The two most important things in startup financials

Jacob Muller, one of our Entrepreneurs in Residence, is an extremely driven individual who has a passion for supporting ambitious, tech-driven projects that make the world a better place. As CEO of Masterly, a startup focused on assisting people transition into different work roles in a time of constant technological change, Jacob has valuable experience and advice that has been helping the Remarkable startups through their journey.

Jacob shares with us a reflective and educational piece which offers insights into startup financials, and some great advice on how to stay on track.

The two most important things in startup financials

Startup financials are a beast of a topic.

But if you’re time poor, what are the most critical things to focus on?

Accountants and other professionals will tell you there are a multitude of things, and that everything is super important. They will hand you immaculately engineered spreadsheets and checklists, beaming with pride at their elaborate creations.

You might mistake them for works of art. And you’re kind of right, in a way. Most financials I’ve seen are like a completed canvas – designed to be appreciated (but definitely not touched!)

I’m writing to you as an ex-accountant who became a founder almost 5 years ago now. During my transition from that career to this one, I realised a lot of the work financial professionals do operates on the assumption that the future is predictable.

This renders much of their work unusable pretty quickly in the chaotic world of early stage startups, where the only thing that is certain is that your projections will be wrong.

So I spent years trying to find signal in the noise. I unlearned many of the things I once took as gospel, and ultimately came out the other side with a focus on getting two things right above all else:

  1. Making sure the company doesn’t run out of money
  2. Making rapid financial decisions in a calculated way

To help me focus on these areas, I built a not-so-immaculately-engineered model, which I use as a working document. It’s a canvas that I keep returning to without ever finishing.

It isn’t particularly groundbreaking. It’s just designed to be useful. The kind of thing that only takes you 10 mins to update every week or two when you want to check in on the financial health of your startup.

You can use this model to answer a number of questions:

  1. What is our monthly burn rate?
  2. How long until we run out of money if we don’t bring in any revenue?
  3. What sales targets do we need to make sure we don’t run out of money?
  4. If we can’t stay in the green with sales alone, when do we need to raise capital by?
  5. When can we afford to hire [insert role]?
  6. Can we afford to pay for [insert expense]?

You can find it here.

I hope it’s useful to you.

Please feel free to reach out on LinkedIn if you have questions and, as always, if you have suggestions on how to improve it.

7 Remarkable new startups

One of the largest under-served global markets is disability, and we have just launched our fourth cohort with 7 startups creating technology for the benefit of people with disability.

From startups using AI to teach children with dyslexia to read, to others using virtual reality to take physically disabled people on virtual excursions, these startups are doing more than just creating tech to make life that little bit easier – they are creating technology to make life possible.

“We’re excited to welcome this latest cohort. There is great diversity in the startups and each of the founders have a deep desire to make a difference in the lives of people with disabilities,” said Pete Horsley, founder of Remarkable.

“Applications came from Australia and across the globe – including Azerbaijan, Israel, Ghana, Brazil and Portugal, however we are really proud of the startups who were selected.”

The Cohort 4 Startups are:

  • Bookbot empowering those with learning disabilities to become confident, independent learners through a reading assistant app.
  • JobMatcher – using predictive artificial intelligence to match the most relevant positions for each job seeker, particularly tackling the low employment rates for people with disability.
  • NomadVR – bringing highly stimulating virtual reality experiences to empower anyone without the means to go outside with the ability to do so much more.
  • Our Care Journal – an app created with carers for carers, offering a way to organise everyday care needs, find services, communicate with others and arrange important information.
  • PolySpine – a customised, modular torso and head support system that enables people with physical disability to participate in various recreational and rehabilitation activities.
  • sameview – a trusted online platform for easier, and better disability care coordination.
  • Spokle – a speech therapy app in your pocket that provides practical, family- centred communication strategies to support children with communication disorders.

Since inception in March 2016, Remarkable has worked with 26 startups to make a positive impact in the lives of people with disabilities. They have seen 82 full-time equivalent jobs created through the startups, and 2,517 customers with a disability served.

Why Adam Jahnke Started Umps Health

Adam Jahnke is the co-founder of Umps Health, which supports people to live safely and independently at home. Umps Health does this using non-intrusive smart plugs that measure patterns in the way people use everyday home appliances, like the TV, kettle, fridge or microwave and raise alerts when behaviour is unusual.

