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Meet the man with a million dollar idea - literally

Date
"I actually really believe in the concept of entrepreneurship as a career. You can take it any direction you want" ... Andrew Birt.

"I actually really believe in the concept of entrepreneurship as a career. You can take it any direction you want" ... Andrew Birt.

Andrew Birt is pretty happy. When we chat, the Melbourne-based entrepreneur is in the US sipping a glass of wine with his business partner Phil Bosua. Four days ago, they launched a project on crowd-funding website Kickstarter. It was based on Bosua's idea of creating wi-fi-enabled LED lights you can control from your smartphone.

That means you can dim the lights, make them change colour, set timers and eventually control all your lights over the internet, even if you're on the other side of the world.

"I love hanging out with entrepreneurs and the bigger the community, the better," he says. "I love the fact you can go from an abstract idea into something you can turn into a company."  

While the pair knew they had a good idea on their hands, they didn't expect the phenomenal reaction they got. You can read the full story about the LIFX light bulbs here.

Beyond expectations

They were looking for $100,000 to get their project off the ground. They set themselves a target of 60 days to achieve their goals. They reached it in a single day. At the time of writing, they have raised over $1 million and there are still 56 days to go.

It's a response that has them reeling. Co-founder Birt says: "It's been surreal." However, this is the kind of entrepreneurial high that Birt is chasing. He met Bosua through another business he founded, start-up accelerator AngelCube, based in Melbourne.

Before then, Birt had been working in an agency consulting to start-ups on marketing. Through working with early stage companies, Birt found himself unwittingly helping his clients with capital raising and finding investors.

Creating an entrepreneurial community

So in June 2011, he scaled back his marketing consultancy to launch AngelCube. "I looked at organisations like Y-Combinator and liked the way it provided mentoring to new companies and helped them raise funds," he says. Birt, 30, launched what he says is the first start-up accelerator in Melbourne along with co-founders Adrian Stone and Nathan Sampimon.

Sampimon founded co-working space Inspire9, a warehouse-style open-plan space in the inner-city Melbourne suburb of Richmond, which also houses the start-ups who are accepted into AngelCube's program. Stone provided the initial $100,000 investment to get the idea going. Birt hasn't contributed financially to the project but runs the operations. "Adrian is very hands-on," says Birt. "He doesn't draw a salary and it's a labour of love. He could be retired but spends 30 to 40 hours a week working with our start-ups."

Entrepreneurs who think they have an idea that's going to be the Next Big Thing, but don't have the funds to turn it into reality, can apply to participate in this program. Last year, Birt accepted four out of the 140 applicants. Birt says he prefers teams that include a technical co-founder (that is, someone who can code or is a software engineer), to apply. Each team receives $20,000 in seed funding and the amount cannot be used for salaries. Birt says: "A lot of this will go into marketing expenses, getting a logo designed, trade marketing, travel costs to the US, operational expenses and so on."

Making the cut

Of the four successful teams from last year, Birt says that two have gone on to secure additional funding of $150,000 each, one is "bootstrapping" and the other is no longer operating.

When he opened applications for this year's intake in March 2012, Birt also received about 140 applications. "Of these we chose eight," says Birt, who explains that start-ups need to commit to weekly milestones and attend mentoring sessions. "I liken it to a semester of an MBA. We made the program tougher this year so two of the start-ups have already dropped out. People leave for a variety of reasons but the program is pretty intense so you find out fairly quickly whether it's the right path for you. Of the remaining six, two of them have already closed their funding rounds."

In exchange for mentoring (there are about 70 mentors who donate their time to provide advice) and introducing start-ups to likely investors, AngelCube takes 10 per cent equity in the company.

Birt says the aspiring entrepreneurs his team works with need to be committed. "When we hear that someone's sold their house to go on their start-up journey, they're probably serious about it. But if they say 'I'm going to quit my job if I get into AngelCube', I'm not interested. By the time they get to us, they have to think that they're all in. They need to work out how they're going to survive."

