Blockchain is revolutionising Finance and Banking

The shift from a centralized digital infrastructure to a decentralized digital infrastructure enabling an ecosystem of an immutable, secure, real time, distributed network has witnessed a rapid uptake from leading banks across the globe. Financial players are among the first movers to capitalize on this technology even though it is still at a relatively early stage. 

A lot of players are implementing Blockchain in the areas of Trade Finance, Cross-border Payments, Bill Discounting, Supply chain financing, Loyalty and Digital Identity areas according to Prateek Kumar, CEO at Kumar Capital Partners.

 

BCT applicability has a significant impact as the data shared among the banks/financial institutions in the blockchain network related to transactions, transfer of ownership, settlements, values/asset transfer etc, removes the dependency on the intermediaries who are mainly required in the traditional infrastructure. It improves interoperability, efficiencies, vulnerability.

 

 

The banks are concerned for an effective applicability of BCT as they are constantly in strive to develop and establish ubiquitous payment network with an appropriate regulatory framework to identify parties (Legal and Regulators) and validate electronic signatures. A smart contract is required significantly here from the legal perspective with standardized contractual clauses to authenticate the transactions.

 

BCT streamlines and simplifies the current procedures with the application broadly categorized into the following use cases:

 

1. Reduction in Frauds:

 Minimizing growth in fraud, Cyber attacks, points of failure, replaces obsolete IT infrastructure.  The multiple manual procedures used in banks and financial institutions create plenty of errors, manipulations, delays and frauds.

 

2. Trade Finance:

A blockchain solution can capture the details contained in a purchase order, bill of lading, invoices, tracking of shipment.  A trade finance solution with multi-signature solutions based on BCT can include all this information as secure BCT digital assets.  It reduces turnaround time, time and costs.

 

3. KYC:

 The current challenges are transaction delays, high compliance costs, large penalties for failing to follow KYC guidelines, negative customer experience, no international agreed standard.  An average annual spending on KYC compliance by banks is $50 million.  Some banks incur an annual cost of $400 million combining KYC compliance cost, Anti-Money Laundering checks and Customer Due Diligence.

 

Goldman Sachs Report a 10% headcount reduction with the introduction of BCT in KYC procedure (amount- $420 million), annual cost saving of $160 million,  reduction in employee training of 30%.  The overall operational cost savings estimated- $2.5 billion.   AML penalties reduction between $0.5 B to $ 2 B.

 

4. Trading Platforms:

BCT mitigates the risk of double spending and means to exchange assets without intermediaries, operational risks and admin costs made transparent and immutable, traceability and permanent historic record on blockchain of every item of value traded provides assurance and authenticity all the way through the supply chain back to the point of creation.

 

BCT provides a distributed and verifiable trust that was not present before. Moving clearing & settlement costs into a digital record on a blockchain in real time will save $20 Billion a year or more.

 

Payments related use cases are  ICICI, India’s largest private sector bank, Emirates NBD, a leading banking group in the middle East,  Yes bank, India’s 5th largest private sector bank with IBM Hybrid Cloud technology, Axis bank, India’s third largest private sector bank, working in association with the fintech firm Ripple for cross-border intra bank transactions.

 

Bank of America, Merrill Lynch, HSBC and the Infocomm Development Authority of Singapore have  success with distributed ledgers to replace paper-based Letters of Credit in trade finance transactions. The application enables exporters, importers and their respective banks to share information on a private distributed ledger. The application uses the open source Hyperledger as blockchain fabric, supported by IBM Research and IBM Global Business Services.

 

Barclays have carried out the world's first trade transaction using BCT, cutting a process that normally takes between seven and 10 days to less than four hours.

 

If you sell your crypto currency it will go to a million dollars.  If you hold on, it will go to zero

Interesting stats on the Victorian Startup Landscape

Great article sourced from startupdaily http://www.startupdaily.net/2017/08/victoria-startups-diversity-talent/

Are women adequately represented in the startup scene? 75.4 percent of founders are male; 

A report, Mapping Victoria’s Ecosystem, is a result of a survey produced by LaunchVic in collaboration with Startup Victoria and dandolopartners, which polled over 1600 companies across the state.

The report had some great insights:-

1. The three biggest sectors for Victoria’s tech ecosystem are 

• Health, 
• enterprise and corporate, and 
• media and entertainment 

representing a combined 33 percent of the state’s startups, while health alone provides 26 percent of jobs in the space, according to a new report.

The Report is based in a survey calling for responses from startups, which it defined as ‘any business with high impact potential that uses disruptive innovation and addresses scalable markets’, 1137 met this definition.

Dr Kate Cornick, CEO of LaunchVic, said this initiative 
is a useful tool for key decision makers in terms of better understanding the makeup of the Victorian startup ecosystem and how best to support it. 

