The Atlanta CEO Council put on a great event yesterday morning. As part of their guest speaker series, they brought in Jim Whitehurst, the CEO of Red Hat, to share his vision as well as lessons learned being the COO of Delta Airlines. After hanging out with Lance Weatherby of the ATDC and Andy Monin of VendorMate, the presentation began. Here were Jim’s key recommendations for CEOs:
- Focus, focus, focus – he mentioned three things they focus on for a year and work hard to say no to suggestions that don’t fall in those categories
- Build repoire in person with all lines of company employees – he talked about meeting with 12,000 flight attendents over a six week period (350 at a time) as a way to help with customer service at Delta
It was a great event.
As a software entrepreneur it can be difficult to know when to expand staff, marketing, etc. One simple method I developed over the years is called GPA (Growth Plan Assets). The method is really simple in that you add together cash in the bank and current accounts receivable and then divide by last month’s “normal” costs. This, in a rough fashion, gives you the number of months you can operate without any new sales.
You know you’re ready to expand when your GPA is greater than a standard college GPA (scale 0 – 4). So, like a college GPA, most of the time you’re in the two or three month range. When you go above that, you have a sufficient GPA to expand. When you are below a two, you’ll have some tough decisions to make. What’s your GPA?
Note: The higher the percentage of revenue that is recurring, the lower the desired GPA.
What’s in a domain name? We’ve spent a fair amount of time lately debating the name of our new product as well as the importance of a domain name to go along with it. Here are the domain name thoughts so far:
- Keep it short
- Include the product name in the domain name
- Use real words (e.g. prospectinsight.com) unless there is one that is short and memorable (e.g. pardot.com)
- Get a .com and don’t settle for another extension
- Look at the domain name auctions and after market
It is extremely hard to find a good domain name these days. Good luck!
Do you have a direct sales team that works hard selling or do you have an order taking call center and website? That’s an important distinction when building a business. With a direct sales team, you have the following characteristics:
- Bigger deal sizes
- Longer sales cycles
- Complex sales cycle and pricing model
- More expensive personnel
When sales come from an order taking call center and website, you see these characteristics:
- Larger marketing budget as a percentage of revenue
- Smaller deals
- Shorter sales cycles
- Free trials as well as “free” editions
It is important to consider both of these options when thinking through the possibilities of a new business application.
Does your company make product roadmaps available? I’ve always tried to avoid providing product roadmaps for prospects and customers for several reasons:
- Agile products need to adapt on a monthly or quarterly basis
- Similarily, the market changes too fast to know what will be important in 12 months
- If they see something they want and it doesn’t get done they won’t be as satisfied (better to under promise and over deliver)
Instead of providing a roadmap, find out what is important to your prospect or customer and make sure it meets their needs now. Sure, it won’t be 100% of what they want but it is better to provide real value now than to hope it will be ready in the future. Hope is not a strategy.
Whenever an issue is brought up to me, I always like to think of it in terms of people, process, and technology. In the two markets that I’m intimately involved with, web content management and web marketing automation, we try to stress that it isn’t just the software or technology that will result in a successful client.
- People – are the right people involved?
- Process – how are things currently being done?
- Technology – what tools and applications are involved?
This simple framework goes a long ways.