David Cummings on Startups

Author: David Cummings

  • Annual Think Big Question for Entrepreneurs

    Bootstrapping technology entrepreneurs are a special breed, especially once they cross the desert to profitability. There’s a real challenge that occurs when attempting to shift away some of the scrappiness inherit in a bootstrapped culture to being more aggressive with resources so as to maximize growth. Here’s one question I like bootstrapped startups to think about annually:

    Where would you direct your resources if you had an extra $1M/$10M/$100M that you had to spend in the next 18 months?

    Thinking bigger, especially when it comes to resources and money, isn’t done frequently enough with bootstrapped startups. With this question, the goal isn’t to encourage entrepreneurs to go about raise institutional money, rather, the goal is to stretch the mind and contemplate putting a significant amount of money to work in a short period of time  in new ways. Thought-provoking questions like this are good for entrepreneurs on a regular basis.

    What else? What are some other questions bootstrapped entrepreneurs should think about annually?

  • 5 Highlights of the Atlanta Technology Community

    With the Atlanta TechCrunch meetup next week on July 9th at Sweetwater Brewery, it’s a good time to talk about five highlights of the Atlanta technology community. The technology community has improved tremendously over the 10 years that I’ve been here, with social media and general maturation being a big part of it.

    With social media, especially Twitter, ideas spread faster and conversations are public. Several years ago the Atlanta technology community had more of an old boys network feel where it mattered who you knew and introductions were critical. Now, events like Startup Riot bring together hundreds of people on a regular basis and the hot startups are highlighted at the event as well as over Twitter, where the community participates.

    Here are five highlights of the Atlanta technology community:

    • ATDC – the oldest and most prestigious publicly funded technology incubator that supports over 400 startups
    • Flashpoint – startup engineering accelerator sponsored by Georgia Tech that takes teams through a 90 day program
    • Atlanta Technology Angels – member-lead organization that is actively doing seed stage and early stage deals
    • Venture Atlanta / Startup Riot – Venture Atlanta is the largest annual venture conference in the Southeast and Startup Riot is the largest annual seed stage startup conference in the Southeast
    • Georgia Tech – the largest engineering school in the country, based on number of engineering graduates per year, and in the top five academically

    As of July 4th, 2012, 778 people are signed up for the Atlanta TechCrunch meetup. Think about that for a second — there’s a good chance 1,000 people will sign up for a single tech startup event in Atlanta. Impressive! There are fewer than a dozen cities in the United States that would have that kind of volume for a tech startup event.

    The Atlanta technology community has made amazing progress in the past 10 years, and still has a ways to go. Things like anchor billion dollar technology companies, more risk-loving seed stage capital, and many more success stories will help Atlanta get to the next level. Thankfully, a strong foundation is already in place and getting better every day.

    What else? What are some other highlights of the Atlanta technology community?

  • Balancing Product Expectations with Constituents

    Software-as-a-Service (SaaS) is great from an engineering perspective because of the economies of scale from a low-friction release process (release early and often!) as well as controlling all aspects of the datacenter/cloud servers (more time is spent on the product instead of issues outside of your control found with installed enterprise software). With great power comes great responsibility. One of the biggest challenges is balancing expectations from all the different constituents involved like customers, marketing, sales, prospects, analysts, etc.

    Here are a few tactics for balancing product expectations with constituents:

    • Find the right trade-off between committing to certain features with a timeline and maintaining the flexibility to quickly adjust the priorities
    • Consider using tools like an idea exchange (e.g. UserVoice) so that customers can submit and vote on features they want
    • Develop a customer advisory council and solicit feedback from them in-person or over the phone once per quarter
    • Share a product vision and high-level future features once per year at a user conference

    Balancing product expectations with constituents is difficult. With so many different demands and opinions it’s challenging to make everyone happy. The key isn’t that everyone needs to be happy, but rather that the product has a strong vision in general and everyone understands where things are headed and why it’s headed there. Clarity and direction is key.

    What else? What are some other tactics for balancing product expectations with constituents?

  • When Tuck-in Acquisitions Make Sense for Startups

    While we haven’t done any tuck-in acquisitions, I’ve talked to a number of entrepreneurs who’ve made small acquisitions for their startups with success. Tuck-in acquisitions, by their name, are smaller acquisitions that open up new opportunities or jump start a strategy change. The idea with these types of acquisitions isn’t to bet the farm, but rather to take advantage of an opportunity.

    Tuck-in acquisitions make sense for a variety of reasons:

    • Key employee talent is desired and the tuck-in acquisition brings it on board (e.g. an acqui-hire)
    • Cross-sell/up-sell of an existing customer base with little risk
    • Startup wants to introduce a new product without distracting the core engineering team working on the mothership
    • Time to market for an opportunity that is moving quickly
    • Geographic expansion, especially if an office is desired in a certain city

    Tuck-in acquisitions, even if it is acquiring assets, are a good way for startups to grow faster and do it in a way that is more of a known quantity. Time and money are always constraints making tuck-in acquisitions more desirable if the capital or equity is available.

    What else? What are some other reasons tuck-in acquisitions make sense for startups?

  • Ideas for Making Remote Employees Feel More a Part of the Startup

    As a startup grows, the demand for specialized skills grow as well. With significant talent shortages for key technology positions, more startups and companies are resorting to remote employees as a long-term solution. Working in a different geographic location from the majority of the team makes it difficult to feel the same as a team member that’s in headquarters. It’s important for entrepreneurs to recognize this and go out of their way to make it the best situation possible.