Startup Victoria CEO, Georgia Beattie added that the report will be an “important playbook” for the state’s startup community - enabling collaboration and connection - facilitating the connection of founders to capital and meetups and accelerators and corporates to founders"

Victorian successes of Note include 

• REA Group valuation $8.7 billion, 
• Seek  valuation of $5.9 billion and 
• carsales.com.au with its $2.8 billion valuation.
• Redbubble - $100m plus - with a trajectory to unicorn status 

Feel free to identify others 

For the majority of founders - the journey from founding a startup to growing into a successful later stage company is “a long one”. 

While the fastest growing firms are reaching the growth stage in around three years, and later stage in eight or nine, on average it takes startups six or seven years to graduate from early stage to growth stage, and approximately a decade to hit the later stage definition.

Interesting stats 

 

Eighty percent of companies surveyed provide a digital product or service, with almost 40 percent targeting business customers, 28 percent targeting consumers, and 16 percent targeting government customers.

In targeting these customers, a significant portion of the state’s startups are executing a monetisation strategy and taking on revenue, with almost 12 percent earning between $1,000 and $10,000 annually, 22.8 percent earning between $10,000 and $100,000, and just over 28 percent earning between $100,000 and $1 million. (62% sub $1m ) 

 14 percent are earning between $1 million and $10 million, 

while 2.1 percent have annual revenues of over $10 million.These are likely the state’s "gazelles and unicorns"

Other interesting stats 

2 out of 3 are exporting, with the US and UK the most common target markets, followed by China and New Zealand. However, 62 percent of firms reported having a majority Australian customer base.

The state’s companies, the report found, are broadly well-supported

• 21 accelerators currently running and six new programs in the pipeline. 
• 190 meetup groups focused on startups and entrepreneurship organised across the state,
• 150 coworking spaces.

Almost 60 percent of companies are accessing support from mentors and advisors, and 81 percent have partnerships with external organisations, from universities or research institutes to suppliers, distributors, or industry associations.

34 percent of founders were born outside of Australia, while 56 percent have at least one parent born outside Australia

75.4 percent of founders are male; as data from the latest Startup Muster report shows, however, this is in line with the wider startup ecosystem nationally. 

The report also found that while the average age of all founders is 36, women are more likely than men to found a company past the age of 45.

Gender diversity is greatest in the social enterprise, design, and real estate spaces, and poorest in the energy, data and analytics, and sports and recreation fields.

Diversity in terms of location is also a significant question, with 97 percent of respondents based in Melbourne, and 71 percent located primarily within the inner city and south eastern suburbs.

Of the three percent of companies outside Melbourne, Geelong, Bendigo, and Ballarat have the highest representation. 

It will be interesting to see whether this increases over the coming years, given the support LaunchVic has given to regional initiatives through its three grant funding rounds.

Also needing to improve is access to talent and skills, with skills around computer science and sales and business development, those considered the most important by firms, also the areas firms are facing the most difficulty recruiting for.

Looking internally, firms reported having a low capability around their own strategy and governance and financial management, though they have established systems and processes around things such as improving customer relationships, developing sales channels, and identifying growth drivers.

Image: Georgia Beattie.

Are most Successful Founders College Dropouts?

The Bob Pritchard Column 

Zuckerberg, Gates and Jobs are white, male, American, college dropouts, so college dropouts make successful entrepreneurs… well that's the leap many people make.   

However, when you add Mason, Parsons, Brin, Page, Hurley, Yang, Cuban, Omidyar, Hastings, Wang and Bezos, now we are down around 20% and a lot less homogeneous.

 

In reality these stories about billionaire/millionaire drop-outs overlook the fact that there are 34 million college drop-outs you don't hear about. This group is 71 percent more likely to be unemployed and four times more likely to default on student loans. Far from being millionaires, on average they earn 32 percent less than college graduates.

 

A minimum of 97% of startup entrepreneurs fail and the primary reason is a lack of skills in business disciplines.  

They may have great ideas but they don’t have the education or the experience to succeed.

 

Sure, there are some dropouts who do succeed:

 

Those who see an opportunity that exists in the moment and will not wait for three years until they complete their degree.

 

Those with unique personality traits which help in succeeding as an entrepreneur or have entrepreneurial parents and a network of family, friends and acquaintances who open doors and provide a safety net.

 

Exceptional individuals whose hard work, determination, and intelligence make up for the lack of a college degree.

 

But they are an extremely limited few. Making it a generalization and effectively encouraging kids to drop out of college is in my view extraordinarily irresponsible.

The vast majority of kids, especially those from disadvantaged families, need college to improve their circumstances. A recent UCLA study found that those who are least likely to attend college, including kids from disadvantaged backgrounds, benefit most from a college education.  For them, college is not a choice but a necessary and vital stepping-stone toward a future of opportunity. It is the platform from which whole families can be lifted to better prospects. 

The Australian Landscape 

A new Australian study shows that over 80% of  startup founders are university graduates. Sure, many students now want to start their own businesses and careers rather than work for someone else.  But they take advantage of college courses that teach them the entrepreneurial skills they need to turn a clever idea into a new business.  

