I happened to catch the same flight as Serg Belokamen from BugCrowd and, since I had a rental car, gave him a lift to his hotel.

Street performer paid to act like a homeless person adds authentic gritty feel to the otherwise 5-star accommodation favoured by Startmate in San Francisco

Sorry, did I say “hotel”? I meant “hostel”. It’s great to see Startmate continues its tradition of not spending any more than necessary to get the job done. The dorm rooms the Startmate teams are booked into at the Adelaide Hostel start at $28/night. Is the neighbourhood unsavoury? In the last few blocks to the address we played a new trivia game: “crack whore or just whore?”. As I pulled the Prius into the dead-way alley fronting the hostel, a homeless man rifled the industrial bins for recyclable waste. Well, at least it’s sustainable accommodation…

Anyway, when you’re a tech startup, where you sleep matters less than where you work, and the Startmate teams have a great office — the vast, tastefully designed workspaces of StartupHQ are only a few blocks away and full of other startups to network with.

Serg from BugCrowd indicates how impressed the teams are with their shared office space at StartupHQ in San Francisco

It’s soon showtime

The first big pitch event is in two days’ time, at the iconic 500Startups in Mountain View, and the teams need this time to get a US SIM card, work out some laptop internet access, find a place to eat and drink, and catch up on queues of customer email left unanswered since they left Sydney (it piles up so fast).

If you’ve never been to this part of the world, San Francisco and Silicon Valley form the Western side of a region called the “Bay Area” which (duh) wraps around San Francisco Bay. The Bay Area is bounded on the Eastern side by the cities of Oakland, Hayward and Fremont, and to the south, San Jose. What they call “Silicon Valley” forms a strip about 65km long and 10km wide down the western edge of the bay from the city of San Francisco’s southern edge to San Jose.

The current generation of startups tend to favour locations in the south of the city, though many are drawn further down the valley to cheap/free office space provided by their investors, or to be closer to business customers spread out on corporate campuses all the way to San Jose.

Rough location guide to Silicon Valley tech startup industry

Transport can be a planning headache, because driving to/from the city is a long way — about the same distance as Melbourne city to Healesville or Sydney city to Campbelltown. The BART train system goes the length of the bay but its stations are rarely closer than 30mins walk from where you want to be, so some opt to BART it to the closest station and then bicycle, get a taxi or Uber car the last few KMs. Rental cars are a little cheaper than in Australia but expensive to park overnight if you’re staying in the city. Think we need to talk to Aussie expat Elias at StartupBus about a twice daily shuttle up and down 101

Got questions about living and working in Silicon Valley and San Francisco? Or questions for some of the Startmate teams? Let us know… 

Nissen has been spending a lot of time in the offices lately, acutely aware of the pressing need to grow users and the number of chats which take place on 7pmanywhere, the dating website he co-founded with Vita Smid. I feel guilty for interrupting Nissen’s afternoon. All the Startmate companies are under the pump lately, but he appears glad to take a break, even if just for a half-hour chat.

He looks tired. While the site has been growing, he knows the rate of growth needs to double each week from now, until the U.S trip. It’s a big ask. The pair has been spending seven days a week at the Startmate offices chasing users and optimising the platform.

“Ideally we’d like to have 100,000 users by the time I get to the U.S,” says Nissen. “Given that we’re on 1,500 now or 1,300 now, it’s like we have to grow 100% each week for the next seven weeks.”

“Now, if you take that like most Y-combinator startups have like a 10% a week growth rate and even that’s like super hard and most of them don’t achieve it; like how the f**k are we going to get 100,000, like 100% a week? So that’s difficult, but yeah you’ve just got to keep pushing on.”

Without ramping up growth Nissen knows it will be difficult to raise money in April, and at the moment growing fast is the focus. When we last spoke it was mid-January and Nissen and Smid were settling into a new city, starting a new-year health kick, and looking forward to meeting the other companies taking part in the accelerator.

At the time, Nissen said reaching critical mass was the most significant challenge for 7pmanywhere, recognising people weren’t likely to share their dating activities on Facebook or Twitter, eliminating  the viral effect all startups crave. The only other options were creating awareness through content (e.g., events, blogging, media) or paid advertising. Although the pair has now opened up the platform outside hometown Melbourne, figuring out how to grow (and grow fast) is still the biggest challenge.

