Protecting Your App Idea

Protecting Your App Idea

Protecting Your App Idea

Protecting Your App Idea

The dilemma facing creators of software Apps is the fear that if you tell others they may steal your idea. The problem is that if you don’t tell anyone you will not be able to raise money to develop it as who would invest in a mystery product that they know nothing about?

Like most startups you will find that you have to talk to a number of potential investors before one shows any interest. Each will want to read at the least your ‘Pitch Deck’ which gives away the core goals of what your idea has been designed to achieve and at some point, you will be asked for a detailed Business Plan which explains everything.

Let’s assume that you have been successful in raising funds and the next step is to develop the App. At this stage you are faced with the need to put protective measures in place to prevent the risk of both employed staff and subcontractors from copying your idea.

There are some steps you can take to put in place a degree of protection and they are explained below.

1. Non-Disclosure Agreement (NDA)

When you are committing to a start-up venture, you and your co-founders will understandably want to protect your “secret sauce”—the information that makes your product or service unique, whether it’s intellectual property, know-how, or trade secrets. Especially when the company is young and growing, your co-founding team will likely want to gain every protection you can to ensure that no one else can implement your idea before you do.

While it’s true that ideas are often less valuable than the execution founders put behind them, innovation is still at the heart of any successful start-up. A sensible first step toward protecting your ideas is to form a legal entity and turn this intellectual property into an asset of a company (rather than individuals). However, there are certain situations where using a non-disclosure agreement (NDA) can go a long way in helping to keep a company’s confidential information outside of public knowledge.

What is an NDA?

An NDA, or non-disclosure agreement, is a legally binding arrangement between two parties where one or both parties will classify confidential information and prohibit the other party from disclosing shared information. The party in the agreement that is disclosing confidential information is conveniently called the “Disclosing Party” and the party receiving confidential information is called the “Receiving Party.” Additionally, the NDA can either be a mutual or unilateral confidential obligation. A unilateral NDA is an agreement where the Receiving Party is the only party that is receiving confidential information from the Disclosing Party. A mutual NDA, in contrast, is an agreement where both the parties are a Receiving and Disclosing party regarding the exchange of confidential information.

The most crucial part of the agreement is making sure that it clearly describes all the information that the Receiving Party must keep confidential. The Receiving Party needs to know exactly what information they cannot disclose. Generally, the Disclosing Party will do this by creating a broad description of what they consider confidential information as well as by marking any shared materials conspicuously as “confidential.” Clearly marking materials is particularly useful when the NDA is between the company and a third party, like a contractor or partner. The markings help the Disclosing Party prove that the Receiving Party was aware that the disclosed material was confidential should a dispute arise in the future.

An NDA is only as good as the protection it offers your confidential information. In the case of a breach, there are several remedies to the harmed party, all of which must be reasonable to be able to enforce—for example, for an NDA to be enforceable between an employer and an employee, it must be reasonably linked to a legitimate business purpose. For an interesting review of the enforceability of NDAs. The two most common remedies are an injunction (a court order to stop disclosing confidential information) and monetary damages.

Which remedy a plaintiff seeks or a court grants depends on the nature of the breach and the harm caused to the affected party. In addition to the description of the information (and boilerplate language), the other key part of an NDA is the timeframe for the agreement. This informs the Receiving Party how long they must keep the covered information confidential. The term is a function of the negotiation between the two parties. The durations used for non-disclosure agreements are most commonly 2, 3, or 5 years, but they can also be indefinite.

2. Copyright and IP Ownership

Copyright and IP Ownership

It is always important to document your application with specific emphasis on:

  • Wireframes
  • Functional descriptions
  • Technical requirements
  • Project scope
  • User Interface (UI) designs
  • User flow diagrams
  • Site layout
  • Source code
  • Images
  • Programming snippets
  • Icons
  • App name

This phase is important as it can impact on ownership if a dispute arises between you and the developer over ownership of various aspects of the App and particularly if you decide to terminate the developer and engage another individual or company to carry on the work.

The software development falls under “literature” and unless explicitly assigned the “author” always retains ownership which even under a ‘develop and pay’ contract could be the developer, not you!! Always ensure that IP rights are explicitly assigned to you.

3. Employees and IP ownership

Always ensure that:

  1. All staff have IP assignment clauses in their contracts
  2. Your App development contract should assign all IP unconditionally after final payment
  3. IP includes the creative works of the software code and the images, icons etc

The IP rights related to 3rd party software used in the build cannot be assigned but would be included on a ‘commercial use’ basis only.

4. Contract and Sub-contract Developers

Contract and Sub-contract Developers

When you engage an App developer, they will often present you with a Contract for their services. This Contract should clearly explain the project and specify the scope and limitations relating to:

  • Scope of work
  • In-house resources used by the developer
  • Budgets for each stage or component
  • Costing
  • Timelines and milestones for payment
  • Confidentiality clauses
  • Post-sales support and associated costs
  • Ownership of Data
  • Technology employed in the build
  • Process for variations

5. Patents

WIPO (The World Intellectual Property Organisation) has published a paper relating to Patents and Software developments.

“Modern society relies heavily on computer technology.  Without software, a computer cannot operate.  Software and hardware work in tandem in today’s information society. So, it is no wonder that intellectual property protection of software is crucial not only for the software industry, but for other businesses as well.

The intellectual property protection of computer software has been highly debated at the national and international level.  For example, in the European Union (EU), a draft Directive on the Patentability of Computer-implemented Inventions has been discussed in order to harmonize the interpretation of the national patentability requirements for computer software-related inventions, including the business methods carried out via the computer.  These discussions show divergent views among stakeholders in Europe.  Furthermore, the Internet raises complex issues regarding the enforcement of patents, as patent protection is provided on a country-by-country basis, and the patent law of each country only takes effect within its own borders….”

Source: https://www.wipo.int/sme/en/documents/software_patents_fulltext.html

Links to useful information published by WIPO can be found at https://www.wipo.int/sme/en/documents/software_patents_fulltext.html

  • Do you really need a patent for your software-related invention? Think twice before preparing a patent application
  • What do you wish to protect from your competitors? Identify the core part of your innovation
  • Is your innovation patentable? Not all types of software-related innovation can enjoy patent protection
  • Do you need to protect your innovation abroad? Patentability requirements are not always the same in each country
  • Consult an intellectual property expert who is familiar with the relevant national law and practice

In conclusion

An App can be a very valuable item and its protection deserves a lot of consideration. Take the time to read as much as you can and seek legal advice in preparing contracts.

Using Crowdfunding to Pre-sell a Product

Using Crowdfunding to Pre-sell a Product

Using Crowdfunding to Pre-sell a Product

Using Crowdfunding to Pre-sell a Product

Apart from raising investment funds Crowdfunding is used by an increasing number of companies to launch new products on the market before they have been produced i.e. (Pre-production Sales).

Crowdfunding has become a flexible and important option and is now being used,

  • Creating cashflow by offering product deals pre-production. In this instance crowdfunding platforms will require you to specify the stage at which your product is at. This option has the advantage of raising cash through sales that can be used to fund production.
  • Introducing new products to a global market. This option is now being used by established companies who are not raising equity and often have a product developed and ready for release

There are many crowdfunding platforms to choose from and these can be easily found on-line including:

  • Indiegogo
  • GoFundMe
  • Fundly
  • Kickstarter
  • FunderHut
  • RocketHub
  • Peerbackers
  • Funding Circle US
  • Kiva
  • Fundable
  • MicroVentures

Crowdfunding Statistics – 2019

The Crowdfunding scene has become very competitive for companies that plan to sell their product and a well planned and executed campaign is necessary to achieve success. The following statistics have been published by Fundera:

  1. There were 6,455,080 worldwide crowdfunding campaigns last year.
  2. Successful crowdfunding campaigns have raised $28,656 on average.
  3. 4% is the average success rate of crowdfunding campaigns.
  4. And there are projected to be  12,063,870 campaigns by 2023.
  5. Kickstarter has had 319,051 completed projects—the most overall for any platform.

(Source: https://www.fundera.com/resources/crowdfunding-statistics)

Crowdfunding Tips

Crowdfunding Tips

Crowdfunding should be taken as a serious exercise and planned accordingly. Success can be significant but is not guaranteed so every dollar you spend needs careful consideration.