Startup Muster surveyed more than 600 startup founders to compile the report, with 64% having university-level software development skills and 61% in business. Marketing (37%), scientific research (13%), engineering (14%) and legal aptitude (11%) also featured.

 

The report also found that tertiary-educated entrepreneurs were also more likely to be founding cutting-edge startups in fields like medical technology, education and fintech.

But here's the thing - those founders with degrees that did not include business - 20% + 39% x 61% (24%) = 44pc of startups in Australia do not have an education in how to run a business 

 

Here's a solution !!!!'

While you are doing your startup, get educated and connected by doing a Diploma of Business with BSI at the Founders Lab 

A Diploma of Business provides founders with the intellectual capital to succeed and the social capital to help them make connections, build networks, and establish life-long relationships. 

It provides them with skills in analysis and reasoning combined with confidence that will lead them boldly to articulate and embrace new ideas. 

It transforms their perspectives, opening them up to different cultures, different world views, and different ways of seeing -- and solving -- some of the world's most complex problems.

 

Far from being an obstacle to entrepreneurial success, the Diploma of Business  arms a person with the suite of skills necessary to capitalize on a great idea.

Some thanks to Business Insider 

Outcome Health - tablets for Doctors - $5b valuation

A notable newcomer to the Forbes Rich list is 31 year-old Rishi Shah whose startup, Outcome Health, puts tablets and large-format touch screens into doctor’s waiting rooms and offices. The purpose of these devices range from allowing doctors to show medical products to patients, to providing a marketing platform for drug companies. In their Series A round of funding, Outcome raised $609.9 million to the tune of a $5 billion dollar valuation in June of this year. This pushed college dropout Shah into the billionaire ranks at $3.6 billion.

The 16 youngest tech billionaires on Fortune rich list

Courtesy of Forbes - aau-yeung@forbes.com or follow her on Twitter: @AngelAuYeung.

The 16 Youngest Tech 100 Bullionaires Under 40

Through social networks and shared economies - these  humans are changing the way we live and interact.

Snap, Facebook, Uber, Wework, Atlassian, Outcome Health and A drone Business 

1. Evan Spiegel – age 27, $3.2 billion
2. Bobby Murphy – age 29, $3.2 billion
3. Rishi Shah – age 31, $3.6 billion
4. Mark Zuckerberg – age 33, $69.6 billion
5. Dustin Moskovitz – age 33, $13.3 billion
6. Nathan Blecharczyk – age 34, $3.8 billion
7. Eduardo Saverin – age 35, $9.7 billion
8. Brian Chesky – age 35, $2.4 billion
9. Joe Gebbia – age 36, $3.9 billion
10. Frank Wang – age 36, $3.2 billion
11. Mike Cannon-Brookes – age 37, $2.6 billion
12. Scott Farquhar – age 37, $2.6 billion
13. Sean Parker – age 37, $2.6 billion
14. Garrett Camp – age 38, $5.1 billion
15. Adam Neumann – age 38, $2.6 billion
16. Robert Pera – age 39, $4 billion

The youngest of the 100 Richest In Tech this year is 27 year-old Evan Spiegel, CEO of Snap who was the youngest in 2015 before dropping off the list entirely last year. Since the company’s IPO in March 2017, Spiegel and his 29 year-old cofounder Bobby Murphyhave seen their fortunes go through tumultuous billion-dollar changes in single days. On the day of Snap’s listing, Spiegel and Murphy added a combined $2.8 billion to their fortunes after a 44% surge above the company’s IPO price. Then in May, after posting revenues that failed to meet Wall Street’s expectations, the cofounders saw their fortunes fall by $1.2 billion each. Snap’s trading saga may be the cautionary tale that bubble-believers have been waiting for, but neither Spiegel nor Murphy seem perturbed. At the company’s last earnings call earlier this month, on another day their stock and thus their fortunes plummeted, the two confirmed they will not be selling any of their stock this year, despite the lock up reportedly having expired on July 29. Spiegel and Murphy, the latter of who is new to tech’s top 100, are each worth an estimated $3.2 billion

The richest of the youngest is Facebook cofounder Mark Zuckerberg who has amassed a $69.6 billion fortune that’s equivalent to entire countries’ GDPs. Zuckerberg, now 33, is the year’s biggest dollar gainer, having added $15.6 billion to his fortune in the past 12 months as Facebook’s stock climbed 34% over that time. Zuckerberg created Facebook in his Harvard dorm room in his last year as a teenager and made his first billion at 23. Now with over a quarter of the world’s population on Facebook, Zuckerberg must reconsider the power and responsibility of his platform. Before, the company’s mission was to create a more open and connected world. As of June, Zuckerberg announced a new prerogative: “Give people the power to build community and bring the world closer together.”