The pair has been experimenting with different methods of acquiring new users, but Nissen says StumbleUpon paid discovery has been driving the most traffic recently. It’s proven more effective than Google Ads in the cluttered market for dating sites. He’d also tried events but they’ve proven expensive, time consuming, and haven’t resulted in the desired media coverage.

“We’re finding our site is not at all viral, but just as a pure pay-for-conversion, it’s actually net positive. And we’re getting around $3 or $4 a conversion on StumbleUpon. If were to go Google AdWords and use dating, it would be $2 a click. So compared to how much it normally costs to get a conversion, it’s a godsend.”

“That was also a driver for opening up to the world — we’ve had some really good vanity metrics. In the last week, we’ve had close to 1,000 sign ups, so the user base has doubled. And 20,000 profiles are being viewed and rated on which is a massive vanity metric. But yes, it’s starting to take shape.”

7pmanywhere co-founders Amir Nissen and Vita Smid (Image: Zach Kitschke)

There are some things the 7pmanywhere team would have done differently. In hindsight, Nissen says it would have made sense to go mobile first. People are used to chatting and texting on their phone, and an app allows them to chat while they’re waiting for a bus or when they’re bored at work. Smid is now working on an app, although it would have been easier to build it first.

“We definitely would have done the mobile thing almost first. And even just designed for mobile first because it’s much easier to start small and go big than it is to go big and compress it,” says Nissen.

At least the platform is starting to grow. The percentage of people who actually chat after signing up has improved markedly since opening the platform, and most people go on to do a second chat. Now, whenever a girl logs on to the site she’s presented with photos of several guys. The guys she picks receive an email message notifying them someone wants to chat. As you can imagine, the re-engagement among guys is higher than among girls.

“We’re getting 100 chats a day, and that’s without re-engaging the girls. So at the moment, guys get bombarded with emails. We haven’t sent anything to girls.”

Nissen says 7pmanywhere is experimenting with different messages to re-engage girls. It’s experimenting with different messages to see what works. The goal is to get people coming back for more chats.

There’s been a clear shift in gears from the Startmate mentors. Nissen says the office hours sessions with program coordinator Niki Scevak are becoming much more serious, as the program edges towards the pointy end.

“I’ve never been to Silicon Valley, so it’s good just to hear where we need to be in order to have a realistic shot of raising money. Niki’s getting a lot more black and white. It’s like, ‘If you guys haven’t got this, there’s no point in meeting next week.’”

That seems to be working. Nissen says knowing you need to push yourself helps you achieve more each week, because you want the mentoring time and advice. The week before last, Scevak said the team needed to get 50 chats. They ended up getting 400, after opening it up worldwide. This week, the goal is to get hundreds of chats each day. There’s no easy way to get this many users, certainly not for free. At the moment, StumbleUpon is driving traffic to the site, but it’s very much a matter of trialling everything.

“I know startups are hard and I know I’m doing this for five years at least. You don’t get into the game without thinking you’re going to be at it for 5 to 10 years. So for me it’s just more of a challenge. Even if we don’t raise money I’ll still be working on this the next day.”

Despite all this, Nissen is still upbeat. He’s also realistic about what it might take to grow 7pmanywhere into a sustainable business. He knows the ups and downs will test the team. For now, he’s focussed on growing users and keeping healthy. Both Nissen and Smid have their sights set on the U.S. Time will tell how they fare.

“It’s tough and certainly it causes a lot of stress on the team. You get down a lot, and that’s where the exercise comes in handy, and looking after yourself, because tomorrow’s another day.”

The pair has been working on an app-based platform which allows casual and part-time employees to swap shifts with colleagues. They aim to save time for managers who previously had to text or ring around to find staff that could cover when someone else couldn’t work.

With coffees in hand, we sink into the maroon lounges in the office foyer on a drizzly March Friday morning. Dean and I chat while Dolejsky taps away on his laptop, interrupting occasionally to demonstrate a new feature or add his thoughts.

