David Cummings on Startups

Author: David Cummings

  • Atlanta’s Modesty When It Comes to Self-Promotion

    Quick, who’s the most famous entrepreneur ever from Atlanta? Hint: he’s been referred to as “the mouth of the South.” That’s right, it’s Ted Turner. Ted Turner understands self-promotion and is happy to speak his mind (see the book Call Me Ted). Now, beyond Ted Turner and his amazing run with TBS and CNN, who are some other famous entrepreneurs from Atlanta. It’s hard to name very many.

    Atlanta, with it’s Southern culture, has too much modesty. There are so many success stories, yet they are rarely talked about. Last year Atlanta had a half billion dollars in exits alone with marketing software companies, and people aren’t shouting the story from the rooftops. Atlanta has three more marketing software companies in Silverpop, Mailchimp, and WhatCounts that are easily worth over a half billion dollars combined — there’s no national press about the marketing software cluster in Atlanta.

    I don’t have the answer but I can see the problem: Atlanta has too much modesty and needs to get better at self-promotion.

    What else? What are some ideas to help with promoting the city and its successes?

  • The Unfortunate Case of the Expired Domain Name

    Over sixteen years ago I put together a simple website for my dad’s business at DrCummings.com. Nothing special really, just a standard brochure site with information about the business, pictures, etc. A year later I went off the college and didn’t think much of it until I received a frantic phone call from my dad: DrCummings.com was now a porn site and they had called the police to find the culprit.

    Explaining the site probably got defaced by some script kiddies, I fired up my FTP client to restore the site. Only, I couldn’t login — it was worse than I had expected. The domain name had expired and someone else registered it, likely owning to the fact that the longest serving professional porn actor shares our last name (and my full name, to be clear). To make matters worse, the domain name was prominently featured in my dad’s new Yellow Pages ad strewn about Tallahassee.

    Naturally, I did what any desperate kid would do and I pulled up the WHOIS registry to get the email address of the person that had registered the domain. I shot off a quick email to the new domain owner in New Jersey asking if it was for sale and how much he wanted for it. By a miracle, the domain owner quickly responded and said he would happily sell it for $1,000. I swallowed my pride and did a PayPal transfer spending $1,000 of my personal savings to fix the situation and move on. Everything was back to normal.

    The moral of the story: pay the extra money and do a five or 10 year registration for your domain and make sure the associated email address is correct.

    What else? Have you had this happen to you and how did it turn out?

  • 10 Awesome Startup Tweets from Box’s Aaron Levie

    If you haven’t been following Box’s Aaron Levie (@levie) on Twitter, you’ve been missing out. Levie has some of the most poignant and prescient startup quips anywhere. Here are 10 of my favorite startup tweets from @levie:

    1. The best disruptions reduce the cost of technology, expand its availability, and create more value for the ecosystem, not less. (link)
    2. The first era of enterprise software was won with sales, being closed, and complexity. This era: service, openness, and simplicity. (link)
    3. Sometimes things are the way they are and can’t be changed, other times it’s because no one ever tried. Your job is to find the latter. (link)
    4. The trick is to build a core competency narrow enough to be unique, yet broad enough to be compelling, and then constantly evolve it. (link)
    5. The only way to avoid disruption is to constantly do what you would do if you were just starting out. (link)
    6. Focus too much on the near-term and you won’t get tomorrow’s customers, focus too much on the long-term and you won’t get today’s. (link)
    7. Imagination > Resources = Disruptor.
      Resources > Imagination = Disrupted. (link)
    8. Spend only as much time thinking about the competition as it takes to beat them, and nothing more. (link)
    9. Your time horizon matters more than almost anything else as a startup. The longer you’re in the game, the more shots you can take. (link)
    10. Better to go after a bigger market without all the answers, than a smaller market without any questions. (link)

    @levie does an amazing job distilling startup strategy into 140 character sound bites. I’m looking forward to reading many more.

    What else? What are your thoughts on the startup tweets from Box’s Aaron Levie?

  • Atlanta Startup Village May 2013

    Tonight we have the monthly Atlanta Startup Village (ASV) meetup at the Atlanta Tech Village. Averaging over 220 attendees per month, ASV is now the largest monthly startup event in the entire Southeast.

