STARTUP FAILURE IS NOT WHAT YOU THINK

Sergey L. Sundukovskiy, Ph.D.

FAILURE

“A person who never made a mistake never tried anything new.”

-Albert Einstein

FAILURE

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life, and that is why I succeed.”

-Michael Jordan

Sergey L. SundukovskiyCo-Founder, CTO & Chief Product OfficerCompanies: PushPoint, Cinsay, LowerMyBills, DIRECTV, CBWInterests: Entrepreneur, Speaker, Mentor, AdvisorEducation: BA CS, MS IT, PH.D. Business

Sergey L. Sundukovskiy, Ph.D. has over 20 years of experience serving in capacities of Chief Technology Officer, Chief Information Officer and Chief Product Officer. Sergey specializes in implementation of subscription based high volume SaaS platforms, with strong emphasis on early stage product development and market deployment. Specific areas of expertise include A/B Testing, Big Data, Video Management, eCommerce, RTB platforms and Cloud Computing. Education: B.A. in Computer Science from the University of California, San Diego, and an M.S. in Information Technology from the University of Liverpool. Ph.D. in Information Technology Management from the School of Business and Technology, Capella University.

INTRODUCTIONBACKGROUND &

SERIALFAILURE

The Story of One Dissertation

Failure Does Not Mean You Are Finished

WHAT ISFAILURE?

?

You Are Finished If You Have NOT Learned

Anything

WHAT ISFAILURE?

?

Your Failures Should Be“Learn Alots”

WHAT ISFAILURE?

?

Complete FailureLights Out

FAILURETYPES

Partial FailureAcquihires

FAILURETYPES

Failure on the Way to Success

Lose the Battles Win the War

FAILURETYPES

Complete FailureFills Ecosystem with

Experience

WHY ISFAILURE IMPORTANT?

?

Partial FailureSecond Lease on Life

WHY ISFAILURE IMPORTANT?

?

Failure of the Way to Success

Completes Success Cycle (Failure -> Learning ->

Success)

WHY ISFAILURE IMPORTANT?

?

What Happens When Failure Is NOT Accepted

FAILUREDONE WRONG

Japan Recession of the 90’s• Companies Would Not Downsize

• Banks Would Not Foreclose• Government Would Bailout

Banks

FAILUREDONE WRONG

Why is Failureso Common?

Failing isSO HOT right now!

REASONS FOR FAILURE

What Does Failure Look Like?• No Addressable Problem

• No Market

• No Effective Team

• No Customers

• No Product

• No Product Positioning

• No Money

PERFECTFAILURE

Beginning of theStartup Journey

REMARKABLESIMILARITY

End of theStartup Journey

REMARKABLESIMILARITY

WOAH…Deja Vu!

Building a Startup Is An Exercise In Unfailure

BUILDING A STARTUP

• Constant Failure

• Must Have the Right

Tools• Impossible to Get Lucky and Win

• All About the Team

• It Is Even More About

Execution• It Is All About Micro-

Pivots

WHAT DO STARTUPS AND GOLF HAVE IN COMMON?

Micro-Pivots After Many Failures In…

ROAD TOSUCCESS

Unfail Startup Founding Team

We’ll hit somethin

g, eventually

.

ROAD TOSUCCESS

Unfail Minimal Viable Product

ROAD TOSUCCESS

Unfail Product Development

ROAD TOSUCCESS

Unfail Product Marketing

ROAD TOSUCCESS

Unfail CustomerAcquisition

ROAD TOSUCCESS

Unfail BusinessModel

ROAD TOSUCCESS

• Too Many Steps to Get

There

Wrong Way To Unfail (Tail of Two Extremes)

• Hole in One Win Strategy

• Giving Up Too Soon

• Listening to Too Many People at

Once

UNFAILURESTRATEGIES

Diving Lesson

GIVING UPTOO SOON

KEEP GOING!

• Have Big Targets To Hit

Right Way To Unfail

• Unfail Most Important Things

First• Change Strategy at the Right

Time• Good Return on Luck

• Nearest Danger Strategy

UNFAILURESTRATEGIES

Malcolm GladwellBig Targets

BULLETS BEFORE CANNONBALLS

Difficult Failure Recovery• Team

• Operational MO aka Process

• Conflict Resolution

• Product Focus

FIRST THINGS

FIRST

1

st

Change of Direction (Tripwires) • High Churn

• High Acquisition Cost

• Low Viral Score

GOLDEN

RULE

Jim CollinsReturn on Luck

GET LUKY

Do NOT Need to Outrun a Shark, Just Your Buddy

SECOND

LAST

First Who, Then What, Then How

UNFAILTEAM

Get the Right People on the Bus

UNFAILTEAM

• Complementary Skillset

• Worked Together Before

• Similar Work Ethic

• Similar Commitment Level

• Similar Conflict Resolution Style

• Can Disagree and Commit

• Ideal Number of Co-Founders is 3

CO-FOUNDER

UNFAILCRITERIA

CO-FOUNDER

UNFAILCRITERIA

(cont.) BAD

NOT GOOD

GOOD

Rat + Cactus

IDEALCO-FOUNDER

WHERE TOFIND ONE?

Plan For Failures

UNFAILPRODUCT

• Wireframing

• Mocking

• Clickable Prototype

• Dynamic Prototype

• MTP

• MVP

UNFAILPRODUCTLIFECYCLE TESTING

TESTING

TESTING

TESTING

TESTING

Highest Paid Person’s Opinion

46

UNFAILHiPPO

“I Find Your Lack of Testing Disturbing”

47

UNFAILTESTING

HISTORY OF FAILURE

Aliens Did NOT Build Pyramids

Testing (Success)Testing (Failed)Testing (Failed)

Unfail Usability Testing

What vs. Why

Unfail Usability Testing (cont.)

Unfail Usability Testing (cont.)

Eye Tracking

• Attention

• Emotion

• Task Completion Time

• Hovering

• Clicks

• Hotspotting

• Path

WHATARE THEY TRYING TO UNFAIL?

?

Rise of the Crowds

Unfail User Testing

Rise of the Crowds

Mechanical Turk

Microtasking Crowdsourcing Platform

Usability Study Setup

Usability Study Setup (cont.)

Usability Study Setup (cont.)

Usability Study Setup (cont.)

Usability Study Setup (cont.)

Usability Study Results (cont.)

Usability Study Results (cont.)

Unfail User Feedback

It Is All About Uncensored Feedback

Unfail User Feedback (cont.)

Unfail User Feedback (cont.)

Usability Testing Tools

A/B Multifactorial Split Testing

Very Different

A/B Singlevariate Split Testing

Slightly Different

Multivariate Testing

That’s a Lot of Combinations

Google Website Optimizer

Omniture Test & Target

Unfail Experimentation

Unfail Experiment Chaining