgy Indonesian Ebay member outbid the Aussie bidder by about $200. I suspected something dodgy, but anyway awaited payment. This morning, I received the following crap from Ebay:

The results of the following listings have been cancelled due to bidding activity that took place without the account owner’s authorisation:

We have temporarily suspended the bidding account and we are working with the account owner to prevent any further unauthorised activity. Since the account owner did not initiate these bids, fees resulting from the listings in question have been credited to your account.

Unfortunately, it is not possible for us to automatically relist these items for you. Instead, to relist these items you will need to start from the beginning of the listing process, either through the “Sell Your Item” process or through your third party listing service. We know that this is an inconvenience and we apologise for the negative impact it may cause you. We are working on tools to allow you to relist your items without starting from the beginning, but they are not available at this time.

Please do not respond to this email, as your reply will not be received. If there are issues that have not been addressed by this message, you can contact us by clicking the “Help” link located at the top of most eBay pages and selecting “Contact Us” from the menu on the left hand of the page.

We apologise for any inconvenience this may have caused.

Regards,

eBay Trust & Safety

I am definitely appreciative of the fact that they realised this guy was fraudulent. However, the problem being that they had now completely wiped all record of my listing. So it was no longer in My Ebay whatsoever - 100% totally lost. I couldn’t offer the legitimate Aussie bidder a “second chance offer” and I lost all the detailed specification text that I’d spent ages in putting together so that the ad was informative and useful to prospective buyers. Ugh!

So the lesson learnt would be always keep your own offline backups of any long and detailed text that you save into an Ebay auction, just incase they lose the lot and you can’t get it back. Additionally, when you’re selling expensive electronic/technology items, block overseas buyers. Chances are they would be able to get the same machine cheaper than from in Australia anyway.

Although I am starting to hate the Ebay product, I just can’t think of any other prominent web site with the potential to sell the laptop for a strong price. Frustrated and confused, I had no choice but to spend the time re-listing on Ebay, however with a few key changes to the listing. This meant trimming and preparing the photos in Photoshop again and cutting and pasting lots of specification text back into a fresh listing. Total time wasted approximately 1 hour. This time, the item won’t be available to overseas buyers and I have trimmed down the accepted payment methods.

With any luck, it might sell for a higher price this time as compensation for the ordeal.

WARNING to bloggers: Do not waste your time typing any really long messages into wordpress unless you have uploaded a .htaccess file containing the following into your wp-admin folder:

SecFilterScanPOST Off

If you don’t do this, a built-in linux thing called MOD_SECURITY may highly likely think that your post is a malicious hacking attempt and it will block the form submission and send you to an ugly wordpress 404 page. I have been stung by this one many times and it just stung me again, while actually writing another blog post which I just completely lost because of this bug. It wipes out the contents of your form when you use the Back button and its extremely frustrating.

Wordpress should have done the right thing and included this .htaccess file with the product archive so that it exists by default without their users having to learn the hard way.

Tomorrow, I will be attending VC Connect ACT 2007 on behalf of Rate the PLATE.

There are some big names speaking at the event so it should be a great chance to network and learn from others. I will try to do a write-up of the key learnings from the event.
Whoever said that Canberra was a boring place purely consisting of Government departments? Things are changing and the Australian economy is thriving.

I know from experience that when I get the following symptoms, its time for a decent break:

• You start staring around at all the big buildings and infrastructure in the city absolutely bewildered at how it all got there and you just can’t understand why anyone would bother with all that hard work - it just blows your mind why people go to work at all.
• 40 hours of consulting in a given week seems like an eternity and you just can’t work out how you used to put “that many hours” in.
• You start taking regular 2 hour lunch breaks, even if its costing you money to do so.

If this is you, you are almost certainly well overdue for a really decent break. Take a month off and don’t think about work at all. You will come back only wanting half hour lunch breaks, totally understanding how all the big buildings and infrastructure got there and your 40 hour week will fly past and you’ll still be ready for more. This is when things happen!