David Cummings on Startups

Author: David Cummings

  • Ecommerce Mystery Coupons

    Last month there was a good bit of dialogue around the lack of innovation in the ecommerce world. Over half of the top 15 internet sites didn’t exist 10 years ago, yet only one of the top 15 ecommerce sites didn’t exist 10 years ago. There are lots of theories why but I’m not going into those now. I want to talk about something related.

    My wife was doing some online shopping, and is passionate about saving money and finding the best deals — she truly gets excited about it. One of the retailers she shops at was running a promotional campaign I hadn’t seen before: put in your email address to have a mystery coupon, worth up to 50% off, sent to you. This is brilliant. As I mentioned before, email is a currency that’s worth more than people realize. People love getting deals and playing games — a mystery coupon combines the two. I believe we’ll see more of these types of campaigns in the future.

    What are some analogous ideas in the B2B world? Do you think these types of campaigns will become more commonplace?

  • Thinking About the Perfect Office

    We’re a little over nine months out from finishing our current office lease. You see, historically, we’ve always done subleases, and we plan on continuing to do so. The big difference this time is that we plan on heavily customizing our space, unless an awesome creative space comes along, which isn’t likely in the financial district of Buckhead in Atlanta.

    A sublease usually only needs to be negotiated 3-4 months before assumption of the lease. But, when building out or modifying an office, it’s usually good to add another 3-4 months for pulling permits, doing construction, etc.

    Now, if you had a clean canvas and could paint a perfect of the perfect office, what would it look like? That’s a question we’ve been debating for a few days now. Here are some of the initial ideas:

    • Open, collaborative space with no cubes or individual offices
    • Lots of conference rooms and phone booths for privacy
    • Awesome kitchen with free food
    • Bright colors and modern decorations
    • Lounge area with sofas for hanging out
    • Multi-purpose area that can host events, all hands meetings, etc
    • Balcony or patio outdoors
    • High in the sky with great views or a loft style space with tall ceilings
    • Shower and relaxation room

    What else? What should we add to the list? Do you have any good examples?

  • Where do Entrepreneurs Hang Out

    I was talking with Mike Landman, the incoming President of Entrepreneurs’ Organization (EO) Atlanta, earlier today about how to spread the word and recruit more members into EO. EO is the organization that entrepreneurs who’ve been in business for a few years, and have over a million dollars in revenue, wish they would have known about all along. It’s an exclusive non-profit for entrepreneurs to network with other entrepreneurs with a strict non-solicitation rule, participate in peer-to-peer experience sharing forums, and learn from some of the best speakers around.

    So, our discussion today was about where entrepreneurs hang out, and how to reach them. We identified the obvious places:

    What else? What are some other places entrepreneurs hang out in Atlanta?

  • Entrepreneurs that Don’t Adapt

    I love talking to entrepreneurs and hearing about progress, current challenges, and the vision for the business. Naturally, I have one or two ideas on their business, and know that many of my ideas are worth what they cost ($0). So what’s the challenge? The challenge is entrepreneurs that keep talking about their issues and don’t make progress. Entrepreneurs need to adapt.

    Once I hear the same issue two, three, and even four times from an entrepreneur I start to get disillusioned with trying to help. My mentality is to tackle an issue head-on and start talking about progress, not about the issue that hasn’t been addressed yet.

    Any advice? How do you deal with people that talk about the same problems, yet aren’t making progress?

  • Marketing in a Web World

    I spent time today talking with the marketing team of a successful financial-related technology company in town. It was a good opportunity to dig into their online marketing strategy — something they are in the progress of moving from primarily off-line to almost all online. Here are the categories they broke things into:

    • Buying leads (e.g. BuyerZone, VendorSeek, etc)
    • SEO/natural search
    • Paid search
    • Email
    • Webinars
    • Display ads
    • Original content sites
    • Affiliates

    I think online marketers often get focused on the most obvious categories — like paid search, SEO, and email — and don’t allocate enough dollars to experiment with other areas like buying leads or sponsoring webinars. My recommendation is to carve out a piece of the annual budget, say 5- 10%, and allocate it to experimenting with different options.

