Going Global: some experiences from Australian startups David Jones #GrowthTown Feb09

Going Global: some experiences from Australian startups

David Jones

Context/History OEM Channel Enterprise Consumer EmU Tech Reach Software 90’s 2000 2003 2004 2006 2008 High Touch Low Touch NetWorth

Austria or Australia? david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz + 612??? Where is the “+” ? The reality: is that 70-100% of revenues for US companies come from US customers “if you build it” they won’t come You PROBABLY have a US competitor Your product is PROBABLY better Your product is PROBABLY cheaper They don’t really care (risk, barriers) “Touch” matters

The reality:

is that 70-100% of revenues for US companies come from US customers

“if you build it” they won’t come

You PROBABLY have a US competitor

Your product is PROBABLY better

Your product is PROBABLY cheaper

They don’t really care (risk, barriers)

“Touch” matters

Ironed out bugs Hit the core features OZ companies are often early adopters Do you need to?….feedback is now global (getsatisfaction, uservoice etc) Have you validated locally?

Ironed out bugs

Hit the core features

OZ companies are often early adopters

Do you need to?….feedback is now global (getsatisfaction, uservoice etc)

Presence in target market (the OEM anomaly – you think its low cost – but no free lunch) OEM Channel Enterprise Consumer High Touch Low Touch Firewall Vendors Security Vendors Per Vendor Customerisation Whiteboxing Are they blowing smoke?? No-one is incented as you! Resellers/Integrators Training Mindshare Are they Incented Symbiotic product-line Pilots/Integration Closing Complex Contract Negotiation Repeatable Contracts Debtors

Resellers/Integrators

Training

Mindshare

Are they Incented

Symbiotic product-line

Entering US - Team (may apply elsewhere) Will a sales focused founder move to US? (CEO is often the best sales guy) If not – your first Sales Hire in critical Consider Sales/BD Contractor ( EMDG and COMET reimbursement (as an agent) ) Work LinkedIn first/SV OZ mafia Be There – no substitute for spending time Work some deals with them – will it work? (Bull-terrier, Hunter, Farmer?) “ Blowing Smoke” factor? What other gigs do they have on the side? (Integrity) What profile do you need? (VP, Director, Outbound Sales) Hire from your industry Can you afford it? (SV VP USD150-180K => AUD23K/month (before EMDG) Dial-for-Dollars – fill the pipeline Anyone had good experience with Austrade outsource? Anzatech, David Cannington? etc

Will a sales focused founder move to US? (CEO is often the best sales guy)

If not – your first Sales Hire in critical

Consider Sales/BD Contractor ( EMDG and COMET reimbursement (as an agent) )

Work LinkedIn first/SV OZ mafia

Be There – no substitute for spending time

Work some deals with them – will it work? (Bull-terrier, Hunter, Farmer?)

“ Blowing Smoke” factor?

What other gigs do they have on the side? (Integrity)

What profile do you need? (VP, Director, Outbound Sales)

Hire from your industry

Can you afford it? (SV VP USD150-180K => AUD23K/month (before EMDG)

Dial-for-Dollars – fill the pipeline

Anyone had good experience with Austrade outsource?

Anzatech, David Cannington? etc

Entering US/UK – Channel Is this relevant in a SaaS world? – trying not to be “vendor 1.0” – technical products Impedance Match OK, so its on their pricelist – but will they sell it? (scratch the itch) Are they selling symbiotic product? Will they be selling to the same customer? Does your product give them a unique differentiator? No-one will EVER sell like you! Reseller Margin (you need to be more generous than you think) Education/Training Again – will they sell it? (training Surfcontrol Web ppl to sell Email Filtering) Work some deals with them – countering objections Cultural Differences Taiwan and Japan were polar opposites

Impedance Match

OK, so its on their pricelist – but will they sell it? (scratch the itch)

Are they selling symbiotic product?

Will they be selling to the same customer?

Does your product give them a unique differentiator?

No-one will EVER sell like you!

Reseller Margin (you need to be more generous than you think)

Education/Training

Again – will they sell it? (training Surfcontrol Web ppl to sell Email Filtering)

Work some deals with them – countering objections

Cultural Differences

Taiwan and Japan were polar opposites

Getting Market Momentum (TMX example) Analysts Industry Forrester/Gartner/451 group Javelin Strategy Glenbrook Partners PR/SEO/Trade-shows Leading Credit Card Companies Leading Credit Card Processors Leading Credit Bureaus/Scoring Providers High End Merchants Presence

Analysts

Industry

Forrester/Gartner/451 group

Javelin Strategy

Glenbrook Partners

PR/SEO/Trade-shows

Leading Credit Card Companies

Leading Credit Card Processors

Leading Credit Bureaus/Scoring Providers

High End Merchants

“Born-Global” or “Flip-up” PTY LTD Commercial Ready Grant I personally prefer a data-room scanned from early on –”Investor/Acquirer Ready” Founders Investors Patents OEM/Channel contracts New Investor Due Diligence Delaware .Inc THEN Acquires 100% of PTY LTD ThreatMETRIX was a “flip-up” – the so-called “Israeli model”

“Born-Global” or “Flip-up” Billable Item Notes Cost (US) Cost Control Statuatory Incorpration Simpler if “Born Global” Costs are a burden until need it Distraction I’d prefer to defer until needed  Tax Advice existing shareholders existing option pool  AU Attorney for Company liaise with US Attorney Execute OZ end of flip-up Advice on Commercial Ready Grant Get a capped quote US Attorney for Company Flip-up/Mirroring of Articles and Shareholders Agreements (SA) 1 st Draft (if you can) of new SA Negotiation of SA Employee Contracts/PIIA Establishment of BoD Get a capped quote – they won’t stick to it but drives behavior Pre-negotiate in the term sheet EVERYTHING not just numbers Never let a lawyer argue business terms – drive it to conclusion with the stakeholders Use a great CFO or project manager so you can keep one eye on the business The cost of Tier-1 attorney Attorney for Investor Due Diligence Negotiation of SA Bad Cop You pay investor’s costs Pre-negotiate in the term sheet EVERYTHING not just numbers Complete Scanned Dataroom IP Due Diligence Patent examination We’ve always engaged a US Patent Attorney and pays off at this time. Complete in dataroom Patent Authors walk it through – accelerate understanding Option Pool Pricing Distributed transaction platform US Valuer quotes were a rip-off. Engaged OZ advice - OK.

Statuatory Incorpration

Simpler if “Born Global”

Costs are a burden until need it

Distraction

I’d prefer to defer until needed

Tax Advice

existing shareholders

existing option pool

AU Attorney for Company

liaise with US Attorney

Execute OZ end of flip-up

Advice on Commercial Ready Grant

US Attorney for Company

Flip-up/Mirroring of Articles and Shareholders Agreements (SA)

1 st Draft (if you can) of new SA

Negotiation of SA

Employee Contracts/PIIA

Establishment of BoD

Attorney for Investor

Due Diligence

Negotiation of SA

Bad Cop

IP Due Diligence

Patent examination

We’ve always engaged a US Patent Attorney and pays off at this time.

Complete in dataroom

Option Pool Pricing

Distributed transaction platform

Questions?