Dean has been thinking a lot about pitching lately; how he can refine and improve the company’s message to present a compelling case to investors. Of course there’s nothing like pressure to focus the mind. This week it was the Optus Innov8 pitch session in front of a room-full of potential investors. And so, one morning last week, Dean made the journey up to Newport to spend time with Startmate mentor and FLT Editor-in-Chief Alan Jones. Over two hours, Dean workshopped his pitch and re-shaped the pitch with a clearer story. And then again on Monday, he took part in FLT’s pitch clinic with Tyler Crowley. The pitch now tells a clear story, and Dean is feeling more confident.

“What I learnt from Tyler, is that you really want to create an emotional connection. You have 15 seconds or the audience will be back on their email, or their phones.”

Dolejsky looks up from his laptop; he’s clearly excited to show me the latest version of the pitch deck. Most of the text in the presentation has gone, and there are noticeably more images. There’s also a clear storyline; a guy who wants to go to a friends’ party but can’t get out of his work shift, a girl who has to pay her way through law school and needs the extra money, and a stressed-out manager who doesn’t want to spend hours on the phone trying to find a replacement staffer.

The pitch introduces the characters and then solves their problems using a pre-recorded product demo. It’s effective and shows a clear narrative with an introduction, a complication and a resolution. It’s the mental-movie approach which Crowley advocates. A smattering of jokes and then the traction slide — almost a hockey-stick graph showing the level of engagement within current McDonald’s restaurants — and the pitch is done.

I’d followed the Innov8 session on social media, unable to make it in person. Dean’s performance proved a hit, at least in the twittersphere. Stuart Richardson, founder of Melbourne-based Adventure Capital, tweeted “Impressive pitch @Shiftr - tackling a common pain, with a simple & elegant solution.” While the outcome of the pitch won’t be known for a few weeks, it has already resulted in a few introductions to potential customers and investors. It also gave the pair the focus needed to refine their pitch.

Updates to the product had also helped boost Dean’s confidence. Over the past few days Dolejsky had added functionality, allowing managers to see who had approved shift-swaps, check potential additional costs incurred if someone swapped shift (i.e., penalty rates for working more than a standard shift, or an increase in wage costs due to age differences), and a new feature the pair is rolling out so that any manager can check shift swaps on the office computer.

“You get some confidence from the strength of the product, and from the pitch prep. We wrote this version the night before, and doing all that and practising made me feel confident about our story,” says Dean.

Shiftr founders Ludek Dolejsky and Adrian Dean (Image: Zach Kitschke)

Shiftr has been growing steadily since speaking to FLT in January, yet the company is at a turning point. Until now, its growth strategy has been to expand within the McDonald’s empire, targeting franchise owners with multiple restaurants. It seemed like a sensible strategy; Dean and Dolejsky would learn from each new store that came onboard, and could refine the product to cater to exactly what managers require. A satisfied manager would refer Shiftr to other store owners, and there was a clear growth strategy. However the pair is now looking towards the U.S., and wondering what questions a potential investor might ask.

There’s an important McDonald’s owner-operator conference in Auckland, New Zealand, next week and it could be a perfect opportunity to secure a number of new customers. The pair is considering whether or not to attend. At the same time, the pair is realising their current focus on one customer is concerning for investors. They know the concept works at McDonald’s, but can it work elsewhere?

“Bart [Jellema, Startmate mentor] was like ‘Okay, that’s great, but from an investor point of view growing from 30-60 McDonald’s might mean some more revenue, but it might not be replicable’,” explains Dean. “He had a good idea about screwing the New Zealand conference and focussing on a mail-out.”

The pair will make the decision on Monday, following a meeting with an influential NSW McDonald’s executive with ties to a number of restaurants. More than likely, they’ll use the money they would have spent on flights, accommodation and marketing materials to do a mailout to the 750 Australian McDonald’s restaurants. They’ve created a ‘starter kit’ which allows a manager to setup on Shiftr in a few minutes, using a packaged USB dongle and step-by-step instructions. Once they’ve made the push, they’ll turn their focus to securing some other paying corporate customers, and focus on proving that the platform can work elsewhere.

