David Cummings on Startups

Category: Entrepreneurship

  • Treat the Website Like a Product

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    Image by Pixy5 /Babushka via Flickr

    Startups often put up a cool website as quickly as possible and focus the vast majority of their efforts on the app. It some cases the app is also the website but often it is a separate endeavor that gets neglected. The website needs to be treated like a product and given serious attention. What good does it do to build an amazing product only to have a website that doesn’t attract visitors, doesn’t convert visitors into prospects, and doesn’t have focus?

    Here are some ideas for treating the website like a product:

    • Clearly assign the website responsibilities to one person in the startup
    • Schedule engineering time to work on the website on a regular basis
    • Don’t set it and forget it – consider assigning a product manager to it
    • Incorporate analytics like new qualified leads (if B2B) and unique visitors (if B2C) into your core KPIs
    • Use inbound marketing and marketing automation to maximize site value

    Treating the website like a product is tough with all the other demands of a startup. Building a sales and marketing machine is even tougher and the website is a critical part of the equation. My recommendation is to treat the website like a product and spend more time on it than you initially thought.

    What else? What other ideas do you have for treating the website like a product?

  • Startups Need Focused Websites

    Outside the Customer Service Centre
    Image via Wikipedia

    There’s a startup tendency to be more broad than more focused when it comes to websites and messaging. Part of it stems from trying not to cast a wide net for potential customers and part of it comes from the search for a repeatable customer acquisition process. Startups are better off with a focused website that speaks to their ideal customer in a direct manner. There’s only so much time to capture someone’s attention and the most likely outcome for a visitor is the click of death: their “Back” button in the browser.

    Here are some questions to ask regarding the focus of a website:

    • How many “products” are listed and how many do you really have?
    • What are the three most important buyer personas and how do you appeal to them?
    • What one or two call-to-actions are found on every page?
    • What are the three most important things you want visitors to do on your site?
    • What social proof (testimonials, videos, references, etc) do you provide?

    Staying focused with messaging is difficult. Startups don’t have the luxury of established brands and need to appeal to the busy visitor by staying on point and getting the message across.

    What else? What do you look for in a focused website?

  • Personal Finance Workshop as Startup Employee Benefit

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    Image by o5com via Flickr

    Last month we finished our first personal finance workshop for company employees and had 28 participants. The idea is simple: employees that feel more confident about their financial future will be happier and more productive team members. We used MoneyCheck’s corporate-sponsored personal finance workshops as our provider to teach the course and have been thrilled with them.

    Here were a few takeaways from the experience:

    • The program should be facilitated by a third-party that is paid for by the company and isn’t trying to sell stuff to the employees (no one wants to sit through a class where they know they are trying to be sold something)
    • Benefits of the program include employee team building, significantly greater 401k participation, and increased individual confidence
    • Arrange for one-on-one time with the instructor and the employees so that more confidential and private questions can be answered outside the larger group setting

    If you’re looking to differentiate your startup’s employee benefits, strengthen your corporate culture, and increase employee satisfaction, I’d highly recommend talking to Alok at MoneyCheck.

    What else? Have you done a personal finance workshop and what’s been your experience?

  • Remind Yourself that Startups are a Marathon

    A couple weeks ago I was talking to a friend who had entered a dip in his startup. Dips are when you’ve been working hard at something for a period of time and it is getting especially tough where you have to decide if you’re going to give up or continue on. These are often very tough times. Startups are a marathon and not a sprint, so it is important to continually remind yourself of that.

    Here are some tips for the startup marathon:

    • Reflect daily and weekly on your small and large victories so that progress is recorded
    • When you’re in a dip recognize it as such and seek peer-to-peer feedback through a group like Entrepreneurs’ Organization (EO)
    • Take personal time and enjoy life knowing that you’re in the startup marathon and need to pace yourself

    Startups are a marathon and need to be treated as such.

    What else? What are some other tips to help complete the startup marathon?

  • Goal Directed Startup Advice Meetings

    Earlier today I met with the sole founder of a startup that will release their app in three months. Of course, three months from now after already working on it for a month being too long is beside the point. The entrepreneur did a great job of having specific questions and areas she’d like advice. Too often entrepreneurs ask to meet and then have broad questions like What do you think of my idea, How much money do I need, etc.

    Here are some tips for goal directed meetings when seeking startup advice:

    • Do your homework and read everything you can about the person on their blog, LinkedIn, Twitter, etc
    • Prepare a list of five specific questions related to tangible issues you’re working through
    • Ask for introductions to one or two other people that might be able to help

    My recommendation is make the most of meetings where you are seeking advice by being prepared and thoughtful.

    What else? What are some other tips for goal directed meetings when seeking startup advice?

  • Best Practices for Incubating a Product in a Services Company

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    Image via Wikipedia

    Continuing with yesterday’s post Repeatable Customer Acquisition Process to Raise Money, I wanted to address the first question that I’ve received several times over the last month: What are some best practices for incubating a product in a services company? Personally, I have more experience building product companies compared to service companies but I did the transition with my first company.

