Favorite Questions to Ask Entrepreneurs

Last week I was at a dinner sitting next to a successful entrepreneur that had built his business to hundreds of employees over the course of 10+ years. Once we finished with the standard chit chat, I asked my favorite question for late stage entrepreneurs:

When did you know you were going to be successful?

Often, it takes two, three, or even four plus years before it feels like you’ve made it. Of course, it isn’t a switch that turns on overnight. Rather, it’s the confluence of hiring momentum, sales progress, market adoption, and scalable infrastructure.

After asking this question, it got me thinking about other fun questions for entrepreneurs. Here are my favorites:

  1. What was the inspiration for your startup?
  2. What was the biggest inflection point in your startup?
  3. How long have you known you wanted to be an entrepreneur?
  4. How did you meet your co-founder?
  5. When did you know the time was right to go full-time?
  6. What was your original idea and how did it change with market feedback?
  7. How did you find your first customers?
  8. How did you find your first investors?
  9. What are your biggest learnings so far?
  10. What were your biggest challenges?
  11. What would you have done differently?
  12. Who was your most important mentor?
  13. What keeps you busy now?

Try these questions out the next time you talk to an entrepreneur and see where the conversation goes. Learning from entrepreneurs is one of my favorite things, and these questions set the stage.

Try these questions and let me know some of your favorite questions to add to the list.

When the Direction Doesn’t Feel Right, Get the Team Together

Last week I got together for a multi-hour strategic session with a great entrepreneur and his team. We’d been talking about a specific, important item for a couple months and the general direction was clear but a critical piece of it didn’t feel right.

As a team, we worked hard to define what we stand for, what we will, and won’t do, and some of our goals for the next 5-7 years. We asked important questions like the following:

Why do we exist?

What is our #1 goal?

What have we learned so far?

What do we need to learn next?

After we went up a couple levels and worked on the most strategic questions, when we finally came back down to the 2022 plan, we were able to ask better questions. From here, we were able to articulate what was needed. And, thankfully, we were able to ask the hard questions about why a current piece didn’t feel right, and find a better solution.

When the current direction doesn’t feel right, get the team together. Go as strategic as possible, frame the discussion, ask the hard questions, and find a better solution.

250 Startup Employees Per Spinoff Startup

Recently, I was asked how often new startups are formed from employees that worked together at previous startups. Good question. Most startups emerge from an entrepreneur encountering an unmet need or opportunity in the market, often informed by their previous job. While I don’t have hard stats, I do have anecdotes from local startups.

Two high-growth startups in town are Terminus and Salesloft. Terminus does multi-channel account-based marketing, has 363 employees listed on LinkedIn, and has raised $120M according to Crunchbase. Salesloft does sales engagement software, has 726 employees listed on LinkedIn, and has raised $246M according to Crunchbase.

From these two pre-IPO stage startups, I know of at least four startups that were started by alumni:

  • Tourial – Self-guided product experiences
  • Sonar – Tech stack monitoring
  • Spaceship – Continuous delivery platform
  • OrderNerd – Restaurant online order management

These startups emerged over the last few years, and the number of startup spinoffs is obviously not static as there are likely more. Let’s call it four startup spinoffs from a combined 1,000 employees, making it one spinoff for every 250 employees.

Startup success begets more startup success, and for every 250 startup employees, look for a new startup spinoff to emerge.

Filter Customer Requests Against the Vision

One of the human behaviors I’ve seen many times, and fallen prey to myself, is trying to do all things for all customers. A feature request comes in from one customer — let’s do it. A “must have” request comes in from a prospect — let’s do it. An item is listed on an RFP that won’t do have — let’s do it. Ultimately, if you do this, and stay alive long enough, the result is a Frankenstein of a product. Sure, it does a multitude of things but it’s only OK at a number of items and not incredibly good at any of them.

Many more entrepreneurial dreams die of indigestion than starvation.

For every request that comes in, ask the question: how does this fit our vision? Not the vision of where we are today, rather the vision of where we want to be in five or 10 years. It’s easy to get caught up in keeping the lights on (important!), pleasing investors, and making progress, but don’t do so without critically thinking through how this impacts where you’re headed.

Need help deciding what fits in the vision and what doesn’t? Paint a picture of your ideal customer. What does he or she do? What problem are they solving? Why are they buying from you? Why do they absolutely love your solution? By continuously refining the vision for the ideal customer, and comparing incoming requests to their need, it’s easy to see what does, and doesn’t, fit.