The initial signs are encouraging. In the past few weeks, the pair has had several meetings with one of Australia’s largest retailers, following an introduction by one of the Startmate mentors. The retailer is interested in doing a trial. While it sounds like good news, the pair is trying to work out whether spending months securing a large enterprise deal is worth the effort, or whether it’s better to continue with the bottom-up approach they’ve had from the start. The pitter-patter of rain drops continues outside.

“Beggars can’t be choosers,” says Dean. “If we land a huge roll-out deal, it gives us the opportunity to prove the system at scale. We’re getting a lot of interest from the enterprise side, but it raises all sorts of questions about white-labelling, security, they’re even concerned about who our cloud-service host is.”

The Shiftr founders will fly to San Francisco with the rest of the Startmate companies in late-April. Before then, Shiftr, like the other companies, will need to prove its business model and demonstrate traction. Without these two ingredients, companies will struggle to attract the attention of investors.

While for now the Shiftr founders seem upbeat, some of the other companies are clearly buckling under the pressure. Perhaps it’s the boost that comes from from delivering a strong pitch, or promising conversations with potential customers and investors that’s buoying Dean and Dolejsky’s mood today. Either way, the pair seem clear on what they need to do in the next few weeks.

“The point of this program is to prove the business case. We’ve got a business case, so it’s now about proving traction,” says Dean.

While that means we’ve spent a lot of time talking to and covering individual companies perhaps the most useful role we play is advocating on behalf of the broader ecosystem — the founders, investors and community that determine the success of our startups. We’re keen on building Australia’s Silicon Beach into an ecosystem that helps more companies become global success stories.

It was great to hear Tyler Crowley speak about the lessons learnt building the Los Angeles and Stockholm startup ecosystems last night at our event at Sydney’s Fishburners. Joining Tyler on the panel was Phil Morle, Rob Antulov and Peter Bradd. The question we asked them: what would make the Australian startup ecosystem better?

Over to you — what do you think we should do to build Silicon Beach?

Not expired, just messed-up by Crazy Domains.

It’s been a week or so of frustration and feeling powerless, with no real help from CrazyDomains, and no resolution in sight, so we’ve been forced to move everything to FLTBTG.com and used social media and word-of-mouth to let everyone know.

The email addresses we’ve used until now are also a casualty, so if you need to reach Zach or I, just use our first name at the new agency.com.au or this contact form for now.

Second, I wanted to let you know that we’ll be publishing fewer new stories on From Little Things for the next weeks/months because we can now see the end of the ‘runway’ in terms of current financial backing for From Little Things, we’ve left it a bit late to begin finding revenue, and we want to make sure we can keep ourselves going for longer while we find a way to pay for ourselves.

Our plan for starting From Little Things was simple:

1. Create a great-quality publication that would help our industry grow; and
2. Once we’d established the value of the publication, get revenue from running a series of FLT-branded events and selling some sponsorships, both at the events and on the blog.

Our goal was to satisfy the Australian tech startup industry’s need for useful, educational advice, and I believe we’re making good progress towards achieving that goal. But we underestimated how long it would take us to develop the event series and find the sponsors needed to pay our way.

We don’t expect to make a fortune from From Little Things (the days of making a fortune from media businesses are probably gone!) but we think aiming to build a ‘ramen profitable’ business is important for our motivation, and for us to be credible in the local lean startup community.

What was to be our first FLT event, with US star pitch coach Tyler Crowley, has instead pivoted into a Pollenizer event for lack of FLT sponsors, which is a bummer, but we’re moving on. We probably need to pivot away from the event series idea and drop the sponsorship proposal, judging by the lack of interest. We still have a proposal for sponsorship of the blog, available on request, and we’re open to other ideas.

Do you want From Little Things to continue in 2013? Is it nice-to-have or important to you? How do you think we should be making it pay? Please let us know, and if it’s just nice-to-have, please help us understand what we need to change to make it essential in your working week.