  • Create a Crowdfunding Action Plan
  • Search crowdfunding websites for recommendations about your;
    • campaign
    • video content
    • timing/duration
    • funds requested
  • Consider expanding your reach through referral sites e.g. Kickbooster.me
  • Consider using a media release service e.g. Krowdster.com
  • Try to raise 25% of your target in the first week to attract attention of the crowdfunding platform you have selected which assists in the chance you will have of being a ‘staff pick’ which will get you more exposure.
  • Stick to a well thought out plan.
PROSCONS
·         Does not involve giving up equity.·         Requires a well-planned campaign strategy including multi-faceted social media co-ordination.
·         Can be used at concept stage, prototype stage, pre-production stage or new product.·         Pre-launch period activity is vital to success.
·         Raise funds based on future sales of a product.·         If you set a ‘fixed’ target and do not reach the funds are returned to the buyers.
·         The buyers take the risk of you meeting your promises.·         Once the funds are raised you are under pressure to deliver.
·         Campaigns have a set duration that you establish up front. If you meet your target·         Crowdfunding platforms charge a fee as a percentage of funds raised.
·         Sales can continue after the campaign ends as crowdfunding platforms offer an after-campaign sales platform for similar fees.·         Every campaign requires continual attention and communication with buyers.

Action Plan for pre-production Crowdfunding sales of a product

Lead up to Launch – (4-8 weeks)
Collect emails·         Create web page for subscribers
Customer Avatars·         Create a series of Avatars for each demographic
Social media·         Create social media accounts for Company and Product
Website·         Create landing pages to collect email addresses
 ·         Use an email responder e.g. Mail Chimp, Active Campaign
 ·         Connect website and social media to ensure email addresses are collected
 ·         Set up Google Analytics and add to landing page
Paid Ads·         Set up Facebook ads manager
 ·         Add Facebook pixel to landing page
 ·         Consider Google AdWords
Public Relations·         Create media hit list and rank by relevance to demographics
Content·         Create 5-10 pieces to share
 ·         Send one email every 1-2 weeks to the growing email list
 ·         Regularly post on social media
 ·         Open a Facebook and Instagram group for the launch
Crowdfunding Page·         Create video/s
 ·         Create reward packages
 ·         Use professional lifestyle photos
 ·         Create Kickstarter or Indiegogo account
Facebook·         Turn on Facebook ads and start test different audiences
2 weeks prior  to Launch
Video·         Finalise pitch campaign video
 ·         Write story and campaign page copy
 ·         Finalise reward and early bird pricing
 ·         Build crowdfunding page
 ·         Submit project for approval
 ·         Create campaign tagline and compelling headline focusing on why your offer is unique and beneficial
 ·         Send a survey out to audience to confirm which features are they most excited about
Paid ads·         Scale ads to build email list
Awareness·         Ramp up frequency of posting on social media
·         Build buzz with audience by releasing sneak peak of your product or service
·         Follow up with influencers that agreed to cover the launch or have not yet replied
·         Reconnect with people in the network that have agreed to spread the word
·         Consider using referral services such as Kickbooster.me
1 weeks prior  to Launch
·         Announce launch date to the network
·         Continue to pitch and follow up with influencers and media
·         Incentivise audience to buy on the 1st day
·         Email audience 7 days, 3 days, 2 days and 12 hours before launch
·         Consider a media broadcast service e.g. Krowdster.com
Campaign  Launch
To Go Live·         Live stream the launch using Kickstarter Live of Facebook Live
 ·         Press @launch Campaign@ button
 ·         Tell everyone and repeat
Backers·         Send campaign update to backers after first 24 hours thanking them for their support
·         Send updates twice a week
·         Respond to customer support inbox and campaign comments

 

In conclusion

Using Crowdfunding to pre-sell a product can be an attractive option, however, like most campaigns a lot of work is required prior to opening the campaign, throughout the campaign and in following up with purchasers and delivery. Successful campaigns are often characterised by having 25% of sales in the first three days which means that a company has to do a lot of promotional work before launch and have committed sales/pledges that will be activated by purchasers within the three day timeframe.

Blockchain – A Simplified View

Blockchain – a simplified view

Have you ever been in a conversation where someone has used a word or a term that you did not understand but you were not prepared to ask them what it means or were embarrassed to admit that you did not know what it is? Well I am prepared to admit that I have, and the word was ‘Blockchain’. At the time I felt as comfortable in understanding what Blockchain is as I do with explaining Einstein’s Theory of Relativity, so I decided to find out more.

‘Blockchain’ like the ‘Internet of Things’ crops up frequently in the entrepreneurial space when people are talking about new digital developments and it supposedly has a broad range of applications where it can be applied.

Who invented Blockchain?

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. (Haber, Stuart; Stornetta, W. Scott (January 1991). “How to time-stamp a digital document”. Journal of Cryptology. 3 (2): 99–111.) The objective was to create a system where document timestamps could not be tampered with. In 1992, Bayer, Haber and Stornetta improved its efficiency by allowing several document certificates to be collected into one block.

In 2008 a person or group of people known as Satoshi Nakamoto improved the design using a method to timestamp blocks without requiring them to be signed by a trusted party and to reduce speed with which blocks are added to the chain. This became a core element of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.

What is Blockchain?

Blockchain is not:

  • a cryptocurrency
  • a programming language
  • a cryptographic codification
  • an AI or Machine Learning technology
  • a Python library or framework

Blockchain is:

sequence of blocks or groups of transactions that are chained together and distributed among the users.

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tapscott.

Blockchain works as an immutable record of transactions that do not require to rely on an external authority to validate the authenticity and integrity of the data. Transactions are typically economic and can store any kind of information in the blocks.

Nodes form the infrastructure of a blockchain. All nodes on a blockchain are connected to each other and they constantly exchange the latest blockchain data with each other, so all nodes stay up to date. They store, spread and preserve the blockchain data, so theoretically a blockchain exists on nodes.

How does Blockchain work?

How does Blockchain work

There are five elements that combine to make up Blockchain:

  1. Cryptographic Hash
  2. Immutable Ledger
  3. Peer to Peer (P2P) Network
  4. Consensus Protocol
  5. Block Validation or ‘Mining’

1.    Cryptographic Hash

A Hash is a cryptographic function that transforms any input data into a fixed-length string of numbers. Every single input of the hash function will produce a different output. If you use the same input, the output value will be always the same. The Hash function is one-way meaning that you cannot reverse the function to generate the original input. The Hash function generates a unique code from every different input. For every input, the algorithm generates a completely different output, and it is not possible to predict how will the input changes affect the output.

The Blockchain nodes use Hash functions to create a unique identifier of any block of transactions. Every block includes the Hash value of the previous block.

2.    Immutable Ledger

An Immutable Ledger simply means a record that cannot be changed. The idea behind all of this is data security and proof that the data has not been altered. Every block of the chain contains the Hash of the previous one, it is not possible to modify any block without changing the entire chain. Hence, the chain works as an immutable digital ledger.

A blockchain is designed to be immutable; once a piece of information goes in there, you can depend on it never changing. You can believe that data on the blockchain is legitimate, having been validated by multiple participants in the network.

3.    Peer-to-Peer (P2P) Network

Every user has its own copy of the transactions and hashed blocks, and they spread the information of any new transaction to the entire network. It is not possible for anyone to alter the information in the chain since it is not stored by an individual entity but for an entire network of node users. Blockchain does not require any external or internal trust authority. Once a block of transactions is validated, it is added to the chain. If an attempt is made to hack into the blockchain the network will not accept any block from the altered blockchain.

4.    Consensus Protocol

Consensus ensures everyone has a single version of the truth. Your blockchain data should match everyone else’s — otherwise, the whole system breaks down. Consensus, therefore, protects the integrity of the blockchain and minimizes the risk of fraud from a corrupt minority.

Users need to meet an agreement about the validity of the chain before adding a new block. When a user adds a new block to the chain all users are required to validate the block by using a common protocol. The nodes reach a consensus about the correctness of a new block by ‘Proof of Work’ or ‘Proof of Stake’ methods.

The nodes check that the new block meets the requisites of their Proof method, including validation for all the transactions inside the block. If the block is valid, they consider it as a part of the Blockchain and keep adding new blocks.

