What’s a co-foundry? How Adelaide-based incubator The Moonshine Lab is aiming to fill a gap in the startup ecosystem
Thursday, June 15, 2017/
It’s a problem many startup founders face: they’ve got a great idea and solid industry knowledge, but no technical founder to build their product. This is where Adelaide-based incubator The Moonshine Lab comes in with its new co-foundry service.
The Moonshine Lab was borne out of Adelaide marketing agency The Distillery, and its principal Jason Neave believes it will fill a current gap in the startup ecosystem.
Neave learnt first-hand how difficult it was to find a technical founder when he launched his own startup, Punt Club.
“When we launched Punt club it was hard to find creative and technical help — I was lucky in that I owned a digital agency at the time,” Neave says.
Most startup founders don’t have the luxury of their own in-house agency, and are often forced to seek expensive agency help or send their tech offshore.
“Going to another agency costs a lot of money, and going offshore is difficult to manage,” says Neave.
“If you’re not a tech person you need to believe what they [developers] tell you and hope for the best.”
Increasing numbers of startups were requesting The Distillery’s services, and this demand revealed a growing niche in the market.
“Having been approached by a number of startups coming to the agency who asked us to do a technical build, we thought there’d be more demand for this kind of service,” Neave says.
“It’s for people who might know their industry inside out but may not have the technical skills on board to get it executed well.”
Since launching less than two months ago, The Moonshine Lab has been approached by roughly 50 companies, entered due diligence with 10 of these companies and signed two up in the next week.
Instead of charging fees for their services, The Moonshine Lab will take equity in the companies they work with, the amount of which will depend on the startup involved.
“We help pull the teams together and manage the build at cost. Our margin is in the value of the shares,” Neave explains.
The incubator is also supported by an adviser board made up of members of the local and international business community, including Vinomofo co-founder Andre Eikmeier, Newsmaker co-founder Leila Henderson, The Hacker Exchange co-founder Bevis Cheng, Transmedia Capital founding partner Chris Redlitz and Uber Australia chief marketing officer Steven Brennen.
The Moonshine Lab is being led by Christian Ullmark, who tailors the services to create a “bespoke” solution for each company. His role is also to ensure the companies accepted in to the incubator are sound investments.
“Every company has risk profiles. We look at 50 factors when we decide the valuation … we value the services based on what we actually contribute — we are really hands on,” Ullmark explains.
For startup founders, the value in this co-foundry service lies in the quality assurance that their tech will be local, reliable and responsive — something Ullmark notes is not always the case when it outsourced.
“Offshoring a technical team is really hard if you don’t have technical expertise. Many of the companies have come to us with unpleasant stories about offshoring where they’ve lost up to $50,000 or $100,000 finding teams overseas,” he says.
“We provide assurance that nothing will halt … that the code will be written in a language they understand.”