For the time-being Zach’s going to be squeezing in the occasional interview and article between freelancing on projects for The New Agency and Pollenizer. I’ll edit Zach’s occasional stories, and we’ll both keep spreading the word, testing the level of interest, and trying to secure sponsorship support from the technology companies, online media companies, telcos and consulting firms we hope can see a place for their brand to be associated with us.

From Little Things isn’t going away, it’s just a bit harder to find and a bit less frequent with the good stuff. We hope to be back, with the volume up to 11, very soon!

- alan

UPDATE: CrazyDomains fixed the configuration issue and we’re back up at fromlittlethings.co again, but we’ll be moving to a new registrar ASAP. Thanks for your support while we were down. The revenue challenge still remains for us to work on!  - alan

Pollenizer, From Little Things, The New Agency, Event Directors and Mi9 have partnered to bring Crowley to Australia to host the two free clinics for a select group of up-and-coming Australian startups, and work with some of the startup community’s key influencers to help improve the ‘Silicon Beach’ ecosystem.

He’ll work with a group of twenty companies chosen to participate in workshops on Monday 25 and Tuesday 26 February, at Pollenizer’s Surry Hills headquarters. During the sessions he’ll share his tips on how to boost investor interest, sell to customers and gain media attention. Applications to take part are open to all Australian startups.

“Pitching is the secret weapon of all great entrepreneurs,” said Phil Morle, co-CEO of Pollenizer. “It’s something that must be sharpened and improved for a startup to win, and the stakes get increasingly higher. We’re really excited to bring Tyler Crowley to Sydney, and think he’ll provide some fantastic insights on how to deliver an awesome pitch, and some lessons for the Australian ecosystem.”

“Pitching events train competing founders to deliver increasingly entertaining, compelling stories of traction and value, convincing investors and partners to back their business. We’ve seen with our Pollenizer companies just how much a great pitch matters. We’re looking forward to working with some of Australia’s most promising startups to help polish their pitches.”

Crowley said he’s looking forward to meeting the talent behind Australian startups, especially following a recent Sydney vs. Melbourne episode of his successful podcast, This Week in Startups.

“I’m really excited to meet some of Australia’s top early-stage companies and help improve their pitches,” he said. “Pitching is a key skill all successful startups must practise and work hard to improve.

“It shapes what your company does every day— its culture, its customers, its brand — but more importantly it’s key to grabbing an audience’s attention. You need to work hard to stand out from the startup crowd.”

Crowley will also host a session at Fishburners from 6pm on Monday 25 February to share the lessons he’s learnt helping build the successful LA startup ecosystem. He’ll share his ‘ingredients for success’ and take part in a panel discussion with leading Australian investors and entrepreneurs.

For more information and to register for the Fishburners event visit http://siliconbeachmakingwaves.eventbrite.com.

To participate in one of the pitch clinics apply at http://pollenizer.com/pitch-clinic-with-tyler-crowley before 5pm, Thursday 21 February.

About Tyler Crowley

Tyler has been helping startups with their important pitches since the first TechCrunch40 events and continues today with the LAUNCH conference, where he works one-on-one with each company to create the most compelling pitch possible for press and partners. Tyler is also co-host of This Week in Startups with Jason Calacanis where he regularly shares insights on the art and science of pitching investors.

“Over the program we provide the opportunity to be exposed to more than 40 CEO mentors,” says Benjamin Chong, a director of the Sydney Founder Institute, and partner at Right Click Capital. “These mentors have either run or are currently running technology companies.”

The 14-week program takes participants through the key stages of launching a business. It’s targeted towards those considering starting a company, or in the early stages of building a product. Chong says many founders are still be working full time and want to build and test their model before committing full-time.

Startup founders selected to take part in the Founder Institute program will need to part with $1,100. They’ll in turn spend one night a week learning about a range of topics, and will receive mentoring from around 40 mentors including DesignCrowd Founder Alec Lynch, Posse CEO Rebekah Campbell, and Pollenizer’s Phil Morle.

Founders which decide to graduate will be required to give up 3.5% of their company’s equity. This equity is held in a central pool and allocated among Founder Institute mentors, previous graduates, and the organisation itself. Those companies which go on to raise more than $50,000 are also required to pay $4,500 to the program.

