David Cummings on Startups

Author: David Cummings

  • Video of the Week: How Airbnb designs for trust | Joe Gebbia

    Joe Gebbia, co-founder of Airbnb, gave a talk at the Atlanta Tech Village a couple years ago and did a great job sharing their founding story. For our video of the week, hear Joe’s TED Talk titled How Airbnb Designs for Trust. Enjoy!

    Joe Gebbia, the co-founder of Airbnb, bet his whole company on the belief that people can trust each other enough to stay in one another’s homes. How did he overcome the stranger-danger bias? Through good design. Now, 123 million hosted nights (and counting) later, Gebbia sets out his dream for a culture of sharing in which design helps foster community and connection instead of isolation and separation.

  • Product/Market Fit: Entrepreneurship 101

    The topic of product/market fit has come up several times recently. More and more entrepreneurs are beginning to understand that in the early stages of getting a startup off the ground, the most important thing is building something that people want. It seems so simple but in reality it’s incredibly difficult. If you haven’t already, go read The Pmarca Guide to Startups and learn more about product/market fit (incredibly good content!).

    Here are a few thoughts on product/market fit:

    One of the most important concepts first-time entrepreneurs need to learn is product/market fit. Read The Pmarca Guide to Startups and the additional thoughts outlined above.

    What else? What are some more good resources on product/market fit?

  • Top Entrepreneurial Trait: Continuous Learner

    Yesterday I was giving a talk to a group of entrepreneurs and one asked the question “what’s an entrepreneurial trait you look for that isn’t talked about as much?” Of course, traits like resourceful, persistent, and dreamer are common in entrepreneurs. One trait that I’m especially fond of is the continuous learner. This is someone who constantly seeks out new ideas, best practices, and ways to get better.

    Here are a few ways to gauge a potential continuous learner:

    • Are they consistently recommending books, blogs, or apps that they like?
    • Do they regularly ask what lessons were learned from different experiences?
    • Do they attend industry conferences and events for networking and content?
    • Do they share relevant ideas and best practices without being asked?
    • Are they collaborative and eager to learn, in general?

    The next time you’re meeting with an entrepreneur, ask yourself if they’re a continuous learner. Some of the most successful entrepreneurs I’ve met truly love learning and seek to learn something new everyday.

    What else? What are some more thoughts on this idea of being a continuous learner as a top entrepreneurial trait?

  • 5 Board Meeting Takeaways

    Earlier this afternoon I attended the board meeting of a fast growing tech startup. Board meetings are a great time to step back and look at a business from a high-level perspective while working through what is, and isn’t, going well. After reflecting on today’s meeting, I had five takeaways:

    • Forward Looking – It’s easy to talk about what just happened last quarter because it’s fresh on the mind. While it’s important to review, most of the time should be spent forward looking.
    • Strategy, not Tactics – Similar to reviewing what happened, it’s critical to spend the majority of the meeting on the strategic aspects of the business and not tactical, day-to-day elements (whenever possible).
    • People, People, People – As much as we technologists like to think it’s all about the latest releases, the reality is that 95%+ of what makes a startup successful is the people element. Board meetings are no different in that a significant amount of time is related to the people component.
    • Mission, Vision, and Values – Just like mission, vision, and values need to be reviewed constantly with team members, so too do they need to be reviewed at every board meeting. Everyone needs to buy in to them and know them by heart.
    • Plan It, Do It, and Review It – One important aspect of a board is to review the plan, follow the progress, and review the results. Put another way, the board needs to provide accountability. The management team needs to lay out what they’re going to accomplish and then provide updates on their progress against that plan. Finally, the board needs to ask the hard questions.

    Board meetings are an important part of the entrepreneurial journey and should help entrepreneurs achieve their goals.

    What else? What are some other takeaways from board meetings?

  • Find an Entrepreneur Community

    One of the most important things an entrepreneur can do in their journey is find a community. The high highs and low lows of being an entrepreneur are incredibly stressful. By finding a community of like-minded entrepreneurs that are eager to share ideas and the ups and downs, success is accelerated and emotions modulated.

    Here are a few ideas for finding an entrepreneurial community:

    • Start with the local EO chapter ($1M+ in revenue requirement) or EO Accelerator ($250k+ in revenue requirement)
    • Look to local colleges and universities as they often have entrepreneurial groups or incubators
    • Find a local tech entrepreneurship center like the Atlanta Tech Village
    • Research the central non-profit for entrepreneurs in the region and get involved

    Finding an entrepreneur community is immensely valuable and should be high on the list of things to do when building a company.

    What else? What are some more thoughts on finding an entrepreneur community?

