David Cummings on Startups

Month: February 2011

  • Increase Site Lead Conversion Rate First

    I wonder what the conversion rate is of this i...
    Image by Adrian Eden via Flickr

    Earlier today I was talking with a SEO expert about online lead generation, marketing automation, and other topics. One of the points he made was that there are two major levers for website leads: traffic to your site and the conversion rate of visitors on your site into leads. Pretty simple, right? Now here’s the kicker – most people focus on driving more traffic to their site as opposed to increasing their conversion rate.

    If you double your conversion rate that’s the equivalent of doubling your traffic with the previous conversion rate.

    Most entrepreneurs should work on their conversion rate before working on increasing site traffic. Here are a few quick tips for increasing conversion rates:

    • Don’t assume the homepage is the starting point for most visitors (search engines make it so that all pages are entry points)
    • Incorporate a call to action on every page (e.g. a link to download a white paper, sign up for a free trial, or join a newsletter list)
    • Think through site personas for your different types of visitors (e.g. technical buyer, executive decision maker, junior researcher, etc)

    My recommendation is to look at your conversion rate and work to improve it first before other web marketing activities.

    What else? What are some other tips to increase site lead conversion rates?

  • Startup “Help” to Avoid

    When starting a company one of the best things you can do is to talk to as many people about the idea and get their feedback and introductions. A successful startup is 20% idea and 80% execution. With that said, there is some “help” that should be avoided whereby people take advantage of first-time entrepreneurs.

    Here are some tactics to stay away from:

    • Fees charged to get an introduction or to pitch angel investors or VCs
    • Offers to write a business plan in exchange for thousands of dollars (I’m against writing business plans as testing business models is the way to go, and if you do need a business plan for something like a bank, you need to be able to do it yourself to understand your own business)
    • People who pose as angel investors only to try and sell you consulting services requiring big fees and stock options to work with you first to see if they might invest later
    • People who pose as angel investors that really want to do business development deals for you in exchange for a percentage of revenue with no desire to actually invest

    My recommendation is to talk with people that genuinely want to help and have a clear motive of helping the community or offering a standard service (legal, accounting, commercial real estate, banking, etc).

    Thanks to my friend Wayt King who inspired this post with his tweet:

    http://twitter.com/#!/wayt/status/34781249474134016

    What else? What are some other examples of startup “help” to avoid?

     

  • Startup Financial Models after Product/Market Fit

    This is a flow plan of an inefficient financia...
    Image via Wikipedia

    The last thing many technology entrepreneurs want to do is to become spreadsheet jockeys but once product/market fit has been achieved one of the next things to do is to develop a comprehensive financial model. Yes, before product/market fit you need to have a good idea if the business is potentially viable, and some spreadsheet work is necessary to understand the business economics, but this should be a simple exercise. Post product/market fit the financial model should be much more detailed.

    Here are some resources to help build and think through a financial model:

    Ideally there would be example financial models online that could be easily customized but the nature of most startups is that there are company-specific nuances requiring heavy customization. My recommendation is to familiarize yourself with as much as you can related to financial modeling while enlisting help when possible.

    What else? Do you have any tips or examples for startup financial models?

  • Startups Don’t Require Perfect Decisions

    Idea leuconoe 2
    Image via Wikipedia

    When talking to people that want to be entrepreneurs but haven’t made the leap, the most common reason cited for not starting something is lack of a great idea. Yes, a great idea is nice but successful companies usually have a good idea, great timing, and great execution. Related to the idea for the business, startups don’t require perfect decisions. Making changeable decisions quickly and  learning from them is critically important. There is no such thing as the perfect decision.

    Here are some examples where a perfect decision isn’t required:

    • Logo – make sure it is professional but don’t dwell on it in search of the perfect decision (once you’re successful you can invest more in it)
    • Marketing strategies – there are so many mediums and venues to try that it is more important to develop  a culture of analysis and testing that will naturally figure out what does and doesn’t work
    • Product messaging – it takes a number of iterations to find the right tone, voice, and message for your target customer profiles (this is one of the tougher things startups must do)

    The idea isn’t to start with bad decisions but rather to debate internally, take the best decision at the time, execute it, and learn as much as you can as quickly as you can. Startups don’t require perfect decisions.