    Here are the startups pitching tonight:

    I’m looking forward to the event and hearing the startups give their five minute pitch.

    What else? What are your thoughts on these startups and the Atlanta Startup Village?

  • Privacy Ideas for an Open Office Layout

    It turns out that the open office layout I mentioned last week is more controversial than I expected. The main culprits are noise, privacy, and ability to focus for an extended period of time. Since the post, a number of people have suggested different ideas to help provide more options for team members, especially when the phone is involved.

    Here are a few privacy ideas for an open office layout:

    There are a number of privacy options to try out and we’ll be experimenting shortly.

    What else? What are some other privacy ideas for an open office layout?

  • Ideas to Increase the Number of Full-Time Entrepreneurs

    When communities talk about needing more local capital, without acknowledging that capital is mobile and full-time entrepreneurs the bottleneck, there’s a disservice to the community. When a community increases the number of full-time entrepreneurs, more viable startups will emerge, and more net new jobs will be created. It isn’t purely a numbers game, but it is heavily correlated.

    Here are a few ideas for increasing the number of full-time entrepreneurs by way of programs that require a nominal amount of capital:

    • Instead of an annual $100,000 business model competition do a quarterly one that’s for $25,000 (a business model competition is a much better route than a business plan)
    • Find a local foundation that’s interested in economic development for the community and start a program that gives a $5,000 grant each week to a local full-time entrepreneur picked by the community using an idea exchange
    • Solicit a large local company that is heavily invested in the community to offer small loans ($10,000 – $50,000) to local entrepreneurs that wouldn’t otherwise qualify for them (e.g. the company or it’s community foundation becomes the guarantor of the loan)
    • Run a relocation campaign and provide incentives to startups in surrounding cities to relocate their company to increase startup density and create more net new jobs

    Increasing the number of full-time entrepreneurs is hard, but with more startups comes more opportunities for success.

    What else? What are some other ideas to increase the number of full-time entrepreneurs?

  • Mentor Madness – Making a Mentor Relationship Work

    Over the years I’ve been asked several times to mentor an entrepreneur. Assuming there’s a good personality fit, I always start with a quick meeting at my office or over lunch. My goal is to get a better understanding of the entrepreneur’s past, present, and desired future. My tendency is to be a problem solver such that I gather as much information as possible and then start looking for solutions, which isn’t always the best course of action.

    Here are a few thoughts on making a mentor relationship work:

    • Design a rhythm of interaction (e.g. a bi-monthly lunch or quarterly phone call)
    • Outline the goals and metrics both parties care about
    • Consider overall commitment period (e.g. let’s try this for a year and re-evaluate)
    • Look for coordinated mentoring arrangements in a professional group (e.g. YPO has a program with mentors from WPO)

    The best mentor relationships happen when both parties are actively engaged and adding value. Mentor relationships take time and effort to be most valuable.

    What else? What are some other thoughts on making a mentor relationship work?

  • Startup Community Idea – Weekly Lunch

    Seven years ago we started doing a weekly Friday lunch for our employees as a way to break bread as a team and to get to know each other on a personal level. It worked so well as a small company, we thought to try it out for the entire startup community with the large event space at the Atlanta Tech Village. So, 10 weeks ago we kicked it off with a good turnout and it’s grown ever since. For the last five weeks, we’ve had well over 100 people per week attend and we’ve even branded it as the Startup Chowdown.

    Here are a few notes on the startup community weekly lunch idea:

    • Charge a nominal fee (Startup Chowdown is $10 for people that aren’t a member of ATV) so that people who sign up are more likely to attend as well as to defray some costs
    • Find a sponsor, whenever possible, to pay for the food and drink in exchange for getting to talk for five minutes in front of the group
    • Cater the food and drink to keep the quality high and effort low for the people coordinating the event
    • Provide name tags or badges with different color labels to promote interaction (e.g. random groupings of people based on their badge color to help people meet new people)
    • Make the event open and inclusive but include a strict no solicitation rule so that people aren’t trying to sell during the event

    The weekly Startup Chowdown event is a great low-key way to bring a startup community together and would be successful in many cities.

    What else? What are some other ideas on having a weekly lunch to bring the startup community together?

