David Cummings on Startups

Category: Entrepreneurship

  • Investment Readiness Level

    Last night Keith McGreggor tweeted a picture laying out the characteristics of the Investment Readiness Level (IRL). After seeing it, I was impressed as seed and early stage angel investors often invest based on the team, the market, and gut feel — a very unscientific process. With the Investment Readiness Level, there’s a barometer of progress that brings much more rigor to the evaluation.

    Here’s the Investment Readiness Level, based on the picture of the slide:

    • High-fidelity MVP
    • Sufficient market opportunity
    • Left side of canvas validation
    • Right side of canvas validation
    • Product / market fit
    • Problem / solution validation
    • Low-fidelity MVP
    • Canvas
    • Hypotheses

    So, the next time an entrepreneur is trying to raise money, have them evaluate their Investment Readiness Level using these attributes.

    What else? What are your thoughts on the Investment Readiness Level?

  • Fear of a Dominant Vendor

    One of the most common refrains I hear from people when talking about a new startup in the Village  is “doesn’t so and so already do that?” Why, yes, you’re right, XYZ company does do a similar thing as the new startup. So, then, why is the new startup doing what they’re doing?

    Answer: they don’t fear the dominant vendor.

    Let me explain further:

    • Large, fast growing markets have room for multiple vendors as most aren’t winner-take-all or winner-take-most
    • Markets have segments like small-to-medium sized businesses and large enterprise customers, which have different needs
    • Vertical specialization is the next wave of successful startups, so even if the new startup looks like the dominant vendor, the vertical specialization creates significant differentiation
    • Incumbents, especially as they get larger, move slower and slower creating room for startup to outmaneuver them (speed and ability to stay close to the customer are two major reasons startups win)

    So, the next time someone brings up a dominant vendor in a category, think about some of the reasons why a new startup can carve out a successful space in the same field.

    What else? What are some other reasons startups can be successful in the face of a dominant vendor?

  • Teddy Roosevelt on Entrepreneurs: The Man in Arena

    Tonight I had the opportunity to attend a wonderful retirement celebration for Sam Williams of the Metro Atlanta Chamber. Sam has been an amazing leader of the Atlanta community for two decades starting with Central Atlanta Progress prior to the Olympics and through the Chamber for 17 years. At the end of his remarks he quoted Teddy Roosevelt’s famous speech titled “The Man in the Arena”:

    It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

    Entrepreneurs and other leaders that put themselves out there to make a positive impact best exemplify the man in the arena.

    Thank you to Sam for being the man in the area for so many years and helping our city take great steps to realizing our potential.

  • 4 Sales Rep Activity Metrics that Matter

    One of the repeated themes at last week’s Ultimate Sales Conference was around measuring sales rep activity metrics. Sales is an unusual position in that the desired results and expectations are so easy to measure: revenue from deals. While measuring a rep based on quota makes sense, it’s also important to measure sales rep activity since it’s a great proxy for deals.

    Here are four sales rep activity metrics that every sales manager should measure:

    • Calls Logged – The phone is not dead. In fact, selling over the phone and cold calling is extremely effective.
    • Meaningful Conversations – Just because calls are being logged it doesn’t mean the sales rep is productive. More importantly, making calls is not enough as reps need to reach people on the other end and have meaningful conversations
    • Demos / Appointments Completed – Following the logical progression, meaningful conversations with the right people should turn into demos or appointments, and completed meetings are more important than scheduled meetings.
    • Opportunities – Often the last step before signing a deal, an opportunity should be created once some defined criteria are met, typically budget, authority, need, and timeline (BANT).

    What gets measured gets done and these four sales rep activities are key to a productive sales team and management visibility into future revenue.

    What else? What are your thoughts on these sales rep activity metrics and what are others that you like?

  • Takeaways from the Ultimate Sales Conference

    Last Thursday the Atlanta Tech Village hosted the first Ultimate Sales Conference and four great speakers. With 200+ people, there was an excellent turnout and the quality of conversations set the bar high. Here are a few takeaways from each conference speaker:

    Derek Grant of Pardot / Salesforce.com

    Steve Richards of Vorsight

    • Coaching is a critical part of sales management
    • Use a headset splitter and listen to sales calls weekly
    • Sales prospecting is a science
    • Millennials want small promotions ever six months and a career path

    Howard Diamond of MobileDay

    • Listen, listen, listen – the best sales people are the best listeners
    • Enter sales meetings with a goal but adapt during the conversation
    • Culture is critical and should be nourished

    Allen Nance of WhatCounts

    • Embrace sales rep specialization as much as possible
    • Recognize the need to go from individual contributor to leader as the company scales
    • Sales leaders should not carry a quota while managing a team
    • List building gets much more difficult as the team grows due to the need for such large numbers of contacts
    • Scaling a sales team is incredibly hard

    Special thanks to SalesLoft and Rivalry for putting on the event.

    What else? What are some other takeaways from the Ultimate Sales Conference?

