It’s been a tough ride for the online crowd, but things are finally moving again, thanks to broadband uptake, new technologies and a bootstrapping ethos that never really died. We chatted to four of our leading internet entrepreneurs about the state of web 2.0 in Australia.
Interviews by Paul Ryan.
A couple of battle-scarred veterans of the ’90s internet bubble, Nick McNaughton and Yorke Hinds have come back better and stronger, and are in the process of selling their slick email marketing application for blogs, Zookoda.
We web 2.0 entrepreneurs are heavily influenced by our web 1.0 journeys. The lessons we learnt formed a really great foundation in terms of expertise, business models, partnerships and pretty much everything you need in place to build a good web 2.0 business.
We wanted to retain equity control, so we avoided angel investment. But we also wanted to have revenue coming into the business that allowed us to fund development of the application. Yorke handled the full service work of email marketing for companies like FedEx, Subaru, Recall, Bang & Olufsen, Kinko’s and OPSM, which paid the bills.
We spent quite a lot of time understanding what the blogosphere was about and where it was in its maturation curve. We’re still very much at the early majority. We’re basically just riding that wave and providing additional value and service to nontechnical bloggers who want to promote their blogs and connect with their audience.
I am also an angel investor and I’m starting to see a real ground swell in the area.
I think the funding for web start-ups is looking positive for the next few years. A lot of informal networks are starting to formalise, there is some money around and I think your magazine is going to be a real focal point.
When I started a consulting business after the dot-com crash, a lot of customers were asking for e-mail marketing. Email design is not too different from building a website, so we added that service using third-party providers in the US to deliver the mail.
The idea for Zookoda was to provide the blogosphere with a way to promote itself. Bloggers spend so much time writing and posting , but they never know who’s coming to their website or how to attract them back. We focus on providing the blogger with the ability to monitor traffic and distribution flows.
In terms of the web 2.0 culture of providing services for free, we have learnt that you only have a limited amount of time before you have to open up a revenue stream by turning on banner ads or making part of the service feebased. You really have to consider that from day one. If you’re someone like MySpace, Facebook or YouTube with millions of visitors, that’s great. But Australia’s market size means that’s highly unlikely.
With over ten years on the cutting edge of web development in Australia, Ben Barren is the consummate insider. After living and breathing the bubble and bust at ninemsn and Sensis, Barren is now his own boss, running Australia’s first local blog search engine, Gnoos.
There’s been a lot of talk lately that to be a successful online business you have to relocate to America, become a Delaware company and get American VC. The interesting thing compared to last time is that a lot of the good businesses are very quickly leaving to become global. My thinking is that globalisation and the second wave of internet businesses just create more local opportunities.
Three years at Sensis, and ninemsn before that, revealed to me that there are fantastic opportunities in local search and local .
Brands and web sites are real. Technorati could introduce an Australian blog search, but it would take a hell of a lot of work on their part because there is no easy way to determine what is an Australian blog. The combination of manual hard labour, passion and a bit of crawling technology has meant that we’ve been able to identify and aggregate all of these Australian blogs in one place, without any of the noise. Australian blogs generally aren’t identifiable by a .com.au address. Most of us use global platforms like WordPress, Blogger, MySpace and LiveJournal. There is no way for me to know just by looking at it whether your blog is Australian. If I go to Technorati there are 50 million blogs. If I go to Google there are 20 billion documents.
There is definitely something intangible about why sometimes a product is successful. But if you’re locally known and first to the market with an authentic product that does what it says it does — for Gnoos, what local voices are saying on the internet right now — then people will at least give you a chance. But it doesn’t mean that you are going to make a billion dollars.
Australia, typically, is really two to three years behind in take-up. We definitely pick up the trends, but I certainly think that in terms of the actual consumer adoption it’s definitely not as simple as saying one size fits all.
Google pays $2.2 billion for YouTube and everyone’s saying, ‘Maybe there is fire where there is smoke.’ I know people that are already building a YouTube for Australia. But localising an online video service is not as simple as applying the technology to this market. The needs to be uniquely local. The local social element is important to the service being of value.
There’s a lot of money in Australia ready to invest in Web 2.0. The biggest challenge is finding engineering resources to execute and build these opportunities, especially in the bootstrapping Web 2.0 way. VCs often like the opportunity, but it’s too hard to find an experienced management team that can execute on that opportunity.
At the tender age of 23, Emily Boyd embodies the youthful exuberance of web entrepreneurship. In 1999, at the age of 16, she and her two younger sisters built MatMice, a website that helps kids make their own websites. In 2003 she was named NSW Young Entrepreneur of the Year. Now, she’s helping the world stay organised through RememberTheMilk.com, an online to-do list application on steroids.
I’ve been involved in the internet for a few years now. When I was about 15 I bought a bunch of books and taught myself. Since we started MatMice in 1999, over 1.5 million kids have used it to create web pages. That’s the power of the internet.
Remember The Milk (RTM) was an idea that I developed with my business partner, Omar Kilani. I’m very much a task management freak and I am really into organisation. It came from this idea that people are really bad at remembering things. It’s stressful always trying to remember to pick up the milk or buy a birthday present. We thought that a web-based system that automatically reminded people of their to-do tasks would really help them to become more organised and productive.
When we started in August 2004, the plan was for a fairly simple web-based task manager. But pretty soon we thought it would be really cool if you could share tasks with your colleagues and friends. It became quite a complicated project that took about a year to develop.
New web applications with social networking are all about sharing information and collaborating with others online. We saw how that could be applied to task management. People want to collaborate on tasks, or even just publish them so friends and colleagues can see what they’re working on.
We received a great review on TechCrunch when we launched in October, which was great publicity. But blogs in general have been great in recommending RTM. There are only two of us, so it’s taken all our energy to just build the service.
We really love living in Sydney. Of course, there are a lot more opportunities in Silicon Valley, because that’s where everyone is. The networking is second-to-none there. But I think web 2.0 is really starting to grow in Australia. We’re building a community in parallel, which is healthy. But I can understand why a lot of Australians travel regularly or relocate to the States, because that’s the epicentre of the industry.
We’re really only just starting to see how much of people’s lives will be online. Even with software applications – all of your spreadsheets and word documents are online, including networking and collaboration aspects. I think it’s very difficult for anyone to predict what the web will look like in ten years. But we want to help them organise it.
Paul Ryan is Editor of Anthill Magazine.