  • Onboarding New Customers

    While most people like to talk about the software in Software-as-a-Service (SaaS), the service element of SaaS is just as important. One area that’s especially critical is onboarding new customers. There’s a huge variation in skill level of users, general sophistication of the customer, and preparedness for a new product.

    Here are a few thoughts on onboarding new customers:

    • Incorporate in-app functionality like a getting started wizard to guide the user through their initial experience
    • Provide an easy way for users to ask questions through a support form or live chat
    • Build an onboarding playbook (similar to a sales playbook) that outlines the whole process
    • Templatize the onboarding steps using a project management system like Trello, Asana, or Basecamp
    • Survey new customers about their experience as soon as the onboarding is finished using SurveyMonkey

    Successfully onboarding new customers is hugely important and often overlooked early on in the entrepreneurial journey. Invest in onboarding early and benefit from happier customers and stronger relationships.

    What else? What are some more thoughts on onboarding new customers?

  • 9 Simple Weekly Metrics for Seed Stage SaaS Startups

    There’s always a balance between tracking too many metrics and too few metrics. What I’ve found is that most seed stage entrepreneurs aren’t diligent enough in tracking simple metrics on a weekly basis. Of course, the seed stage is mostly about finding product/market fit and finding a repeatable customer acquisition process (see the four startup stages in eight words), so most activities should be customer focused.

    Here are nine simple metrics seed stage SaaS startups should track weekly:

    • Cash on hand
    • Weekly burn rate
    • Monthly recurring revenue
    • New customers
    • Lost customers
    • Marketing qualified leads
    • Sales demos
    • Active sales opportunities
    • Customer net promoter score (NPS)

    Cash on hand, weekly burn rate, and monthly recurring revenue are the three most important metrics as they indicate how many weeks left until running out of money and how fast the top line is growing. Configure a basic Google Sheet or goal/metric tracking system and record these nine simple metrics every week.

    What else? What are some other metrics that should be tracked weekly for seed stage SaaS startups? Here’s a more comprehensive list of SaaS metrics to track.

  • Video of the Week: Startup Secrets – Turning Products into Companies

    For our video of the week, watch the Harvard i-lab | Startup Secrets: Turning Products into Companies. Enjoy!

    From YouTube: You’ve figured out your value prop, you’ve got a great product under development. Now what? How can you develop a roadmap to build a company? VCs often qualify deals as being a “feature” a “product” or a “company.” Which do you have and how will you get where you want to go? During this session we’ll discuss how to think about designing your product as a foundational element of your business. Think beyond UX and Architecture to Whole Product, Ecosystems, and Strategic partners. Formulate how to design your go to market strategy and business model into your product with a modular architecture, distinctive packaging and a frictionless approach.

  • Sell in Advance of the Roadmap

    Last year I was talking to an entrepreneur who was recounting how they had just lost a big deal they thought they were going to win. Curious, I asked for more details. The prospect was pitched by a competitor where the competitor spent an hour doing a vision call talking about their direction, upcoming features, and general approach to the market. This call, which was about what was potentially going to happen, sealed the deal.

    Entrepreneurs need to sell in advance of the roadmap.

    Meaning, have a vision for the future and sell features and benefits that are coming soon, not purely what’s there today. Now, this can get tricky as we’ve all had sales people promise us things that were not true. That’s not the idea here. The idea is that when prospects buy a SaaS product, they’re not only buying what the product can do today — they’re also buying what the product will do tomorrow. Find the right balance between making sure the prospect will get value right away and promising things to come.

    Don’t underestimate the importance of selling in advance of the roadmap — customers are also buying a vision of the future.

    What else? What are some more thoughts on the idea of selling in advance of the roadmap?

  • Modern BANT Sales Qualification

    Jacco Van der Kooij has a great article up titled BANT Sales Qualification for a New Era. BANT (budget, authority, need, timeline) has been around for decades as a way to qualify sales prospects. Personally, I’ve used BANT for many years as it’s logical and a great starting point in the absence of a more specific methodology (most sales people don’t use any methodology). Only, Jacco argues that BANT needs to be modernized based on factors like SaaS being less of an upfront expense so budget isn’t as big of a concern as it used to be, decision making often goes through a process, as opposed to a specific person, and more. Here’s Jacco’s modern BANT with a new order:

    • N = Need = Impact on the customer business
    • T = Time-line = Critical event for the customer
    • B = Budget = Priority for the customer
    • A = Authority = Decision Process the customer goes through

    Every entrepreneur needs to go read BANT Sales Qualification for a New Era right now.

    What else? What are some more thoughts on modern BANT sales qualification?