  • Develop a Routine with Potential Investors

    Say you’re thinking of raising money from investors (angels or VCs), when’s the best time to start the process? This is a trick question. The answer: when you don’t need the money.

    Hopefully you’ve heard this before, but investors like to invest when things are going so well that you don’t need the money. Why? You’re doing great and have mitigated much of the business risk, presumably by being profitable and consistently signing new customers. If you’re not at this stage of the business, and an investor expresses interest but isn’t ready to invest, I’d recommend developing a routine as follows:

    • Ask permission to provide periodic updates, which is a great way to show progress and dependability
    • Choose a timeframe for the updates (e.g. quarterly) and stick to it
    • Keep the updates short and to the point, with meaningful information (e.g. number of customers signed, revenue growth, etc)
    • Always ask if it is OK to continue to provide these updates as you don’t want to be burdensome

    Have you tried this? Does it work for you? What else would you recommend?

  • Strong Startup Categories for Atlanta

    After looking at the Atlanta Logos (atllogos.com) site, which lists hundreds of Atlanta startups in different stages, I realized we can do a better job of highlighting the categories, or markets, that Atlanta has a strong base. Historically, people tend to think of Atlanta as a strong market for B2B companies, Internet security (ISS), and logistics (UPS, Delta). Here are some other categories with a strong local base of companies:

    Oh, and Atlanta has the largest number of data centers of any metro area in the country. I encourage people to talk about these other categories, in addition to the usual suspects.

    What are some other startup categories with a strong base of companies in Atlanta?

  • Breaking Bread as a Team

    For the first six years at my company we’d recognize birthdays, or a big customer win, by taking the whole office out to lunch to celebrate as a team. After a while, this became such a frequent occurrence that I decided to have catered lunches delivered to our office every Friday, 52 weeks a year. We’ve been doing it for over three years now and it is one of the best things we do. Here are a few reasons why it is so beneficial:

    • We do it on Fridays, giving everyone a chance to end the week on a good note and talk about what’s going on in their lives
    • Breaking bread with team members is a great way to get to know each other on a more personal level, leading to stronger relationships and more trust
    • We encourage team members to bring in their spouses or kids, creating a family atmosphere
    • People love free food and to debate which places are best to order from (we usually rotate between a few different places, and change up those places every quarter)

    I didn’t know how successful it would be when we started, but having “Free Food Fridays” has been great and I highly recommend doing something similar. You won’t regret it.

  • Soft Drinks and Software

    Comparing soft drinks and software seems like a dead end road. For me, I like looking at analog analogies whereby something from the physical world is compared to something in the digital world in order to look for patterns or themes. The soft drink industry provides several examples that are relevant to the software industry:

    • Once established as the standard in a market, monopoly pricing and power emerge (e.g. Coke for soft drinks, Microsoft for OS, and Google for search)
    • Distribution (shelf space for soft drinks and customer acquisition costs for software) become one of the main drivers for success
    • The standard soft drink flavors at restaurants are like the standard apps that come with the operating system — the casual person takes whatever comes is already there
    • There are a handful of mainstream products but mostly niche offerings

    What am I missing? What are some other ways the soft drink market is like the software market?

  • EO Accelerator Strategy Day Tomorrow

    Tomorrow is Strategy day for the EO Accelerator program in Atlanta. Strategy day, in our context, is an eight hour education workshop talking about topics like:

    To many people, it might sound like fluff. To entrepreneurs that have been in the trenches building a company with employees, these items are extremely important.

    One of my colleagues in the program sent this great article for entrepreneurs working on mission statements, written by Dan Heath of Made to Stick fame: How to write a Mission Statement that doesn’t Suck.