David Cummings on Startups

Author: David Cummings

  • Recruiting a Technical Co-Founder

    I’ve talked previously about the importance of having a technical co-founder. A friend of mine asked me today if I had any tips or thoughts on recruiting a technical co-founder. Here are a few ideas on finding one:

    Now, once you’ve identified a couple candidates, recruiting the person is even harder. Here are some recruiting ideas:

    • Offer a contractor period of one to three months to try out working together
    • Compensate with significant equity (e.g. 5 – 20%), but have it vest over four years (so that there’s incentive to stay) and include a one year cliff (meaning if it doesn’t work out in the first year, no equity is granted)
    • Try recruiting two engineers that want to work together since they already trust each other

    Finding and recruiting a technical co-founder is tough. Good luck!

  • Time for Quarterly Performance Reviews

    Yes, I’ve written about quarterly performance reviews several times in the past but they are so valuable it is important to reiterate them. We like to ask four simple questions, adapted from a Patrick Lencioni book:

    • What did you accomplish?
    • What are you going to accomplish next?
    • How can you improve?
    • How are you following the values (provide anecdotes)?

    Quarterly performance reviews provide a great time to spend an hour with each direct report and manager, recapping the quarter and talking about the future. It really is a valuable time to reinforce company alignment. I recommend quarterly performance reviews.

  • Joining the Atlanta Tech Startup Community

    In the past week I’ve met with two different entrepreneurs that said they were interested in getting involved with the Atlanta technology startup community. Of course, I had one or two ideas on things they can do. Instead of emailing a bunch of resources around I decided to enumerate them here. Let’s go:

    • ATDC is the mothership. Get involved.
    • TAG has tons of networking events related to technology (not necessarily startups)
    • Shotput Ventures is the accelerator seed fund
    • Mike Blake has the best post on joining the VC scene (most is applicable to tech entrepreneurs who don’t want to raise VC as well)
    • TechDrawl is the Southeast specific technology startup blog (think localized TechCrunch)
    • ATLSE.com (Atlanta Startup Entretpreneurs) has a bunch of random stuff (events, people on Twitter, organizations, etc)
    • AtlanTech is the local business journal tech blog where Urvaksh fights hard for the scoop

    Needless to say it is easy to get involved and to start meeting people. Do it.

    Did I miss anything?

  • Social Media Value

    In the last week I’ve heard two different successful entrepreneurs say they don’t get Twitter, thinking it is just a vacuum of trite platitudes. Of course, I beg to differ. There’s a chicken and egg problem with new users of platforms like Twitter whereby a good bit of value comes once you have a decent number of followers to converse with. Here are a few examples of value from social media:

    • Seeking recommendations (e.g. a friend wanted to get a hard-to-find item quickly, called several stores with no luck, and posted it online and had an answer in 10 minutes)
    • Monitoring conversations about competing or complementary product names and chiming in with value, including that your product should be evaluated (this is looking for leads — it works)
    • Learning more about people before you meet them (e.g. for a networking lunch) so that you can develop a stronger relationship and have a better conversation faster

    My recommendation is to start using social media and join the conversation. There’s a good bit of value, but it doesn’t happen without effort.

  • Speaking about Entrepreneurship

    Tomorrow I’m giving my Iterate or Die talk at a Georgia State entrepreneurship class. I’ve given the talk several times now at Emory and once at a TAG/ATDC event, so it is pretty smooth. My main emphasis is that entrepreneurial success, defined as building a million dollar plus company, comes after most of the following are met:

    • Tons of hard work
    • Never giving up
    • Belief in the vision
    • Constant iterating and pivoting
    • Luck (very important!)
    • Market timing

    Most of these sound like common sense, and they are, but it can’t be reiterated enough: it isn’t easy. Fortunately, the journey makes it worth it.

