Some experiences from early-stage Australian startups


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ICTI presentation on startups upstarts and experience doing that from Australia.
I've included some slide notes which hopefully are useful.
A list of lessons/mistakes on the last slide but could probably do about 20 slides on that!
All comments are practical from founding/working/advising at
If you want a PDF copy contact me directly (details in the deck)

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  • Slide #1 comment 06/19/09
  • CONTEXT: I don’t know a lot about consumer space – just learning now: founder at is a language translation engine & social network, advisor at which is desktop security that protects against keylogging and 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 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 helping products from research to market. 4. Started, funded from savings and cashflow – remains a profitable part of 5. 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
  • I am talking about companies that are trying to “scale” to a very large user or revenue footprint.
  • 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.
  • 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.
  • 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.
  • Agility vs schizophrenic
  • You need to remove the barriers. 9 out of 10 calls will be initiated by you.
  • 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.
  • 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.
  • I modified this slide from a Verisign presentation – it shows how only a few ‘fronts ’of the identity theft/fraud ecosystem
  • Discuss fast implementation and the fact that we are flexible in our ability to provide several different kinds of configurations to satisfy the customers requirements. Using the SaaS model ThreatMetrix can be up and operational in a matter of hours with no impact to the customers back room applications. It takes minimal IT assistance to install and maintain. We can provide real time alerts via email or provide access via a portal. If the customer requires an enterprise integration into their existing fraud management platform we can accomplish that too.
  • Some experiences from early-stage Australian startups

