Events where a group of strangers build a start-up over a weekend are nothing new, tech specialists and geeks have been doing it for decades, but a new wave of high-profile brands are bringing this concept to the mainstream.
What has for years been the domain of coders and hackers, start-up building events such as Startup Weekend and Launch48 have grown into a mainstream proposition, targeting the general entrepreneurial populace.
Punters with a cool idea inspired by stories of developers making millions overnight from a simple app are being targeted by a series of new events cropping up across Australia, invariably conducted at breakneck speed.
Alongside Startup Weekend, an international concept that judges a business idea concocted over 54 hours in a five minute pitch, there’s ANZA’s new Pitch Slam events, the whirlwind StartupCamp gatherings and even an Amazing Race themed competition that requires entrepreneurial students to scurry across Sydney solving problems for businesses.
But what is the real value of these events? Can you produce the next Google or Facebook or will other people steal your dreams and ideas? Ultimately, are these start-up competitions nothing more than trumped-up networking exercises?
To answer these questions, StartupSmart writer Mahesh Sharma participated in the recent Startup Weekend event in Melbourne, where relative strangers assemble into teams to compete over a weekend and turn an idea into a working prototype with a viable business model.
Here’s how he went.
7.30pm Heading to Sensis’ Melbourne headquarters on Lonsdale Street. I’m a bit nervous considering this is my first time at one of these types of events, but it’s too late to turn back now. Do I have to pitch? What skills do I have to offer?
8.30pm Empty beer bottles and pizza boxes are littered around the office. Everyone is loosened up and having a go at pitching (no matter how bad the idea).
9.00pm We’re voting for the top 10 pitches. I really liked Matthew Ho’s pitch about that language game and David* had terrific energy even though his idea was average.
9.00am David spends the morning actively rounding out the skills in seven-person teams. He is a magnet for the best and brightest at the weekend (including myself!) This should actually be fun.
10am David’s belief is inspiring. We’re buzzing from all the possibilities flying through the air. This could be massive, it could change the world. Green Amazon, Green Facebook… Us?
10.15am I speak up over others to make my comments heard. I’ve never been that assertive. People listen and take it on board. My confidence is building and the weekend is paying off already.
11.00am We’ve been gasbagging for about an hour about big picture but nothing tangible. David refuses to take control of the situation even though it’s his idea. I can’t speak up again, can I?
12.00pm Alright, back on track. A basic structure has focused our energy into a powerful laser. We’ve put aside big picture stuff to focus on achieving the goals of the weekend: develop a working prototype and a solid pitch to investors.
12.15pm The idea is refined and the tech developers scurry away to “the tunnel” to build a prototype. Us “business-types” can take care of the important stuff: markets and money.
12.30pm A mentor swings by, he’s from 99designs. Didn’t they just get millions of funding from an American VC? He must know his stuff.
The mentor asks how it’s going to make money and David stumbles. David explains the idea but it sounds completely different from what we agreed on. Just big-picture fluff.
1.00pm David leaves. No instructions.
3.15pm David still gone. Internet drops out, for the squillionth time. Our developers are hamstrung. The mood is tense, a revolution is brewing.
3.30pm Our fearless leader is back! Just in time. He finally delegates tasks but it’s nothing like we agreed earlier. Alarm bells ringing.
4.00pm Disengaged, I wander to the room of Matthew’s team. Heads down, keyboards rattling, only one voice at a time. Storyboards across the walls of the office.
There is an open-door policy, allowing anyone from the event to come in and contribute. He even asks for my ideas! I’ve never felt so loved.
5.00pm David gives us all homework. He asks us to write parts of an elaborate business plan that has no bearing on the weekend.
We just need a prototype and a pitch. I won’t freely surrender my intellectual property. I’m going home to watch the footy.
10.00am I come in late and we’re one developer down. I wonder why he dropped out? The other developers built a really cool prototype.
Those guys are legends! Their ability to execute really demonstrates the value of shutting up and getting on with it. Gives me some ideas for my own business.
10.15am Matthew’s doing really well. The working prototype of their language game is great. Such a simple concept but it works so effectively.
I wonder how they did it? Matthew mentions they simplified the concept based on a mentor’s advice, which set a more achievable goal.
Also, they are primarily developers, with one or two business/marketing guys. More doing, less talking. It makes sense now.
11.00am David’s gone walkabout again. In his absence the team is getting restless. His incompetence and selfishness have driven us closer together. There is talk of mutiny.
12.00pm Five hours to the pitch. All other teams are harmoniously working together and on track to produce a strong pitch. Our leader has disappeared.
3.30pm The prodigal son returns! He has the pitch sorted. Any work we did was a waste.
7.00pm David gives a great pitch, also demos the prototype, which was awesome. This guy could sell milk to a cow.
Matthew and his crew had good content, including a live demo of the game, but the delivery wasn’t perfect and they took some hard questions from the judges. It’ll be close.
8.00pm Matthew wins! That’s one for the good guys. I think they were the crowd favourite as well.
8.30pm It’s over.
Despite the team’s negative experience, we all agreed that we learnt some very important lessons about working with different personalities and developing ideas into products.