The program receives around 100 applications each round, and 30 to 40 participants will be selected for this program.

Those interested in applying will need to fill in a form on the website and undergo a ‘predictive admissions’ test, similar to a psychometric test. Chong says it’s designed to determine a potential founder’s aptitude for launching a company. He says people are more important than ideas.

“We’re more interested in the actual founder. We’ve had people change their idea so what’s important is having the right attitude and mindset.”

Graduates from the last program include ConnectGolf, SlideFish, and WattCost. Chong argues the program is worth the cost, as founders end up with all the tools “in the box” needed to grow a successful company.

More information on the program can be found on the Founder Institute website. Applications close Sunday 24 February.

Under the current laws, ESOPs can be expensive and complicated enough to make them rare amongst Australian tech startups. Meanwhile, there’s a general sense that now is the time to lobby for change, since we have a federal election campaign long enough to lobby Canberra. Even better, Labor, Liberal and Greens all seem keen to propose popular legislative changes in their policies.

Liubinskas posted his Twitter discussion with Startmate’s Niki Scevak on Pollenizer’s blog, where he neatly explains how ESOPs are meant to work, and explains the problems arising under Australian legislation. To paraphrase Scevak’s response, he says the problem is over-stated, and if you’re a small startup and you really want to motivate employees with an ESOP, it is possible.

Scevak’s right to a point. It is possible, but what’s possible for an industry veteran like Niki to grasp isn’t easy for mere mortals to grasp. Someone leaving their full-time job and joining a startup for the first time won’t have the same understanding.

Here’s the rub: motivating potential employees with equity only works if the people you want to hire understand how it works, and to my mind all the workaround ways of granting Aussie employees a stake in the company are too complicated — they come off looking risky and complex, designed to bamboozle you out of a fair salary.

Sure you can still do a simple ESOP by setting up your company structure in the US. But setting up a Delaware C Corp is not the answer on its own — if you’re an Australian taxpayer you’ll still be subject to ATO treatment of your US stock options unless you also move to the US, get paid in the US, and pay tax in the US (US/AU tax treaty will mean you only have to pay tax in one country). Moving to the US is non-trivial for the startup and for the employee-to-be, and probably makes your ESOP even less desirable an offer in comparison to salary.

Liubinskas’ proposal is typically simple for the man I like to call “Mr Focus”: a $2M revenue threshold. Until your new business is earning less than $2M revenue a year, you can grant share options to employees and no tax is payable until the employee exercises the option to buy their shares.

Great idea. I can’t see a reason why it shouldn’t be extended to all small ventures in Australia, not just tech startups. If sharing the risks and rewards of equity with tech startup employees is a good idea, it could make sense for other industries where recruiting and retaining good staff is a problem (restauranteurs and retailers, I’m looking at you).

Thanks to the privatisation of Telstra, Australia has one of the highest per capita rates of share ownership in the world, suggesting Australians are more likely to understand how sharemarkets work, what a share option is, and what it isn’t.

But we still need an ESOP framework that is easy for potential employees to understand, that doesn’t tax them until their options are exercised, and a framework that is cheap and attractive for entrepreneurs to setup.

(You know what else would be great? If the ATO could extend its Business Benchmark reporting to include a report for tech startups, so we could compare our financial performance to our peers. Or if that’s too much of a stretch, even Information Technology as a whole. They’re tracking hairdressing salons, hot bread shops, carpet layers and air conditioning installers, but not information technology. Awesome.)

For sale: baby shoes, never worn

It really did have it all — an introduction, multiple characters, an emotional turn. Think about your favourite teacher at school or the stories your grandparents would tell you for hours. ’Just one more story,’ you’d demand. Why did you want more? What makes a story so appealing?

People will tell you a pitch is based on a compelling story. A story does more than help spark an investor’s interest. It shapes everything you do — how you treat customers, whether you wear a suit or a hoodie, your company’s values.

During the week I heard oDesk Gary Swart speak. His ability to tell stories was immediately apparent. Each time, he held the audience in his palm. He made them laugh, engaged them. On Monday, he dropped by the Startmate offices in Redfern to chat with the company founders. He asked the founders gathered for topics they’d like to discuss. He picked up a whiteboard marker and made a list: the oDesk story, how to kickstart a marketplace, dealing with fraud, raising money. He was completely at ease as he sat on the table at the front of the room, and started to talk.