Some live off their life savings, others stay living with their parents. This year's intake of founders range from age 23 to 38. "We try to help them raise money as quickly as possible," says Birt. "Once you've raised your money, you can pay yourself a modest salary of $50,000 to $60,000."

Funding AngelCube

AngelCube itself has raised further investment from private investors to the tune of $625,000. "AngelCube is a five-year fund. We plan to invest in 40 start-ups in that five-year period," says Birt. "We're going to be a $2-million fund and, over time, we'll raise the next $1.275 million, but we're not in a hurry to do so. All the investors are from Australia and I don't see any reason to get international investment."

While 40 start-ups – and the investors they collect on the way – have the chance to hit pay dirt, success is not guaranteed by any means. "Obviously a financial return is what drives this," says Birt. No doubt investors hope the next Facebook will be among these start-ups. "But the worst-case scenario would be if not a single start-up gets a return. If that happens, we will have still created a lot of jobs in the start-up community and supported an ecosystem to nurture them."

Unsurprisingly, being around so many aspiring entrepreneurs has fuelled Birt to - you guessed it - co-found his own start-up, the company behind the LIFX globes. Along with Bosua and five other team members, their debut has obviously been a hit. "I feel like I have enough time to build a big company outside of AngelCube," he says.

But ultimately, whether it's AngelCube or LED light bulbs, it sounds like Birt is in it for the thrill of the ride. "I love hanging out with entrepreneurs and the bigger the community, the better," he says. "I love the fact you can go from an abstract idea into something you can turn into a company. I actually really believe in the concept of entrepreneurship as a career. You can take it any direction you want. You're not working for someone else counting down the days until Friday. It's a privilege to be able to do that."

twitter Follow Valerie Khoo on Twitter @valeriekhoo

17 comments so far

  • The article mentions that this is a million dollar idea. It is really refreshing to see someone being realistic about the worth of their idea. Which by the way, one million dollars is a great milestone, It is an amount that most workers take 30-40 years to earn throughout their working lives. If I had an idea that made me a million dollars, I would feel very proud and successful of myself (I'm still working on it by the way).

    I say this in light of the last few entrepreneurial Aussies that I recently read about, all saying that they were sitting on "a billion dollar idea". For example, the Aussie girl who came up with the idea of making a website for other girls to swap 2nd hand clothes with each other...she thought that idea was worth a BILLION dollars. That number gets thrown around like it was no big deal. Folks...a billion is 1000 million dollars! I'm happy with just 1 million, I don't need 1000 million. If I had more than I needed, I would stop wasting my life trying to earn more money, and start enjoying my life until I get too old to do all the fun things.

    Good luck to all the entrepreneurs. I hope you can at least make a measly million dollars.

    Commenter
    Curly
    Date and time
    September 21, 2012, 12:37AM
    • "one million dollars is a great milestone, It is an amount that most workers take 30-40 years to earn throughout their working lives"

      That would mean most workers earn $25,000 - $33,000 per annum. You may be a little prone to exaggeration yourself!

      Commenter
      Alx
      Date and time
      September 24, 2012, 4:38PM
    • Alx, I think Curly meant that it would take most works 30-40 years to save or accumulate $1 million in wealth.

      Commenter
      Alex
      Location
      Sydney
      Date and time
      October 02, 2012, 11:12AM
  • I hope you are successful guys, with regard to the product, I have a few questions. I guess the principle thing is does it actually reduce the amount of electricity used? I have neighbours who have numerous exterior lights on the front of their home and built into the wall on the nature strip which are always on at night and It must cost a fortune in electricity and it serves no useful purpose. Does your system act like a timer to turn lights on/off at certain times to create the impression someone is at home? Timers are pretty cheap
    From an energy use point of view, doesn't it really make sense to just have the lights on in the room where you are, and do I really need the internet to make adjustments when I am sitting a few metres away? I get the remote control idea via the internet but would you really use it, do I want to turn lights off and on if I'm not at home and as raised before isn't a timer a cheaper less bother option?

