Mat: Hello and welcome to StartupCast brought to you by StartupDaily.com.au. Today we’re talking about piracy democratisation, we’re also talking about coworking, and of course we’re going to be talking about AdMuncher, because we have the founder, Murray Hurps in the studio with us today, how are you Murray?
Murray: I’m good, hey guys.
Mat: Murray, first of all tell us a little bit about AdMuncher, because you’ve been getting a little bit of press about it lately from a blog post that you wrote, where you’ve just let it go, it’s free now, where you used to charge about thirty bucks a month for it, and you had a hundred thousand users of it.
Murray: Thirty per year, basically we’ve sold about one hundred thousand licenses over fifteen years, and that’s been half of my life, literally in doing this. It’s been amazing, the first sale was surprising, and the second sale was surprising, and the next 99,998 were surprising, but now, because of that, we’re able to be in the position where we can switch to a free license, which is something we’ve wanted to do for a while.
Mat: Tell me a little bit about the psychology behind that, because a lot of people might not get it — you’re getting money for something, why give it for free?
Murray: Basically we’re number two in the market, behind AdBlock plus, and I’ve got a lot of respect for the people doing that, but not so much their monetisation strategy, but I’ll get to that later. They’ve got about 50 million active users, we’ve got nowhere near that, because we’re a paid product, and because of that, they are a more valuable company, they have opportunities available that we can never have. When you’re running as a bootstrap startup, and you’re relying on every single sale to keep people employed, and people paying their bills, you can’t take risks, you can’t put huge development, if it’s in, if it’s required. And we want to be able to do that.
Mat: So, obviously I’m not a huge fan of AdMuncher, because I have a site with ads on it.
Murray: Let’s talk about the elephant in the room.
Mat: Let’s do that.
Murray: I get that said a lot, but not by advertisers, it’s been interesting. We only block what people ask us specifically to block, I’m a big fan of advertising that’s done right. You have something that’s relevant to someone viewing the page, that’s introducing them to something that they would like, that they’re not aware of, I think people are okay with that, it keeps the internet working. But if it’s flashing, if its crashing your browser, if it’s installing malware on a major site, which happens sometimes, obviously there’s things not to like.
Mat: So, StartupDaily gets your tick of approval, then?
Murray: Yes, yes it does.
Mat: So, I guess there’s a lot of talk around the whole democratisation and accessibility of products at the moment, tell me a little bit about your thoughts around that, and some companies you think are doing it well.
Murray: Okay, I think the shareware model — it’s not working anymore, there’s too many things for free, there’s too many easily accessible competitors in every space, that the person with the free user base that expands quickly then has the capacity to offer a small amount to a small percentage of those customers that can make them far more money than if they’re charging a small user base for every single user. That’s kind of our plan, to be able to scale up to ten million in the next couple of years, which is a very conservative target, and based on that we’ll be making more from offering complementary products, like an AdMuncher firewall, or AdMuncher antivirus, where a tiny conversion ratio, one in five hundred or so, put us in a better position
Mat: Awesome, so with piracy —
Murray: And, I will say, I’ve run this for fifteen years, and I don’t normally talk about how we do things pretty high in this scene, so blog posts are a change in that direction, to make it more public. Partly out of this appreciation of people supporting it and allowing me to do what I love, and this interview is probably one of the first ones on AdMuncher as well.
Mat: Is there a reason that you did that? Because, I mean, you’re not an unknown person within the startup space.
Murray: In startups, not so much for AdMuncher. The sales we got primarily were through editorial coverage, and people like Steve Bass in PCWorld, if you’re listening, Steve, I hope you’re enjoying retirement, because he did so much for us in these ‘Steve Bass’ tech blocks’ in all the syndicated newspapers, that was what was getting us the sales, there was never much reason to put it out there.
Mat: AdMuncher was pirated, as well, tell me a little bit about what that was like, what process you had to go through to combat that, and were you able to combat that?
Murray: It’s kind of weird, you say you’re surprised that people pirate you, but as soon as you get used to it when they don’t pay, when they’re putting up versions up that are then modified to be free to use, you somehow feel offended by that, even though at the start you didn’t think it was worth paying for anyway. It’s a strange thing to get down this path and then expect everyone to pay the same, but it did happen a lot. There’s forums with over a thousand posts in a single thread on how to use pirated versions of AdMuncher, there’s a special service set up so they can serve pirated lists for the program as well, so it doesn’t contact our servers, it contacts another one who then handles taking their lists and modifying them and putting them on their server. Partly it surprises me that people are willing to put that kind of trust in people they don’t know, I’m surprised they put it into me as well, but if they have full access to your browsing, they can modify anything they like, and you’re not paying them a cent, then where are they getting the money from
Mat: What is something that you probably say to startups who do have their product pirated, is there any advice you’d give them?
