David Cummings on Startups

Category: Entrepreneurship

  • What does the Atlanta startup community need most?

    Within the past month, three different local Atlanta groups brought up the question, “What does the Atlanta startup community need most?” Now, I don’t have the answer, but I’ve heard a number of suggestions.

    Here are a few ideas that were brought up for the Atlanta startup community:

    • More Risk Capital – Additional idea and seed stage capital to address the earliest and riskiest startup stages
    • More Growth Capital – Additional growth capital for local startups that have already de-risked most of the equation, have north of $5 million in recurring revenue, and have a shot at being a home run (growth capital is already readily available since it is so mobile, but the challenge now is that most of the value created from big wins goes to investors in other parts of the country)
    • More Modern Entrepreneur Training – Too many programs are geared towards traditional ways of thinking about entrepreneurship including business plan writing and getting ready to raise money without having customer proof points — there’s a need for lean startup, customer discovery, and business model canvas training
    • Major Annual Tech Startup Conference – Similar to SXSW in Austin, the idea is to bring together a number of events into a packed week and draw attendees from around the country
    • More Community Coordination – With all the organizations and events in town, there’s overlap and competing agendas, which is to be expected, leading to some desire to more centrally coordinate things

    If I had to pick one, I’d choose more modern entrepreneur training. With more modern entrepreneur training, there will be more lean startups, which will result in more compelling startups, which will result in more success stories. More successful startups is what Atlanta needs most.

    What else? What are your thoughts on these ideas for the Atlanta startup community as well as other ideas?

  • 8 Ideas Every Startup Person Should Know

    There’s a great Quora post from entrepreneur Mike Sellers in response to the question As first time entrepreneurs, what part of the process are people often completely blind to? His core response is so concise and complete, I had to repeat it here as 8 ideas every startup person should know:

    1. An idea is not a design
    2. A design is not a prototype
    3. A prototype is not a program
    4. A program is not a product
    5. A product is not a business
    6. A business is not profits
    7. Profits are not an exit
    8. And an exit is not happiness.

    The next time someone asks me what they should know if they want to get involved with startups I’ll send them straight to Mike Sellers’ answer.

    What else? What do you think of the 8 ideas every startup person should know?

  • Lessons Learned from Shotput Ventures

    With the launch of the Atlanta Ventures Accelerator, one of the questions I’ve received is what did we learn from Shotput Ventures that we’re going to do differently this time. As a quick back story, Shotput Ventures was launched at the beginning of 2009 as a Y Combinator clone in Atlanta. We invested in nine companies, had one great exit, and learned a ton.

    Here are a few takeaways from Shotput Ventures:

    • Startups with strong technical co-founders made the most progress during the three month program (as expected)
    • Non-technical co-founders that were relentlessly resourceful made much stronger contributions to their company (some business co-founders didn’t feel they could contribute since they didn’t code, which is patently false)
    • Most teams didn’t launch a minimum viable product soon enough and had little to show come demo day
    • Lack of a shared office hurt the camaraderie aspect of the program (most people worked out of their apartments and came in for Wednesday night dinners)
    • Mentoring and coaching from the community was great and exceeded expectations

    Overall, Shotput Ventures was a good learning experience but didn’t have the desired impact on Atlanta. Now, with the Atlanta Ventures Accelerator, we’re going to use what we learned and make a serious impact on Atlanta.

    What else? What were some other observations or lessons learned from Shotput Ventures?

  • The New Atlanta Ventures Accelerator

    Today, we launched the new Atlanta Ventures Accelerator for prototype-stage startups (great ABC coverage). As part of the program, startups receive a $20,000 investment from Atlanta Ventures and a $100,000 convertible note from the BIP Early Stage Fund. Our goal is to help coach and mentor the startups to then raise a $500,000 seed round after the program.

    Here are a few details on the Atlanta Ventures Accelerator:

    • Two or more co-founders are required with an in-house technical person or a technical person identified that will join at the start of the program
    • Rolling admission and not cohort based (we don’t do cohorts since we want to be flexible to the timing needs of startups and we have the Atlanta Tech Village education programs, mentors, and speakers)
    • Focus is on helping startups find product / market fit and complete stage 1 of the startup process, followed by raising a seed round of financing
    • Instant community comes from the Village and the 100+ other startups
    • Office space during the program is included at the Village

    With the new Atlanta Ventures Accelerator, we’re working hard to help grow and nurture more successful tech startups in Atlanta. Please apply today.

    What else? What are your thoughts on the new Atlanta Ventures Accelerator?

  • You Can’t Steer a Car That’s Not Moving

    Recently I was at a conference and the speaker was talking about a dead brand that he worked on reviving. At the beginning of the talk he used a phrase that really stood out to me: you can’t steer a car that’s not moving. This is especially applicable to potential entrepreneurs that have an idea and do nothing about it.

    I was reminded of this a couple days ago via Jeff Hilimire’s blog post titled Wantrepreneurs – begin the begin where he says, “…you have to get started or you’ll never get started!” Should everyone that’s thinking about being an entrepreneur be an entrepreneur? No. Should everyone that’s serious about being an entrepreneur get started? Absolutely. One of the best ways to get started as an entrepreneur is to do the eBay flip.

    The next time you hear someone talking about an entrepreneurial idea without doing anything, tell them you can’t steer a car that’s not moving.

    What else? What are some other phrases like “begin the begin” and “you can’t steer a car that’s not moving” to describe the need for entrepreneurs to get started?