    Commenter
    Mark
    Location
    Manly
    Date and time
    September 21, 2012, 10:59AM
    • I'm feeling pretty grumpy today so I am going to play the devils advocate.

      LED swap-out lights already exist so the USP is that you can control it with your phone. I imagine flicking a switch is a bit quicker than finding said phone, loading app and spinning a virtual dial. We are therefore left with something quite gimmicky I feel - and seeing as LED bulbs are already more expensive than other established competitors I am guessing that Wifi enabled ones are going to be more expensive still. So yet again the market for the product dwindles further to people with IOS and Android phones - who can find and download apps - who like novelty products - and who would pay maybe about $19.99 for a coloured light bulb that responds to WiFi.

      I can easily see a scenario where they might make a $m, but I am not sold on it being a lucrative investment - or the product offering anything substantial ecologically speaking to the world. There is no mention of taking into account all the manufacturing of the electronic components (not just energy, but waste) that traditional bulbs do not have and then there are all the people leaving WiFi networks on all night so they don't trip over the cat!

      Hmm, I feel a bit better. Back to slogging on with my idea... the hard way...

      Commenter
      Dazler
      Location
      Melbourne
      Date and time
      September 21, 2012, 12:43PM
      • These guys a little bit too late. There is already a full blown implemented product called Bluetooth Bulb.
        http://bluetoothbulb.com

        An idea is worth nothing. It's all about the implementation and these guys are just too late.

        Commenter
        Tibs
        Location
        Adelaide
        Date and time
        September 21, 2012, 2:17PM
        • Actually, it isn't the same product. The bluetooth bulb only has a range of 50 meters from the phone as bluetooth is a short range transmitter device. This allows you to use your phone to turn the appliance on from anywhere in the world. We did a demo for an Australian mining company a few years ago where the head of the UK research labs used an avatar in second life to turn on appliances such as a fan in his his home in the UK from a laptop in Perth. (they wanted to fully automate their mines such as driver less trucks etc.) The difference is that in this case it uses a mobile phone rather than the laptop. It is a great idea of adapting an existing idea and making it better much like Apple have done with their products (think the mouse which was a Xerox idea, Ipod which came from the Sony Walkman but using other poeples advances in storage and battery technology etc.). Good luck to them.

          Commenter
          Lawrie
          Date and time
          September 21, 2012, 7:31PM
        • I think for 99% of customers bluetooth range is just fine. It is also not a big deal to make it Wifi.

          Wifi is much more complicated to set up as it normally needs a user interface (display) or physical connection to set the wifi settings (name, password, etc). Bluetooth devices can be paired without a cable.
          Bluetooth is also much cheaper and less complex to integrrate then any wifi chips.

          Commenter
          Tibs
          Location
          Adelaide
          Date and time
          September 24, 2012, 10:00AM
      • Good luck with it guys and to everyone giving it a go.
        It is such a shame that a few hundred mill from the "lucky countries" mining boom (tax) could not have been set aside for "the smart country"(entrepreneurs) then potential Aussie start ups would not have to jump through all the Kickstarter hurdles. One has to do a lot of the setting up through America..in other words it is really to assist American business start ups...but if determined enough others like Andrew can succeed and that is great.
        This is what is part of the new Australian future...Aussies starting Aussie businesses and then maybe manufacturing some of it in Australia.
        Where are our pollies on this...Oh yes debating gay marriage and knocking each other over the head and telling us China will be there for us.
        PS...i couldn't care less whether gays marry or not but I do care about Aussie businesses Aussie jobs and a bit of Aussie pride.

        Commenter
        give it a go
        Location
        Sydney
        Date and time
        September 21, 2012, 3:14PM
        • This product exists already!

          Commenter
          itage
          Location
          melbourne
          Date and time
          September 21, 2012, 4:06PM

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