The next time a request comes in, filter it against the vision. The strongest products have an opinionated view of what they will, and won’t, do. Build for the ideal customer and avoid being all things to all people.

Growing Into Reset Startup Valuations

One of the popular topics right now is asset prices and valuations. Everywhere you look, things are priced at all-time highs — public companies, startups, homes, cars, etc. Whether investing, or consuming, the current market dynamics are highly unusual. In startup land, with the BVP Cloud Index publishing an average revenue multiple of 23x, public Internet companies are priced to perfection. But does that matter?

Let’s say the valuation of all public (and therefore private) cloud companies are cut in half — 11.5x revenue multiples. The BVP Cloud Index average growth rate is 37%. Assuming growth stays the same (which it won’t), and valuation multiples are halved, how long will it take to grow into the previous valuations?

Let’s break down the math:

Current Valuation is $1 billion

At a valuation multiple of 23x revenue, revenue is $43.5 million.

If the new valuations were cut in half, $43.5M * 11.5 = ~$500M.

Assuming a constant growth rate of 37%, let’s look at how long it takes for the $500M valuation to get back to a $1B valuation.

Year 1

$43.5M * 1.37 = $59.6M revenue

$59.6M revenue * 11.5 multiple = $685M valuation

Year 2

$59.6M * 1.37 = $81.6M

$81.6M revenue * 11.5 multiple = $940M valuation

Now we know: if valuations get cut in half, it’ll take just over 24 months to grow back into the previous valuation, assuming a constant growth rate. And, assuming continued growth, the startups will dramatically appreciate in value once again post valuation reset.

Growth, growth, growth. As long as there’s strong growth ahead, valuations can be drastically reset and there’s still great value creation in the future.

Continued Startup Momentum in Atlanta

Wow, last week was an amazing one on the announcements front for the tech and startup scene in Atlanta. For years, we’d have one or two big announcements per quarter. We’ve had four just in the last five days. Momentum!

Let’s take a look.

MailChimp Acquisition by Intuit for $12 Billion

This is one of the largest bootstrapped acquisitions of all-time. Nothing Atlanta specific, this is one of the biggest deals in the world for a bootstrapped tech company. In addition to the founders becoming multi-billionaires, the staff is getting $500 million as bonuses and equity awards. One of the big ideas is that success begets success in a startup community, and having tons of new millionaires (and billionaires!) in the community will help fund the next generation of startups.

Roadie Acquisition by UPS

A logistics startup in a logistics town acquired by one of the largest logistics companies in the world. Yep, that’s Atlanta for you. Roadie, which provides same-day delivery, announced their acquisition by UPS for an undisclosed price that is rumored to be a huge number. Per Crunchbase, Roadie has raised $62M since their founding in 2014.

Stord Raises $90 Million at a $1.1 Billion Valuation

The unicorn stampede continues. Local supply chain and logistics startup Stord announced a $90M round at a $1.1 billion valuation led by Kleiner Perkins. Stord is especially interesting as it came out of CREATE-X at Georgia Tech and is only a few years old. More logistics in Atlanta.

GreenSky Acquisition by Goldman Sachs for $2.2 Billion

The buy now, pay later space is on fire (Zoolander, so hot right now) and GreenSky, which specializes in home improvement financing, just announced their acquisition by Goldman Sachs for $2.2 billion. GreenSky was one of the more recent Atlanta startup IPOs and it’s great to see they found a long-term home.

All in all, a pretty amazing week for the tech and startup scene in Atlanta. I’m excited for the what the future holds.

Customer Onboarding Effort and Retention

During the early Pardot days we’d be out pitching venture capitalists and they’d always ask about customer onboarding.

How long does it take to get a new customer live?

What are the steps involved?

How much manual labor is required?

We’d outline the process of how it’d take 30-45 days, how it was “productized services” with a repeatable template, and that it’d usually require 10 hours of manual labor plus some group webinar sessions. All in, it might be $1,000 of work to get a new customer up-and-running. Then, inevitably, the investors would ask how we can bring that cost down. How could we make it more self-service? Knowing that some could be automated but most effort is manual making sure the CRM sync was working, that the landing pages looked correct, that the emails rendered in the inbox, etc.

I felt we were inferior. We weren’t self-service freemium. We had wonderful humans helping make our customers successful, and that took time.