Murray: In our case we never tried to stop them, we just tried to make it a little bit harder, so it wasn’t a completely simple thing to use, as a pirated user. So we did a lot of technical things that are detailed on the blog, murrayhurps.com if I can so boldly —
Mat: Personally I didn’t really understand a word of the technical chat, the diagram I saw and I was like, yeah I don’t get it. Way too smart and intelligent for me.
Murray: No, no, every complicated thing is a combination of really simple things, and after a long time of doing simple things I can make a graph that looks complicated. But in doing them we can make it so we put up a new version, and maybe a month after that the pirated version would be available, and there would be a noticeable sales peak, every time we put out a new version, because there was a pirated version available.
Mat: Constantly update and innovate is probably the advice there?
Murray: Yes, make it not entirely straightforward to use it without paying.
Mat: Is that something — I know you’re a huge part of [08:03 verbatim] Fishburners, and you’ve actually taking over the running of Fishburners in the last couple of weeks, is that something that you pass on to Fishburner startups
Murray: I try to, I’d like to see some more … startups in Australia, but they’re few and far between, and my kind of software released. Fishburners needed a new manager as of about two weeks ago, on short notice I’ve been on the board there for a while, and I raised my hand and said Fishburners has been fantastic to me over the last two years of working from there, and I’d like to throw my head in and do what I can to repay the favour.
Mat: So what can we expect to see, I know you’re very passionate about it, you’re much engraved in that startup scene. I mean you were one of the driving forces behind startup master, which is Australia’s biggest startup survey, and there’s been countless other initiatives, I know you’ve even helped out startup daily in times of crisis as well, so I think that you’re very, very passionate about what the future of startups in Australia should look like. And I’d like to kind of have a talk with that if you don’t mind.
Murray: Pretty much in the last three years something’s happened in Australia, this explosion of startups, the previous twelve of us doing it in Sydney, you’d find another company that was doing software somewhere in Sydney, and you’d go to their office and it’d be half a dozen people closed off, not talking to any other companies, and it was just kind of sad that all the exciting stuff was happening overseas, and anyone doing it here was doing it because they had to. Some reason stopping them going elsewhere. But now, Fishburners for example, has ninety tech startups working from it, and 120 people at the moment, it’s the largest co-working space in Australia, and you can look around the building and you can see all these people that have opportunities now that — this didn’t exist before, the problems that startup master was identifying, the survey, are problems that I think we can address with that kind of scale. If you can’t get investment in your startup, or tech employees, or the attention to government to change e-sub laws or something, ten guys in a building isn’t going to get any attention, but five thousand tech startups that are employing people, getting investment, and are exporting things overseas are getting attention.
Mat: Do you think that Australia’s startup scene is fragmented right now?
Murray: Yes, it’s ridiculous.
Mat: I really noticed that when I was in the startup Asia conference, and saw how cohesive Asia was, as a startup scene, and I mean that’s a continent full of different countries, with different cultures, and different languages, and they seemed more cohesive than new south wales, and was the same way.
Murray: I think it’s partly a geographical thing, people don’t want to drive that far to see other startups. We’re just not the country to get away with that, we don’t have enough startups here, we need to be communicating with each other, and not reproducing work, and being organised together in some ways. Startup wars is a good step towards that in terms of providing a consistent message for government, invest us in media, and on-boarding process for startups and all of that.
Mat: Do you think that we need that, I suppose for lack of a better word – mecca, like a silicon valley — and I don’t want to put the word silicon in front of it, it shits me when people are like silicon this, silicon that, it’s like let’s just call it something that it is.
Murray: I’m going to call you silicon mat.
Mat: There was a great, great blog post the other day about why not use Geelong, or something like that, as our key point of where all startups migrate, do we need that one kind of place where we all migrate to? Or do you think that we can have a cohesive space without cities being..
Murray: I’d like to say we can keep it spread, but I think that there are practical things that get in the way of that. It makes a huge difference having a building full of people where you can point across the room where you can see some expert in SEO, or whatever it is you need in that day, and being able to collaborate straight away. The efficiency improvements there are huge, and if you’re having Friday pictures or something, which we do each week, and investors are coming to that to see the talent that they could invest in, it’s so much harder to do as a regional person.