There are three other young tech entrepreneurs who owe their billion-dollar fortunes to Facebook despite no longer playing active roles in the company. Dustin Moskovitz, who is eight days younger than Zuckerberg, co-founded Facebook when he and Zuckerberg were Harvard roommates. The company’s first chief technology officer, Moskovitz left Facebook in 2008 with his 3% stake still intact and cofounded Asana, a workflow software company. He is worth an estimated $13.3 billion. Eduardo Saverin, the third cofounder of Facebook, renounced his U.S. citizenship in 2012 and co-founded B Capital Group, a venture fund that he runs from Singapore. He is worth an estimated $9.7 billion. The last of the Facebook billionaires is Sean Parker who had a brief stint at the company’s president when he was 24. Before Facebook he cofounded the music sharing service Napster at 19 years-old. Parker is worth an estimated $2.6 billion.Another company responsible for creating a fleet of young tech billionaires is Airbnb. The three cofounders, Nathan Blecharczyk, Brian Chesky and Joe Gebbia, who are 34, 35, and 36 respectively, are all worth an estimated $3.8 billion each. Chesky and Gebbia went to college together at Rhode Island School of Design and built airbedandbreakfast.com out of desperation – they were broke and were at risk of being priced out of their San Francisco apartment. Since Chesky and Gebbia are designers by training, Gebbia brought in Blecharcyzk, a software engineer and his former roommate, to help them build out their house-rental start-up. The company now operates in 65,000 cities and has been used by more than 160 million people. Airbnb, which closed its most recent round of funding in March of this year, raising money at a $31 billion valuation, continues to be closely watched as one of the most anticipated tech initial public offerings.

WeWork and Uber are two other mega-unicorns responsible for creating vast wealth for its youthful founders. Despite the ridesharing app’s turbulent year, Uber’s cofounder and chairman Garrett Camp is worth an estimated $5.1 billion, though that is more than a billion less than what he was worth a year ago. Adam Neumann’s WeWork, a communal work space startup, raised $1 billion in the company’s most recent round led by SoftBank in July at a valuation of $21 billion. Neumann was raised on a kibbutz in Israel and moved to the states before starting WeWork in New York City. He is 38 years-old and worth an estimated $2.6 billion.

Neumann isn’t the only youngster with a tech business outside of Silicon Valley. Based in Sydney, Australia, Atlassian cofounders Mike Cannon-Brookes and Scott Farquhar are worth $2.6 billion each. Their enterprise software company includes products that help improve project management and collaboration amongst software engineers. China’s Frank Wang is the world’s first drone billionaire, and is worth an estimated $3.2 billion, thanks to his privately held robotics company Dajiang Innovation Technology.

A notable newcomer is 31 year-old Rishi Shah whose startup, Outcome Health, puts tablets and large-format touch screens into doctor’s waiting rooms and offices. The purpose of these devices range from allowing doctors to show medical products to patients, to providing a marketing platform for drug companies. In their Series A round of funding, Outcome raised $609.9 million to the tune of a $5 billion dollar valuation in June of this year. This pushed college dropout Shah into the billionaire ranks at $3.6 billion.

Fintech Spriggy raises $2.5m

Courtesy of Anthill http://anthillonline.com/australian-fintech-startup-spriggy-secures-2-5-million-investment-funding-round/

Australian fintech startup Spriggy, recently announced it’s closed a $2.5 million funding round. The funding will be used to help the pocket money startup, which already has over 35,000 users, expand its services and help more Aussie families teach their kids about earning, saving and responsible spending in an increasingly digital world.

The funding round was led by Alium Capital with additional investments from venture capital group Perle Ventures, and several high-net worth individuals. Former ING DIRECT Australia CEO Vaughn Richtor, and former Delivery Hero CTO Scott Fletcher will also join Spriggy in advisory roles to help guide the company into its next phase of growth.

Through its purpose-built mobile app and a personalised prepaid Visa card, Spriggy gives kids as young as eight the independence and responsibility to learn real-world money skills in an online era. Spriggy also ensures parents remain in control of their child’s financial activity, with customised parent and child user interfaces.

What is the story behind Spriggy?

Established in 2016 by founders with backgrounds in banking and education, Mario Hasanakos and Alexander Badran came together over the idea that financial institutions should do more to help their users live happier financial lives.

Cofounder Alex Badran said, “When we started Spriggy, there was so much talk about Australia moving to a cashless society, but little was being done to help tomorrow’s generation prepare for that future. We came up with the idea to help mums and dads better prepare their kids so that they could live healthier, more confident financial lives.”

“Spriggy is quite a simple concept, and one that we’ve found kids and parents love. Many of today’s youth are already spending online from an early age through apps and the like. By using their own cards to make purchases, they can see the impact of their decision on their balance in real time. This gives them a greater sense of ownership, while also translating the value behind what they’re doing.”

Badran added, “While counting coins from the piggy bank may bring back nostalgic memories for many parents, in a world where we’re increasingly moving away from cash payments, we need to make sure we’re preparing our kids accordingly.”

Why is Spriggy relevant today?

The founders’ thinking reflects current consumer behaviour, with The Reserve Bank’s 2016 Consumer Payments Survey finding a strong decline in the share of consumer payments being made in cash; with participants making 37 per cent of their payments in cash, compared to 47 per cent in 2013, and 67 per cent in 2007.

