Social Media And Online Entrepreneurship

Concurrently with the advent of online businesses, the social media phenomenon has grown to become a significant aspect of our personal and professional lives.

When it comes to online entrepreneurship, social media can play a pivotal and driving role in determining whether a business flourishes or flops. Starting your own enterprise can be hugely daunting. The power of social media (Facebook, Twitter, LinkedIn) lies in its near-ubiquity in Australia as shown in the following graph.

It offers a unique window of opportunity into your target demographic. Those who are willing to forgo traditional brick and mortar establishments for their online substitutes are likely to have a strong presence on social networks. According to Foresee, a staggering 56% of online shoppers are connected to an online retailer on some social network. There is definitely a symbiotic relationship between online shoppers and social media users. 

Cara Pring of The Social Skinny compiled a report that explored the relationship between social media and e-commerce.

What does this tell us? Online retailing is growing rapidly as people become more accepting of purchasing online. Furthermore, they use social networks to augment their shopping experience. Online business owners are gaining valuable brand exposure from social media platforms like Facebook and Twitter, which can be of immense benefit especially to small start-up ventures.

To prove this point, we here at the Online Entrepreneur are going to propagate ourselves on social platforms. Watch as our online community grows, and just imagine your entrepreneurial venture doing that!

Yet, the Social Skinny report tells us that only one-third of online retailers have metrics in place to track social media rates of investment. Social media is often overlooked because business owners cannot see tangible and immediate returns. Chris Wallace of Entrepreneur Magazine attempts to clear some of the misconceptions around the benefits of social media HERE. 

In the upcoming weeks, we’ll be discussing social media strategy with successful entrepreneurs to provide the inside scoop for you guys when you embark on your own entrepreneurial adventure.

I have an idea, but...

FINANCIAL ROADBLOCKS.

Our web feature isn't going to be an instructional or advice page, but we'll investigate the greatest challenges our young Aussie entrepreneurs faced as well as how they overcame them. These investigations will culminate in a page on entrepreneurial pitfalls and possible solutions.

So far, we've identified four major roadblocks to building an online business: lack of start-up capital, lack of technical skills (to program apps etc), lack of business acumen and a lack of connections.

This blog post will summarise our research to date on the first, and most daunting roadblock - a lack of start-up capital.

Young entrepreneur Abraham Choe's greatest challenge in starting his university merchandise business was accessing "money to make money". And he needed a lot of it - to purchase licenses to reproduce university trademarks, to promote and to distribute - which he managed thanks to investments from family and friends.

Abraham Choe from the University of Oregon. Pic from youngentrepreneur.com

But we can't all fall back on "kitchen table"pitches and scores of wealthy relatives to lend a hand. The solution is to be creative and proactive in the search for funding.

Conventional ways of securing start-up capital include:

• Finance from personal networks.
• Low-interest loans from start-up networks like ENYA (Entrepreneurs Network for Young Australians) which partners with NAB to provide loans from $500 to $20 000.
• Australian Government Business loans - up to $1 million, contingent on a high-quality application. Read more about it at BGA and on the Australian Industry website.
• Conventional bank loans - these can be difficult to attain for young entrepreneurs who haven't built up a good credit history and can't use home equity to secure the loan. 
• Angel investors - wealthy individual business people who invest capital in start-up companies. Check out the Australian Association of Angel Investors, Business Angels Australia and the Australian Investment Network.
• Venture capitalists - companies who invest managed funds in start-ups. See Wholesale Investor and CVC. 
• Apply for government grants and enter competitions. Check out Community Builders and BGA.

Asheesh Advani, founder of Circle Lending and Virgin Money USA, also offers this cool tip: instead of restricting financing pitches to close family and friends, young entrepreneurs should expand their view of their "networks" and think creatively about who could help (read story here). Write up a fantastic proposal and pitch it to business people and professionals you regularly come into contact with. Consider university contacts, friends' parents and parents' friends. Atlantic Records, for instance, famously scored a start-up loan from the family dentist.

Whichever way young entrepreneurs decide to pursue funding, Advani recommends chasing finance in multiple rounds rather than in one single capital raise, in order to minimise risk in the eyes of investors, and maximise the chance of getting your business off the ground!