Like the business world, it’s never smooth sailing, but it’s better to learn these lessons in a casual weekend than in a big company when your livelihood is on the line.
A minority of people found it a waste of time (eg. our developer who didn’t come in on the Sunday, the people that didn’t return after Friday night) and also others that blindly held onto the belief that winning the competition would be their ticket to launch a world-leading technology, which was never going to happen.
The large majority, however, were enthusiastically united by the shared goals of networking with new people, and learning how to take the first steps towards turning their ideas into a product or business. Matthew’s team exemplified these qualities and was rewarded accordingly.
By the end of the weekend, winning seemed like more of a burden than an opportunity, because most people realise it’s almost impossible to commit the required time and resources to take a product through to major commercial success.
The key outcome was drawing on the energy of other entrepreneurs to build your own confidence to launch a start-up and collaborate.
It’s also a unique opportunity to network with motivated and talented developers and marketers that could be potential business partners. The competition drives people to new heights.
Start-up competitions have spawned a handful of promising enterprises, but it has become a mini-industry in itself.
Startup Weekend organiser Tyson Lundbech is a veteran of these events around the world. At the competitions in New York and San Francisco, Lundbech was part of winning teams which went on and developed the prototype into fully working products, including a map-sharing app that has been downloaded over 100,000 times from iTunes.
Inspired by the effect of start-up events in other countries, Lundbech co-organised the recent event in Australia and sees it as a way for regular punters to get involved in the start-up community and meet like-minded people.
Previously it used to just be techies getting together but he said there is a greater interest in these types of events because of the app culture, where every day there is a new story about another software developer that has made millions overnight from an app which people use all the time.
“The proliferation of apps on smartphones has also educated people about the potential to turn a good idea into an application that can reach millions of people.”
“Single developers create successful apps and get traction around the world and not only make money but build something successful.”
Another start-up building event which took place in Melbourne was Launch48, founded in the UK several years ago by ex-Melbournite Ian Broom. The format has now been exported to all corners of the globe including Romania, Melbourne and Moldova.
Broom believes these events provide a pathway for people to develop an idea ready for incubator programs like YCombinator in the US, where mentors invest and work intensely with people and early stage companies.
“In America there are a lot of accelerators and incubators, which have funding from huge venture capital firms. They’re taking start-ups and putting them through intense three month training.”
“These events are like a funnel. They’re taking an idea just in someone’s head, who hasn’t written a single sentence, giving them the opportunity to create and play with this.”
Broom says people quickly realise that they’re not going to create the next Google at these events, which is why Launch48 is focused on the networking and learning, and creating a sustainable business.
“Try something, fail fast, take a whole bunch of knowledge out of the event. I now have these new skills so at least if i start my own business can do in a realistic way.
“I’m less likely to fall at the first hurdle because of the Launch48 experience.”
But is it really realistic to expect that you can create a long-term business proposition with a group of sleep-deprived strangers over a weekend? Lundbech says the main focus is meeting like-minded people.
“It’s people that want to actually do something, they’ve given up their free time over the weekend.”
“If you look at Contiki it’s about people partying together and who want to go on a journey and trip and want like-minded people to hang out with. This is much the same.”
Startup Weekend is a not-for-profit event and run by volunteers, and costs $99 (less for students) with the entry fee primarily goes to covering costs such as food, Lundbech says.
Any extra revenue will go toward future events, including plans to take it to Sydney and Perth later this year.
It is the responsibility of individuals to form companies and divide equity, if they choose to do so, and the event itself doesn’t take a stake in a business.
In contrast to Startup Weekend’s hands-off, winner-takes-all approach, Launch48 introduces some measures to organise teams and provide resources, including board meetings with lawyers.
Attendees are organised into four distinct groups; developers, designers, marketing and business people.
These skills are evenly distributed across all teams, which roughly consist of 10 to 12 people, to provide a balanced team, Broom says.
There are regular “board meetings” at key intervals where team leaders update mentors on their progress and take away recommended tasks to be completed according to a structured agenda.
“The whole idea is to keep teams focused,” Broom says.
In the final board meeting the teams are introduced to a lawyer who explains ideas such as company structure, intellectual property rights and equity.
Matthew Ho, who won Startup Weekend, is moving to Melbourne to Sydney to work on his idea with his team, but the disparate nature of teams of strangers thrown together can cause problems when trying to build the business following the event.
At previous Launch48 events, teams have ground to a halt to a halt because participants would become overly protective of their ideas.
“There was one really awesome idea but the team ruined it,” Broom said. “They were working well until 75% of the way when a couple of people brought up issues that divided the team.”
“It became a war between how much equity everyone would get and the team decided they would register the business on Monday and everyone was going to get equity, which was really not a good idea.”
“It was going to cost them hundreds of pounds a year to register the business that wasn’t even generating revenue.”
“They ultimately decided not to do it but you can see how damaging it can be if you provide that information early on.”
Introducing these business concepts at the wrong time can ruin the experience, Broom says, which is why there are also no winners at Launch48.
*The name of the team leader has been changed in order to protect his identity.
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