For Founders Institute Sydney 2012 discussing two companies I founded as case studies. Lessons learned, axioms internalised and specific actions for early stage companies.
Injustice - Developers Among Us (SciFiDevCon 2024)
Product/Market Fit - Twists and Turns
1. Product/Market Fit
Twists and Turns
David Jones
Founder StreetHawk, Mentor StartMate
Founder ThreatMetrix
Founder/CEO EmUTech->Surfcontrol
FOUNDERS
INSTITUTE
APR 12
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
2. This talk is “Pivot”-free
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
3. Case 1: Benefit of Knowing Your Sector
Iteration/Evolution Hind-sight Axiom
Email Filtering for corporate Client asked for 1st iteration and In ENTERPRISE, “Get out of
developed to. the building” works.
I knew the problem, worked with
a customer
Spam Detection CEOs secretary gets a porn spam. Be a pain-killer not a
Trial immediately approved and vitamin.
invoice paid.
Melissa/Lovebug virus We were well-positioned for an Catch the wave as its
released unforseen event. breaking.
Exit to Surfcontrol Acquirers make build, buy
decisions to catch up
1 year later Major AV vendors Catch the wave as its
deliver email products breaking
4 years later IronPort exits to Ride the wave requires big
Cisco to >$800M david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz big VC
revenue or
4. Startups exist because incumbents don’t innovate
1. Incumbent rejection/deferral is actually a strong positive signal
2. But make sure you have 10x differentiation in your core.
3. Find the core because there are many conflicting signals
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
5. Case 2: A History of “Twists”
Iteration/Evolution Hind-sight Axiom
SpamMATTERS forensic tools “early adopters have same Don’t validate with your
for enforcement affliction as entrepreneurs” Mum
Botnet tracking/IP Reputation OEM Model not a scalable Know your investor. “Begin
for security revenue model in security with the end in mind”
IP Reputation for fraud IP addresses not enough Be 10x better
prevention granularity Validate with target market
early and often
“Markets Shift”
Device Intelligence for Listening to Gorilla’s tell you “Get TO the conversation”
eCommerce about the future. Respond to
customers needs
Real-time fraud prevention Virtual Goods Be aware of “tectonic”
and enabling ECommerce Virtual Currencies shifts
(US Gov stops gambling)
Social/FB Gaming (New Commerce models)
Massive transaction scale (Privacy Laws)
Machine Learning
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
6. Consumer – still a work in progress for me
• Your Product is NOT “The Product”
– (Ash Maurya)
– Acquisition more important than Product
• Startup Metrics for Pirates (McClure)
– Its about the pipeline to revenue baby
• Assert(LTV > CPA)
• Retention/Churn
• Install/Visit->Login->Engagement->Transaction
• “Vanity Metrics” debate
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
7. Reading/Repeating startup tips is easy -
Internalising is hard
• “Enterprise” startups
– Measurement is not easy
– No large base of consumer feedback
– Solution: Solve a big problem
– Ask for money when MVP feature-set agreed
– Grind out the case studies and references
• “Consumer web/mobile” startups
– Is it in your DNA?
– ***Your product includes user acquisition***
– Don’t believe end-user conversations
– Measure everything – use the key things
– Pivot (company is “built to learn”)
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
8. Great Tools for Enterprise
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
9. Delusion: Picking the wrong metrics
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
10. Axiom: “Be aware of tectonic Shifts”
Mega-vendors:
- Apple vs Google
- Microsoft vs Google
- Social vs Search (FB vs Google)
Revenue Models:
-Licence vs Monthly
-Credit Card vs Virtual Goods
Deployments Models:
-SaaS vs Enterprise install
- Desktop vs Mobile
Form Factor:
- Mobile vs Web vs Tablet
- No easy acquisition on mobile
- No easy “Wallet” on mobile
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
11. Oz related challenges/opportunities
• Cons
– If you are not a “subject matter expert” then get them or get out
– Often OZ startups say “No money to validate”?
– Get advisors in the target market (don’t underestimate this value)
– To overcome isolation – get TO the conversation. You MUST use:
• Adwords->Analytics to learn what matters/resonates
• Leadlander (or some origin based analytics) – What companies are on your site?
• Surveys/Feedback (Google Docs, Wufoo forms, SurveyMonkey)
• Social data mining (If enterprise product LinkedIn groups for segment is valuable and leadgen)
• Tradeshows (enterprise). Spend the money that gets you into the conversation
• Gorillas (talk to eBay etc). Spend the money that gets you into the conversation
• Pros
– Aussie companies are good early adopters (has pros/cons)
– Leverage Gov Grant Funding to get target market validation
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
12. http://www.google.com/profiles/david.jones
@djinoz
Slides at http://slideshare.net/djinoz
david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Notas del editor
Maybe I need a random comment on slide #1 to get slideshare to see slidenotes 04/25/12