Get involved with entrepreneurial networks like Vibewire, which will build your contacts (therefore providing more options in terms of potential investors) and help you to refine business plans and objectives. These need to be professional and inspiring to appeal to risk-averse investors.

Finally, to appease investors, young entrepreneurs may need to make significant compromises on their ideas or business plan. Investors are experienced business people and generally know what they're talking about - plus they have the money! Within reason, flexibility is key.


For some more great advice on how young entrepreneurs can secure funding, check out this interview with Scott Gerber, serial entrepreneur, angel investor and founder of Young Entrepreneur Council in the United States. He knows his stuff.

The Online Entrepreneur Target Audience

Our feature project is targeted at young people who are university students or fresh graduates, who are ambitious to start online businesses, and who are seeking inspiration and advice from successful young entrepreneurs. Tom Dawkins at Vibewire, a successful youth organisation existing for more than 10 years, and Tim Fung at Airtasker, a newly established marketplace website, will either share the highs and lows they experienced at the startup period of their businesses, or their strategies on how to sustain and develop small businesses into something bigger!

Together with case studies including Sneaking Duck and Viparo, our feature will cover successful online entrepreneurship in a variety of fields, ranging from youth-support organisations, community and marketplace websites, motorsports businesses and fashion start-ups. Here at Online Entrepreneur, we will create informative and inspirational pieces with the use of videos, image galleries and graphs, all of which will focus on the types of young Australians seeking success that have been described above. 
 

Sneaking Duck- our dream case study

One company in particular has been getting us fair excited about doing our feature- Sneaking Duck!

Sneaking Duck is a Sydney-based online business that sells funky, fashionable and affordable prescription glasses. Founded in October last year by four young entrepreneurs, Sneaking Duck was awarded two ORIA awards (Online Retail Industry Awards) this year for 'most innovative online retailer' and 'best customer experience'. 

There are a few things we really like about Sneaking Duck. Firstly, the creators are all young, tech-savvy and taking risks in the online entrepreneurial world- exactly the market our feature is aimed at.

Mark Capps, CEO of
Sneaking Duck

Mark Capps, CEO and founder of the business, worked for Google for six years before branching out on his own. He says on his Sneaking Duck bio that he left Google to start his own online retail store because his 'eyes were fully opened to the scale of possibility that is the internet and fell in love with online retail'.

The three other people behind Sneaking Duck- Mike, Michael and Jodie- are all also founders of successful online shoe retailer 'Shoes of Prey'.

The second thing we like about Sneaking Duck is that the site is so darned easy to use, smart and, well... cool. You can browse online their wide range of custom made designs with names like 'beached as', 'professor pivot' and 'birthday suit' (they are nude coloured). The process of buying itself is seamless and transparent: they call your optometrist and get your prescription, they automatically choose the best lens and coatings for you and they have one fixed price.

One more nifty advent of theirs is the virtual try on function, where you can upload a picture of yourself and see what each design looks like.

Lastly, it seems Mark Capps himself is bursting with entrepreneurial tips, with several of his own articles published on the retail e-commerce website power retail, detailing Sneaking Duck's semi- meteoric rise to online retail success.
For all of these reasons and more- we want Sneaking Duck to be part of our feature. So, I have sent off an email to them and am currently awaiting their response.

What exactly is the Online Entrepreneur looking to achieve?

 If you are here, it’s likely that you want to know exactly what we seek to achieve here at the Online Entrepreneur.

Truth be told, we’re not quite sure! What we do know is that it’s a little intimidating to browse the Entrepreneur Magazine or Forbes, publications targeted at high-powered corporate businessmen.

Perhaps you’re a university student habituating the digital sphere with an eye towards being self-made. Or perhaps you’re just a naturally creative and tech-savvy individual with a great idea.

Here at the Online Entrepreneur, we know that more than ever, aspiring online entrepreneurs are propagating tech-savvy and creative solutions. Coupled with a little bit of funding, these young self-made men and women are now the envy of all. Perhaps the most illustrious example is pictured below!

In Australia however, we’ve noticed that the government and businesses have undervalued entrepreneurial ventures. Only $120 million out of the $1.8 trillion funds under management in Australia was invested by Australian venture capital firms last year.

Consequently, more and more Australians are moving overseas to seek greener pasture for their online start-up enterprises. Places like Silicon Valley are reaping the rewards of Australian dreams, with an estimated 17,000 Australians spread out across the San Francisco Bay area, and at last count, 65 start-up businesses with Australian roots.