5.    Block Validation or ‘Mining’

The term ‘mining’ refers to the act of meeting the Proof of Work requirements for adding a new block with pending transactions to the Blockchain. There are many different mining methods, as they are custom defined for the chain.

Types of Blockchain

Types of Blockchain

Blockchain networks can be classified into three types:

Public blockchains

A public blockchain has no access restrictions. Anyone with an Internet connection can send transactions to it as well as become a validator (i.e., participate in the execution of a consensus protocol). Bitcoin is an example of a Public Blockchain.

Private blockchains

“A private blockchain network requires an invitation and must be validated by either the network starter or by a set of rules put in place by the network starter. Businesses who set up a private blockchain, will generally set up a permissioned network. This places restrictions on who is allowed to participate in the network, and only in certain transactions. Participants need to obtain an invitation or permission to join. The access control mechanism could vary: existing participants could decide future entrants; a regulatory authority could issue licenses for participation; or a consortium could make the decisions instead. Once an entity has joined the network, it will play a role in maintaining the blockchain in a decentralized manner.” (https://www.ibm.com/blogs/blockchain/2017/05/the-difference-between-public-and-private-blockchain/)

Consortium blockchains

A consortium blockchain is a system that is ‘semi-private’ and has a controlled user group but works across different organizations.

“Consortium blockchains differ to their public counterpart in that they are permissioned, thus, not just anyone with an internet connection could gain access to a consortium blockchain. These types of blockchains could also be described as being semi-decentralized. Control over a consortium blockchain is not granted to a single entity, but rather a group of approved individuals. With a consortium blockchain, the consensus process is likely to differ to that of a public blockchain. Instead of anyone being able to partake in the procedure, consensus participants of a consortium blockchain are likely to be a group of pre-approved nodes on the network.  Thus, consortium blockchains possess the security features that are inherent in public blockchains, whilst also allowing for a greater degree of control over the network. Examples of consortium blockchains would be: QuorumHyperledger and Corda.” (https://www.mycryptopedia.com/consortium-blockchain-explained/)

Where is Blockchain used?

Blockchain is being used in a number of sectors including:

  • Cryptocurrencies –Bitcoin and
  • Smart contracts – contracts that can be partially or fully executed or enforced without human interaction.
  • Financial services – back officesettlement systems, peer-to-peer insurance, parametric insurance and microinsurance. Stock trading and share settlement trade confirmations become almost instantaneous (as opposed to taking three days for clearance). Potentially, this means intermediaries — such as the clearing house, auditors and custodians — get removed from the process.
  • Video games – CryptoKitties
  • Supply chain – supply chain logistics and supply chain management. E.g. Everledger, Hyperledger.
  • Entertainment – Mycelia service has also been proposed as blockchain-based alternative that gives artists more control over how their songs and associated data circulate among fans and other musicians.
  • Public – Tezos Online voting technology.
  • Contracts – Land title registration. Publicly accessible ledgers, blockchains can make all kinds of record-keeping more efficient. Property titles tend to be susceptible to fraud, as well as costly and labor-intensive to administer. Honduras was the first government to announce such an initiative in 2015. This year, the Republic of Georgia cemented a deal with the Bitfury Group to develop a blockchain system for property titles. Most recently, Sweden announced it was experimenting with a blockchain application for property titles.

What skills are needed to develop a Blockchain application?

What skills are needed to develop a Blockchain application

The demand for blockchain developers and engineers keeps on increasing without pause. According to research done by management consulting firm, Janco Associates, the median salary for a blockchain developer is now as much as USD$127,000. (Nov 19, 2018).

A Blockchain developer requires a knowledge of solution design, building blocks, cryptography, nodes and transactions; blockchain components (smart contracts, network types, consensus mechanisms, on-chain and off-chain data storage); Hyperledger (Sawtooth, Fabric), Ethereum; platform and vendor assessment network.

A Blockchain Developer must know one of the modern programming languages like Java or C++. These languages don’t just help create applications for blockchain, but also help learn contract-based or blockchain-based languages like Simplicity or Solidity.

In conclusion

The technology of blockchain is continually evolving as new applications are conceived and built. There is a school of thought that predict that Blockchain developments will threaten the viability of many existing large businesses by introducing a new transaction protocol and there is also an opposing view that those that are threatened will take advantage of what Blockchain has to offer. Time will tell.

What is Big Data used for

Big Data

Big Data

What is Big Data used for

In the world of new ideas, new processes and digital information Big Data has arisen as a discussion topic, control mechanism and the way to make more money by collecting information on a massive scale. The information (data) collected can be structured or unstructured and include location, browsing patterns, text, audio, video, images, behavioural patterns, trends and more. It is labelled ‘Big Data’ because the sheer volume of data collected makes it too difficult to process using traditional database and software techniques and it moves too fast to be handled by existing processing capacity.

What is Big Data used for?

A primary use for the data collected is to discover patterns and trends related to human behaviour and how we interact with technology.  The results generated by the analysis of the data can be used to make decisions that impact how we live, work, and play

How much Data is out there?

  1. By 2020, there will be around 40 trillion gigabytes of data (40 zettabytes). (Source: EMC)
  2. 90% of all data has been created in the last two years. (Source: IBM)
  3. Today it would take a person approximately 181 million years to download all the data from the internet. (Source: org)
  4. Internet users generate about 2.5 quintillion bytes of data each day. (Source: Data Never Sleeps 5.0)
  5. In 2018, internet users spent 2.8 million years online. (Source: Global Web Index)
  6. Social media accounts for 33% of the total time spent online. (Source: Global Web Index)
  7. In 2019, there are 2.3 billion active Facebook users, and they generate a lot of data. (Source: Data Never Sleeps)
  8. Twitter users send nearly half a million tweets every minute.(Source: Domo)
  9. 2% of organizations are investing in big data and AI. (Source: New Vantage)
  10. Using big data, Netflix saves $1 billion per year on customer retention. (Source: Inside Big Data)
  11. What is big data and analytics market worth in 2019? $49 billion, says Wikibon. (Source: Wikibon)
  12. In 2019, the big data market is expected to grow by 20%. (Source: Statista
  13. Job listings for data science and analytics will reach around 2.7 million by 2020. (Source: Forbes)
  14. By 2020, every person will generate 1.7 megabytes in just a second. (Source: Domo)
  15. Automated analytics will be vital to big data by 2020. (Source: Flat World Solutions)

Where is Big Data analysis used?

Where is Big Data analysis used

It is fair to assume that every industry and sector has a use for the results and insights provided by big data analysis. Just to name a few of them:

  • Agriculture
  • Legal
  • Financial markets
  • Gambling and betting
  • Politics
  • Insurance
  • Security
  • Urban planning
  • Retail banking
  • Mining and resources
  • Transportation
  • Consumer products (Fast Moving Consumer Goods – FMCG)
  • Healthcare and pharmaceutical
  • Energy
  • E-commerce
  • Web analytics

What tools are used to analyse Big Data?

What tools are used to analyse Big Data

There are several software tools used to analyse big data which include NoSQL databases, Hadoop, and Spark. With the help of big data analytics tools, we can gather different types of data from the most versatile sources – digital media, web services, business apps, machine log data, etc.

The following comparison between Hadoop and Spark appeared in:

https://www.datamation.com/data-center/hadoop-vs.-spark-the-new-age-of-big-data.html

“Upon first glance, it seems that using Spark would be the default choice for any big data application. However, that’s not the case. MapReduce has made inroads into the big data market for businesses that need huge datasets brought under control by commodity systems. Spark’s speed, agility, and relative ease of use are perfect complements to MapReduce’s low cost of operation.

The truth is that Spark and MapReduce have a symbiotic relationship with each other. Hadoop provides features that Spark does not possess, such as a distributed file system and Spark provides real-time, in-memory processing for those data sets that require it. The perfect big data scenario is exactly as the designers intended—for Hadoop and Spark to work together on the same team.”