  • Startup Style – Open Floorplans with No Private Offices

    In two weeks we’re moving into a newly renovated suite in the Atlanta Tech Village with a number of cool features like 12 foot ceilings, exposed duct work, indirect lighting, iPads outside all meeting rooms/phone booth rooms, seven 70 inch LED TVs mounted on the walls, and an open floorplan with no private offices. I’ve been a part of a number of cool, interesting offices but this will be the first time I’ve tried the open floorplan with no private offices.

    Design wise, we’ll have 40 desks total split into two large rooms with 25 and 15 desks respectively. Then, on the interior perimeter of the suite, we have three phone booths (tiny rooms for personal calls, cold calling, web demos, etc), four team rooms that support up to four people per room, and one board room that supports 14+ people. So, seven shared rooms for 40 people. Assuming 12 people are gone on any given day working from home, on vacation, at a trade show, etc. that leaves a ratio of one shared private room per four people, which feels like plenty right now (we can squeeze in more desks in the open floor plan eventually).

    Naturally, there are concerns about noise, personal space, and interruptions. We’ll have high quality white noise machines, sound boards, rollable partitions, and plenty of furniture to help with some of the noise but a loud conversation will still carry throughout the space. Part of the process will be unwinding general tendencies to collaborate right on the spot in the open area and instead move to the one of the break out rooms (the different rooms will be equipped with white board paint and iMacs to enhance their usefulness).

    Open floorplans with no private offices are still rare but slowly growing in popularity, especially in the startup world. It’s a new change for me and I’m looking forward to it.

    What else? What are your thoughts on open floorplans with no private offices?

  • Public Company SaaS Valuations

    Periodically I like to take a quick snapshot of the public company SaaS valuations (see 2012 and 2010). With Marketo having a big IPO last week and ChannelAdvisor just pricing their IPO today, it’s a good time to see where things stand compared to my last SaaS valuations post 13 months ago.

    • salesforce.com (NYSE:CRM) – customer relationship management SaaS company.
      Market cap: $26.82 billion
      Last reported quarter’s revenues: $834.7 million
      Employees: 9,800
    • NetSuite (NYSE:N) – enterprise resource planning (accounting, inventory, etc) SaaS company.
      Market cap: $6.58 billion
      Last reported quarter’s revenues: $91.6 million
      Employees:  1,953
    • Constant Contact (NASDAQ:CTCT) – email marketing for small business SaaS company.
      Market cap: $456.9 million
      Last reported quarter’s revenues: $68.2 million
      Employees: 1,162
    • LogMeIn (NASDAQ:LOGM) – remote machine access SaaS company.
      Market cap: $601.3 million
      Last reported quarter’s revenues: $37.4 million
      Employees: 565
    • LivePerson (NASDAQ:LPSN) – live chat SaaS company.
      Market cap: $505.6 million
      Last reported quarter’s revenues: $42.5 million
      Employees: 748
    • Responsys (NASDAQ:MKTG) – email marketing SaaS company.
      Market cap: $478.8 million
      Last reported quarter’s revenues: $48.5 million
      Employees: 866
    • Demandware (NYSE:DWRE) – ecommerce SaaS company.
      Market cap: $887.5 million
      Last reported quarter’s revenues: $20.5 million
      Employees:  298
    • ExactTarget (NASDAQ:ET) – email marketing SaaS company.
      Market cap: $1.6 billion
      Last reported quarter’s revenues: $88.9 million
      Employees: 1,673
    • Marketo (NASDAQ:MKTO) – marketing automation SaaS company.
      Market cap: $882.8 million
      Last reported quarter’s revenues: $19.7 million
      Employees: 373
    • ServiceNow (NYSE:NOW) – IT asset management SaaS company.
      Market cap: $4.9 billion
      Last reported quarter’s revenues: $85.9 million
      Employees: 1,077
    • Workday (NYSE:WDAY) – HR and financial management SaaS company.
      Market cap: $10.9 billion
      Last reported quarter’s revenues: $81.5 million
      Employees: 1,750

    SaaS shows no signs of slowing down as a growth sector and the market valuations reflect it. Salesforce.com continues to dominate in terms of size and scale with two of the newer entrants, ServiceNow and Workday, having massive revenue multiples and expectations of amazing growth.

    What else? What are some other thoughts on public company SaaS valuations?