A few days later I sat down for breakfast at Sydney’s Shangri-La hotel, overlooking the harbour. We had organised an interview weeks before. Again, the same stories resurfaced. For me, it suddenly made sense. These stories had become part of the company’s folklore; in the early days, the site conveyed a maturity supported by a bunch of people running the “hamster wheel” behind the scenes. Smoke and mirrors. At first the site relied on people manually reading through incoming requests for contractors.

Now, 350 staff worldwide get up every day for the oDesk vision. Originally staff at oDesk would literally go and find the programmer in Romania, or the transcriber in France. ’We need a developer in Romania, quick find someone!’, they’d say. Now these stories are now part of the company’s legend — details embellished, names changed.

Each startup has stories just like this. It’s the Sydney founder who works three nights a week in a restaurant then goes to Fishburners in the morning to work all day on his startup. It’s the Melbourne founder who has thrown her inheritance against the wall but has staged a comeback and is now paying herself a wage.

But the importance of storytelling goes beyond this. Everything that happens in your business — everything from finding customers to recruiting staff  — needs to form part of your story.

Who is your customer? What’s their name? Why do I care about their problems?

Let me into their world.

The truth is Hemingway might not have even come up with his six-word tale. But what does it matter?

Everyone loves a good story.

As a founder, it can hard to figure out which events are worth attending. At FLT we know all too well, trying to allocate our time to events worth reporting, the ones which help founders be better. And this week our calendar has filled, but this is just the shortlist: Monday night, World Startup Report curator Bowei Gai at Fishburners; Tuesday night, the founder of the internet Sir Tim Berners-Lee at the Sydney Town Hall; Wednesday night, Google Sudo is hosting a fireside chat; and Thursday night, Odesk CEO Gary Swart is joining a panel on access to on-demand services.

While these events are almost always interesting —admittedly they can be an indulgence we’re afforded as writers — we need to ask which of them are helpful for founders, and thus, worth us covering.

I often find myself in this pickle. Having attended Gai’s Sydney talk last night, this question has resurfaced, as I subsequently try and get something of value down on paper. I started with a standard line about his quest to uncover the startup stories of cities around the world, but by line two realised the story needed to be a different one.

Yes, it’s a big mission. The Chinese-born American plans to spend eights months touring the world one city at a time; in total he’ll meet the founders shaping the startup hubs of 36 different cities, spread across 29 countries.

And his motivation to help provide ‘good information’ for startup founders, investors, and perhaps even governments is a noble one. I’d even go as far as to say the Australian report (which anyone can access/edit) will provide a useful repository of what is happening in the ecosystem. But ultimately, it’s another around the world trip intertwined with a startup quest, leaving questions about the validity of information collected, and the actual application for the reports.

It all started after Gai sold his previous startup, CardMunch, to LinkedIn for $US2.4 million in 2011. He was curious to see what existed beyond the Silicon Valley ‘reality distortion field’, something he refers to often. “I really wanted to see what was happening in China, and ended up getting introductions to everyone from billionare entrepreneurs, through to startup founders and the media,” he told the packed audience at Fishburners.

The China Startup Report fast rose to the front page of Slideshare, and has been viewed close to 100,000 times. It’s been covered by major publications in China, the U.S. and elsewhere — see here, here and here. But, you need to ask — what value does a project like this actually provide? Now, I don’t seek to take arms against the McClures and Felds of the world (both support the project). Yet, it seems a question worth asking. It was great to see a packed room of people in Sydney to hear Gai speak and some broader media discussion about what makes for a good startup environment, but I think it’s important to draw the line regarding the value of the information these projects collect along the way. Presenting several graphs during his talk, even Gai admits that the key areas of comparison are based on his own subjective ‘Bowei scale’.