    1. 1. <ul><li>Looking out from Downunder </li></ul><ul><li>Some experiences from early-stage Australian startups </li></ul><ul><li>David Jones </li></ul>ICTI Cluster June 09
    2. 2. Context/History OEM Channel Enterprise Consumer EmU Tech Reach Software 90’s 2000 2003 2004 2006 2009 High Touch Low Touch NetWorth
    3. 3. Definition: “startup” “ A new business venture in its earliest stage of development.” “ but the phrase &quot;startup company&quot; is often associated with high growth, technology oriented companies. Investors are generally most attracted to those new companies distinguished by their risk/reward profile and scalability .” (Wikipedia) david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
    4. 4. The Australian “upstart” $$$ Team Skills Mentors and Relationships david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz Customer Pool
    5. 5. Wishful thinking…. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz Australia: Not a great track record here X
    6. 6. Now what? Market Changes or slow execution… a common “underfunded aussie story”. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz X
    7. 7. VC’s role in creating wealth (more wishful thinking) But experience for future success it built by trying, failing and trying again. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
    8. 8. 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
    9. 9. Austria or Australia? Sustainable sales come from a larger market …. But global (non-bespoke) products tend to have more price competition david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz + 612??? Where is the “+” ? <ul><li>The reality: </li></ul><ul><li>is that 70-100% of revenues for US companies come from US customers </li></ul><ul><li>“ if you build it” they won’t come </li></ul><ul><li>You PROBABLY have a US competitor </li></ul><ul><ul><li>Your product is PROBABLY better </li></ul></ul><ul><ul><li>Your product is PROBABLY cheaper </li></ul></ul><ul><ul><li>They don’t really care (risk, barriers) </li></ul></ul><ul><li>“ Touch” matters – be near your customer </li></ul>
    10. 10. <ul><li>Ironed out bugs </li></ul><ul><li>Hit the core features </li></ul><ul><li>OZ companies are often early adopters </li></ul><ul><li>Do you need to?….feedback is now global (getsatisfaction, uservoice etc) </li></ul>Have you validated locally?
    11. 11. 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! <ul><li>Resellers/Integrators </li></ul><ul><li>Training </li></ul><ul><li>Mindshare </li></ul><ul><li>Are they Incented </li></ul><ul><li>Symbiotic product-line </li></ul>Pilots/Integration Closing Complex Contract Negotiation Repeatable Contracts Debtors
    12. 12. Entering US - Team (may apply elsewhere) <ul><li>Will a sales focused founder move to US? (CEO is often the best sales guy) </li></ul><ul><li>If not – your first Sales Hire in critical </li></ul><ul><ul><li>Consider Sales/BD Contractor ( EMDG and COMET reimbursement (as an agent) ) </li></ul></ul><ul><ul><li>Work LinkedIn first/SV OZ mafia </li></ul></ul><ul><ul><li>Be There – no substitute for spending time </li></ul></ul><ul><ul><li>Work some deals with them – will it work? (Bull-terrier, Hunter, Farmer?) </li></ul></ul><ul><ul><li>“ Blowing Smoke” factor? </li></ul></ul><ul><ul><li>What other gigs do they have on the side? (Integrity) </li></ul></ul><ul><ul><li>What profile do you need? (VP, Director, Outbound Sales) </li></ul></ul><ul><ul><li>Hire from your industry </li></ul></ul><ul><ul><li>Can you afford it? (SV VP USD150-180K => AUD23K/month (before EMDG) </li></ul></ul><ul><li>Dial-for-Dollars – fill the pipeline </li></ul><ul><li>Anyone had good experience with Austrade outsource? </li></ul><ul><li>Anzatech, David Cannington? etc </li></ul>
    13. 13. Entering US/UK – Channel No-one will EVER sell like you! <ul><li>Impedance Match </li></ul><ul><ul><li>OK, so its on their pricelist – but will they sell it? (scratch the itch) </li></ul></ul><ul><ul><li>Are they selling symbiotic product? </li></ul></ul><ul><ul><li>Will they be selling to the same customer? </li></ul></ul><ul><ul><li>Does your product give them a unique differentiator? </li></ul></ul><ul><ul><li>Reseller Margin (you need to be more generous than you think) </li></ul></ul><ul><li>Education/Training </li></ul><ul><ul><li>Again – will they sell it? (training Surfcontrol Web ppl to sell Email Filtering) </li></ul></ul><ul><ul><li>Work some deals with them – countering objections </li></ul></ul><ul><li>Cultural Differences </li></ul><ul><ul><li>Taiwan and Japan were polar opposites </li></ul></ul><ul><li>Is this relevant in a SaaS world? (people still buy from people but “self-service does compress sales cycle) </li></ul>
    14. 14. Lessons Mistakes <ul><li>Be useful </li></ul><ul><li>Validate with someone other than your mum and dad </li></ul><ul><li>Hire well </li></ul><ul><li>Fund to expand, not research </li></ul><ul><li>Control your sales (Direct or Channel) </li></ul><ul><li>Measure, adjust, repeat </li></ul><ul><li>Market Value not Features </li></ul><ul><li>Not learning from mistakes </li></ul><ul><li>Hire too soon – Hiring “execs” </li></ul><ul><li>If you raise VC, you will take your eye off the fundamentals </li></ul><ul><li>“ Weekly Strategy Meetings” </li></ul><ul><li>“ Inward facing dog” </li></ul><ul><li>Focus on Outcomes not Activity </li></ul><ul><li>Waiting to be discovered </li></ul>
    15. 15. About ThreatMetrix
    16. 16. The Fraud Ecosystem ThreatMetrix Surfcontrol SpamMatters Encassa ThreatMetrix (AML/Laundering KYC) Credit: Verisign
    17. 17. What ThreatMetrix does ThreatMetrix Confidential <ul><li>Transparently Profile 300+ Device Attributes </li></ul><ul><li>Match in real-time against global network </li></ul><ul><li>Generate Unique and Persistent Device ID </li></ul>Identify Verify Validate <ul><li>Device Reputation and Score </li></ul><ul><li>Determine True IP and True Geo Location </li></ul><ul><li>Verify Biometrics (e.g. Time zone, Use of Proxies, Botnet Infection, Language) </li></ul><ul><li>Identify Returning Devices </li></ul><ul><li>Validate Device Attributes </li></ul><ul><li>Detect Account Hijacks </li></ul>
    18. 18. Where ThreatMetrix adds value ThreatMetrix Confidential
    19. 19. How customers integrate 3 Simple Steps: 1 2 3 ThreatMetrix proprietary and confidential Get Web tags from ThreatMetrix Paste Web tags on Transaction page Log on to portal or use API or batch file for immediate results Same Day Benefits
    20. 20. Questions?