Rajeev Gupta from Alium Capital said, “Many of today’s financial services companies have offers that are confusing, lack coordination or are expensive to use. Spriggy has done particularly well to identify gaps in our current financial system, and put in place a simple solution that can make everyone more financially savvy.

“We were impressed with Spriggy’s knowledge of their user and marketplace from day one. The team is incredibly passionate about helping Australian families, and has the insight and know-how to make their vision a reality.”

Cofounder Mario Hasanakos added, “Financial issues are a key source of stress and anxiety among Australians.  The more we learnt about the problem, the clearer it became to us that the solution had to be built on better financial education.  Spriggy’s purpose is to help families do that education better.

“Today’s funding announcement is tremendously exciting because it enables us to deliver that purpose to many more Australian families.  If we can help mums and dads raise a generation of Australian kids more financially literate and comfortable with decision making, we can make a real difference in this country.”

Upskilling the planet by providing loans to educate and upskill students

Prodigy FinanceCameron Stevens, CEO Prodigy Finance.

 Fintech - London Company - Prodigy Finance - who loans money to postgraduate students from developing and emerging market who are studying overseas.has raised $US240 million (£186 million) in debt and equity funding.

Investors include London venture capital funds Index Ventures and Balderton Capital, as well as African fintech accelerator AlphaCode have invested $40m while an unnamed “global” investment bank is providing a further $US200 million debt facility to help it finance loans.

Prodigy Finance helps promising students in places like India, China, and Africa fund their university studies by connecting them with rich alumni who will loan them money based on future earning potential. Founded in 2007, Prodigy has financed $US325 million of loans over its platform, helping 7,100 students.

The platform has partnered with top universities around the world including London Business School, Oxford, Cambridge, INSEAD, Stanford, Wharton, and Harvard. 

"Our major acquisition channel is the universities" says CEO Cameron Stevens. "We’re solving a very real problem for them. If you’re a domestic student, there are 300 options for where you can get a loan. For an international student, there isn’t. The universities have a real problem and we’re solving that.”

Ilian Mihov, the dean of INSEAD, said in a statement: “About 25% of our students are funded by Prodigy Finance loans and they come from all over the world, many from countries where it would be difficult to get a bank loan or other forms of financing."

“It’s an important source of funding at INSEAD and helps contribute to diversity, as we have over 90 different nationalities represented. Diversity is essential to our DNA, as it’s a source of creativity and understanding.”

Prodigy Finance is targeting expansion in America, where the business launched last year. The funding will increase the capacity to fund on the platform to be able to give more loans to more people, particularly in the US.

Index Venture’s Neil Rimer said in a statement: “Every decade, the number of international students doubles and our hope is that Prodigy Finance will help accelerate that growth. Our planet sorely needs more educated citizens of the world" 

UangTeman Raises up to US$12M in Series A - For Microlending

Published on August 18, 2017

UangTeman, a Jakarta, Indonesia-based digital lender, has raised up to US$12m in Series A debt and equity round. 

The round was co-led by K2 Venture Capital Ltd, Enspire Capital, and first institutional investor Alpha JWC Ventures with participation from Tim Draper’s Draper Associates. 

Stanley Wang, the Managing Director of K2 Venture Capital, will be joining the Board of the parent company, Digital Alpha Group Pte Ltd, as part of the deal joining Jefrey Joe, Managing Partner of Alpha JWC Ventures.

As part of this round, STI Financial Group, a Hong Kong-based asset management company, is also providing an undisclosed amount of debt financing to support the company’s lending capital requirements in Indonesia.

UangTeman will use the funds to scale customer acquisition throughout Indonesia as well as to invest in further research and development. The company is planning to open a Data Science & Analytics Centre in Singapore and India where further research on lending analytics will be conducted.

Launched in April 2015 by Aidil Zulkifli, CEO, and Soon Chern Chua (who has departed from the company since April 2016), UangTeman is a digital lender providing short term unsecured microloans of no more than US$350 to Indonesian consumers at a maximum of 30 days tenor. It is providing safe and transparent loans to underbanked Indonesians in more than 14 cities throughout Indonesia including Bali, Bandung, Jambi and Surabaya.
UangTeman has recently obtained its official registration from the financial services regulator of Indonesia (OJK) as a fintech lender under regulation 77/2016.

FinSMEs

Africa -mobiles - risk and opportunity in Education

Inspired by Innovationaus

http://www.innovationaus.com/2017/08/Africas-lure-is-a-difficult-path?utm_medium=email&utm_campaign=Newsletter%20146%2018%20August%202017&utm_content=Newsletter%20146%2018%20August%202017+CID_e933b18f3f94e8af456dc3c28b4b3b1f&utm_source=Email%20marketing%20software&utm_term=Africas%20lure%20is%20a%20difficult%20path

Africa is big, diverse, rapidly digitising and has huge promise as well as many dangers for export oriented Australian tech outfits.

