David Cummings on Startups

Category: Entrepreneurship

  • 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?

  • Pardot’s Pricing Progression Through the Years

    The topic of pricing and request for advice on how to price a product comes up on a regular basis. I always like to share the Pardot pricing experience, including lessons learned. Pricing is something that is best treated as yet another experiment in the startup process with the caveat that all things equal, it’s better to start too high and come down.

    Here’s the early progression of pricing at Pardot:

    • $65 / user / month, minimum three users – At launch in late 2007, we priced the product based on Salesforce.com (how cool is it that Salesforce.com now owns Pardot?!?). The idea was that each marketing user that used the product would pay for a seat. Note: it didn’t do email marketing at the time, so there weren’t any email volume concerns.
    • $325 / account / month, unlimited users, unlimited contacts, with an allotment of 10,000 emails, 100,000 page views, and other modules (e.g. 10 landing pages), plus a required $2,500 quick start fee to set everything up. Email overages were billed separately. We quickly raised prices to $500 / month to reflect value and market dynamics.
    • $1,000 / account / month with the same characteristics as the previous offering but now a quick start package was included at no additional charge. By getting rid of the quick start fee, we were able to shorten the sales cycle, increase the average recurring revenue, and capture more of the value provided by the software. This was a major breakthrough for the business overall and this was the pricing for 3+ years of the business.
    • $1,000 / account / month for up to 30,000 contacts with unlimited emails and additional fees for more contacts. This became the standard in the industry and allowed vendors to capture value based on the size of the database such that accounts would grow as their marketing efforts grew. This change worked well and allowed us to grow the average size of an account.

    Pricing should adapt to the market and continually change over time. We didn’t get the pricing right originally, but we kept improving on it and built a great business.

    What else? What are your thoughts on Pardot’s pricing progression through the years?

  • Entrepreneurs Want Private Space Combined With Community

    When we started the Atlanta Tech Village we thought that there would be more demand for coworking space, with the idea that entrepreneurs and tech-related service providers wanted to be in large, open areas together. In reality, the initial private rooms sold out immediately — entrepreneurs want private space combined with community.

    Here are a few ideas around private space combined with community:

    • Entrepreneurship can be lonely, especially in the early days if things aren’t working out, so community is important
    • Absent coworkers, community provides for more social interactions
    • Private space provides more options for branding and customizing the furniture, pictures, etc
    • Private space makes it easier to lock things up and leave personal effects behind

    Of course, private space is more expensive than individual space if you don’t have the requisite number of people to fill the room, so it’s good to have a variety of options.

    What else? What are your thoughts on entrepreneurs wanting private space combined with community?

  • Get Potential Customers to “No” as Quickly as Possible

    Earlier today I was talking to an entrepreneur in the finding product/market fit stage of the startup adventure. He’s making progress collecting information but is still trying to understand if there’s a viable market. After hearing an update and sharing a few ideas, I recommended that he get to “no” with a bunch of potential customers as quickly as possible. The idea is that it’s often easier and faster to figure out if an idea isn’t viable, such that you can then move on. Too often, entrepreneurs take too long to kill an idea.

    Here are a few labor-intensive ideas to get in front of a number of people to determine viability for an idea:

    • Make a methodical plan to reach a certain type of person (e.g. take the last 100 people featured in the local business journal and contact them via phone)
    • Find a list of award winners (e.g. the Inc. 5000) and contact at least 500 companies on the list
    • Reach out to 100+ people that you know and ask for a referral to someone that could be a potential customer or could point you in the right direction

    Now, if this sounds like sales, it’s because it is sales. Most startup founders like building a product and don’t like selling. Whether it’s sales or customer discovery, the best thing to do is to get in front of as many people as possible, as quickly as possible.

    What else? What are your thoughts on getting potential customers to “no” as quickly as possible?

  • The Real-Time Entrepreneur

    As I was switching through different web apps and reports today, it struck me how real-time information is today as an entrepreneur. I had just published a new post on the Kevy blog titled Managing a SaaS Metrics Dashboard With Pardot (check it out for an example on how to use a marketing automation system to feed the top-of-the-funnel SaaS metrics). Right after hitting publish and sending out a couple tweets about it, I was immediately able to see clicks and prospects interacting with it. As an entrepreneur that loves results, it doesn’t get much better than that!

    Think about information from the most common apps:

    • Salesforce.com – Watch sales rep activities, opportunities, and deals
    • Pardot – Watch anonymous visitors, leads, and digital fingerprints
    • Google Analytics – Watch information on macro hits and visitors
    • GitHub – Watch pull requests and progress on the current sprint
    • Zendesk – Watch support tickets and customer interaction

    Of course, a dashboard with all the critical data in one place would be cool (like Geckoboard), but the fact that each system is there and can be left open in a browser tab makes it readily accessible. It’s great to be a real-time entrepreneur.

    What else? What are your thoughts on the real-time entrepreneur?