Innovation Bay angel dinner: great stories from start-ups Goanna, Posse and AdSoft


Since Victoria and Phoebe are still in hospital, last night I snuck out to Innovation Bay’s angel dinner. Innovation Bay has been running for five and half years, bringing together an invitation-only group to a variety of compact events. The founders Ian Gardiner, Rand Leeb-du-Toit and Phaedon Stough recently got together to reassess what they should do with the community and decided to run an ‘angel dinner’, inviting all of their speakers over the years plus some other successful entrepreneurs and investors to see some new start-ups. I in fact spoke at Innovation Bay’s second event in early 2004, giving an overview of the social networking space at the time, including key players and business models.

It was an excellent evening, and all three of the companies that presented were very impressive with very good stories to tell. Here are some brief notes from the evening:

The dinner was at Table for 20, which seats all guests around long tables to share food, with a different common menu every night. They donate part of their proceeds to the homeless, and have contributed $170,000 to local causes. Highly recommended!

Rand in his opening comments talked about the “venture capital pool becoming shallower while the entrepreneurial pool is getting deeper,” which is an accurate description of the situation in Australia (and most other countries at the moment).

NICTA sponsored the event and provided one of the start-ups for the evening. Their focus on open innovation and collaborative research makes them an important part of the technology start-up environment in Australia.

Someone from the Commonwealth Commercialisation Institute spoke briefly. They have been given $196 million over four years then $82 million annually. Unusually they have allocated the money before deciding how to spend it – they are actively looking for ideas – this is one of the first times the government has specifically asked for “something radical” to be done.

First start-up was Goanna, the first product out of RedLizards. It has been incubated in NICTA for four years, is pre-revenue, and about to launch. It automatically finds software bugs during the development process. Existing players in this space generate around $1 billion – Goanna will differentiate through greater capabilities, and also through marketing to individual developers as well as large project teams.

Second presenter was Posse, which was founded 12 months ago and launched 6 weeks ago. This is a word-of-mouth marketing tool which was developed out of the experience of a concert promoter, Scorpio Music. When promoting a national tour of Evermore, all concerts were selling well except for Perth. Newspaper ads had no measurable impact. They launched a system allowing people to promote tickets to their friends, and eventually had 12 people who each sold over 50 tickets to the show. The basic structure gives 5% of the ticket sale to the vendor and 3% to Posse, though promoters can choose different reward structures. The system is live in Australia and shortly to be launched in US and UK. They have raised an initial round and intend to raise a number of additional rounds over the next while to fund global expansion. I was particularly interested in this one as I am spending much of my time on the influence landscape at the moment and the commercial models around this – Posse is a very interesting example and indeed a contender for what Posse calls ‘Amway for Generation Y’.

AdSlot develops premium private marketplaces to sell unsold inventory and maximize yield return. They mainly discussed online ad inventory and airline tickets, which are probably currently the two most significant yield management markets. They are applying the mathematics of combinatorial auctions to optimize returns, based on dynamic pricing models. Andrew Barlow, founder of Hitwise, is chairman of the company. They are a partner for Microsoft’s Azure cloud computing platform. Interestingly, Rapt, previously biggest player in ad yield management to date, was bought by Microsoft in March.