Grame Barty (ex Austrade) has identified the potential around digital services delivered over mobile phones in Africa is massive.

“The African continent delivers one of the world's top three mobile phone – and increasingly smart phone – connected regional populations and will reach 725 million unique subscribers by 2020,” says Mr Barty 

“The entire African population – regardless of location, nationality, tribe, age or gender will shortly be able to access mobile and smart phone delivered services."

“This means that high volume, mass market, low cost cloud based universal new service delivery will be possible,” he writes.

Add in burgeoning electronic payment infrastructure, a growing tech development ecosystem with 173 tech hubs and incubators in Africa and venture capital funding in African tech startups increasing by a factor of 10, from $41 million in 2012 to $414 million in 2014 with $600 million expected by 2018.

The Risk

But beware - African countries are not for the faint hearted, with bribery and corruption prevalent as well as a lack of infrastructure and security and health concerns.

Africa lacks sufficient skilled, local blue collar and white collar talent, efficient infrastructure (power, transport, logistics, and urban utilities in particular), enforceable rule of law and are often beset by opaque business practices, bribery, corruption, facilitation payments and lack of adherence to contractual agreements, and  African leaders can get very populist when it comes to foreign interests (Zimbabwe's President Mugabe looking to nationalise anything white or Tanzanian President John Magufuli who has got tough with foreign mining interests and has threatened to close every mine in the country if they don’t cough up the required taxes and royalties.

The Opportunity 

Education

There is an opportunity for Australian business to play a part in the upskilling of Africa - maybe with the use of microlearning elearning and the extensive skills Australia has amassed in the VET (vocational education and training space )

There is a massive lower class - aspiring to become middle class - and when this wave happens - massive growth occurs!!!

“Australia has the best vocational training system in the world. Africa will have the world's largest unskilled population. We know that new jobs will need to be created in new industries which creates additional strains for Africa’s economies. Australia’s training system is highly capable of supporting Africa’s countries define this requirement/opportunity and deliver on it,” says Barty

This courseware would not necessarily need to offer accreditation, instead it could be offering simple skill development.

“I may or may not get accreditation for that skill – but before I start in a mine I have to complete an occupational health and safety course or learn the basics of operating a piece of equipment,” Mr Barty said.

R&D Tax scheme getting a makeover



Arthur Sinodinos: Announced a plan to make it easier to understand R&D Tax Incentive eligibility

The federal government has embarked on a plan  to help make the scheme easier to understand.
It continues to make headway in improving the accessibility to a scheme, which many small businesses and start-ups have not  understood, or were unaware they were entitled to.


The Department of Industry has announced plans to simplify the language and develop better processes to help tech companies better understand how to access the R&D tax scheme.


The department will work with a range of IT companies to pilot a system over the next several months to help businesses more easily work out whether the work they are doing qualifies for a concession or not.

“We look forward to being able to have a clear set of guidelines so that innovative companies and startups can have clarity on their eligibility: ,” says Michael Lynch R&D Tax Concession Specialist and DIrector at BSI Innovation

These recommendations are to be implemented as a result of the‘Three F’ review panel into the R&D tax credit scheme chaired by Bill Ferris, Alan Finkel and John Fraser concluded in April 2016, was release for public comment in September 2016.


A spokesperson for Industry Minister Arthur Sinodinos reiterated that it is still considering the recommendations made in the review and will provide a response once those considerations are completed.

How the Collison Brothers went from a startup to $9b in 6 years with 7 lines of Code

From the desk of Bob Pritchard 

The Collison brothers were born in Limerick to parents with scientific backgrounds—father in electrical engineering, mother in microbiology.  Dad ran a 24-bedroom hotel while Mom operated a corporate training company from home.  The boys went to a tiny and Patrick spent his last year studying at home so he could graduate at 16. At 16 Patrick was named Young Scientist of the Year for developing a programming language and artificial intelligence system. He condensed a two-year test-taking process into a 20-day period in which he aced 30 exams.

Patrick enrolled at MIT in 2006 and John followed him to America, attending Harvard. In their spare time, they developed iPhone apps. They helped create a way to manage EBay auctions and sold that company, Auctomatic Inc., for $5 million in 2008.

They dropped out of college and in 2009 they set up an office in Palo Alto, across the street from the old digs of PayPal. There’s such an improbability to their story, that these brothers from a little village would build what could well be one of the most important companies on the internet.

Stripe began in 2011 with Patrick as CEO and John as president. They spent two years testing their service and forming relationships with banks, credit card companies, and regulators so customers wouldn’t have to.  With Stripe, all a startup had to do was add seven lines of code to its site to handle payments: What once took weeks was now a cut-and-paste job. Silicon Valley coders spread word of this elegant new architecture.

Every day, Americans spend about $1.2 billion online and growing rapidly. But, the web’s financial infrastructure is old and slow. Companies wanting to set up shop have had to go to a bank, a payment processor, and “gateways” that handle connections between the two. In 2010, the Collison brothers company, Stripe Inc., built software that businesses could plug into websites and apps to instantly connect with credit card and banking systems and receive payments. The product was a hit with Silicon Valley startups. 