    What else? What are some other examples you see where people try to make the perfect decision?

  • Market Research for Inquiry Response Time

    laser board front
    Image by nebarnix via Flickr

    Lately I’ve been using contact us forms on websites for companies that I would have normally called in order to test the effectiveness and response time for their follow-up emails and calls. The results aren’t pretty. Companies must not a) have a process for their online form inquiries, b) get very many leads online, or c) only have the form because the web design firm went ahead and included it.

    Here’s my simple research:

    • Local tire store – responded eight days later with the quote I requested
    • Local dentist – no response at all
    • Child swim coach – one hour response
    • Marketing vendor – responded 24 hours later and never responded to my email response (has been eight days)

    Now, I’m not saying small businesses should drop everything when an email comes in but they should prioritize these prospect inquiry requests, as with inbound marketing, these are usually the most serious leads. A couple ideas for the issue include having alerts for these sent to a special email address that multiple people receive as well as using software to have the phone ring when a form is completed.

    What else? What’s your experience been like using contact us forms online?

  • Details of a Cool Startup Office – Cloud Sherpas

    Earlier today I had the opportunity to visit with some of the team members at the fast-growing Atlanta startup Cloud Sherpas (Google Apps consultants). Cloud Sherpas did a custom build-out that took two months over at Piedmont Center in Buckhead. Here are some details of their new space:

    • Orange paint throughout to emphasize their corporate branding
    • Conference rooms named after famous mountains (playing off the “sherpa” part of their name)
    • Concrete floors and exposed duct-work in the reception area to create a loft feel even though they are on the seventh floor of a mid-rise
    • Huge breakroom with two full-size refrigerators, giant LCD TV, several sofas, and large whiteboards on the wall
    • Great work areas with numerous workstations using half-height dividers to give some privacy while being primarily open
    • And, most importantly, genuinely happy people walking the halls

    The new Cloud Sherpas office is great and really sets the tone for a cool technology startup office.

  • Co-Founders are Keepers of the Culture

    Palace of Culture in Warszaw
    Image via Wikipedia

    One of the biggest things I underestimated when I started my company over 10 years ago was the importance of corporate culture. In fact, underestimated is the wrong word — I didn’t even recognize it as something to consider. Corporate culture is now the most important part of the company. Why so important? It’s our only sustainable competitive advantage where we have complete control.

    Co-founders are keepers of the culture and need to guard it however they can. Here are a few ways to develop and maintain a strong culture:

    • Define the culture and attributes you look for in a person (ours are positive, self-starting, and supportive)
    • Develop a rhythm where the culture is talked about on a regular basis (e.g. weekly team meetings, quarterly reviews/check-ins, etc)
    • Empower other team members to own the culture (e.g. require unanimous decision for new hires, have a culture book that documents why things are the way they are, etc)

    The corporate culture is critical to long-term success and the co-founders need to guard it. Co-founders are keepers of the culture.

    What else? What other tips do you have to develop and maintain a strong culture?

  • Outsourced Appointment Setting in Startups

    Antique oak "double phone" from earl...
    Image via Wikipedia

    We recently started the process of researching outsourced appointment setting to get a feel for the options and how it might help us accelerate our growth. After a few meetings I’ve developed a grasp of the different options and strategies. Here are a few notes so far:

    • Dials per day per rep is typically 80-100 using an automated dialer technology
    • Success percentages are in the 3-7% (e.g. call on 1,000 companies and get 50 appointments for a 5% success percentage over a comprehensive campaign)
    • Pricing styles include per call costs (~$2), per hour costs ($30 – $50), and per completed appointment costs ($500 – $1,000) or a hybrid of these
    • Training typically takes 4-6 weeks to get started
    • Reviews weekly of recorded successful calls is a best practice

    I can readily see the value these organizations provide and we should be making a decision shortly. I’m looking forward to learning more about what does and doesn’t work.

    What else? Have you tried outsourced appointment setting and what did you learn?