  • Fighting Complexity

    One of the challenges I didn’t expect to face as my company grew is how hard it is to fight complexity in a variety of areas. I try to follow the keep it simple mantra throughout everything we do, and find myself saying that on a regular basis. Here are some areas that I see continually see requests for complexity creep:

    • Metrics and KPIs
    • Product functionality
    • Policies and procedures

    My recommendation for entrepreneurs is to constantly ask the question will this add significant value and be applicable 80% of the time when confronted with adding more complexity. Most of the time, the value isn’t there.

  • Shotput Ventures and ATDC

    I’m excited to announce that Shotput Ventures and the Advanced Technology Development Center (ATDC) at Georgia Tech have teamed up for the Shotput 2010 class of companies. Here are some aspects of the partnership:

    • Shotput companies will be ATDC member companies
    • The ATDC Seed Fund is investing in the Shotput fund
    • The Shotput companies will have office space at the ATDC
    • The weekly dinners will be held at the ATDC
    • Shotput companies will be able to participate in CapVenture

    Applications for Shotput 2010 are now open. Please apply.

  • LinkedIn Who’s Viewed My Profile

    In talking with a friend of mine two days ago about how he markets his five person consulting firm, he told me one of the best things he’s found to track how well he’s doing is to check the LinkedIn Who’s Viewed My Profile feature on a weekly basis.

    The idea is that he’s always reaching out to executives and decision makers within his niche to build his pipeline. One of the major challenges is to determine who’s interested at the early stages of the deal cycle, and he doesn’t have enough content on his website to justify a marketing automation product to track prospects. With LinkedIn, he doesn’t know the individual person at the company that has looked at his profile, but he can see if one or more people at a specific company pulled up his profile. If they have, he then focuses more effort on following up with his contacts at that specific firm.

    Use technology and social media to become a more effective marketer.

  • Email as Currency

    I was talking with an entrepreneur earlier today and the conversation centered around strategies for monetizing highly specialized content. Her company provides niche business services and supporting collateral (books, white papers, worksheets, etc) to a valuable audience. The question was as follows: should I sell my content or give it away for free?

    In the end, my advice was to go the free route for the following reasons:

    • The conversion rate for unique visitors to buyers of digital content (e.g. a PDF for $20) is likely 1 in a 1,000, so it’ll take a ton of visitors to make much money
    • Most people don’t like to buy content online, and pulling out a credit card to purchase a PDF results in tons of friction
    • If instead of 1 in a 1,000 that spend $20, you give the content away for free in exchange for providing a valid email address that opts into an occasional newsletter (no more than 2x a month), the number of emails you earn is 20 in a 1,000
    • With opted in email addresses, and thus a targeted audience, new articles and content can be sent out with sponsored, context-relevant advertising, that will command a high quality rate (e.g. $5 – $10 per email of annually), resulting in significantly more revenue than the digital content route
    • The biggest value of focusing on email as currency is that not only is the revenue higher, but that it is recurring revenue, which is one of the best business models

    Selling digital content appears to be an easy way to make money online, but I believe that building a loyal, opted-in audience around the content is a superior strategy for value creation.

  • Milestones for New Sales Reps

    Hiring an effective sales team is one of the most difficult challenges for a technology entrepreneur. It isn’t that there aren’t good sales people out there, it is just that sales is usually foreign to technologists, and like non-technical people trying to hire technical people, it is hard to determine who will be successful. Sales people can be even more challenging to figure out because by their very nature they are good at selling, especially themselves.

    One of the best things to do as part of hiring a new sales person is to establish success milestones. These are milestones for the sales rep to achieve during their first six months to a year, assuming you have a consultative sales process with a decent learning curve. Here are some categories to measure:

    • Call conversations logged
    • Demos scheduled and completed
    • Opportunities created
    • Opportunities closed won (sales made!)

    Of course, these are standard metrics to track for sales people. What I’m emphasizing here is to have specific numbers of each that are required to be met for every 30 day period to stay on the bus until quota is achieved. What gets measured gets done.