Businesses such as Lyft, Facebook, DoorDash, and thousands of others turned Stripe into the financial backbone of their operations.

They charge a small fee on each transaction and half of Americans who bought something online in the past year did so via Stripe. 

This has given it a $9.2 billion valuation and made Patrick, 28, and John, 26, two of the world’s youngest billionaires.

One way to justify the number: Stripe’s new partnership with Amazon. com Inc., the largest and most sought-after customer on the internet. Over the past couple of weeks, Stripe began handling a large portion of Amazon’s transactions.

Stripe is beginning to move beyond payments by writing software that helps companies retool the way they incorporate, pay workers, and detect fraud. It’s part of an ambitious bid to revamp how online business has been conducted for 20 years and to give anyone with a bright idea a chance to compete. It gives two people in a garage the same infrastructure as a 100,000-person corporation.

Today, Stripe is the financial engine for more than 100,000 businesses. It stores key financial information such as credit card numbers, deals with fraud, and adds support for new services such as Apple Pay as they arise. It’s getting close to handling $50 billion in commerce annually, which would translate to about $1.5 billion in revenue.

Three years ago, Stripe had 80 employees. Now it has 750.

Gustowski is a Human passionate about innovation

Inspired by article in SMH

There are a number of accelerators and spaces for innovators and startups popping up across Australia.

Muru-D, the Telstra accelerator ,York Butter Factory, Fishburners, Sydney Start-up Hub, for which the NSW state government has recently provided $35 million in funding,  River City Labs, which focuses on tech and telcos and Stone and Chalk focussing on Fintech.  

When it comes to creative tech,  Creative Enterprise Australia (CEA ) -  QUT's hub for creative start-ups, is  at the forefront of supporting businesses in this sector.

 CEO Mark Gustowski of CEA says that it is a hybrid facility in that it is an incubator, an accelerator, a co-working space and a venture capital fund.

Tech companies are in our facility for between one and five years. They get access to mentoring programs, workshops and, potentially, funding, says  Gustowski 

An associated company , Collider, invests up to $20,000 each in some of the startups in exchange for equity, and then run through a 12-week program with the entrepreneur-in-residence with each start-up. 

There are around 100 start-up founders on-site here across our co-working space, which is called the Coterie.

The venture capital fund can invest up to $150,000 in individual start-ups that sit within the creative technical industries.

"We act as a champion of creative tech across Australia," Gustowski says

An example of a startup within CEA is Trademark Vision, an image recognition and machine learning business working in the legal space. 

We get to work with amazing founders and help them grow their business, which is really exciting.

Mark Gustowski 

Startups include businesses focussed on  virtual reality, augmented reality, digital content creation, design, industrial design, a little bit of robotics, fashion tech, wearables and music tech, enthuses Gustowski 

Here are Gustowski's top-five tips for emerging creative enterprises:

1. Build for user experience, not the technology. Think about how your start-up can change the user's life as opposed to technology and build something from there. Identify the problem before you build a solution.

2. Ensure you have a minimal viable product before raising capital. At the same time, raise capital when you don't need it. This will reduce pressure on the business. Don't run the business down to its last cent and then raise capital.

3. Understand that raising capital, whether through an angel investor or venture capital is a 4-6 month prospect – at least.

4. Immediately look for export channels. Australia is a very small market and most start-ups should look for international markets straight away. Australia's a good testing market, but it's not really big enough for most start-ups.

5. Immerse yourself in a start-up community, whether it's a co-working space, incubator or accelerator. Co-working spaces tend to cater to different people; some are creative, some are for software programmers, some are for tech and some are for mining. Find a tribe and become part of it because it can be a lonely journey being a founder.

Will the tech Bubble burst ?

Pfffffft

Written on behalf of the New York Times for 

Ruchir Sharma, author of “The Rise and Fall of Nations: Forces of Change in the Post-Crisis World,” is the chief global strategist at Morgan Stanley Investment Management and a contributing opinion writer.

At the height of a market mania in 1967, the author George Goodman captured the mood perfectly, comparing it to a surreal party that ends only when “black horsemen” burst through the doors and cut down all the revelers who remain. “Those who leave early are saved, but the ball is so splendid no one wants to leave while there is still time. So everybody keeps asking — what time is it? But none of the clocks have hands.”

• Every decade since, the global markets have relived this party. In the late 1960s the mania was for the “nifty 50” American companies like Disney and McDonald’s, which had been the “go-go” stocks of that decade. 

• In the late 1970s it was for natural resources, from gold to oil. 

• In the late 1980s it was stocks in Japan, 

• and in the late 1990s it was the dot-com boom. 

• Last decade, investors flocked to mortgage-backed securities and big emerging markets from Brazil to Russia. In every case, many partygoers were still in the market when the crash came.

