Building great startups
Last week, I was lucky enough to attend ANZ Innovyz START as a mentor for 4 days.
ANZ Innovyz START is an intense start-up incubator based in Adelaide, Australia. For 3 months, 10 companies get access to free software, office space and time with experienced mentors. The program culminates in mid August with a demo day in front of a huge crowd at the Adelaide Town Hall.
The startups involved had all kinds of products, from a clever lock design that aims to make the lives of short term accommodation providers easier to live and post production captioning, software designed to take the pulse of large enterprises, a platform for ciphers and a community for international students arriving in Australia. In short, the range of innovation was really impressive.
After spending a couple of days getting to know each company, mentors were matched with the companies that best-fit their backgrounds and skillsets. I used the time to talk to 3 companies about building a great business around a great product.
Creating a customer base
Investors want to see three things when evaluating pitches from startups: a great product, a great team and a proven or potential customer base. Work had already been completed on the first two aspects so we focused on the third. We spent lots of time working through exactly how to establish what a potential buyer’s situation is, what his or her pain points are and whether the product can address those pain points. We talked at length about which questions they should ask their buyers and when they should ask them.
Creating processes, creating data
Hammering these processes out makes sales easier for startups by creating an established, repeatable set of questions. When a process is repeatable, it’s scalable. As a startup grows and hires new salespeople, they can train them on the processes rather than leaving each new salesperson to reinvent the wheel. This saves time and money.
Then we moved into the actual sales management. By combining a rigorous sales process with an extensive set of leads, and tracking them in a suitable application, startups can create some really big datasets around their sales process. Then they can use the data to make more informed decisions about how to turn more leads into quotes, and more quotes into sales orders. This in turn gives them the ability to quantitatively demonstrate both existing and potential demand – making them more attractive to investors.
Of course, I stressed the importance of cloud products for sales process management – right down to CRM and support systems. Spreadsheets are no longer acceptable! Happily, the startups I spoke to were very receptive to cloud technology. They were all either on Xero already or in the process of moving to Xero.
Taking it further
As part of the bigger picture, the program is currently playing a very important role in the Adelaide technology landscape and could be the catalyst to drive further investment in the Australian early stage investment scene. With announcements of new funds available for post incubator companies from large players such as Optus/SingTel, we hope to see a continued rise in the start-up industry in Australia. Xero is thrilled to be playing our role in the Australian startup scene and we look forward to a continued involvement in several programs.
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