Hadoop

a general-purpose form of distributed processing that has several components: the Hadoop Distributed File System (HDFS), which stores files in a Hadoop-native format and parallelizes them across a cluster; YARN, a schedule that coordinates application runtimes; and MapReduce, the algorithm that actually processes the data in parallel. Hadoop is built in Java, and accessible through many programming languages, for writing MapReduce code, including Python, through a Thrift client. (https://logz.io/blog/hadoop-vs-spark/)

Spark

Spark is structured around Spark Core, the engine that drives the scheduling, optimizations, and RDD abstraction, as well as connects Spark to the correct filesystem (HDFS, S3, RDBMs, or Elasticsearch). There are several libraries that operate on top of Spark Core, including Spark SQL, which allows you to run SQL-like commands on distributed data sets, MLLib for machine learning, GraphX for graph problems, and streaming which allows for the input of continually streaming log data.

Spark has several APIs. The original interface was written in Scala, and based on heavy usage by data scientists, Python and R endpoints were also added. Java is another option for writing Spark jobs.  (https://logz.io/blog/hadoop-vs-spark/)

What programming skills are required to work with Big Data?

Coding is essential to undertake numerical and statistical analysis with massive data sets and the languages that are currently in use include Python, R, Java, and C++.

In conclusion

The collection of data will continue to expand on a massive scale impacting our daily lives in many ways. We live in a world where almost everything is on view and the more data that is collected the more others know and understand our behavioural patterns.

Mergers & Acquisitions

Mergers and Acquisitions (M&A)

Mergers & Acquisitions (M&A)

Mergers & Acquisitions

Definitions

Merger – the combination of two companies to form one entity.

Acquisition – the take over of one company by another company.

Background

Announcements of new Mergers and Acquisitions is common and often seen to be related to large well-known companies, however M&A strategy occurs frequently in lesser known companies both large and small. There are many reasons why a merger or acquisition makes sense as part of a business growth strategy including to;

  • Gain a greater market share
  • Diversify into other related products and markets
  • Benefit by economies of scale
  • Accelerate growth
  • Increase the company’s capital value
  • Access different and new technologies
  • Improve the tax structure
  • Diversify risk

Mergers & Acquisitions can take place by:

  • Purchasing ordinary shares
  • Purchasing assets
  • Exchange of shares for assets
  • Exchanging shares for shares

Types of Mergers and Acquisitions

There are several ways in which M&As can be classified:

  • Horizontal – two companies that are in the same industry
  • Conglomerate – two companies in unrelated industries which may or may not have parts of their operations in common
  • Vertical – two companies at different production stages in the value chain
  • Market Extension – two companies that deal in the same products but in separate markets.
  • Product Extension Mergers – two companies that deal in products that are related to each other and operate in the same market.

M&A legal perspective

From a legal point of view M&As can occur in different ways:

  • Short-Form Merger – when a subsidiary merges into a parent that already owns most of the subsidiary’s shares. This can be less expensive and time consuming than an ordinary statutory merger.
  • Statutory Merger – a combination of two or more corporations under the corporation laws of the State, with one of the corporations surviving. The surviving corporation acquires the assets and liabilities of the merged corporation(s) by operation of State law.

Fundamental considerations for small companies planning a Merger or Acquisition

Fundamental considerations for small companies planning a Merger or Acquisition

1.      Points to consider for both the buyer and seller

  • Will the two businesses produce more income together than apart?
  • Does either business have assets that can be sold to allow for more profit?
  • Do company cultures match?

2.      Questions to ask if your company is the buyer

  • Will the existing revenue and clients of the company you are acquiring remain after acquisition?
  • Are there legal, legislative or economic issues that can be foreseen that will affect future revenue?
  • Is the revenue dependant on a small number of clients?
  • Are staff loyal to the business or may depart with the owner of the business you intend to purchase?
  • Are there new competitors moving into the market of the company you intend to acquire?
  • Is the acquisition a purchase of stock (equity) or the assets of the acquired company?

3.      Points to consider if your company is the seller

  • Do not overestimate the value of your company. If you are a business owner and have the possibility of merging with or being acquired by another company it is easy to have an inflated view of your company’s value based on the amount of effort and money it has cost you to get to this point. This is often the reason why deals fail, and an opportunity is wasted. It is often wise to seek advice on this from an independent professional adviser.
  • What obligations, financial and otherwise, will be transferred to the new owner?
  • Has your earnout been clearly stated and acknowledged by all parties? An earnout is a contractual provision stating that the seller of a business is to obtain additional compensation in the future if the business achieves certain financial goals, which are usually stated as a percentage of gross sales or earnings. If an entrepreneur seeking to sell a business is asking for a price more than a buyer is willing to pay, an earnout provision can be utilised. In a simplified example, there could be a purchase price of $1,000,000 plus 5% of gross sales over the next three years.
  • Has the sale been structured to minimize risk and taxes?
  • Is there a proper contingency plan in place if your company’s revenue decreases during the buyout period?

Typical stages of a Merger or Acquisition

Typical stages of a Merger or Acquisition

1.       Pre-acquisition review

An internal review conducted by the buyer to determine if a M&A will be advantageous, to estimate the value of the acquisition target and forecast what the combined growth may look like.

2.       Target search and examination

Searching for attractive takeover candidates and examining their operations to determine whether they are a good strategic fit for the acquiring company.

3.       Investigate and valuation of the target

An in-depth analysis of the target company also referred to as due diligence.

4.       Negotiation stage

Discussion between the buying and selling companies with the objective of reaching a mutually agreeable deal.

5.       Post-merger integration

After execution of the agreement the work commences to combine the assets and operations of both companies.

Recent Mergers and Acquisitions

Some of the larger M&As that have taken place over the past year or so have included;

Amazon acquires Whole Foods Market – $13.7bn

Amazon is known for its quick turnover of inventory and its logistical strengths. The effects on the food retailer have been lower prices and Amazon lockers in Whole Foods stores. It is expected that this will attract a new customer base that has previously avoided Whole Foods because of its niche reputation and relatively high prices.

Disney acquires 21st Century Fox – $52.4bn
The deal brings together two of the biggest entertainment companies in the world, and future-proofs Disney’s vast empire.

CVS acquires Aetna – $69bn
CVS is the biggest pharmacy chain in the country and the acquisition merger puts pressure on other significant players in the market.

Intel acquires Mobileye – $15.3bn
Intel, the world’s largest chipmaker acquired the Israeli visual sensor company Mobileye and is looking to position itself as a leader in of the hottest fields in tech right now.

Verizon acquires Yahoo – $4.48bn
In 2016, Yahoo was the world’s sixth most visited site. The company now operates under Oath, Verizon’s digital content subsidiary, which also controls AOL and Huffington Post.

In conclusion

M&A’s are considered as important change agents and are a critical component of any business strategy providing opportunities for growth and expansion into other markets. As an example of M&A in action, in 1999 the author of this article founded a company called Smartsalary Ltd. Between 1999 and 2019 Smartsalary Ltd has acquired 16 companies in related fields and now has a capital value exceeding $1 billion.

Hiring a Patent Attorney For Your Business

Protecting your IP – Hiring a Patent Attorney

Protecting your IP – Hiring a Patent Attorney

Hiring a Patent Attorney For Your Business

There are two schools of thought regarding protection of intellectual property. If you have not already lodged patent applications and have a business that operates in the technology space where several major companies have interests you should be aware that large amounts of money and resources are applied by these companies to review emerging ideas and products with a view to protecting their own interests. In some cases, this has resulted in entrepreneurs seeing their ideas and creations challenged with the ultimate goal of delaying their market entry. One school of thought is that where companies have not embarked on the patent process is that the best line of defence is to create the product bring it to market and be the first mover in the field. The alternate strategy is for entrepreneurs to file for the relevant protection available to them. Entrepreneurs should seek Independence legal advice as to be most appropriate course of action.

Obtaining intellectual property protection, such as patents, can minimise competition and act as a defensive mechanism against infringement claims from others. Intellectual property also can attract or solidify funding and partnerships. Should you decide to apply for Patent protection then you will need to consider hiring a professional Patent Attorney.