Only later did I realize that this was actually a positive, and not a negative.

The more effort it takes to onboard a customer, the more committed they are to the product. The more committed they are to working through the inevitable kinks. The more likely they are to renew, assuming a good experience.

There’s a direct correlation between onboarding effort and retention rates. Yes, exceptions exist but more effort to get on means more effort to leave. In SaaS, renewal rate, gross and net, are two of the most important metrics, and onboarding effort correlates with better renewal rates.

The next time the topic of effort to onboarding new customers comes up, know that in addition to generally increasing the chance of customer success, it also correlates positively with renewal rate. Put the effort in and reap the rewards.

Startup Executive Bonus Plans

Over the years I’ve seen a variety of bonus and incentive plans for startup executives. Ideally, equity compensation alone would drive the appropriate behaviors to optimize what’s best for the business but bonuses and incentive compensation are commonplace as the startup scales.

In the early years, below a few million in revenue, it typically doesn’t make sense for an executive bonus plan as the business doesn’t have enough repeatability, there are few executives, and it isn’t worth the overhead. With time and success, a bonus plan should be added.

There are a few guidelines I like to think through for a startup executive bonus plan:

  • Keep it Simple
    Too often, I see plans that are overly complex. The main goal of the bonus plan is to drive behavior that aligns with the business goals. Multiple priorities equals no priorities. For an initial plan, err on the side of being too simple and go from there.
  • Target the Most Important Metrics
    While there are dozens of metrics that should be tracked weekly, it’s best that a bonus plan align with 1-3 metrics that are both easy to understand and the most important in the business. For example with SaaS, growth rate is a huge driver of valuation and is a common bonus metric.
  • Counterbalance the Metrics
    Ideally, one or more of the bonus metrics have a counterbalance metric so that the combined results are best for the business. As an example, if growth rate is the first metric, the second metric would be cash burn such that the executives are aligned to grow as fast as possible while burning an appropriate amount of cash. Faster growth might be possible with more cash burn, but the executives would be incentivized to get the mix just right for their bonuses, and this would align with the board expectations.
  • Tied to Base Salary
    Bonuses are usually connected to the salary as a percentage of base compensation. For example, a bonus that is 30-40% of base salary is most common so that executives have the majority of their short-term compensation paid out regularly and once a year they get their bonus (typically paid out after the fiscal year is closed out).

So, as an example, an executive bonus plan would be 40% of base salary and weighted with 70% for growth rate and 30% for cash burn and paid out annually. The percentages and metrics vary from business to business but the general ideas stay the same: keep it simple, target the most important metrics, counterbalance the metrics, and tie it to the base salary.

Startup Equity Expectations: New Car, New House, New Life

Outside of the largest startup regions, the role of stock options/equity compensation is often unappreciated. Salary always gets the most attention, for obvious reasons, followed by benefits, and lastly equity.

Why doesn’t equity and “upside” get the same amount of interest? Simple: without local stories and lore of “regular” people getting wealthy from stock options, they don’t occupy any mindshare. Unfortunately, it’s a foreign concept and doesn’t fit the typical model of being paid in a way where you can promptly spend it. Plus, add in the fact that being short-term focused is a normal quality, waiting years or decades for a potential payoff doesn’t get many people excited.

How do you set team member expectations about the potential value of equity? Start by equating it to more commonly appreciated financial markers and then provide specific details. Let’s look at some example expectations.

New Car

Ah, the unusually satisfying smell of a new car — a sign of success and accomplishment for many people. When startup equity has the potential payout to a buy a new car, set the ballpark expectations. If the startup does well, this is the type of value you can expect from the stock.

New House

Still the American dream for millions of people, the goal of home ownership is a major aspiration. While it often requires a much greater level of startup success, there’s a chance that this equity will turn into enough cash to buy a new house, debt free. Set the appropriate expectation and what level of exit valuation is necessary for this possibility.

New Life

Financial freedom (FIRE!). The rarest, of course, is the outsized-outcome that creates enough wealth for a new life, however that’s defined by the individual. Usually, this happens when a startup sells or goes public for billions of dollars. While possible, set expectations accordingly.


Yes, most startups fail and most entrepreneurs don’t make any money after they raise venture capital. But, it’s a game of power laws and the winners can exceed the wildest dreams. Set expectations with team members around the potential value of their equity and connect it to common financial markers like new car, new house, and new life.