• Today, tech mania is resurgent. Investors are again glancing at a clock with no hands — and dismissing the risk. The profitless start-ups that were wiped out in the dot-com crash have consolidated into an oligopoly composed of leading survivors such as Google and Apple. 

These are giants with real earnings, yet signs of an irrational euphoria are growing.

One is pitchmen bundling investments with very different outlooks into a single package.

•  Last decade they bundled Brazil, Russia, India and China to sell as the BRICs.

•  More recently they packaged Facebook, Amazon, Netflix and Google as FANG, 

• then, as names and prospects shifted, subbed in Alphabet, Apple and Microsoft to make Faama.

•  Others are hyping the hottest tech companies in China as BAT, for Baidu, Alibaba and Tencent. 

Whatever the mix, acronym mania is usually a sign of bubbly thinking.

Seven of the world’s 10 most valuable companies are in the tech sector, matching the late 1999 peak. As the American stock market keeps marching to new highs — the Dow hit 22,000 this week — the gains are increasingly concentrated in the big tech stocks. 

The bulls say it is inevitable that Apple will become the first trillion-dollar company.

No matter how surreal the endgame, booms tend to begin with real innovation. In the past, manias have been triggered by excitement about canals, the telegraph and the automobile. But not since the advent of railroads incited market booms in the 1830s and 1840s has the world seen back-to-back booms like the dot-com bubble of the 1990s and the one we are in now.

The dot-com era saw the rise of big companies that were building the nuts and bolts of the internet — including Dell, Microsoft, Cisco and Intel — and of start-ups that promised to tap its revolutionary potential. The current boom lacks a popular name because the innovations — from the internet of things to artificial intelligence and machine learning — are sprawling and hard to label.

If there is a single thread, it is the expanding capacity to harness data, which the Alibaba founder, Jack Ma, calls the “electricity of the 21st century.”

Market excitement about authentic technology innovations enters the manic phase when stock prices rise faster than justified by underlying economic growth. Since the crisis of 2008, the United States economy has been recovering at the rate of around 2 percent, roughly half the rate seen for much of the past century. The areas of growth are limited in this environment. Oil’s not very euphoric, with prices depressed, while regulators are forcing banks to keep the music down. In the most direct echo of 1999, technology is once again seen as the best party in town.

It is true that prices today are not quite as widely overvalued as in 1999. Large technology stocks are up 350 percent this decade, the low end of the range for the hot stocks from earlier booms, which saw gains of 300 to 1,900 percent. Only a few select technology companies — mainly the internet giants — are trading close to the valuations of the dot-com era, when the average price-to-earnings ratio for tech companies hit 50. The average ratio for that sector today is 18.

However, the scale of today’s tech boom is not readily visible because much of the investment action has moved into the hands of big private players. 

In 1999, nearly 550 start-ups went public, and after many ended in disaster, the government tightened regulation of public companies. In part to avoid that red tape, this year only 11 tech companies have gone public. 

Many are raising money instead from venture capitalists or private equity funds. 

Venture capitalists have poured more than $60 billion into the technology sector every year for the past three years — the highest flows since the peak in 2000 — and private equity investors say there has never been a better time to raise money.

These new private funding channels are creating “unicorns,” companies that haven’t gone public but are valued at $1 billion or more. Unicorns barely existed in 1999. Now there are more than 260 worldwide, with technology companies dominating the list. And if signs emerge that the privately owned unicorns are faltering, the value of publicly owned tech companies is not likely to hold up either.

We can never know when the end will come. Still, there are three critical signals to watch for.

The first is regulation. The tech giants are seen today as monopolizing internet search and commerce, and they are angling to take over industries such as publishing and automobiles, raising alarms at antitrust agencies in Europe and the United States. Fear that new internet technologies are doing more to waste time and brainpower than to increase productivity has already provoked a backlash in China, where officials recently criticized online gaming as “electronic heroin.” A regulatory crackdown on tech giants as either monopolies or productivity destroyers could pop the allure of tech stocks.

The other signals are more familiar. Going back to the “nifty 50” stocks of the 1960s, nearly every big market mania ended after central banks tightened monetary policy and many people who had borrowed to get in the game found themselves in trouble. 

The dot-com bubble peaked in 2000, after the Federal Reserve had increased interest rates multiple times. The current boom will likewise be at risk if an increase in inflation compels the Fed to raise interest rates beyond the modest rise the market currently expects.

Finally, watch for tech earnings to start falling short of analyst forecasts. The dot-com boom was driven in part by increasingly optimistic predictions for technology company earnings, and it imploded when earnings started to miss badly. Investors realized then that their expectations about profits from the internet revolution had become unreal.

Of course, no two booms will unfold exactly the same way. We are now eight years into this bull market, making it the second longest in history, behind only the run-up of the late 1990s. No bull market lasts forever, and while it is clear that we are entering the late stages of this cycle, it is impossible to say whether this moment is like 1999, or 1998 — or earlier.

The clocks have no hands, and the black horsemen may appear at any time.