David Cummings on Startups

Category: Entrepreneurship

  • The All Hands Startup Sales Meetings

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    Recently I was talking with a friend about sales-oriented startup cultures. He recalled how at his first startup, of which he was an early employee and investor, everyone in the company was extremely focused on sales. It was such a sales-oriented culture that the entire company participated in the weekly sales meetings where they discussed the pipeline, opportunities, wins, and losses.

    Naturally, you’re probably thinking that that’s not a big deal when you have five or 10 employees. Everyone can jump into a conference room and hash things out for an hour. Well, they kept doing the all hands weekly sales meeting by conference call up to the time they had 100 employees. Imagine taking an hour a week out of the busy schedules of 100 people, most of which weren’t in sales, to be on the sales meetings.

    The all hands sales meetings were important so that everyone in the company was thinking about ways to improve the product, close deals, and outsmart the competition. There was no telephone game from the front line sales reps back to the engineers by way of the product managers. Everyone was able to hear everything good, and bad, that was going on each and every week.

    What else? What are your thoughts on an all hands weekly sales meetings?

  • 7 Startup CEO Tactics for Operational Excellence

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    As a startup grows into a small business it becomes necessary to add more process and operational aspects to the company. The need for this typically occurs when a startup reaches the 10 – 20 employee size, and thus has more going on than can be simply managed by the startup CEO and other co-founders.

    Here are seven startup CEO tactics for operational excellence:

    1. Company-wide daily check-in stand ups/scrums
    2. Weekly KPIs available company-wide in a Google Spreadsheet
    3. Weekly tactical meetings with the management team to discuss the week ahead
    4. Quarterly check-ins that act like a lightweight performance review
    5. Quarterly off-site meetings with the management team to plan the next 90 days
    6. Quarterly celebrations with all team members to spend time outside the office and reflect on the last 90 days
    7. LCD scoreboard in a very visible location with up-to-date goals and progress

    These ideas come from a combination of Mastering the Rockefeller Habits and books from Patrick Lencioni. I’ve found this approach works well and I highly recommend it.

    What else? What are some other CEO tactics for operational excellence?

  • Catalytic Mechanisms to Drive Behavior

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    Recently I was talking to an entrepreneur that had rolled out a new technology product to her team members. The challenge was that the adoption was weak and they weren’t seeing a return for the significant investment made in the custom technology.

    Catalytic mechanisms are processes and procedures that drive change through the very way things operate. You can think of it as ways to explicitly align interests or make one thing more tightly dependent on another. Instead of asking for a behavior change one approach is to rearrange something else that forces the behavior change.

    For the entrepreneur, I offered up a simple suggestion: pay the team members (independent contractors) based on data present in the new system. If they don’t put it in the software, they don’t get paid. It seems so simple but it can make a profound impact (I know of companies that don’t pay commissions to sales reps unless the deals are in the CRM).

    What else? What are some other catalytic mechanisms that drive human behavior?

  • Startups Should Keep Frenemies Close

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    Startups in a competitive market should develop frenemies. Frenemies are companies that you compete with but respect and share market intelligence. Now, you can’t collude on price, as that’s against the law, but you can compete against each other on Monday and share information about a different competitor on Tuesday.

    If you haven’t done it before it might seem strange. Once you start doing it it becomes invaluable. Startups are always looking for an edge, something to be more effective in the market. Frenemies provide a mechanism to do just that against joint enemies.

    The next time you pick up a great piece of competitive intelligence, and suspect your frenemy has value to add, consider sharing information in a way that doesn’t reveal your whole hand, but does help your organization become more effective.

    What else? What other thoughts do you have about frenemies?

  • The Opportunistic Startup Hire

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    A difficult situation some startups face is the opportunistic hire they can’t afford. What I mean by this is that the startup gets referred a great person, and there’s no position available, but they really want to hire her.

    Here are some things to think through when the opportunistic startup hire comes along:

    • What does the growth of the business in the next 12-24 months look like with and without the person?
    • What impact will this person have on the business outside of growth?
    • What ways can you get the person involved if you can’t afford them full-time? Advisor? Part-time?
    • What’s the likelihood you’ll be able to hire this person down the road when you can afford them?