    Here are some best practices for incubating a product in a services company:

    • Don’t have employees split time between their traditional services and product work — inevitably the services work will continue to get done because it pays the bills and enough progress won’t be made on the product
    • Dedicate a product manager/jack of all trades and a software developer to work on the product full-time — these two people should complement each other well and have the capabilities to do everything necessary to get the product off the ground
    • Consider making the product a separate company so that it can receive the dedicated attention it needs
    • Employ lean startup best practices throughout
    • Have everyone involved read Getting Real by 37signals – the best web app product management book available

    There’s no sure fire way to make the product successful but by following some of these best practices the chances of success increase substantially.

    What else? What best practices do you recommend for incubating a product in a services company?

  • Repeatable Customer Acquisition Process to Raise Money

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    Image via Wikipedia

    In the past month I’ve had three different co-founders of digital marketing agencies approach me for feedback on their idea for a SaaS marketing product. All three product ideas have been different but the questions they ask were the same: what are some best practices for incubating a product in a service company, how should I staff it, and do you think I can raise money for the idea if I make it a separate business? My answer to the last question is always the same:

    Don’t raise money for the idea until you have a repeatable customer acquisition process.

    Now, this sets the bar extremely high but it gets people thinking in the right mindset. To have a repeatable sales process means you have customers and you have patterns as to how you acquired those customers. It also means that you figured out how to make ends meet before you take someone else’s money, which bodes well for delivering a nice return on a potential investor’s money. A big benefit of this approach is that if you’re an entrepreneur without a successful track record you’ll be able to raise money at a much better valuation. Also, if things go really well, you might be able to bootstrap indefinitely.

    What else? What do you think of developing a repeatable customer acquisition process before raising money?

  • Developing a Weighted Sales Pipeline

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    Image via Wikipedia

    Continuing the sales pipeline theme from yesterday, I wanted to take the pipeline concept once step further and talk about a weighted sales pipeline. A weighted sales pipeline is a much more detailed pipeline where each prospect opportunity is given a specific value based on where they are in the buying process. So, instead of saying that we have 20 prospects, you might say we have 20 opportunities at 50% or greater likelihood of closing with a weighted pipeline value of $100,000.

    Here’s how the values of a weighted pipeline might look with the percentage being the chance of closing the deal:

    • 10% Prospecting/Qualification
    • 20% Needs Analysis/Value Proposition
    • 30% Proposal Sent
    • 50% Identifying Additional Decision Makers
    • 60% Second Demo (Post Proposal)
    • 70% Negotiation / Review
    • 75% Acceptance Sent
    • 90% Acceptance Reviewed
    • 90% Proof of Concept
    • 100% Closed Won
    • 0% Closed Lost or Deal Dead

    Developing a weighted pipeline gives you a much better proactive view into the future health of the business. I recommend weighted pipelines for all entrepreneurs.

    What else? What are your thoughts on weighted sales pipelines?

  • Startups Should Differentiate Suspects/Prospects/Customers

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    Image by Madame Meow via Flickr

    When I talk to seed stage entrepreneurs and co-founders one of the things they love to tell me about is how many “customers” they have in their pipeline. I love startups that have customers! At that point I like to pause for a second and ask how many of these customers have signed a contract. It gets quiet. Well, these are actually prospects. I ask if they’ve identified the BANT (Budget, Authority, Need, Timeline) sales requirements for these prospects. Hmm, they don’t have that so they are actually suspects.

    There’s nothing wrong with getting them confused but I think it’s important for entrepreneurs to understand the difference. Here’s a quick recap of the three categories:

    • Suspect – a contact that you’ve had an initial discussion about your product or service
    • Prospect – a contact that has budget to buy your product, authority to make a decision, need for what you’re offering, and a timeline to get a deal done (never forget BANT)
    • Customer – a contact that has signed a legal agreement in which you’ve been paid or will be paid money for your product or service

    My recommendation is to use this terminology when discussing your startup’s sales pipeline.

    What else? Have you seen entrepreneurs mis-use the words suspect, prospect, and customer?

  • Dark Features as a Product Management Best Practice

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    Image via CrunchBase

    In the most recent issue of Inc. Magazine there’s an article about the Tumblr founder titled  The Way I Work: David Karp of Tumblr that mentions one of the things I’m a big proponent of — dark features. The idea of a dark feature is that it is a feature added to a webapp that only certain users like your employees and a few early adopter customers can see. Web technologies are great in that it is easy to try out new functionality in production while locking it down until it has been refined and polished.

    Here are a few benefits of using dark features as a product management best practice:

    • Encourages broader testing of new functionality by stakeholders
    • Feature testing is done in the production environment providing for a greater chance that more edge case are found
    • Improves engineering by promoting new functionality to production more frequently for real-world feedback (feedback is oxygen for a product)

    My recommendation is to incorporate dark features as a product management best practice.

    What else? What do you think of incorporating dark features in the development process?