Startup spotlight: BugHerd

Bug tracking maker receives $500k investment from Starfish Ventures

The BugHerd team: James, co-founder Alan Downie, co-founder Matt Milosavljevic, and Vincent.

The BugHerd team: James, co-founder Alan Downie, co-founder Matt Milosavljevic, and Vincent.

Bug tracking maker BugHerd has today received $500,000 in backing from Melbourne-based venture capital firm, Starfish Ventures.

The startup is the creation of 35-year-old programmer, Alan Downie, and 29-year-old designer, Matt Milosavljevic. The pair came up with the idea of BugHerd after noticing a lack of bug tracking solutions for visual website issues.

After refining the software, Downie and Milosavljevic pitched BugHerd to Australian startup incubator, Startmate, and were selected for incubation in 2011.

Since then, the startup has received funding from US incubator fund, 500 Startups, and became the first Australian company to participate in 500 Startups’ accelerator program in Silicon Valley. BugHerd also won the People’s Choice award at the Australian technology awards event, Tech23.

Computerworld Australia talks to BugHerd’s co-founder, Alan Downie.

What does BugHerd do?

BugHerd is a bug tracker for websites. Traditional bug trackers are designed for software engineers and aren't much use for anything other than internal use.

BugHerd is designed to source feedback from non-technical people, such as clients, managers or end users. It's all done within the Web page the user is viewing, allowing them to click on the specific elements that are causing problems.

When the bug is submitted, the developer then automatically knows what page the user was looking at, where the problem occurs and an array of other details about the issue, all without having to ask the user for those details.

What are the origins of BugHerd?

BugHerd was created by Matt and I while we were working on a previous product, fivesecondtest. We had real difficulty finding a bug tracker that would work for both us; I'm a programmer and Matt is a designer.

Traditional bug trackers required me to take a screenshot, and upload it to the bug tracker and then explain what my issue was. Often I just wanted to say, "Hey Matt, can you make this button blue?", but without context it was impossible for him to work out what I wanted.

Worse than that, it'd take me longer to explain it than it would for him to fix it. So, we built BugHerd as an internal tool, basically as a means to annotate the Web application as we were building it describing any issues or changes directly on the site.

How did you get started?

We read about the Startmate program late in 2010 and decided to apply with BugHerd. Fivesecondtest was doing OK, but not enough for either of us to live on. But we thought we were on to something good with BugHerd.

We got in and had some amazing opportunities that came along with the program. We were put in touch with awesome mentors and investors who helped us on our way during 2011, and eventually led us to being able to get this new round of investment. We now have five employees and are looking to hire a couple of new front-end developers.

What kind of challenges have you experienced?

The biggest challenge to date has been growing from a couple of guys building Web apps in our spare time to actually running a business. Fortunately, with the help of some great mentors we've been able to pick up a lot along the way and really grow personally with the business.

We've also had to resist the fairly strong urge to move the company to the US. It seems to be the standard thing to do in Australia at the moment; you start a company and flip it up to the US to get funding over there.

We've been fairly keen to try and stay in Australia and hire local talent to grow a great business here in Australia. It's been challenging, because obviously there is a lot less money here than in Silicon Valley and the investors here tend to be more conservative.

How did you overcome such challenges?

Without a doubt, having a mentor network has been critical. Having someone like Niki Scevak [Startmate co-founder] and Alan Jones [Startmate mentor and investor] on the end of the phone when you're in a panic about something has been amazing. So, many times you find yourself without an answer to a question, and knowing you've got someone there who is willing to support you and talk through the challenges is immensely valuable.

In terms of tackling the funding challenges, I think the key is to be persistent and focussed. Aussie investors are definitely keen to invest, but you really need to be able to prove you have an investable business.

Investors here are more risk averse — they need to have a lot of confidence in the team and the product vision. As an entrepreneur, it's not good enough just to have a great idea; you have to demonstrate that you've done the work.

Is it a good time for startups in Australia?

I think without a doubt this is the best time to be running a startup in Australia. We have so many amazing opportunities both locally and in the US. There are a so many new great startup accelerators at the moment including Startmate, PushStart and AngelCube locally and with so many new startups getting into the top tier accelerators in the US, such as Y-Combinator and 500 startups, it's just mind blowing.

The more success these new companies see, the more funding opportunities will arise, and the whole eco-system will just keep on growing. Success breeds more success.

What are your top tips for people wanting to create their own startup?

Test your idea before you build it, prove that there is a market for it. Apply to every accelerator program you can whether it be locally or internationally. You can't run a startup and have a day job. Why would an investor commit to your project if you won't?

Last tip is that being Australian is most definitely not a barrier to success. There are so many Aussies doing amazing things. It's a great time to run a startup!

Follow Diana Nguyen on Twitter: @diananguyen9

Follow Computerworld Australia on Twitter: @ComputerworldAU

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