    I’ve found that opportunistic hires rarely come along, but you know it when you see it.

    What else? What other considerations do you have when you find an opportunistic startup hire?

  • The Startup Tendency is to Over-Engineer the Product

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    Greg and another successful entrepreneur independently mentioned that startups have a tendency to over-engineer their original product. Over-engineering a product is done with the best of intentions: there’s a clean slate, more time for adding features since there aren’t customers, and an idealistic view of what the market needs and wants. Without customers to slow things down, find bugs, and submit requests, the pace of development is blazingly fast.

    Startups need to spend more time with prospects and less time over-engineering the product.

    This isn’t easy. Human nature, tending towards instant gratification, and the desire to build things, lends itself to writing more code and inventing more features, regardless of market demand.

    The next time you add a feature without customer input, ask yourself the following question: will 80% of my future customers get value from this fuctionality?

    What else? Have you seen the startup tendency to over-engineer the product?

  • Notes from Greg Foster at Flashpoint

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    Greg Foster, CEO and co-founder of BrightWhistle (marketing platform for multi-location healthcare companies), was the guest speaker at tonight’s Flashpoint meeting at Georgia Tech. His message was focused on entrepreneurial lessons learned. Here are a few notes from his talk:

    • Promote healthy conflict and dialogue internally — watch out for tunnel vision
    • Bring on a person that can translate market need into product functionality — product/market fit is often different from what entrepreneurs initially think the market wants
    • Internally, the CEO sets the tone when dealing with challenging customers, so be cognizant of what you say
    • Get to know your investors beyond those that are on your board (e.g. if you have an angel investor syndicate, talk with everyone involved)
    • Build an amazing team, especially at the beginning as they will be instrumental in each subsequent round of hiring
    • Raising money is a step in the process, but given too much attention as success

    Greg did a great job telling stories and sharing his lessons learned.

    What else? What were some other lessons learned shared at the event?

  • What does your startup do?

    Elevator Pitch
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    Last week I was talking to an entrepreneur at Venture Atlanta and I asked the casual question “What does your startup do?” With that simple question I received a three minute response that was confusing and forced me to ask simple, clarifying questions in an attempt to get a basic understanding of the business.

    Entrepreneurs should craft a 100 word response, much like an elevator pitch, so that everyone in the company can provide a consistent answer to the question “what does your startup do?” Here are some items to keep in mind:

    • Different audiences, like ones that are more technical, do want more information, but let them ask for it after you’ve provided the one minute answer to the question
    • Specifically include if you offer a product or service as well as the most common buyers and industries
    • Provide a memorable hook or anecdote, if possible
    • Incorporate social proof into the message (e.g. we have 100 paying customers)

    The next time you hear the question “What does your startup do?” I hope you provide a concise, memorable answer that sticks with the listener.

    What else? What other tips do you have when explaining what a startup does?

  • Atlanta Startups are Funded by Customers

    At last week’s Venture Atlanta event I was talking with a number of venture capitalists from outside of Atlanta. After the first day, in which several early stage startups did a great job presenting, one venture capitalist made an observation I agree with:

    Atlanta startups are funded by customers much more so than investors.

    Immediately I concurred and cited examples of local successful technology companies that took little or no outside funding and grew substantially by way of paying customers.

    Can everyone build their business via customers only without outside funding? No. Startups that can do so, especially in towns like Atlanta that have the right ingredients but little risk capital, are at a significant advantage compared to those that are not capital-light.

    What else? Do you agree that Atlanta startups are funded by customers much more so than investors?

  • Over 1,000 Employees in Atlanta’s Marketing Software Cluster

    In early 2010 I wrote a post titled Atlanta’s Online Marketing Software Cluster to bring awareness to the numerous startups in town. Well, I wanted to revisit the companies listed in that original post and add employee counts based on LinkedIn as of late October 2011. Here we go:

    Total number of employees: 1,008.

    Now, these are total employees listed online, and not all are in Atlanta. All of these companies are headquartered in Atlanta with the majority of their employees here. With 1,008 employees in these 15 companies, marketing software is one of the largest technology clusters in Atlanta.