This leads me to the crux of the Online Entrepreneur. We want to explore avenues for young Australian entrepreneurs who achieve their ambitions while staying on home soil. We’ll be investigating WHY our entrepreneurs aren’t being supported and what possible changes we can effect. By talking to Vibewire, a non-profit organisation providing support for entrepreneurs, we hope to find a solution to the entrepreneurial exodus.

We’ll be talking to several successful entrepreneurs who have made it locally. Sneaking Duck is an award winning online glasses venture co-founded by four young entrepreneurs in Sydney. Similarly, the online fashion leather retailer Viparo was founded by a few savvy entrepreneurs who jumped onto the online fashion wagon. We’ll also hopefully be talking to few entrepreneurial ventures in different fields, such as Kogan the electronics retailer and Renting Smart, an online rent system.

From this accrued wisdom and business acumen, we’ll be looking to compile a comprehensive how-to guide for our readership to help get you started, no matter what rung on the entrepreneurial ladder to success you are.

Online Entrepreneur Tim Fung and his online businesses

Sydney Genesis, based in the Business School at the University of Sydney, is a start-up entrepreneurship competition program for students from any background who are passionate about their ideas in business, technology or social entrepreneurship. 

The contact information for Sydney Genesis or their mentors: business.competition@sydney.edu.au (Julia Di Kang). I have sent an email to her and am waiting for her response.

Tim Fung, one of 10 Sydney Genesis mentors and a graduate from the University of New South Wales, has founded or co-founded several web businesses, including Airtasker, Joe Button and Circuit Club. He has been named in SmartCompany’s Hot 30 Entrepreneurs under 30 for 2012.

The three businesses Tim has set up focus on three interesting but different areas. Airtasker, newly founded in February this year, is a community marketplace website allowing people to outsource daily tasks and errands to reliable neighbours or “runners” in their local community. Such chores include ironing, furniture delivery or car washes. Their slogan is “gets it done”. Just in late August, the company announced that it has secured $1.5million in funding. This newly secured funding will be used to enhance the website’s functionality and to improve its messaging systems and mobile capabilities. I think the case of Airtasker can provide valuable lessons for young entrepreneurs on how to get funding.

 

There is an anecdote relevant to Airtasker when it was founded early this year: Airtasker paid a person $950 to queue for the first new iPad from 9am on Monday until Friday when the new iPad was available in stores. You can find the original task posted by Tim Fung on Airtasker here. News website news.com.au has run a story on this task.

Joe Button is a Sydney-based online clothes custom store; what distinguishes it from online shopping websites is that Joe Button allows customers to design 100% European cotton shirts. Check out how Joe Button works.

 

 

Circuit Club is a motorsport events business, holding fast driving events for car lovers at the race track. Its website allows drivers to search events and to book online. Circuit Club was set up in 2003 and has since created an active motorsport community; the site facilitates a numerous ‘Trackday’ events in NSW and Vitoria.

Having been involved in setting up these three web businesses, Tim Fung is a typical and successful Australian young entrepreneur, who can serve as a great case study for our final feature project.

 

 

 

 

Viparo

Earlier in the year I scored an awesome job selling funky leather garments at a pop-up store in Westfield's 100 Squared Emerging Designer Market. The shop was Viparo, an Australian online fashion label specialising in leather pieces for young people.

Over the four months I worked there, I found myself continually amazed by what its young owners - all in their mid 20s - had built. Go to Viparo's web site. 

It was more than a pop-up store, and more than an online fashion label. They'd built a legitimate, strong and genuinely cool brand - and up until that point, it was entirely over the internet.

The idea came to Bert Ranoa, 27, four years ago, when he and two friends, all recent uni grads, noticed a gap in the international fashion market for cool, reasonably-priced leather jackets for 18-30 year olds.

After developing one core mens' jacket and selling it successfully on eBay, Viparo then expanded their offering to a full range of jackets, skirts, shorts, leggings and bags.

They now have a thriving online store, are regularly featured in eBay's fashion gallery, and (this is where I come into the picture) have experimented with a pop-up store in the city, allowing customers to try on garments before making expensive purchase decisions.