Plenty of people came out to hear Bowei Gai speak at Fishburners (Image: Zach Kitschke)

Going by initial signs, the reports will at the very least be read and shared: “I actually wrote the China report as a way to say thanks to the friends who had helped me out on my trip. I went to sleep at 2am, and by 8am it was the most popular presentation on Slideshare. And then, at 5pm the next day, the Chinese people woke up, and it was published on every major news site in the country.”

But, what would help better understand how healthy startup cities work? This week, I caught up for a chat over coffee with Professor Donald McNeill, a fellow from the University of Western Sydney, who’s working on a research project, ‘Governing Digital Cities’. Over the next few years, he’ll spend time observing Australian cities including Sydney and Melbourne and compare them with ecosystems like London and Rio de Janeiro.

As a cultural geographer, his passion is the intersection of economics and cultural activity; how economies and industries are created and constructed. He’s turned his focus to startups, with the help of a government grant and the University’s support. Honestly, we could do with a lot more funded research into innovation and entrepreneurship; looking at the science and trends of startups.

Some people have advocated this as something government should support. Head of Commercial Development at the University of Sydney, Randal Leeb du-Toit, thinks the Government should establish an entrepreneurship policy and research unit as part of a Centre of Entrepreneurship and Venture Capital, to publish data and information with the aim of “broadening Australia’s understanding of the drivers of innovation and that advances entrepreneurship and its symbiotic relationship with venture capital.”

Taking an Australian viewpoint is critical here. We don’t face the same issues as the U.S. with its Series A crunch. Most local investors will tell you we’ve always had one — a lack of appetite for institutional money to the risk of VC results in it going elsewhere. All things considered, our home market is very different to that of the U.S., and many Aussie companies need to markets elsewhere to have a chance.

While the focus for McNeill is perhaps more conceptual, it is potentially just as helpful. He plans to explore how an ecosystem is created, how particular communities comes together, define themselves, and create a shared identity. It brings us to this ‘Silicon Beach’ tag, which Los Angeles has tried to wrestle from Sydney’s sweaty palms (despite what the SMH argues about Rio de Janeiro being in with a chance). Silicon Harbour, Silicon Gully, and even the bizarre Silicon Colony have been suggested as possible Aussie alternatives. But let’s save that discussion for another day, hey?

The original metonym took hold in the early days of the tech scene in the Bay Area, attaching itself to the community of people, companies and activities taking place in the fields of technology and science. According to most accounts, the now deceased Ralph Vaerst was the first to coin the name. And now Silicon Valley symbolises for tech what Hollywood does for movies. It’s ubiquitous. Elsewhere, the epithet has become a recurring attempt to define startup activity; reaching an earworm-likeness to the ‘gate’ suffix, following the 1970s Watergate scandal. Considering this, we need to ask just how important is a brand?

It’s a topic we’ll explore when Tyler Crowley visits Australia for FLT’s first event this month (more to come). He has been involved in building the Los Angeles ecosystem, which has arguably mushroomed since gathering behind the brand, tapping the otherwise organic startup talent and energy which has appeared in the city over the past few years.

I mean, having someone like Gai come and provide their perspective on the Australian ecosystem is all good and well, but as comments from a few of Australia’s startup stalwarts show, sometimes first impressions aren’t entirely correct. This is the danger with any research expedition that’s not grounded in a clear methodology.

For example, responding to the idea that Australian startups might focus on building products for local people and industry, BlueChilli’s Sebastien Eckersley-Maslin told the AFR: “the thing with online start-ups that make them work is volume, and in Australia we don’t have that volume.” It’s as if to say that the somewhat well-worn path of startups to San Francisco can be important, if not necessary.

With projects such as the World Startup Report we must ask what purpose they serve. They promote discussion, sure. But will it help Australian founders be better? Will it help Australian policymakers do better? Will it help startups make better products and service? The answer is, probably not.

While kudos should be given to people like Bowei Gai and Simon Walker of the LEEAP project for their efforts in connecting different global startup ecosystems, it’s important to recognise these projects for what they are. They’re not scientific, and they’re not necessarily representative. While the actual report may prove useful for founders to get a feel for other markets, perhaps even help make connections with the who’s who locally, ultimately what the Australian ecosystem needs is more comprehensive research and analysis — that requires proper investment.