failcon 2012

“Social Proof is Not Proof”

Michael Wolfewww.about.me/michaelrwolfe

@michaelrwolfe

Now *this* is a tough crowd

I didn’t know you were such an EPIC FAIL

Do you win the conference by being the

biggest FAIL?

I hope your presentation isn’t a FAIL!

May 2011 TechCrunch Disrupt

Team

Our Investors & Board:

Our Experience:

COMPELLING TEAM• Three previous startups – all had big exits• Cohesive, strong team, B2B experience• Great board and advisors

Solving “the email problem”

The workplace still runs like this!

COMPELLING TEAM

BIG PROBLEM• Universal• Well-understood• Hitting a breaking point

Made the finals

Got press and awards

“The CEO Michael Wolfe is a proven winner along with his backers at Benchmark. This is a natural idea and opportunity with very long legs.”

- NextUp Research

COMPELLING TEAM

+ BIG PROBLEM

+ SOCIAL PROOF

== WIN?

Four months later . . .

Wut went wrong?

Let’s go back to summer 2010

• Entrepreneur in Residence at Benchmark• Was working on new company ideas• Intrigued by the collaboration market

• Co-founder/CEO at Vontu with Mike• Now is a Partner at Greylock• Was working on a photo-sharing company

Looked at the usual suspects

They gave up and built a homegrown system based on mailboxes and wiki pages

“Enterprise 2.0 from your inbox”

GOAL: build a collaboration solution that people will actually use

• Embrace email, don’t compete with it

• Zero friction to become a user

• Great UI, search, social features

• Viral and freemium

The Plan

• Raise some money

• Build small team

• Customer validation

• MVP, iterate, iterate

• Product/market fit

• Profit!

TEAM fail

VALIDATION fail

VALUE fail

PRODUCT fail

SOCIAL PROOF fail

TEAM

Awesome engineering team

Mike took on customer validation, sales, marketing, finance, product management,

financing, etc.

TEAM fail – no “hustler”

“HUSTLER” “HACKER”

TEAM lesson

If you fail, it will be because you don’t reach product/market fit and don’t get customers

So, someone on your team should be great at and work on only that

It is not a part time job

An engineering team is not a company

VALIDATION

Is email overload a problem?

Do you live out of your inbox?

You aren’t happy with the tools you’ve tried?

Would you try this?

Yup

Yup

Yup

Yup

VALIDATION fail

We validated the problem but not the solution

Overbuilt the MVP - we thought we needed clear differentiation. Should have got it out

sooner

“We talked to some customers” is not validation

VALIDATION lessons

You aren’t doing it enough

No, you aren’t

Stop it, you really aren’t

No, shut up

VALUE fail

“Enterprise 2.0 value proposition:– Get more done– Find information– Discover experts– Build reputation and

relationships– Be happy

The “soft” value prop

NO BUDGET. NO URGENCY.

NO ONE GETTING FIRED.

The VALUE degrees of difficulty

Loserville

“HARD “VALUE PROP

Get customers, grow revenue

Compliance, security, cost

savings

Productivity, collaboration,

employee satisfaction

“SOFT “VALUE PROP

Winners

Email Web Saas Cloud Social Mobile OLD TECH NEW TECH

VALUE lessons

We focused on adoptability, not value

Wasn’t new and different enough – not “10x” better than the alternatives

This is why the collaboration market is so hard

And why so many email startups fail

SMART MAILING LISTS• Easy to create and grow• Capture documents and

discussions• Find content, discover experts• Social and viral

PRODUCT fail

People “liked” our product, but we didn’t get “love”

OK to have haters as long as you have lovers

Needed critical mass of usage to provide value, but without value couldn’t attract critical mass

Early adopter market overlapped with Google’s install base

Then, to add insult to injury

SOCIAL PROOF fail

“I have an idea I want to run by you”

(Smart people involved. I guess they know what

they are doing)“Sounds great”

(People love my idea!)“Let me tell you about

my great idea!”

(Wow, Mike sounds really excited about this)“Sure, we’ll try it”

(Everyone loves it!). “This thing is happening!” “Can I invest?”

Things we did well

Pivoted decisively

Great support from board and investors

Team cohesion

Selected a new project (Pipewise) with a lower “degree of difficulty”

Don’t get distracted by who has SOCIAL PROOF and who doesn’t

Diverse TEAM, VALIDATE the idea, leverage larger waves to add VALUE

Follow your gut – you know the right thing to do

Go and do it.

Questions?

Knowledge has been dropped:

“Social Proof is Not Proof”

Michael Wolfewww.about.me/michaelrwolfe

@michaelrwolfe