As the author of this article I was recently involved with an Australian company that had been granted an Australian Standard Patent and was in the process of applying for a US Patent. In this case the company engaged an Australian based Patent Attorney to prepare the application which was subsequently lodged with the US Patent Office. Protocol being what it is, the US Patent Office will not correspond directly with a Patent Attorney from another country meaning that if you go through this process you will also need to engage a US based Patent Attorney so that the two attorneys can communicate with the objective that the latter corresponds with the US Patent Office. Selecting the right local Patent Attorney in your country may also come with the advantage that they have US counterparts to work with. This was the case in our situation, the dialogue took place between the attorneys and the US Patent Office and a US Patent was successfully obtained, however, the time frame involved from lodgement to grant of Patent was over 3 years and the costs exceeded $30,000 even though the US process started with all of the information, description etc that had already been created for the Australian Patent application.

The bottom line is that the process of applying for Patents is a time consuming and costly excersise and requires continual communication with your Patent Attorney.

Hiring a Patent Attorney

Patent attorneys can be classified in to two groups, those that specialise in obtaining patent rights for inventions, and those that specialise in handling legal disputes about whether someone is infringing an existing patent.

Some of the questions that need answering before you select a Patent Attorney include:

  1. Do you specialise in patent prosecution and/or patent litigation?
  2. Do you specialise in a particular sector or technology?
  3. How many patents have you successfully obtained?
  4. Have you dealt with patent attorneys in other countries?
  5. Do you hold the appropriate licences and qualifications?
  6. How many patent applications do you typically file per year?
  7. What is your success rate?
  8. What is the profile of your typical client?
  9. Do you work with startups?
  10. Will you be working on this application personally, with colleagues in your company or be employing junior associates to do some of the work?
  11. Can you provide an outline of how you will work with our company on this project and how much time you require with key personnel?
  12. Are there any hurdles you see in presenting this application?
  13. Are you representing any similar interests or products in this sector?
  14. How do you charge by the hour or a fixed fee?
  15. Can I expect any charges for extras?
  16. What do you think the total cost estimate will be?
  17. How long do you think the process will take?
  18. Can you provide client references?

Preparing to meet with a Patent Attorney

Preparing to meet with a Patent Attorney

Preparation and some research can save you money and heartache in the long run. Before you meet with a potential candidate consider doing the following:

  • Prepare a description complete with photographs of your idea.
  • If you have a prototype be prepared to discuss its features.
  • Explain the features and attributes that differentiate your product from others.
  • Explore the competition as they may have features that you are claiming as unique.

Professional Patent Searches can be an option to reduce costs before engaging a patent Attorney. In the USA, according to www.ipwatchdog.com , they will be able to find prior art patent and pending applications that you did not know about.  Searches done by a professional patent searchers and an attorney written opinion typically range from $1,000 to $3,000, depending upon:

  1. The amount of written analysis you want to receive;
  2. The complexity of the invention; and
  3. The amount of prior art discovered that needs to be considered.

The search directs the entirety of the remainder of the patent project, or it could show there is no reasonable opportunity to obtain a suitably broad patent claim so the project should be abandoned, saving the inventor many, many thousands of dollars.

In conclusion

Patents can be valuable in many ways, they can help you secure investment funds, create a product that is unique, or they can be saleable in their own right. Ensure that before you decide to engage a Patent Attorney you have done your research and are confident that your idea is not only able to be protected but that it is worth protecting. Choosing the right Patent Attorney is critical to success, for example in the case of the Australian company (above) that applied for a US Patent it was necessary to terminate the first Patent Attorney company and find a new one. The Patent Attorney that had secured the Australian Patent unfortunately died before the US Patent application had run its course and the process was taken over by individuals within that company who lacked the relevant experience. $10,000 in fees later the application was rejected by the US Patent Office. A new firm was found that had the required experience, a challenge was lodged and after 6 months a US patent was granted.

What benefits does a fundraising consultant bring to the table

Startup Fundraising Consultants

Startup Fundraising Consultants

Startup Fundraising Consultants

Did you know that it took Jeff Bezos (Founder of Amazon) 60 meetings with potential investors to raise $1 million? He raised it from 22 people at approximately $50,000 a person. Amazon could have ended before it got off the ground.

Only one in two-hundred startups succeed in raising venture capital.

Sources: www.seed-db.com/accelerators and www.genconsortium.org

As a Founder that has trodden this path many times the thought of enlisting help in raising funds has crossed my mind. This article takes a look at the pros and cons and the tips and traps that need to be considered BEFORE you engage a fundraising consultant.

Before you interview potential fundraising consultants

To prevent wasting everyone’s time and a lot of your own money you will need to consider the following:

  1. Have you prepared a comprehensive Business Plan?
  2. Will your Marketing Plan stand up to investor scrutiny?
  3. Do you have the right corporate structure in place to accept investments?
  4. Can you describe in detail how you will use the funds?
  5. Are you ready to apply the funds raised immediately?
  6. Are you ready to enter the ‘Due Diligence’ phase if an investor shows interest?

If you have answered ‘yes’ to these questions, then read on.

Be aware – Investors expect the CEO to be the fundraiser

Investors expect to be talking to the CEO when fundraising and think something is wrong if this is not the case. They see a ship without a captain:

What benefits does a fundraising consultant bring to the table?

What benefits does a fundraising consultant bring to the table

Fundraising consultants are also known as corporate finance advisors, fundraising brokers and placement agents. They will all offer to raise funds in return for some form of remuneration. Competent fundraising consultants can assist in many ways, including:

  • Having a track record of previous successful raises.
  • Helping you with pre-investor material such as Pitch Decks, videos, Data Rooms and advice on what to expect.
  • Hopefully they will have a list of contacts and open doors to investors that individually you would find hard to reach, including:
    • Angels
    • High Net Worth individuals
    • Venture Capitalists
    • Family offices
    • Seed funds
    • Retail funds
    • Corporate investors
    • Institutional investors
  • Understanding each investor and matching their investment preferences to your company.
  • Fundraising Advisors can save you time and energy contacting investors, organising meetings, following up and maintaining momentum whilst you concentrate on the business.
  • Your business may be located well away from where investors are and a consultant with presence in the right location may assist in opening doors.

Fundraising consultants are not always effective

Apart from a lack of track record and specific investment knowledge of the sector you operate in there are some other reasons that hiring a fundraising consultant may not be appropriate:

  • Many investors prefer to talk directly with the Founder rather than an intermediary.
  • Some VCs will refuse to deal with certain fundraising consultants.
  • Fundraising consultants main concern is their own income don’t care who the investor is or what terms they are setting.
  • Investors realise that part of what they are investing will go directly to the fundraising consultant instead of being invested in the business.
  • The wrong fundraising consultant could lose the investor.

What to look out for

The whole process of finding a reputable and successful fundraising consultant can be overwhelming as there seems to be an industry that has emerged around the ‘Startup’ sector, happy to take money from Founders in need of help but with no guarantee of delivery. These can include:

  • Former founders who have raised some money for one or two ventures and hold themselves out as experts in the field. That field may be related to a single fundraising exercise in a segment of the market.
  • 25-year-old with 20 of experience on telling people how to do things via their website. No practical experience and few contacts.
  • Professional looking fundraising websites that on closer examination do not have a track record. You may find that there is only one or two people behind the service.
  • Small Venture Capital types of individuals that have accumulated some wealth but not necessarily a lot of experience.
  • Can they validate their contact list?
  • Does state or federal law require your fundraising consultant to have a licence?
  • Is this a full-time job or something they do part-time whilst being involved in other businesses?
  • If your business is technical or complicated, do they really understand your proposal?
  • Do they have a good knowledge of your sector?
  • Are they sector specific or work with anyone?
  • What are the sizes of the raises they have completed and in what sector were they?

All will be willing to take your money but before you jump, make sure they can back up their claims and seek references of recent raises.

How much should you expect to pay?

How much should you expect to pay

Generally fundraising consultants will charge in one or more ways:

  • A lump sum payment on engagement to cover pre-investment preparation work such as Pitch Decks, Information Memorandums etc;
  • Individual, task specific charges for say a Pitch Deck or Business Plan,
  • A monthly retainer for presentations, meetings etc,
  • A success fee based on the capital raised.

A common combination would be a monthly retainer plus a success fee based on the total raised, e.g.

  • 10% of the first $1 million, plus
  • 9% of the second $1 million, plus
  • 8% of the third $1 million, plus
  • 7% of the fourth $1 million, plus
  • 6% of the fifth $1 million, plus
  • 5% of the sixth $1 million, plus
  • 4% of the seventh $1 million, plus
  • 3% of everything above $8 million.

