Forget traditional venture capital – a new approach to helping start-ups with potential is emerging.
The approach, called ‘venture technology,’ is about giving an early stage venture the right technology to support its business plan, rather than just providing the cash for the company to grow.
GiggedIN, a soon-to-be-launched website offering musicians a new way of booking gigs, is one business using this model.
Founder Edwin Onggo says the concept – that a gig will only be held once a minimum number of tickets are sold – is revolutionary.
“We came up with the idea when Groupon came to life. I wanted to apply the group buying model to an industry I care about,” he says.
GiggedIn will make its money from a booking fee on every ticket sold through the site. But one of its most significant assets will be the database it creates of ticket buyers and their music preferences.
Down the track that information will be used to help bands reach new audiences – and create extra revenue streams for GiggedIN.
Technology firm BlueChilli is building the back-end software, with the website due to launch next month.
Onggo is currently approaching bands to be part of GiggedIN, and will also contact booking agents and promoters.
He believes the venture technology model is ideal for businesses like his that need not just technological assistance, but strategic direction.
“Blue Chilli’s value for us has been technology design and development, but it’s also opened up a big network. We’ve been able to meet great people with experience in the industry who have put their hand up to help us out,” Onggo says.
Part of that support was a workshop that helped the business identify key customers, including music lovers, record companies and ticket sellers. The workshop also helped identify businesses that might potentially want to acquire GiggedIN later.
In exchange for providing strategic and technological support, Blue Chilli founder Sebastien Eckersley-Maslin has taken an undisclosed minority stake in the venture.
He says Blue Chilli’s approach is very different to other technology businesses, with the focus on getting the business model right before looking at the technological solution to support it.
“We firstly look at the target market and a strategic marketing plan and only after we’ve done that do we look at the software,” Eckersley-Maslin says.
Blue Chilli has also worked with Vumero, a new online marketplace that matches finance professionals with those needing work competed. Similar to Freelancer.com, users post jobs; for example they may be looking for someone to build a cash flow statement or review a complex spreadsheet.
Vumero founder John Persico says his business has benefited from Eckersley-Maslin’s experience with a diverse range of businesses.
“Seb really pushed us and forced us to be strategic. He helped us focus on execution through sales and marketing. He also helped us from a leadership perspective,” says Persico.
Vumero has also benefited from Blue Chilli’s focus on the people that will use the site.
“You can log in to Vumero through LinkedIn and we have a sophisticated tagging system that is not easy to develop but is seamlessly integrated into the site.”
Blue Chilli has also taken an equity stake in Vumero, although Blue Chilli also operates on a fee-for-service basis.
Right now, Eckersley-Maslin is developing business incubators in Sydney and Melbourne, with plans to launch both locations simultaneously in coming months.
Blue Chilli plans to help launch a new business each month this year. So far, the launch schedule is full until May.
Read the full story at SMH: http://www.smh.com.au/small-business/startup/pushing-the-right-buttons-new-help-for-startups-20120201-1qsr9.html