This is a presentation I did at Failcon 2012 in San Francisco, It tells the story of ccLoop, a startup I founded in 2010. ccLoop was my fourth startup. The first three found large markets and did well, but this one did not. I discussed a few topics including: - Getting the right founding team. - Solving a problem that customers care dearly about. - Building a product the customer can't live without. - Knowing when to pivot and when to persevere. - Not getting wrapped up into PR and worrying about which startups have "social proof" and which don't.

1. “Social Proof is Not Proof”
Michael Wolfe
www.about.me/michaelrwolfe
@michaelrwolfe

2. 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!

3. May 2011 TechCrunch Disrupt

4. Team
Our Investors & Board:
Our Experience:

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

6. Solving “the email problem”

7. The workplace still runs like this!

8.  COMPELLING TEAM
 BIG PROBLEM
• Universal
• Well-understood
• Hitting a breaking point

9. Made the finals

10. 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

11.  COMPELLING TEAM
+
 BIG PROBLEM
+
 SOCIAL PROOF
== WIN?

12. Four months later . . .
Wut went
wrong?

13. 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

14. Looked at the usual suspects
They gave up and built a homegrown system based
on mailboxes and wiki pages

15. “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

16. The Plan
• Raise some money
TEAM fail
• Build small team
VALIDATION fail
• Customer validation
VALUE fail
• MVP, iterate, iterate
PRODUCT fail
• Product/market fit
SOCIAL PROOF fail
• Profit!

17. TEAM
Awesome engineering team
Mike took on customer validation, sales, marketing,
finance, product management, financing, etc.

18. TEAM fail – no “hustler”
“HUSTLER”

19. 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

20. VALIDATION
Is email overload a
problem?
Yup
Do you live out of your
inbox?
Yup
You aren’t happy with the
tools you’ve tried?
Yup
Would you try this?
Yup

21. 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

22. VALIDATION lessons
You aren’t doing it enough
No, you aren’t
Stop it, you really aren’t
No, shut up

23. 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

24. The VALUE degrees of difficulty
“HARD “
VALUE PROP
Get Winners
customers, grow
revenue
Compliance, secu
rity, cost savings
Productivity, colla
boration, employe
e satisfaction
Loserville
“SOFT “
VALUE PROP
Email Web Saas Cloud Social Mobile
OLD TECH NEW TECH

25. 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

26. SMART MAILING LISTS
• Easy to create and grow
• Capture documents and discussions
• Find content, discover experts
• Social and viral

27. 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

28. Then, to add insult to injury

29. SOCIAL PROOF fail
(Smart people involved. I
“I have an idea I want to run guess they know what they
by you” are doing)
“Sounds great”
(People love my idea!)
“Let me tell you about my (Wow, Mike sounds really
great idea!” excited about this)
“Sure, we’ll try it”
(Everyone loves it!).
“This thing is happening!” “Can I invest?”

30. 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”

31. Knowledge has been dropped:
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?

32. “Social Proof is Not Proof”
Michael Wolfe
www.about.me/michaelrwolfe
@michaelrwolfe