Regular updates from your fundraising consultant are essential

You have paid a lump sum, or the first monthly retainer and it’s gone quiet. To avoid stress and the ‘not knowing what’s happening’ feel then ask the consultant to set out the terms of reporting and contact as part of their contract. Ask them to set some milestones covering:

  • How many investors will they approach every month?
  • Identify the sectors of interest those investors are interested in as approaching investors who are not interested in what you are doing is pointless and a waste of money.
  • What is their track record in raising funds for businesses in your sector?
  • How much have they raised?
  • How long did it take?
  • What are their expectations surrounding timeframe for your raise?
  • What happens if they fail to get meetings with potential investors?

If You don’t get feedback, ask why.

In conclusion

When hiring a fundraising consultant there are some fundamentals to bear in mind:

  1. Obtain recommendations from other business owners, CEOs, and investors to see whether they will give you recommendations.
  2. Ask candidates for their client referrals, call these previous clients. and ask direct questions about the consultant’s work style and his or her strengths and weaknesses.
  3. Ask, ‘How’ they propose to assist you and what type of investors do they have in mind.
  4. Have your Co-Founder/partner or senior team member/s sit in as a panel when you interview candidates.
  5. Above all, set very clear objectives around targets, dates, reporting and milestones.

It is highly unlikely that any fundraising consultant will provide any type of guarantee regarding success.

 

Hiring Developers for your Startup

Hiring Developers for your Startup

Hiring Developers for your Startup

Hiring Developers for your Startup

You have an idea that requires the skills of one or more developers. You have decided that the idea is worth pursuing and you have raised some capital to get going but you do not have some key development skills in-house that will be necessary to build out your app or platform.

I have been in this position before and gone through the hiring and sub-contract process with mixed success and a similar thing can be said for many startups that I have encountered. The question is how do you make informed choices when it comes to selecting the developers that will make your vision a reality?

Microsoft, Google, Facebook and Amazon offer top developers lucrative salaries and perks to join their companies and it is virtually impossible to compete with them in the job market, however, there are developers that prefer smaller, more agile organisations and if you feel you have found one of those they may be attracted by a smaller salary, more flexibility and the option of equity if they meet the milestones that you set.

Point to consider when hiring a Developer

1.      Why do you need a Developer?

Is a developer essential or can you achieve the results with your existing team? If your company is in the early startup phase and is still developing the concept then it may be too early to take on additional IT staff, however, if you conclude that an IT person is essential to move forward then you may have reached the point where it is the right decision.

On some occasions it may be a consideration to take on a technical co-founder that not only has the skills but is someone that has the track record of managing situations such as yours and growing startups into larger businesses. The downside is that unlike a salaried employee, a technical co-founder may want an equal (or large) share in the business.

If you cannot build your project without development talent then, and only then, is it the right time to hire a developer for your startup.

2.      Could you outsource instead of hiring?

Skilled, accomplished developers attract high salaries and would most likely be seeking equity or stock options as part of their remuneration which may be beyond your existing budget. It is not unusual to see startups hire employees to only later realise they are not able to complete the tasks required or are not a good cultural fit with the company. In these cases, it is difficult and potentially expensive to terminate employment and to start looking for a replacement.

It may be more cost-effective to consider outsourcing the work and paying on a per project basis. Although outsourced developers may have other concurrent projects, costs can be controlled, and payments made on a phase completion schedule.

3.      Can you document a clear set of tasks for the Developer?

As a Business Plan is critical to your business’ success, a Technology Development Plan is essential in establishing goals, setting milestones and providing a basis on which you can measure a developer’s progress. Make sure you have a documented plan before you talk to potential developers. It’s your vision and end goal, not theirs.

Whether you hire or outsource you will need a plan.

4.      When should you hire a developer?

Do you have an immediate need but can’t find the appropriate talent? If this is the case, then outsourcing may be the best option, otherwise you may be able to wait until the right candidate arises.

5.      Where can you find Developers?

There a several things you can do when hiring or outsourcing a developer, these include:

  • Recruitment agencies/websites that specialise in IT personnel.
  • Talk to your personal and business network to get recommendations.
  • Contact Universities and tertiary institutions that run courses for developers.
  • Contact Innovation Hubs.
  • Visit startup Incubators and talk with startups in your sector.
  • Join Online developer communities like Github and Stack Overflow. Software developers upload samples of their work and the code they have written on these platforms so that You can make intelligent connections and get insights into their coding capabilities.
  • Attend Developer events,Developer conferences, hackathons and tech events.

Before you start on the above make sure you have a concise view about what you will say when you meet potential candidates, tell them about the problem that your startup intends to solve and why it matters.

6.      Consider a trial period with a predefined task

Developers may resent or object to working on a part of your project on a trial basis unless they receive some payment. If you believe you have identified a suitable candidate/s give them a real problem to solve. This will provide you an insight into their approach, methodology and capabilities handling a problem that relates to your business.

7.      Evaluating their resume and qualifications

Educational achievements and work experience are the starting point for deciding on a candidate to fill a role. If they are agreeable ask for a sample of their work and for references from people with whom they have worked.

A growing number of software developers are self-taught, and most have learned additional languages and obtained more skills beyond what they had learned in their tertiary education.

8.      Do you need assistance with the hiring process?

If you, your co-founder or someone in your team has the skills to understand the requirements and is comfortable interviewing technical personnel then you have the technical interview round covered but if not, you might find yourself needing assistance.

If there are several people in your company that are conversant with the requirements, then a panel interview may be appropriate. Alternately a professional recruitment company that specialises in IT developers may be an option.

9.      How will the candidate fit in with company culture?

The interview process should include broader questions beyond the needed technical skills. Look for people who share your vision for the direction that the startup needs to take and the implementation of the solution to the problem you are looking to solve.

Explain the company culture and look for response that indicate the new recruit would be a good fit for both the job and with your team. In a developer role the candidate will require  good communication skills as well as an understanding of the specifications.

Hiring Freelance Developers

Freelance Developers

When you hire a freelance developer there are some important points to consider:

  1. As the business owner consider what is the minimum that can built that will create revenue? A good developer interested in an ongoing future with you as a client will and your developer should be pushing you to think that way.
  2. Before you decide whether to engage the freelancer on a price per project basis or an hourly rate do some research on what similar projects have cost other business owners as in some cases a freelancer will charge a much higher price and factor in contingencies that may never occur, whereas, an hourly rate contract may work out cheaper.
  3. Determine the scope of the contract clearly. If you fail to do this, you may be subject to higher costs as a result of scope-creep possibly because the developer sees the project from a different perspective than you.

Choosing Technologies

Choosing Technologies

Developers will use different languages to produce different systems. Developers often specialise in particular languages  and the choices developers make at this point have long-term consequences. As the author of this article I have worked with business owners and large corporations and have found that years after developing their first programme they have experienced difficulties in integrating new modules primarily because of the developer and language used to create the first programme/s. One world recognised bank was grappling with 100 old systems (called legacy systems) and trying to combine their outputs with a whole new set of programmes.

The choice of languages can cost months of work to undo, hold up clients, and delay revenue and future versions, or can force a rebuild of your entire application.

In conclusion

Irrespective of whether you hire new personnel to develop your system or subcontract to an external company or freelance developer it is essential that you lay down a clear plan, set out the objectives and create achievable and measurable milestones before you engage a developer. Take the time to do the homework, understand the implications of languages and investigate the track record and performance of candidates before signing them up.