Behind the scenes on Viparo's A/W 2012 Men's photoshoot

Impressively, Viparo’s edgy branding and excellent social media strategy have earned them a large international customer base. This ability to access people shopping for winter clothing all year-round has been essential to Viparo's success - buoying, and even accelerating sales - during Australia's sweltering summers.

Bert has agreed to be part of our project... we look forward to bringing you more on Viparo!

Are "millenial" tech entrepreneurs ruining it for the rest?

In a recent article for Forbes, Are Millenial Internet Entrepreneurs Hurting the Economy?, Larissa Faw proposes that when it comes to tech startups, young, impatient, creative and overly ambitious "millenials" are actually dominating over more experienced entrepreneurs, even though the latter has more plentiful capital and traditional business skills.

The discrepancy, she says, is all in the understanding of the internet. Its nuances, trends, conventions, connections. As a prerequisite, the best businesses these days need a superbly functional website.
Many older entrepreneurs don't have the technical skills to create a company website. They don't have the same intimate knowledge of online marketing.

Now consider that many (but not all) millenials have these skills. And if they don't, they have the skills and confidence to learn them (from a simple Google search, video instructional or mass Twitter cry for help).

What's more, they have the cultural capital to use online resources effectively. They have their finger on the pulse. Social media has brought the market and the customers for digital innovation all to one place, and we're all immersed in it.

There has been a power shift, and the pre-web generation of entrepreneurs is being left behind.

Scott Shane from youngentrepreneur.com has a different view, attributing the rise in young entrepreneurs to the economic downturn and consequent lack of employment options for graduates, rather than their superior technical skills or social media know-how. He believes that social and political commentators have exaggerated achievements of young entrepreneurs to present them as the panacea to  America's economic problems, while in reality, they're not doing all that much.

DAD????

Whether or not that is the case, my own dad had a sad realisation just a few weeks ago. Always having considered himself a natural entrepreneur, having learnt the ropes over decades of hard work, he always imagined that if he was to start from scratch, creating a business the second time around would be relatively easy. He knew exactly what not to do.

But then came the internet, BRW (his bible) filled with stories of young internet moguls and my technologically disabled father realised he was out of the loop. So were his peers and networks, and it was very unlikely they were going to get back in it.

This raises an intriguing question. Will gen-Y we be the first and last generation to overtake our elders in the entrepreneurship field, given we're the first to grow up understanding the internet? Or will the young tech gurus in 20 years' time be coming up with better billion dollar apps than millenials?

Perhaps the coolest question revolves around how savvy young entrepreneurs can pair up with more experienced baby boomers/gen Xers (and their money) to build awesome startups more efficiently, effectively and regularly?

Could this type of partnership or venture funding be one solution to the problem of Australia's startup funding, as Laura discussed in the previous post, Silicon Valley and the 'Brain Drain'?

The Entrepreneur Rollercoaster

Check out this interesting video of The Entrepreneur Rollercoaster; the highs and lows of a startup journey:

 

 

Vibewire and beyond

Vibewire Youth Inc is a truly youth-oriented organisation, founded by young people and taking university students as interns. It exists to support young people in effectively shaping their world through media, arts and entrepreneurial opportunities. You can visit Vibewire's main website.

Vibewire was founded by Tom Dawkins in 2000, who served as CEO until 2008. Tom has also involved in a number of successful projects, such as StartSomeGood, which aims at empowering entrepreneurs by providing financial and intellectual support through their website. Tom recently moved back from the US after 4 years, where he expanded his entrepreneurial experience and increased his Twitter following to over 300 000. I think it would be great to have Tom Dawkins share with us his experiences of establishing the Vibewire organisation, and to have him talk about supporting young entrepreneurs, in our feature project.

Have a look at Vibewire current board members here. Most of them are young people, who believe in the potential of young minds and who support young entrepreneurs. For example, Annie Le Cavalier, the Vice-President of Vibewire, is a digitally-savvy social entrepreneur and a story-teller, who loves to inspire young people. There is a great chance they would be willing to share their stories.

 




Silicon Valley and the 'Brain Drain'

In May, SMH's technology editor Asher Moses published a piece entitled 'Brain Drain: why young entrepreneurs leave home'.

Through interviews with young Aussie entrepreneurs and various key venture capitalists, the article paints a picture of an Australian entrepreneurial market that is lacking in investments and therefore not keeping up with the rest of the world.

