Skate to where the puck will be - cliche or axiom?


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Case study of one Australian's startup's pivots in the volatile market of eCommerce and fraud protection. Highlight things tips/traps for startups in competitive landscape, blindspots of technical founders and some unique challenges/opportunities for Australian startups.

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  • Maybe I need a random comment on slide #1 to get slideshare to see slidenotes 03/20/10
  • Skate to where the puck will be - cliche or axiom?

    1. 1. <ul><li>Skate to where the puck will be…. </li></ul><ul><li>Cliché or startup axiom? </li></ul><ul><li>David Jones –Founder/CTO ThreatMetrix </li></ul>PRODUCTCAMP SYDNEY FEB 10
    2. 2. Case Study: Delivering product in volatile market segments <ul><li>What so Volatile????? </li></ul><ul><li>Security </li></ul><ul><li>Changes every week </li></ul><ul><li>Bad Guys are well funded </li></ul><ul><li>Virtually all Malware now carries payload that steal data </li></ul><ul><li>This is a war of counter-measures. </li></ul><ul><li>Payments/eCommerce: </li></ul><ul><li>Power Law comparison: </li></ul><ul><ul><li>“ Bricks and Mortar” retailers to </li></ul></ul><ul><ul><li>“ Online e-tailers” </li></ul></ul><ul><ul><li>benefits the “Land-grab” (@chr1sa and Clay Shirky) </li></ul></ul><ul><li>Social magnifies the “Power Law effect because of the network effect”! </li></ul>
    3. 3. For Startups: Product Strategy should “Pivot” not “Jump” (Eric Ries) Strategy doesn’t change based on last customer call Pivoting is like Twister Remain “grounded” in your current strategy and pivot based on feedback and skillset
    4. 4. A History of “Pivots” Iteration/Evolution Hind-sight Axiom SpamMATTERS forensic tools for enforcement “ early adopters have same affliction as entrepreneurs” Don’t validate with your Mum Botnet tracking/IP Reputation for security OEM Model not a scalable revenue model in security Know your investor IP Reputation for fraud prevention IP addresses not enough granularity Validate with target market early and often “ Markets Shift” Device Intelligence for eCommerce Competitive solutions degrade the addressable market Physical Goods are so ’90s Competition drives scale SaaS drives scale Commerce PowerLaw Real-time fraud prevention and enabling ECommerce Virtual Goods Virtual Currencies Social/FB Gaming Massive transaction scale Machine Learning Be aware of “tectonic” shifts (US Gov stops gambling) (New Commerce models) (Privacy Laws)
    5. 5. Will “pivot” be the next startup cliché? Is it just a new word for an old axiom? <ul><li>&quot;fail fast” = current startup cliché </li></ul><ul><li>In “consumer web” startups (agile) </li></ul><ul><ul><li>Validate the hypothesis </li></ul></ul><ul><ul><li>Measure with appropriate metrics </li></ul></ul><ul><ul><li>Pivot (company is “built to learn”) </li></ul></ul><ul><li>In “enterprise” products </li></ul><ul><ul><li>Measurement is not so easy </li></ul></ul><ul><ul><li>No large base of consumer feedback </li></ul></ul><ul><ul><li>No easy way to find the buyer </li></ul></ul><ul><ul><li>R&D is often deeper and intellectual property driven, so pivot ain’t easy but still essential (more waterfall-ish) </li></ul></ul>
    6. 6. But…signals are weak amid incumbent’s noise
    7. 7. But… startups exist because incumbents don’t innovate Incumbent rejection/deferral is actually a strong positive signal
    8. 8. Axiom 1: Don’t validate with your Mum Entrepreneurs and Early Adopters skew early validation. Are you solving a scalable problem? Entrepreneurs will “re-interpret” results to support initial hypothesis/belief. Hopelessly optimistic. The “Pragmatists” may not be ready to “buy”. (and support your business model)
    9. 9. Axiom 2: Know your investors (or corp drivers) Product must match the strategic Imperatives of the business. Who are the stakeholders? Do their agendas disrupt the roadmap?
    10. 10. Axiom 3: “Markets Shi f t” What was OK last year is not cool now. (underfunded OZ startups often look dated due to lack of resources and access to revenues)
    11. 11. Axiom 4: “Be aware of tectonic Shifts” <ul><li>Mega-vendors: </li></ul><ul><li>- Apple vs Google </li></ul><ul><li>- Microsoft vs Google </li></ul><ul><li>Deployments Models: </li></ul><ul><li>SaaS vs Enterprise install </li></ul><ul><li>Desktop vs Mobile </li></ul><ul><li>Revenue Models: </li></ul><ul><li>Licence vs Monthly </li></ul><ul><li>Credit Card vs Virtual Goods </li></ul><ul><li>Other: </li></ul><ul><li>- Scale/Aggregation </li></ul><ul><li>Google vs China? </li></ul><ul><li>Hyper-local vs Long-tail </li></ul>
    12. 12. Axiom 5: “…where the puck will be” <ul><li>Product targeting depends on: </li></ul><ul><li>All your “normal” PM activities/conversation/validation </li></ul><ul><li>Tectonic Externalities </li></ul><ul><li>Internal strategic influencers/stakeholders </li></ul><ul><li>Runway </li></ul><ul><li>Your resources/people </li></ul><ul><li>“ Only the paranoid survive” </li></ul>
    13. 13. Oz related challenges/opportunities <ul><li>Often OZ startups say “No money to validate”? – Find some! </li></ul><ul><li>Now is actually a great time as US Venture has contracted </li></ul><ul><li>Leverage Gov Grant Funding to get target market validation </li></ul><ul><li>If you are not a “subject matter expert” then get them or get out </li></ul><ul><li>Get advisors in the target market (don’t underestimate this value) </li></ul><ul><li>Aussie companies are good early adopters (has pros/cons) </li></ul><ul><li>To overcome isolation – get to the conversation. You MUST use: </li></ul><ul><ul><li>Adwords->Analytics to learn what matters/resonates </li></ul></ul><ul><ul><li>Leadlander (or some origin based analytics) – What companies are on your site? </li></ul></ul><ul><ul><li>Surveys/Feedback (Google Docs, Wufoo forms, SurveyMonkey) </li></ul></ul><ul><ul><li>Social data mining (If enterprise product LinkedIn groups for segment is valuable and leadgen ) </li></ul></ul><ul><ul><li>Tradeshows (enterprise). Spend the money that gets you into the conversation </li></ul></ul><ul><ul><li>Gorillas (talk to eBay etc). Spend the money that gets you into the conversation </li></ul></ul>
    14. 14. “Cautionary Tale” or “Story of Agility” ? Would a more intelligent life-form figure it out sooner?
    15. 15. Now I’ll puck off... @djinoz Slides at