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Startup Metrics for Convicts
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Startup Metrics for Convicts

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If you startup isn't in the bay area it has disadvantages.

If you startup isn't in the bay area it has disadvantages.
If you startup isn't in the US it has disadvantages.
So stop whinging and identify the barriers you can control for success!

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  • Slide #1 comment 10/15/10
  • CONTEXT: I don’t know a lot about consumer space – just learning now: founder at jollo.com is a language translation engine & social network, advisor at encassa.com which is desktop security that protects against keylogging and SafeAndSurf.com which adds eCommerce security and simplicity to iPhones. Background in OEM/Channel/Enterprise 1. In the 90’s learned about startups being the local tech agent for Legato->EMC, Networth->Compaq, Reach (died). Also built Lotus Notes practice. 2. EmUTech, corporate email filtering, started in bedroom, funded from savings and cashflow, exit to surfcontrol.com end 2000. The email filter grew to significant contributor to Surfcontrol’s revenues 3. I left to bake a new startup and spent 6months with sensorynetworks.com helping products from research to market. 4. Started spammatters.com, funded from savings and cashflow – remains a profitable part of threatmetrix.com 5. threatmetrix.com leveraged spammatters to address a bigger opportunity now HQ in Silicon Valley, eng in Sydney. 6. SafeAndSurf (the surfing padlock) is a ThreatMetrix lab spinout
  • All startups are like Rubiks’ cubes – the team tries to figure out the right balance of features/benefits/costs that displace incumbent solutions and then how to capture/keep customers in a revenue sustainable way. For Aussie startups – the challenge is multidimensional (like a rubiks cube) Few upstarts have access to funds to bootstrap There are not a lot of peers or mentors to share experiences to learn from (thankfully, that is changing) The ANZ customer pool is small which means revenues are constrained Teams may not have built a globally sustainable product before Each of these can be overcome by fostering a community of trying, failing, trying again and succeeding.
  • There is not a deep pool of Australian startup that reach IPO that is profitable for more than a few select investors. Therefore, the Seed/Angel/VC scene is limited – however if companies are building for: Sustainable permanence Tradesale exit These are great outcomes that build an ecosystem of success and attract investors.
  • It’s a myth that silicon valley manufactures success – in fact it manufactures failure as this chart shows. HOWEVER, those failures are the seeds of future success as teams, companies and investors learn what is smarter. So there is no reason why (if Aussies embrace “try, fail, try again”) great successes can’t happen again and again in the future.
  • But….shortage of cash and small customer base means that aussie upstarts don’t evolve when the market changes. There is a point in time where agility/adaption is required because often Aussies startups are first or early to market (good innovators) but often don’t have the financial framework to win the sprint or the marathon.
  • Australians are early adopters because they have smaller and more agile companies. This is a great opportunity in the enterprise space. We also have high education and quality lifestyle which is valuable in consumer space. Use the local face-to-face conversations to validate product. Local emotional support and networks are important. Maybe local validation is not so important anymore but a verbal conversation uncovers nuances.
  • Agility vs schizophrenic
  • Australians are early adopters because they have smaller and more agile companies. This is a great opportunity in the enterprise space. We also have high education and quality lifestyle which is valuable in consumer space. Use the local face-to-face conversations to validate product. Local emotional support and networks are important. Maybe local validation is not so important anymore but a verbal conversation uncovers nuances.
  • You need to remove the barriers. 9 out of 10 calls will be initiated by you.
  • Its tempting to go OEM because you don’t have the cash for a sales force. But “baking-in” OEM is actually a high-touch activity with long lead cycles.
  • Australians are early adopters because they have smaller and more agile companies. This is a great opportunity in the enterprise space. We also have high education and quality lifestyle which is valuable in consumer space. Use the local face-to-face conversations to validate product. Local emotional support and networks are important. Maybe local validation is not so important anymore but a verbal conversation uncovers nuances.
  • Australians are early adopters because they have smaller and more agile companies. This is a great opportunity in the enterprise space. We also have high education and quality lifestyle which is valuable in consumer space. Use the local face-to-face conversations to validate product. Local emotional support and networks are important. Maybe local validation is not so important anymore but a verbal conversation uncovers nuances.

Startup Metrics for Convicts Presentation Transcript

  • 1.
    • Startup Metrics for Convicts
    • Goal:
    • Geographic challenges Australian founders need to control
    • David Jones
    • http://djinoz.com
    • http://slideshare.net/djinoz/startup-metricsforconvicts
    Technology Venture Creation (ELEC5701) Oct 10 Homage to Dave McClure’s “Startup Metrics for Pirates”
  • 2. Personal experience from 3 startups OEM Channel Enterprise Consumer EmU Tech Reach Software 90’s 2000 2003 2004 2006 2009 High Touch Low Touch NetWorth
  • 3. Don’t whinge but recognize you have more barriers than a US Founder $$$ Team Skills Mentors and Relationships david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz Customer Pool/Feedback
  • 4. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz So ask yourself this: 1. How will I define success? (revenue, exit, lifestyle, headcount) 2. If I take investment, how will investors define success? 3. At each stage of the business where do I need to be to maximize (their definition) success? 4. How much control do I want to give up?
  • 5. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz $$$
  • 6. (Ye olde) Funding Model for: Web 1.0, Enterprise S/W, Deep IP, Rockstar Founders david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz Australia: Not a great track record here X
  • 7. VC as an asset class is under question Hence the birth of angels, super angels, micro-VCs AND “Lean” is now fashionable. Infrastructure supports “lean” david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
  • 8. Lean but not starving - revenue is a the best deodorant BEWARE: Market Change or slow execution… a common “underfunded aussie story”. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz X
  • 9.
    • Aussie startups have always been “lean”
    • (its in our DNA by necessity)
    The Good News…
  • 10. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz Customer Pool/Feedback
  • 11. Bridge the Geo Gap to feedback david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
  • 12. Focus or Fail (picture credit: Mick Liubinskas/Pollenizer ) If you have limited resources and cash reserves then focus is your most valuable discipline – if you get it wrong at least you “fail fast” david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
  • 13.
    • You Can Validate Locally (audience/segment focus)
      • Hit the core features
      • OZ companies/consumers are often early adopters
      • Ironed out bugs
    • Do you need to?….Consumer have the tools for global frictionless feedback (getsatisfaction, uservoice, engagement metrics, game mechanics)
    The Good News…
  • 14. Austria or Australia? You need revenues from a BIG market to survive …. If your product is “enterprise” you need Sales/Support in US Timezone 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 – be near your customer
  • 15. Match your audience to your cash (or get diluted) (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
  • 16. Entering US - Team (or 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” (Geek Founders have no clue how to interview Sales ppl)
      • 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
  • 17. Entering US/UK – Channel No-one will EVER sell like you!
    • 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?
      • 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
    • Is this relevant in a SaaS world? (people still buy from people but “self-service does compress sales cycle)
  • 18. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz Mentors and Relationships
  • 19.
    • The local startup community is building:
      • StartupCamp
      • StartMate
      • SeedAccelerator
      • Courses like this….
      • Lots of global information
    • Aussie “mafia” in Silicon Valley (StartMate)
    The Good News…
  • 20. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz Team Skills
  • 21. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz So much to say I don’t want to say anything… But… 1. Now “scale” == “traffic scale” (so - Access a gene pool who’ve done massive traffic before) 2. Market/Product Define/Build--  Transition to Growth-  Growth There is a different team “fit” at each stage.
  • 22.
    • Same as mentor slide…
    • … get advice from people with scars
    The Good News…
  • 23. Questions?