Mat: It’s very interesting that idea of a huge kind of community, I mean we’re based out of fox studios, and there’s so many people in the film and television industry, obviously, from lawyers that deal with film and TV stuff, to the producers and then actors, and crew, and, you know, milliners that are making hats and costume designers — but it really is such, I mean it’s huge, but it’s such a migratory spot for everybody that’s in that creative industry. It’s such a buzz, it would be cool to have that in Australia
Murray: Based on Startup Muster, we’ve got 49% of startups in New South Wales, which is slightly depressing, because — I love Sydney, I grew up in Sydney, but there’s so many things happening in Adelaide and Melbourne, and off the gold coast that we miss out on because they’re so far away. I’m not sure I know a solution, but one other interesting thing that came out of startup master as of a few days ago, I personally cross-referenced with the NBN current and planned rollout schedule, against the post codes of the startups, and based on that, .5% of startups have any prospect of current or future NBN coverage where they’re working from, which is a bigger problem. But again, if you’re regional and you don’t have internet access it’s so much harder to do what we’re trying to do.
Mat: Do you think that — we’ve got a whole lot of incubator programs at the moment, and they’re great and they’ve been producing some great results, do you think, though, that we’re now getting to a stage where there’s too many incubator programs? We get press releases about a new incubator program every other week, and I’m like really? Why don’t we just kind of concentrate on the ones we’re doing, and maybe expand those efforts?
Murray: I completely agree. There was a point where I considered starting my own, but that was about a year and a half ago, and since then, as you say, there’s been so many others opening up, and I’m much more inclined now to combine resources and have a larger effort together. I think nothing bad comes from, a and z and b companies getting behind an incubator, and raising awareness and having competitions, and putting resources into it. But more good can come from them doing it together
Mat: Yeah. What are some of the things that startups in Australia need right now, in the next six months?
Murray: They need funding, and they need technical talent. That’s the two biggest problems, by far. And by funding I mean private funding as well. Based on the survey there was a lot of people that had government funding that weren’t talking about it, about 13% of those 430 companies had government funding. Which has scaled back hugely, I’ll be interested to see what next year’s survey —
Mat: On that point, why do you think that Australian startups aren’t as willing as American and Asian startups to talk about their funding amounts?
Murray: They’ll jump on the rooftop when it’s private, but when it’s government money it’s something you want to keep private.
Mat: I find that even in the private sector they’re unwilling to disclose amounts, really. Do you think that that — I look at the startup media in a lot of these different countries around the world, obviously to just kind of get a gauge of what’s going on, and what their startup scenes look like. It just seems to me that if you’re more willing to talk about it, it actually is more helpful to your startup, it’s more newsworthy and that kind of thing
Murray: It’s definitely coverage, that’s what happening there. The news that we see is Uber getting three hundred million dollars, or things like that, that everyone sees on the news. To come out there and say I’ve got a slightly disappointing round, but I did it in Sydney
Mat: Well, that’s great for our publication.
Murray: This is a purely numbers comparison, I think that people are scared to put them out from Australia.
Mat: Why do you think that is?
Murray: I think the gap in valuations here versus overseas, and the kind of funding that people get for rounds here, I think people should be proud with it, and not just as proud as they…
Mat: But do you think as well, and Tas wrote a great article comparing Silicon Valley culture to Australian startup culture, and they’ve got like fifty-two years on us, and it took them fifty-two years to get to those huge acquisition and huge valuations and that type of thing, should we put things into perspective a little?
Murray: I think, thinking of a particular city as the hub that we want to reach and become like I’m not sure is the answer, I think. If we’re working in tech, we’re working on people around the world and making communication easier, and everything that goes with it. Surely, at some point, you don’t have to be in Silicon Valley to raise from a Silicon Valley investor —
Mat: Canva is an obvious example.
Murray: Yeah, there’s great companies coming from Australia, and at some point they’re going to see these opportunities coming up and start giving them comparable valuations.
Mat: Given I just mentioned Canva, and I personally think they’re going to be a huge success story, in the same league as, you know, 99 designs and that kind of thing, any predictions you want to make about who we should keep an eye on in the Australian startups?
Murray: Well, obviously anyone that’s working from Fishburners, I don’t want to pick favourites because I’ll upset too many people. I will say that I’ve never been so excited as I am now, the kind of higher tech stuff that is coming out of here is not — people tend to think that startups are making apps, or doing some simple delivery thing, and those, even if they do look like that on the outside, there’s hidden complexities and technology underneath that make them scalable and efficient, but the amount of high-tech stuff that’s coming out of the moment, big data, analysis, and interesting algorithms on supply-chains and things like that, that’s — I find that very exciting.
Mat: Murray, thank you so much for coming and having a chat for us today, you have been listening to StartupCast by StartupDaily.com.au, make sure you tune in next week, where we’ll be chatting with a panel of women on women in tech. It’s sure going to get feisty, I love it. We’re going to bring up all the controversial stuff that we’re not writing about. I’m Mat, I’m the publisher and founder of StartupDaily.