What inspired you to start this?

In 2016, my grandpa fell at home and was hospitalised. When he came out of hospital, he wanted to stay living in the home he’d been in for more than 60 years, and we wanted to support his independence.

I looked to technology, but found that he already had the industry standard in incident detection – a pendant worn around the neck. The problem with this is that we only find out about something after it happens, and like most people, even when my grandpa fell he wasn’t wearing it.

So we set out to build something new. Something that worked with my grandpa’s daily habits, was non-intrusive and easy to install and maintain. My grandpa was the first person to use our technology, we all call him Umps, and that’s where our name comes from.

What’s the biggest challenge you’re facing with building your startup and how do you think Remarkable can help you overcome this challenge?

This year, we want to scale our business and our impact. We can’t do this without partners, and are looking to work with organisations already delivering care to older people and people with disabilities. Remarkable, as a technology accelerator within a large service provider, straddles both the technology and service provider landscape and is uniquely placed to support us during this stage of growth.

Umps Health
Umps Health

What have been the highlights of your Remarkable experience so far?

Definitely exhibiting Umps Health’s technology at the Sydney Disability Expo. At the Expo, we spoke to hundreds of people with disabilities and their families about how technology meets (or doesn’t meet!) their needs. I was taken aback by how hungry people are for this type of technology, and it gave us the opportunity to hear first hand about the transformational power of disability tech. In particular, I loved hearing the stories of people in their 20s and 30s using technology to live with autonomy for the first time. And the best part? We’re now supporting some of those people we met at the Expo.

You’ve done another accelerator program. How does Remarkable compare to the other accelerator program you did?

Prior to Remarkable, we were a participant in the Melbourne Accelerator Program (MAP) – run by the University of Melbourne. The support we received from MAP matched the challenges we faced at the time. During the program, we worked to better understand the problem we were solving, test our value proposition with early customers and outline our strategy for growth.

When we came into Remarkable, we already had a product and some traction with early customers in aged care. It was Remarkable’s clear focus on disability tech that motivated us to apply, and we entered the program with 3 specific goals: to determine whether our technology could work for people with disabilities, to identify potential funding streams under the NDIS and establish a presence in New South Wales. I’m glad to say, we’ve accomplished all three!

Do you have any tips for startups who are trying to get on an accelerator program?

You don’t need to wait until you’re accepted into a program to access the benefits of being part of the community. Both Remarkable and MAP run events and masterclass programs all year around, and the mentors, alumni and program teams are very generous with their time.

What is your top tool, blog, book or podcast that you’d recommend others look at?

Tackling Heropreneurship, by Daniela Papi-Thornton. Daniela’s research outlines the importance of taking a systems approach to social impact, removing ego from the equation, understanding your unique strengths and finding your “you-shaped hole”. The Impact Gaps Canvas from the report is a really practical tool to map a complex problem landscape, the existing solutions and identify potential gaps.

Where are all the Startup Founders with a Disability?

As we approach the end of our 16 week accelerator program, we are starting to think about who will be applying for our 2019 program. We know that the best founders have a deep understanding of the problem they’re trying to solve for and it got me thinking about where are the founders with a disability and how do we get them to apply for Remarkable? We think that there could be more people with a disability out there who are either working on something or have the seed of an idea for something…and we want to know who they are!

Founders with a disability
Founders with a disability

We’re looking for people with disability to get involved in Remarkable because we believe that founders with disability will have great insights and truly understand the problem they are solving. Designing with disability rather than designing for disability can make a big difference. As Liz Jackson, founder of @The Disabled List says “People with disability are the ultimate life hackers. They’ve been hacking their whole lives”.

There has been no better time to get involved in disability tech. Crunchbase news recently reported that VC investment in startups building assistive technologies and treatments for disabilities grew by 133 percent between 2012 and 2017 and the number of VC deals grew by 87 percent.

And Startup Muster, the largest survey of the Australian startups, shared in their 2017 Annual Report that 4.3% of startups are in the disability space. This is the first year that Startup Muster has recorded this information about disability and we expect to see this grow in 2018.

Now is an exciting time to innovate and to harness technology to improve the lives of people with disability. This is a call out to unearth the founders with disability and invite them to apply for the Remarkable accelerator program in 2019. If you or someone you know has a disability and an idea, even if you’re not ready to apply in 2018, we would love to hear from you!