  • Continuing the Internet of Things Examples

    Continuing with the internet of things experiments from July, I’ve come across several more that are intriguing. Internet of things refers to everyday items, like a camera or car, being connected via WiFi to the internet, enabling a variety of new functionality.

    Here are several more internet of things devices that are promising:

    • Netatmo Personal Weather Station – Track the temperature, humidity, and a variety of other data points from a mobile device, and be alerted when certain thresholds or values are met
    • NeatConnect Cloud Scanner – Scan documents and images straight to the cloud, including Google Drive, without connecting the scanner to a computer
    • Nest Smoke + Co Alarm – Smoke and carbon dioxide alarm connected to the cloud for remote management and monitoring as well as more sane audible alarm options (e.g. have a voice announce that smoke has been detected before sounding a shrill alarm)

    The internet of things is super exciting and I’m looking forward to trying out these new devices.

    What else? What are some other cool internet of things devices?

  • Written Assessments in the Hiring Process

    Earlier today Derek Grant gave a great talk on building a sales department at The Ultimate Sales Conference. One of his recommendations was to use a written assessment during the hiring process, which has several benefits:

    • Reveals level of interest by the potential recruit
    • Demonstrates ability to research information and articulate a response
    • Shows candidate’s responsiveness and turnaround time for an assignment
    • Creates more valuable conversations throughout the interview process due to more background research

    We first implemented the written assessment at Pardot after Adam and I had a debate about hiring a candidate with no experience. I thought the candidate really fit our corporate culture and had the right acumen to succeed on our services team. After going back and forth a few times, we decided to give a technical assessment and written assessment. He passed with flying colors.

    Going forward, we’d ask each candidate to write short answers to the following types of questions:

    • What do we do?
    • How do we differ from Google Analytics?
    • What are three trends in our industry?
    • Who are our three main competitors and why?
    • How do position ourselves in the market?

    Candidates were expected to research the questions and provide short, thoughtful answers. Everything about it worked great. Once that first one worked out well, written assessments became a best practice for the hiring process.

    What else? What are your thoughts on written assessments in the hiring process?

  • 4 Major Revenue Goals for Organization Membership

    Goals are an important part of the startup process. Now, SMART goals are even better, but as a startup with no operating history, revenue goals are mostly fantasy. Regardless of startup-specific revenue goals, here are four major revenue goals for organization membership:

    So, when thinking about goals for a startup, consider revenue requirements for organization membership as an option.

    What else? What are some other major revenue goals for organization membership?

  • Atlanta’s Greatest Active Entrepreneur: Jeff Sprecher

    Today I had the opportunity to hear entrepreneur Jeff Sprecher talk for 45 minutes at the Atlanta Rotary club. Just six weeks ago, his Atlanta-based company InterContinental Exchange (NYSE:ICE), bought the New York Stock Exchange for $10.9 billion dollars. That’s right, NYSE, started in 1792, and viewed as the heart of American capitalism for over 200 years, is now owned by an Atlanta upstart that was founded in 2000.

    In his talk, Jeff recounted trying to get into the software business in the mid 1990s. After becoming a successful entrepreneur building power plants in California, he saw the state’s deregulation of the electricity market as an opportunity to build a trading platform. Only, the state wanted it to be a government run marketplace. After licensing software from a startup in Sweden, Jeff bought a DEC VAC minicomputer, rented a U-Haul and a generator, and drove from Los Angeles to Sacramento. He camped out on the front lawn of the capitol building and paid a lobbyist to bring legislators out to see the product in action, inside a U-Haul. Only, other, more powerful lobbyists, got a bill passed outlawing any private electricity marketplaces in the state.

    Undeterred, Jeff found a startup in Atlanta building a trading platform that was owned by a power company in Iowa. He promptly offered to buy the company for $1 plus the assumption of $4 million of debt and quickly consummated a deal. Immediately everyone except for the engineering team and a few sales people were let go and the company was rebooted as a derivatives trading platform. After a slow start to the business one of the best things he could have hoped for happened in December 2001: Enron collapsed. Enron was the dominant company in derivatives and energy trading. With a giant hole in the market, ICE quickly stepped in and became the market leader.

    Over the years ICE has acquired 17 exchanges all around the world and now has a market capitalization of nearly $25 billion dollars.

    Jeff Sprecher is Atlanta’s greatest active entrepreneur.

  • Balancing Personality Types on Founding Teams

    When building a startup it’s important that the founding team have different personality types. Some people like to constantly start things, but don’t enjoy maintaining them. Other people love maintaining things, but don’t get as excited about creating new things. Some people do both creating and maintaining, but often have a preference for one over the other. There’s no right or wrong answer as long as there’s some balance on the team.

    Another consideration with founding team personality types is around the traditional Myers-Briggs attributes. Most entrepreneurs have N and T (e.g. ENTJ) as the middle of their four attributes, which stands for intuition and thinking. Going along with intuition and thinking, other Myers-Briggs attributes like sensing and feeling are important as well. Regardless, balance is important.

    So, founding teams should look for that balance, that yin to the yang, as it’s important to have multiple perspectives.

    What else? What are some other thoughts around balancing personality types on founding teams?