Accompanying the article was a link to Asher's new web documentary series, 'Digital Dreamers' where he follows a group of young Australian entrepreneurs on a 'start up bus' around America seeking investments for their tech development ideas. The message, as Moses states, is that 'Australia ignores its innovators at its peril', as many of Australia's brightest young entrepreneurs are jumping ship to America to try their luck at the 'mecca' of technological design and investment, Silicon Valley.

This article provided us with key ideas and background info to start us off on our research. Firstly we decided to look closer into this phenomenon of young Australian entrepreneurs leaving home for America. If this was a real trend, then the feature would make more sense to focus on only successful Australian (rather than international) entrepreneurs and how they succeeded without leaving home. Therefore the feature would take on broader aspect of researching why the Australian entrepreneurial field is not up to scratch and then more specifically how it is possible to make it from home and, acting as an important resource for young entrepreneurs looking for tips, examples, common pitfalls etc in the entrepreneurial field.

Nikki Durkin, founder of 99Dresses

A little more digging around however, and we found that Moses' conception of the Australian entrepreneurial field was not held across the board. An article in BRW entitled 'Why Australian technology start-ups don't need to go to Silicon Valley' offered a slightly more balanced picture. It appears that Nikki Durkin, the poster girl for Moses's article and creator of online fashion powerhouse 99Dresses, has returned home after a brief stint in Silicon Valley stating it was 'too expensive' for a start up such as hers.

The article goes on to explore how in many ways, making the jump to America is not always the wisest choice compared to staying home-grown. Companies such as Atlassian, Australia's most succesful tech start-up, prove how staying home-grown or incorporated a blended approach of American and Australian based business models can be effective. Just ten years after starting the company as uni students at UNSW,with just $10,000 in credit card debt, Scott Farquhar and Mike Cannon-Brookes' companyAtlassian is regarded internationally as a powerhouse in enterprise software. In July 2010, the duo turned heads globally after taking $60 million from Silicon Valley venture capital. All without leaving home.

The article goes on to list many other smaller yet successful startups that are Australian based businesses such as Shoes of Prey (founded by 3 out of 4 of the people behind our case study Sneaking Duck!), Bubble Gum Interactive, rome2rio and BugHerd.

Conclusion- the entrepreneurial field in Australia has it's benefits and it's drawbacks and it's not a simple case of entrepreneurial exodus to America or stagnation. There are a bunch of great startup companies growing even just in the past few years and we need to start getting out there and talking to them!

The Frank Team: Inspiration for young entrepreneurs

The Frank Team is the not-for-profit group behind the fantastic guidance/motivational/networking website for young entrepreneurs: youngentrepreneurs.net.au.

The website is an incredibly comprehensive guide to entrepreneurship for a young audience. It provides access to a network of entrepreneurs, displays dozens of feature articles, collates success stories, gives specific advice for start-ups and answers FAQs. It's a brilliant resource for entrepreneurs, and for our project.

It differs significantly from our own web feature, firstly because it does not focus purely on internet start-ups. Also, it is primarily a "how-to" support website aimed at encouraging and fostering entrepreneurship, whereas our feature is case study-based investigation into an issue with Australia's entrepreneurial culture.

'Entrepreneurship'- What is it?

We all have some vague concept of what an entrepreneur does. Richard Branson is a name often bandied around as a poster child for entrepreneurship. But what exactly makes someone an entrepreneur?

Howard Business School professor Howard Stevenson defined entrepreneurship almost 40 years ago as “the pursuit of opportunity without regard to resources currently controlled.”

Fast-forward to the present, and the core remains the same. Entrepreneurs see a niche in the market that they are capable of capitalising on, be it product or service.

The other major consideration that Professor Stevenson highlighted belies the risk that comes with many entrepreneurial ventures. Having a great idea is one thing. It takes resources to transform words and concepts into reality.

There is rarely a ‘sure thing’ when it comes to entrepreneurship. With the advent of the Internet as a great unifying transnational force, competition has become more intense than ever.

But, with great risk comes great reward. Here at the Online Entrepreneur, we’ll be delving into all these issues and more in the upcoming months!

For now, I’m going to leave you with this humorous depiction highlighting just how baffling entrepreneurs are to the rest of the world. How do you see yourself?