Startup costs

Startup costs and considerations

Startup costs and considerations

Startup costs

There are many points to consider when you start a new business, some will be able to be done for nothing while others will cost money. The activities and costs can be divided int a few groups:

  • Essential operating items
  • Business building activities

Essential business formation and operating costs

operating costs

The costs will depend on the type of business you are starting and the industry you are entering. There are costs that every business owner encounters that cannot be ignored, some or all of the following may apply in your case:

  • Business formation costs
    • Business name registration
    • Domain names
    • Licences
    • Permits
    • Trade marks/designs/patents
    • Vehicles
  • Property costs
    • Rental lease cost (Rent advance/deposit)
    • Utility connections & bonds
    • Phone connection
    • Internet connection
    • Vehicle registration
  • Insurances
    • Building & contents
    • Public liability
    • Product liability
    • Professional indemnity
    • Workers compensation
    • Business assets
    • Business revenue
    • Vehicle
  • Fees
    • Legal costs
    • Accountant fees
    • Membership fees
    • Franchise fees
  • Capital costs
    • Furniture
    • Shop fitout
    • Shop fitout
    • Computer equipment
    • Phones
    • Security system
  • Operating costs
    • Computer software
    • Stock/raw materials
    • Training
    • Wages
    • Stationery & office supplies
    • Printing
    • Initial stock and raw materials
  • Marketing & advertising
    • Travel and accommodation costs
    • Market research costs
    • Website creation
    • Social media marketing
    • Print, tv and broadcast media costs
    • Signage

Hiring professional Business Advisers

Hiring professional Business Advisers

There are often times when the advice and qualifications your business requires will be beyond the skills of the people employed in your company. Hiring professionals to provide advice can be effective, however, there are many things that you should consider before you make a commitment.

  1. What you need to do first
  2. When to get business advice
  3. Types of business advisers
  4. Where to look for a business adviser
  5. What to consider when choosing a business adviser
  6. How your company will work with the business adviser

1.      What you need to do first

It is a good idea to prepare a Business Plan as the first step in identifying your goals and needs. Your Business Plan should contain a SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) which will help you determine the missing requirements such as skills, professional expertise and cash requirements.

Using this information will assist in defining what type of help you need and the type of adviser that can provide support.

2.      When to get business advice

Cost and availability of funds will determine when you seek professional advice to address a particular issue in your business. Before making a commitment to engage an Adviser consider whether:

  • The skills required already exist within your team.
  • Will the advice you pay for be worth the outlay?
  • Is there a legal requirement for getting external advice?

Sources of free business advice

You may be able to obtain the advice you need from sources that you do not have to pay for. Take the time to research potential free advice from:

  • Government programmes
  • Financial institutions
  • Industry associations
  • Your personal network
  • Social media forums, case studies and free websites

3.      Types of business advisers

In the event that you decide an external professional adviser is necessary the next step is to determine which type of Adviser can address your needs. There are different types of advisers are available to help you with your financial, legal and other business needs for instance:

Accountants

Accountants can give you advice about:

  • Starting, buying and growing a business
  • Taxation requirements and returns
  • Employment obligations
  • Record management
  • Financial management

You should check that your accountant is registered with the appropriate professional association.

Business bankers

Business bankers should have a thorough understanding of your business needs and can provide advice about:

  • Online banking services
  • Business credit cards
  • Investment strategies.
  • Solutions for making and receiving payments
  • Finance and loan options
  • Industry conditions

Consultants

Consultants operate in many different fields of expertise and can provide assistance in specific areas of your business e.g.

  • Management
  • IT
  • Intellectual Property and Patents
  • Human resources
  • Sales and marketing

Financial advisers

A financial adviser can address areas that not all accountants cover including:

  • Investment strategy
  • Investment placement
  • Superannuation
  • Succession planning
  • Risk management

You should check that your financial adviser is registered with and have authorisation from the appropriate professional association.

Insurance brokers

Qualified brokers understand the insurance market and can negotiate competitive policies on your behalf. They can put together a comprehensive and cost-effective insurance package for your business.

Insurance brokers should be licensed.

Legal Advisers

Legal advisers can provide support in:

  • Creating a business structure
  • Shareholder Agreements
  • Licensing and compliance
  • Contracts and legal documents
  • Intellectual property protection
  • Dispute resolution.

Business mentors

A business mentor acts as a role model, adviser, critic and consultant. Mentoring can be informal, with friends, family or business contacts providing support and advice when it’s needed. You can also get involved with formal mentoring programs run through government or industry associations.

4.      Where to look for a business adviser

The following sources  represent places where advisers can be located:

  • Business and social networks
  • Industry associations.
  • Professional associations for:
    • Legal advisers
    • Financial advisers
    • Accountants
    • Consultants
    • Insurance brokers
    • Business bankers
    • IP attorneys
  • Other online databases

5.      What to consider when choosing a business adviser

Before choosing an adviser, you should research their background and qualifications, licences, areas of expertise and fees.

  • Check licences and qualifications and ensure they cover the advice you are seeking
  • Compare fees and services
    • Fees – Different advisers charge different fees for their services. Some will work for a fixed fee, some will work for commission, and others may charge an hourly rate. Try to validate the advisers experience and performance with previous clients, ask for references.
    • Services – are they what you need?
  • Meet with your business adviser to discuss their fees, experience and how they can help your business. Check whether you will be charged for this meeting.
  • Choosing an adviser – ask yourself the following:
    • Are they a good fit for your business?
    • Is their personality compatible with your team?
    • Did you feel comfortable discussing your business with them?
    • Did they understand your specific needs and future direction?
    • Does their availability suit your needs?
    • What are their fees?
  • If you have sensitive material that you want kept confidential is the adviser prepared to sign a Non-Disclosure-Agreement?

6.      How your company will work with the business adviser

You will be paying for your adviser’s time so make meetings efficient:

  • Always prepare for meetings by preparing a clear agenda and desired outcomes.
  • Give your advisers accurate information about your business.
  • If you have certain information that cannot be disclosed, let your adviser know.
  • Keep advisers updated about any changes to your business.

Ongoing review

If you have an ongoing relationship with a business adviser, it is worth reviewing your arrangements on a regular basis to determine:

  • Are you getting value for money?
  • Are milestones being met?
  • Are there any unresolved issues with the adviser?
  • Does my adviser still suit my business needs?

How Much Does It Cost to Hire a Small Business Consultant?

How Much Does It Cost to Hire a Small Business Consultant

Exact costs are going to vary depending on what skills you are seeking. Consultants with more experience to charge substantially more than someone who’s just starting out. Some typical costs for consultants are:

Type of ConsultingRelevant SkillsAverage Hourly Rate
MarketingDigital marketing, campaign planning, market research$25-100
Accounting and BookkeepingAuditing, accounts payable and receivable, tax preparation$30-100
HR ManagementAdministering benefits, mediating disputes$35-175
IT SecurityEstablishing security protocols, penetration testing$40-140

In conclusion

All businesses have costs and detailed planning will help you understand and prepare for the expense. It is likely that at some stage in the development of your business you will require expertise from outside sources and turn to consultants to provide the support. Before you engage a consultant make sure you research exactly what you need before you discuss those needs with potential professionals.

There is no substitute for a well-researched Business Plan when you are setting up a business or contracting with professional advisers.

Entrepreneurs The Now And Then

Entrepreneurs – Then and Now

Entrepreneurs – Then and Now

Entrepreneurs The Now And Then

My first meeting with a true entrepreneur was in 1975 when I went to work for Philip Dulhunty at his company Dulmison Pty Ltd. Philip is the type of person Indiana Jones was cast from, Born in Kempsey, New South Wales, in 1924, great-grandson to Robert Velour Dulhunty, the first white settler of what was to become the city of Dubbo, New South Wales. At age six, the family moved to Port Macquarie where Dulhunty left school after completing his Form Three Intermediate Exam, no higher school tuition being available in Port Macquarie at the time.

In World War II he served as a Commando in the Australian Armed Forces in Japan, following which he was posted to the reconstruction forces stationed in Japan where in 1947 he started Dulmison Pty Ltd to exploit importing opportunities in the strictly controlled, quota and foreign exchange limited trading environment then prevailing in post-War Australia, opportunistically trading in whatever available quota presented itself (e.g. fireworks, costume jewellery, calico and case shooks),

A flying start

Philip is a keen aviator and on his return from Japan he continued with Dulmison and in 1949  established Port Macquarie Clipper flying services from Rose Bay Sydney to the northern New South Wales town of Port Macquarie in 1949, operating several Short S25 Sunderland MKIII flying boats leased from Trans Oceanic.

Good vibrations

Whilst maintaining a lifelong interest in flying Philip steered Dulmison into the power distribution components business in which it became a leading player in Australia for decades and having successfully developed a portable testing set for recording Aeolian vibrations in 1976 he created and patented the Dogbone damper which represented a significant improvement on the traditional Stockbridge damper commonly used. The design was adopted worldwide and sold in the millions.

