Comments for 10,000 Startup Hours - David Cummings

Comment on Interviews Where Only One Question Matters by Kyle Porter

Kyle Porter — Sat, 04 Feb 2012 11:20:54 +0000

The most powerful question I’ve ever asked is this:

“What is your most significant accomplishment and could you tell me all about it?”

The answer to this question can tell you the person’s competence, motivation, and priorities. It can uncover passion, communication & values.

If I could only ask one question, that would be it.

Comment on Notes from the Facebook S-1 IPO Filing by Sanford Levings

Sanford Levings — Fri, 03 Feb 2012 16:42:25 +0000

I read where the speculation is that the company will have a market capitalization, post raise, of $100 billion. So, at $1 billion in 2011 net income, that would place the PE ratio at 100 x trailing earnings.

A fascinating perspective to me is that your return based on a 100 PE would be 1%. ($1 billion / $100 billion), which is much higher than you will receive on your money market today.

So, is 100x trailing earnings too high or too low? obviously, time will tell.

Comment on Notes from the Facebook S-1 IPO Filing by Anand Thaker

Anand Thaker — Fri, 03 Feb 2012 03:34:54 +0000

David thanks for breaking this down for us. What are your thoughts on the profit per customer metric as described in this article?

http://www.google.com/hostednews/ap/article/ALeqM5jkj7jx4E5HlLOX7anwkhNjXEf32Q?docId=7cec5dcb02dd4596b4f258a45d2294bf

Comment on Pre-Paid SaaS Contracts are Free Working Capital for Startups by Sanford Levings

Sanford Levings — Thu, 02 Feb 2012 20:08:28 +0000

It’s called “deferred revenue” on the balance sheet and is moved to revenue when the service is performed.

I had two great business partners in the 90′s and we started, arguably, the first pre-paid calling company in the country.

Two more great advantages of prepaid contracts are:
1) no collection problems, i.e., the money is already collected.
2) “escheat”, the legal term for “abandoned property”. it became known as “breakage” in our industry. A consumer purchases a prepaid calling card and they don’t use all of the time on the card. Eventually we would “turn the card off” and at that time, we would record the unused service as additional revenue. Our breakage averaged about 15% of the sales price and remember all of this fell to the bottom line.

In 1993, we just about went out of business. We had less than $10,000 in the bank. Long story short, we somehow got in front of Lufthansa airlines. They already understood the concept of prepaid calling cards because phone booths in Europe offered them. Remember, it’s 1993..nobody knew the concept of prepaid telecom in the United States. Lufthansa decided to do three $250,000 prepaid calling card campaigns with our company. We put vintage airplanes on the front of the card. Lufthansa gave out these cards, for free, to their first class customers. I don’t think one card was ever used…no kidding. The only cost we had was to design the card and offer special Lufthansa thank you prompts. So our margins were 95% and presto..we were back in business!

Comment on Startups as a Way to Build Community Leaders by Michael Van Osch

Michael Van Osch — Thu, 02 Feb 2012 17:34:04 +0000

This is right on David. Income and prosperity rarely exceed a man’s personal development and leadership abilities. Leadership starts with the self and then flows out from there. Enjoyed the post.
cheers.

Comment on Calculating Your FU Money Amount by Starting the Journey | StartupChicks

Starting the Journey | StartupChicks — Thu, 02 Feb 2012 04:40:12 +0000

[...] Before you start the journey, it’s important to have an understanding of where you are going. You need to Start With The End in Mind. Where do you want your business to be in 5 years? What is your Exit? Local Atlanta Entrepreneur, David Cummings, would ask “what is your FU Number?” [...]

Comment on Stronger Startup Cultures Take Longer to Hire by Mike Schinkel

Mike Schinkel — Thu, 02 Feb 2012 02:07:23 +0000

I would concur. Would be interested in a future post in hearing you describe Pardot’s culture and what are and are not good cultural fits to give us an example.

Comment on The Power of Recurring Revenue in Startups by Midwest Web Developers

Midwest Web Developers — Wed, 01 Feb 2012 14:29:58 +0000

As a founder of a new startup myself, this is something I need to focus on.

The problem is that in my line of work, its very easy to get sucked into one time gigs. These are nice for the sudden influx of cash, but they are not sustainable.

Thanks for the reminder that we all need to look at the long term a lot more!

Comment on Benchmarking Data for Startup Marketing by Jacqui

Jacqui — Wed, 01 Feb 2012 01:54:14 +0000

An index is a time tested consumer marketing tactic. Think JD Power Customer Satisfaction Index and the Good Housekeeping Seal of Approval. So it is neat to have it be embraced by startups and those in the tech sector.

Comment on Pre-Paid SaaS Contracts are Free Working Capital for Startups by David Cummings

David Cummings — Tue, 31 Jan 2012 14:10:24 +0000

Cash basis makes sense most of the time:
http://davidcummings.org/2011/06/06/accrual-vs-cash-basis-accounting-for-startups/