Atlanta Startups on the 2021 Inc. 5000

Every year I enjoy reading about the newest Inc. 5000 fastest growing companies in the United States. The Inc. 5000 is a great vantage point into a variety of different industries, not just tech startups. Future entrepreneurs would do well to study it and look for trends, both across industries and geographies.

Here are the Atlanta startups on the 2021 Inc. 5000:

  • No. 30: Greenlight – Kids’ Debit Card
  • No. 42: Stord – Digital Warehouse and Distribution Network
  • No. 52: Radix Health – Scheduling Solutions for Medical Practices
  • No. 91: Benevate – Employer Assisted Housing Solution
  • No. 92: RateForce – Compare Auto Insurance Quotes
  • No. 132: OneTrust – Operationalize Privacy, Security & Data Governance
  • No. 203: Roadie – On-The-Way Delivery Platform
  • No. 266: LeaseQuery – Lease Accounting Software
  • No. 278: RoadSync – Logistics Payment Software
  • No. 357: Bitcoin Depot – Crypto ATMs
  • No. 371: DC BLOX – Data Centers
  • No. 518: inBrain – Market Research Made Easy
  • No. 595: Accushield – Sign-In and Health Screening Kiosk
  • No. 618: IRONSCALES – Email Security Platform
  • No. 673: Safely.com – Vacation Rental Protection
  • No. 1,036: CoreView – Office 365 Management Platform
  • No. 1,048: FullStory – Digital Experience Management
  • No. 1,125: Florence Healthcare – Software Solutions that Advance Clinical Research
  • No. 1,150: SingleOps – Business Management Software for the Green Industry
  • No. 1,155: Wick – Multi-Mode Survey Platform
  • No. 1,210: SalesLoft – Sales Acceleration & Customer Engagement Platform
  • No. 1,397: Payrix – Embedded Payments for Vertical Software Platforms
  • No. 1,444: FormFree – Automated Asset Verification for Mortgages
  • No. 1,446: MacStadium – Mac Servers and Cloud Solutions
  • No. 1,457: 1Q – Customer Engagement Platform
  • No. 1,584: Terminus – Account Based Marketing Platform
  • No. 1,637: Cooleaf – Employee Engagement & Experience Management
  • No. 1,654: CreateMyCookbook – Make a Recipe Book
  • No. 1,727: SaaSOptics – Automate Subscription Management
  • No. 1,744: LendingPoint – Personal Loans
  • No. 1,783: BeyondTrust – Privileged Access Management
  • No. 1,878: DefenseStorm – CybertSecurity, CyberCompliance and CyberFraund for Banking
  • No. 1,992: Field Pros Direct – On-Demand Adjusters Network
  • No. 2,075: GROUNDFLOOR – Real Estate Debt Investment Marketplace
  • No. 2,114: AODocs – Document Management and Business Process Management
  • No. 2,234: Itential – Network Automation, Configuration, and Compliance
  • No. 2,342: CallRail – Call Tracking & Marketing Analytics Software
  • No. 2,402: Spiralyze – Predictive A/B Testing
  • No. 2,548: Intellum – Customer Education Software
  • No. 2,552: N2N Services – API Integration Platform
  • No. 2,701: Mobilewalla – Consumer Intelligence Platform
  • No. 2,846: Azalea Health – Health IT Platform
  • No. 2,903: Deposco – Warehouse and Order Management Systems
  • No. 2,994: SimplePart – E-commerce Programs for Automotive
  • No. 3,101: Springbot – Email Marketing and Paid Advertising Platform
  • No. 3,145: WorthPoint – Antiques, Art, and Collectibles
  • No. 3,164: Rev.io – Telecom, MSP & IoT Billing Platform
  • No. 3,329: MessageGears – Enterprise Customer Marketing Platform
  • No. 3,497: DecisionLink – Customer Value Management
  • No. 3,539: Tripwire Interactive – Video Games
  • No. 3,602: EMS Technology / Operative IQ – Operations Management for First Response
  • No. 3,897: Vyne – Connecting Disconnected Data
  • No. 4,030: Vital4 – AI-Driven Data Solutions for Risk Screening
  • No. 4,300: AchieveIt – Integrated Plan Management Solution
  • No. 4,914: ClickDimensions – Marketing Automation Software

Congrats to the 50+ startups on the list and here’s to their continued growth.