Staying afloat

Philip had always been a keen swimmer and won the North Coast Junior Open Surf Race in 1940. Always the thinker and inventor he and a colleague, Calvin A Gongwer devised the “Aqueon”, a winged contraption configured to cause the swimmer’s legs to operate in unison, delivering power in the manner of a dolphin’s kick. He claimed it had a propulsion efficiency of 86 per cent, as compared to 25 per cent for the average swimmer. The Aqueon did not sell and by the time I met Philip there was a warehouse full of unsold units. Nothing would curb Philip’s enthusiasm and, in an attempt, to promote the Aqueon he swam across Sydney Harbour towing his wife Lenore in a dinghy but still no sales were achieved.

Under water

In 1986, Dulhunty designed the “Flook Anchor”, an automatically setting flying anchor. The device automatically adopts the correct angle on the bottom, obviating the necessity for sailors to make the often difficult estimation of depth and length of line to pay out. It was patented and sold successfully in Japan and the US.

All downhill

In the 1960’s Dulmison won a contract to install power to Perisher Valley an Australian ski resort and Philip decided to build a chair lift across the mountain to another close resort. The electrification contract went well but the chair lift venture did not as the route exposed the lift to high crosswinds, so it was closed and never reopened.

At about the same time he decided to build Australia’s first indoor ski hill and converted an old theatre for the purpose. Artificial ski slope technology was primitive to say the least and slopes in other countries were using a white mineral Baryte as the substitute for snow, however, baryte was not available in Australia and crushed blue-metal (stone) was used and lubricated with kerosene. The venture lasted one day.

The digital age – World’s first laptop

Dulmison continued to create new products and solutions in the power industry and in 1979 conceived the idea for what became the world’s fist laptop computer, the Dulmont Magnum.

Dulmont Magnum (later, Kookaburra) Laptop PC

The Dulmont Magnum went into production in 1983 and was successfully marketed both domestically and internationally by a joint venture with Tramont Ltd, a subsidiary of the Belgian National Electricity Authority, (one of Dulmison’s customers).

The Indiana Jones spirit

In 1976 Philip was a passenger on  Egypt Air Boeing 737, which was on its way from Cairo to Luxor with 96 passengers aboard, most of them Egyptians and Japanese and French tourists who wanted to visit the ancient valley of the kings and the temple at Karnak. The plane had a crew of six.

According to an Egyptian Government spokesman, the guerrillas had threatened to blow up the plane and its passengers unless five persons in jail in Cairo in connection with two assassination attempts were released.

The spokesman said that the guerrillas demanded also that the plane he flown to Benghazi, Libya. But the pilot told them he did not have enough fuel, whereupon he was allowed to land at Luxor.

There the plane was surrounded by paratroops, and the guerrillas negotiated with Egyptian officials. The Prime Minister and War Minister Mohammed Abdel Ghany el‐Gamasy flew to Luxor to take charge of the operation.

According to Egyptian officials, the plane, which had left Cairo at 7:30 A.M., was stormed in mid-afternoon by army commandos dressed as mechanics.

As the commandos entered the plane, Philip jumped out of his seat and wrestled with one of the hijackers, however, the commandos could not distinguish between the two and knocked both of them out with their rifles. A few days later Philip recovered and walked out of hospital.

A born survivor

In the early 1980’s Philip purchased Haxstead a national trust property of 400 acres on the coast south of Sydney. It had a lake and a working cattle farm. Ever the keen aviator Philip accompanied by his wife Lenore and his dog, took off in their Tiger Cub seaplane from their home on Sydney Harbour and headed for Haxstead. The Tiger Cub is a two-seater with one behind the other and a small area for luggage.

On approach to Haxstead Philip lined up the lake and touched down. He was at the opposite end of the lake to the homestead so turned around and started to taxi towards it, however, since his last landing there had been no rain and the lake was shallow. The plane hit a sandbank, flipped upside down during which the dog and the anchor (both stored in the back), flew past Lenore and Philip’s heads and exited through the front windscreen remarkably missing both of them.

On the hillside, witnessing all of this was Colin Eddy, the farm manager. He was on horseback mustering cows and on seeing the plane inverted in the water, he reacted like a true bushman and galloped towards the crash to save the planes occupants. Sadly, for Colin, he fell from his horse and broke his arm, made his way to the plane from which Philip and Lenore had emerged. Both were totally uninjured and Philip calmly aske Colin ‘what was wrong’.

Other achievements

On the water

The list is long but one day in the early 1980’s I was with Philip on his large cruiser entertaining some Saudi Arabian clients with whom we had a power transmission line contract. He asked me to accompany him to the top deck where he showed me a surfboard with a sail. He had just secured the Australian rights and went on to make sailboards for many years.

Never to be left behind Lenore had imported acupuncture needles (unseen before by the average Australian) and was busy demonstrating them on their pet dog on a midday TV chat show.

Below the road but above water

Philip was the chairman of the Seaplane Pilots Association is the only person that has ever flown under Sydney Harbour bridge.

At the age of 91 as the Chairman of the Catalina Flying Memorial he found and purchased a Catalina flying boat in Portugal, returned it to Australia and is involved in its restoration to bring it back to flying capability.

The wrong side of the fence

The Meta Sokol was a Czechoslovakian sports and touring four-seat single-engine low-wing aircraft and Philip is obviously a keen pilot, so why not import them into Australia. The story goes that on taking delivery personally in Czechoslovakia he took off and accidentally landed behind the iron curtain. Another narrow escape.

Dulmison becomes a circus

With over 200 people employed in Dulmison Thailand much time was spent in that country. Philip walked into the office in Australia one day and said that he thought that the way the Thais employed elephants to move logs could be useful in Australia for electricity authorities in the erection of telephone and power poles.

The bombshell was that he had purchased two elephants and they were on board a cargo ship on its way to Sydney!!! An immediate problem arose, a permit for their entry into the country had not been applied for.

After some quick research we found that the only way they could enter the country legally was to register Dulmison as a ‘Circus’. This was formally done, and the elephants were set to work in Sydney, however, it did not work out as planned and they were retired and spent their lives at a wildlife sanctuary west of Sydney.

Idea after idea flowed continuously.

Fighting on

Having survived this and so many other events including being gored by a bull in a Mexican bullring where he had climbed over the fence to take on the bull, Philip has never lost his fighting spirit or his passion for life. The photo below was published in the Lane Cove magazine ‘In the Cove’ in May 2018.

Philip Dulhunty was awarded the Medal of the Order of Australia in 2004 for “service to international trade through the design, manufacture and export of equipment for large high voltage electric systems, and to aviation, particularly through the Seaplane Pilots Association of Australia.

In 2008, the Institution of Engineering and Technology (IET) conferred its James N Kurby Award on Dulhunty for “outstanding eminence, distinction, and public recognition”.

Sir Richard Kingsland described Dulhunty as a “truly Renaissance man, and his contribution to the business and engineering life of post-war Australia … astonishing.”

In June 1986, Dulhunty’s Dulmison UK Ltd received a Queen’s Export Award in recognition of its successful exports of power-line equipment, particularly vibration dampers, from its plant in Corby, Northamptonshire.

A privilege to be there

As the author of this article I was privileged to spend 8 years working alongside Philip as Contracts Manager, Production  Manager and International Development Manager during which time Dulmison employed more than 700 people in its offices and factories in Australia, New Zealand, Thailand, Tokyo, Hong Kong, United Kingdom and the USA. His leadership and willingness to explore new ideas was legendary and proved to be influential in my career as an entrepreneur in my own right. I will be always grateful for the opportunity Philip gave me including the recognition and understanding that you will not always get things right but if you keep working at it success is achievable.

The Modern Entrepreneur

There are 582 million entrepreneurs in the world. 22.5% of small businesses fail within the first year. Here are some interesting statistics about today’s start-up scene:

In conclusion

Everyone has the opportunity to become an Entrepreneur. Starting with money does not guarantee success. It was once said;

“How do you create a small fortune?”

The answer was;

“Start with a large fortune.”

There are no guarantees but as is the case with so many successful business people they never give up, never lose the passion and are prepared to learn from failure and try again. The story of Philip Dulhunty is testament to that theory.