  • Startup Review: Springbot

    Earlier today Springbot, a local Atlanta startup, announced a $3 million Series A round of funding from TechOperators and TTV. After going through the Flashpoint program at Georgia Tech, Springbot settled in on their current business model: marketing automation for small and medium sized ecommerce companies. Coming from the marketing automation world for B2B marketers, this is a great business idea and there’s a real need in the market.

    Here are a few thoughts on Springbot:

    • Ecommerce is a great market to go after, especially the Magento community with 150,000+ online stores
    • Being able to show true return on investment from the software in a timely manner is a beautiful thing (painkiller and not a vitamin)
    • Getting structured data out of an ecommerce system won’t be hard; getting clients to write content to do email blasts and social media will be very hard
    • Productized services will be an important component to get clients up and running quickly and successfully
    • Repeatably acquiring customers at scale in a cost-effective manner is going to be the number one challenge for the business

    Overall, I’m really excited about Springbot and want to see them be another major success in the Atlanta marketing software cluster.

    What else? What are your thoughts on Springbot?

  • The Culture of Anchor Technology Companies Influences Future Startups

    Earlier today I was at a meeting with two dozen of Atlanta’s startup community leaders. After talking for an hour, the topic of anchor technology companies came up and how as a community they are tremendously influential (Atlanta has several including AutoTrader.com and AirWatch). One of the things that wasn’t mentioned, but struck me on the drive home, is how the culture of the anchor technology companies influences future startups that come from employees of the anchor company.

    Back in the 1970s, Atlanta had the largest software company in the world — MSA. MSA provided accounting and ERP software for mainframes, and was known for having an extremely sales-oriented and competitive culture. Fast forward to the 1990s and several of MSA’s past employees, including some of their sales professionals, had started very successful tech companies in Atlanta. Being immersed in a sales-oriented culture influenced how the MSA alumni ran their startups.

    Some companies are sales-oriented, others are focused on engineering or customer service. It’s not that one focus is better or worse than another but that the culture of the anchor technology companies influences future startups as people take cues from their previous employer.

    What else? What are your thoughts on how the culture of anchor technology companies influence future startups?

  • Getting Atlanta’s City Leaders Excited About Tech Startups

    Today I had the opportunity to speak for a few minutes to 300+ members of the downtown Rotary Club of Atlanta. The goal of my talk was to help get Atlanta’s city leaders excited about tech startups and the great opportunity we have as a community. Initially, I shared the Pardot story and set the stage for starting, growing, and selling a tech startup. Finally, I talked about the vision for the Atlanta Tech Village.

    Here are a few thoughts on getting city leaders excited about tech startups:

    • Seismic shifts in technology that will both destroy and create billions of dollars of value are taking place right now due to cloud computing, smart phones, and more
    • Over the next 10 years, the majority of jobs created will be from companies that aren’t in existence today
    • Startup density is a big driver of community due to the desire for learning, sharing, and collaborating
    • All the natural resources are present including technical talent, creative professionals, infrastructure, and can-do attitudes

    I’m looking forward to future conversations with city leaders and spreading the tech startup message outside the standard business community.

    What else? What are some other ways to get city leaders excited about tech startups?

  • Entrepreneurs Need to Seek Out Ideas

    Early on in my first company we hit a nice period of growth and hired a bunch of people. Fast forward 18 months and the business was fine but the people side of things was a mess. There was no cohesive corporate culture and we were suffering mightily because of it. At that point, I went on a reading binge and worked at assimilating as much information as possible on the people side of the business. Finally, we worked through a number of tough changes and came out stronger because of it.

    I tell this story not to highlight the importance of corporate culture, but rather to emphasize that entrepreneurs need exposure to many ideas early and often. Yes, it was important for me to experience things first-hand, but I should have been more proactive earlier around gathering ideas and learning from others.

    Here are a few ways to seek out ideas:

    • Join a startup or entrepreneur group like EO
    • Subscribe to blogs (including this one!) via email or RSS (try Feedly or Digg Reader)
    • Network with other entrepreneurs in town
    • Follow entrepreneurs on Twitter

    The goal isn’t to spend a ton of time away from your business learning everything about everything, rather the goal is to continually learn and gain exposure to a wide variety of ideas.

    What else? What are your thoughts on entrepreneurs needing to seek out ideas?

  • Product Pricing Properties

    Continuing with yesterday’s post titled Pardot’s Pricing Progression Through the Years, I think it’s important to add a few more comments on the topic of pricing. Too often, entrepreneurs labor to set the perfect price before they’ve even launched the product. The best thing to do is to get out and talk to prospects to get a better understanding of the value provided. While they won’t necessarily be explicit, they will provide feedback and information to make a better decision.

    Here are a few thoughts on properties of product pricing:

    • Product pricing has nothing to do with a cost plus formula (e.g. it cost me $10 to make it, and I want to make $3 on each sale, so I’ll charge $13 for it) and everything to do with value provided
    • Product pricing should scale with value provided to the customer (e.g. as the number of seats/transactions/usage grows, so too does the price)
    • Product pricing should be as simple as possible while still capturing the appropriate value
    • Consider having several pricing tiers where the tier you want most customers to buy is accented by the other tiers (e.g. a major jump in pricing or a major difference in functionality so that human psychology causes the person to focus in on a specific choice)
    • Work to differentiate against the competition based on value and not based on price
    • When it doubt, charge much more than you think something is worth as it’s easier to lower prices than to raise them

    Pricing is a peculiar part of the startup process that should evolve over time. At a minimum, keep pricing straightforward and oriented around capturing value.

    What else? What are some other product pricing properties?