Based on 2 successful startups and one in-progress startup. Some axioms and lessons are shared about getting a product that people want.

1. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Product/Market Fit
Twists and Turns
David Jones
Founder StreetHawk, Mentor StartMate
Founder ThreatMetrix
Founder/CEO EmUTech->Surfcontrol
FOUNDERS
INSTITUTE
MAY 13

2. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
This talk is “Pivot”-free

3. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Focus or Fail
In Australian you have limited resources and cash reserves
then focus is your most valuable discipline
if your hypothesis wrong at least you “fail fast”
(picture credit: Mick Liubinskas/Pollenizer)
Don’t let
Perfect be the
Enemy of the
Good
Don’t let
Perfect be the
Enemy of the
Good

4. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
GET TO THE CORE!!!
DON’T GET HYPOTHESIS BACKLOG
The mistake we all make is to generate product ideas without
proving they are so valuable that your customer “must have
it”.
Have a look at Lean Canvas:
- Method is to break out biggest risk hypothesis
- Test first to prove/disprove

5. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Revenue is a deodorant

6. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Validation Tip of the day:
Look them deeply in the eye and ask for money

7. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Caveat
I really don’t know “Consumer” – observation is
based on experience in enterprise.
What I do know is nobody in Australia has baked a
consumer success without a revenue model.
i.e “Twitter”
The funding just isn’t there (typically)

8. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Validation Tip of the day:
Look them deeply in the eye and ask for money
Because if you can’t get to product/market fit
you will never get to sustained ARPU
1.You will never get initial purchases
2.If you do, the leaky bucket has a big hole.
Average Revenue Per User. Also LTV = Lifetime Value

9. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Talk to the right people
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
4. Don’t validate with your mum

10. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Your Product is not your product
(Ash Muraya)
Customer
Acquisition
&
Monetization
Customer
Acquisition
&
Monetization
The
Actual
Product
(Code)
The
Actual
Product
(Code)

11. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Case 1: Benefit of Knowing Your Sector
Iteration/Evolution Hind-sight Axiom
Email Filtering for corporate Client asked for 1st
iteration and
developed to.
I knew the problem, worked with
a customer
In ENTERPRISE, “Get out of
the building” works.
Spam Detection CEOs secretary gets a porn spam.
Trial immediately approved and
invoice paid.
Be a pain-killer not a
vitamin.
Melissa/Lovebug virus
released
We were well-positioned for an
unforseen event.
Catch the wave as its
breaking.
Exit to Surfcontrol Acquirers make build, buy
decisions to catch up
1 year later Major AV vendors
deliver email products
Catch the wave as its
breaking
4 years later IronPort exits to
Cisco to >$800M
Ride the wave requires big
revenue or big VC

12. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Case 2: A History of “Twists”
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. “Begin
with the end in mind”
IP Reputation for fraud
prevention
IP addresses not enough
granularity
Be 10x better
Validate with target market
early and often
“Markets Shift”
Device Intelligence for
eCommerce
Listening to Gorilla’s tell you
about the future. Respond to
customers needs
“Get TO the conversation”
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)

13. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Non Vanity Metrics – keep yourself honest
• See “Revenue is a deodorant” slide
• Especially useful in “Consumer”
• 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

14. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
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”)

15. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Great Tools for Enterprise

16. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Delusion: Picking the wrong metrics

17. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
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

18. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
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

19. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
http://www.google.com/profiles/david.jones
@djinoz
Slides at http://slideshare.net/djinoz

20. david DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinozdavid DOT jones AT gmail DOT com | skype://djinoz | Cell:+61 412 683 111 | @djinoz
Product vs Sales Matrix
Product needs selling, strong sales piece.
This is a sales-driven company.
Product sells itself, strong sales piece.
This is ideal.
Product sells itself, no sales effort.
Does not exist.
Product needs selling, no sales effort.
You have no revenue.
Credit: Thiel
http://blakemasters.tumblr.com/post/22405055017/peter-thiels-cs183-startup-class-9-notes-essay