    Here are a few ideas for making remote employees feel more like they’re in the home office:

    • Fly the team member to headquarters for one week per quarter to reconnect and celebrate with the team
    • Incorporate Google Hangout or Skype Video into the weekly routine so that there’s a face-to-face connection (e.g. staff meetings, all hands meetings, etc)
    • Coordinate trade show opportunities so that remote employees have a chance to work the booth or meet customers with other team members

    Several or our employees work full-time from home and these techniques have worked well. With technology, effort, and the right personality types, remote employees are just as happy and effective as in-house team members.

    What else? What are some other ideas for making remote employees feel more a part of the startup?

  • Delineating and Segmenting Sales Teams

    In a small, fast-growing market, one of the best and easiest things to do with an inside sales team is to make it a free-for-all such that the sales reps can aggressively go after any business they want that isn’t already being called on by a co-worker. The idea is that there’s huge potential and the reps should have the autonomy to figure out what works best for them, especially in a situation with no cap on commission.

    As the market and the team grows, many times it becomes necessary to delineate the sales team based on one or more factors. Here are some of the more common examples to segment sales reps:

    • Geographic territories (e.g. regions, state, cities, zip codes, etc)
    • Industries (e.g. technology, healthcare, government, etc)
    • Company size (e.g. companies at or below 250 employees and companies above 250 employees)
    • Deal size (e.g. deals at or below $10,000 and deals above $10,000)

    One of the worst things a sales rep can hear is that their comp plan is changing and their territory is shrinking (often happens when a startup is growing fast and adding more reps). My recommendation is to keep things simple as long as possible and introduce more complexity and specialization as feedback and data make it painfully obvious that there’s a better way.

    What else? What are some more ways to delineate and segment sales teams?

  • 12 Core Principles from How to Win Friends and Influence People

    After finishing the book How to Win Friends and Influence People by Dale Carnegie, I now highly recommend it to entrepreneurs. The book has a tremendous number of short anecdotes and ideas about how to be a better person. In the latter part of the book the author enumerates 12 core principles to win people over for your way of thinking:

    • The only way to get the best of an argument is to avoid it.
    • Show respect for the other person’s opinions. Never say, “You’re wrong.”
    • If you are wrong, admit it quickly and emphatically.
    • Begin in a friendly way.
    • Get the other person saying “yes, yes” immediately.
    • Let the other person do a great deal of the talking.
    • Let the other person feel that the idea is his or hers.
    • Try honestly to see things from the other person’s point of view.
    • Be sympathetic with the other person’s ideas and desires.
    • Appeal to the nobler motives.
    • Dramatize your ideas.
    • Throw down a challenge.

    Entrepreneurs should put this book on their list and embrace the 12 core principles.

    What else? What are your thoughts on the 12 core principles?

  • Visually Representing a Corporate Culture

    Recently I had the opportunity to meet with a startup that is very focused on corporate culture. Now, this is a growth stage company that many would say have moved beyond startup phase but they still had a number of startup elements.

    One of the many things that impressed me is how they visually represented their corporate culture throughout their office. Here are some ways they present their culture in a more physical manner:

    • Creating a logo or graphic that represents the culture, as separate from the company logo
    • Incorporating the visual representation into standard office items that all employees use like pens, notebooks, cups, etc
    • Painting the walls and other physical building elements with the graphic

    Many companies put their values or mission statement on a wall for team members to read on a regular basis but miss the fact that for a culture to care about these things they need to be alive on a daily basis. By visually representing a corporate culture throughout the office with many different mediums, and walking the walk, the culture is reinforced and significantly strengthened.

    What else? What are some other ways to visually represent a corporate culture?

  • Leaders Are More Effective When Liked from How to Win Friends and Influence People

    One of the most popular self-help and professional development books available is Dale Carnegie’s How to Win Friends & Influence People. Amazingly, the book was published in 1936 and is still supremely relevant today. As part of our leadership development program, we’re doing a book club with this being the next book on our list.

    For leaders, the book is a must read. Yes, it is commonsense but commonsense that needs to be thought through and digested on a regular basis. Leaders are more effective when they are liked and respected — team members generally want to work for, and with, people they like.

    From the book, here are six ways to get people to like you:

    • Become genuinely interested in other people
    • Smile
    • Remember that a person’s name is to that person the sweetest and most important sound in any language.
    • Be good listener. Encourage others to talk about themselves.
    • Talk in terms of the other person’s interests.
    • Make the other person feel important — and do it sincerely.

    How to Win Friends & Influence People should be on the list for all entrepreneurs and leaders looking to get better at what they do and how they do it.

    What else? What are some other ways to get people to like you?

  • Transparency of Information in a Startup

    One of the best ways to built trust in a startup is through transparency of information. The author Jack Stack argues for extreme transparency in his book The Great Game of Business. Transparency, to me, is a great way to get everyone on the same page company-wide, align interests, and engender trust. Communication of information, especially information that changes frequently, is one of the more difficult parts of building transparency into the culture.

    Here are some techniques to help facilitate transparency of information in a startup:

    • LCD scoreboard in the lobby with near real-time information on progress towards goals
    • Simplified One Page Strategic Plan updated and rolled out to all team members quarterly with financial information like revenue
    • Bottom-up daily check-ins throughout the organization
    • Anonymous town hall questions where nothing is off limits
    • Discourse and explanations around company changes as opposed to edicts with no reasoning

    Creating an environment of transparency is tough and requires commitment from the top down. These techniques and methodologies help set the tone and promote transparency.

    What else? What some other ways to promote transparency of information in a startup?