David Cummings on Startups

Category: Entrepreneurship

The 5 Main Marketing Areas for Startups
All too often, startups I meet with don’t have a good grasp on their marketing strategy, more precisely, their customer acquisition strategy. The most common response to the marketing strategy question is search engine optimization (SEO), which almost never plays out as an exclusive strategy due to the competitiveness of the industry. On a simple level there are only a few areas startups should focus to build awareness and generate leads. Here are the top five marketing areas for startups:
- Word of mouth – where prospects and customers tell their friends and colleagues about the product (notice I didn’t say viral marketing, as so few products are truly viral)
- Pay-per-click – yes, Google AdWords are terribly expensive, but they are also effective especially with more targeted phrases (e.g. buying competitors’ names is a great tactic for low volume, high quality leads)
- Search engine optimization – SEO does work but needs to have a 6-12 month horizon and tons of content (e.g. publishing 1-2 blog posts a week indefinitely)
- Cold calls – now, people generally associate cold calls with sales reps, but cold calls are also a great way to build product awareness in a marketing fashion and should be done by most startups
- Social media – yes, people are making money off social media by monitoring industry terms and competitors’ names, then tactfully joining the conversation
My recommendation is to employ all of these areas as part of a marketing strategy and focus in on the ones performing the best.

What else? What are some other marketing areas for startups?
November 11, 2010
Startups Overcomplicate Their Product
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Technology startups, especially ones with strong technical skills on the co-founding team, have a tendency to overcomplicate their product and the necessary pieces to launch. There are several reasons why this is the case:
- As a developer it can be fun to experiment with the most fancy of tools, even when they are overkill (premature optimization is the root of all evil).
- There’s no code debt, so it is incredibly easy to add more features, even before a prospect has validated that there’s a need for the existing features.
- It is more fun to innovate and add functionality, due to the immediate sense of satisfaction, as opposed to doing sales and marketing with potentially little results.
- Without a deadline, or timeboxing the minimum viable product, there’s a normal perfectionist tendency as the product is a representation of the developers
- The minimum viable product often slips into the minimum respectable product, which is fine only in limited circumstances
My recommendation is to continually ask yourself if you are overcomplicating the product and necessary pieces to launch and start developing relationships with prospects.

What else? What are some other reasons startups overcomplicate their product?
November 10, 2010
Track Your Brand Recognition Online
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Entrepreneurs are always looking for an edge or a new strategy to assess progress. One area that is important to track for certain startups is brand recognition online. The Internet, unlike most marketing mediums, provides fairly straightforward methods for tracking brand recognition through several avenues like the following:
- Track the number of times monthly that someone searches for your company or product name in a search engine and then clicks the link to go to your site (this is measured via the referring keywords in standard web analytics tools like Google Analytics)
- Measure the number of direct visitors to your site that didn’t come from clicking a link on a site to get to your site as this implies they had your site bookmarked or typed in the URL directly, and thus remembered your brand
- Calculate the number of mentions of your brand on social media sites like Twitter, Facebook, and YouTube using a social media monitoring tool like Looxii
As you probably guessed, the goal is to see the data show growth of the your brand recognition on a monthly basis.

What else? What are other ways to measure your brand recognition online?
November 9, 2010
Knock Three Annual Goals Out of the Park
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Recently I was talking to an entrepreneur about 2011 goal planning. A few minutes into the conversation she told me that one of the more successful approaches she’s encountered is to set three SMART goals at the beginning of the year and do whatever it takes to knock them out of the park. Too often people set too many goals, or no goals, and then aren’t able to adequately measure their progress. Some tips for the three goals:
- Make the goals specific, measurable, achievable, relevant, and include a timeline (SMART)
- Ask advisors, friends, and family to hold you accountable on just these three goals (any more makes it difficult to focus and for others to remember)
- Put the goals on a post-it note on your bathroom mirror so that you see it every morning
- Set a recurring event in your calendar for the first day of every month to email you to review your progress against the goals
- Knock the goals out of the park and start thinking of your next set of goals
What else? How do you like to do annual goals?
November 8, 2010
The Cease and Desist Letter
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Often times in the startup world there is what many refer to as the roller coaster of emotions that vary not only day to day but sometimes even hour to hour. One of the most unpleasant events, because it is potentially a waste of time, money, and energy if fought, is the cease and desist letter. The cease and desist has a few tell tale signs including arriving in a FedEx overnight envelope from a unrecognized law firm with a good bit of legalese. We’ve received several of these over the years for reasons like the following:
- Product names that were too close to a competitor’s name (2x)
- Price comparison page that ranked first in Google for the competitor’s name followed by “pricing”, which rankled the competitor
- Passing on information to prospects that was given to use by an employee of a competitor that was looking for a job with us, and volunteered it in her intro email
On a simple level it’s good to push the limits as it is almost always easier to ask for forgiveness than it is to ask for permission. When it comes to cease and desiste letters, nine times out of 10 it is better to make the adjustment and move on.
November 7, 2010
B2B Sales Tools That Didn’t Exist a Decade Ago
Image by SystemF92 via Flickr

Yesterday I was spending time with one of our reseller partners talking through our best practices and strategies for selling our software. Towards the end of the conversation, with it clear that our partners were impressed by some of our techniques, one exclaimed how many of the B2B sales and marketing tools we use didn’t even exist a decade ago.

Here are some of those new tools and techniques:
- LinkedIn to find the appropriate contact based on company and job title
- Jigsaw.com to understand the email naming convention for a company as well as the direct dial number for a potential prospect
- Twitter to monitor your industry name and competitors in order to find potential prospects
- Caller ID for your website to understand which companies have been browsing around
- Drip marketing and other prospect nurturing programs to stay top-of-mind
Of course, no amount of new technology can substitute for good old fashioned hard work, including picking up the phone and talking to people. My recommendation is to experiment with a variety of B2B sales and marketing tools and incorporate the ones that are most beneficial.

What else? What are some other B2B sales and marketing tools that didn’t exist a decade ago?
November 6, 2010
Sell to Customers Before You Build
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This week I’ve had the opportunity to talk with three different idea-stage entrepreneurs. Two of them are on the right track talking to prospects in advance of the building the product. Unfortunately, I could tell from their answers to my questions that the picture they painted for their prospects was much too vague for their proposed solutions.

Selling to customers in advance of building a product is critical. Here are some tips:
- Mock up a few screens in a wireframing application
- Ask general questions but make sure they aren’t leading questions (entrepreneurs love leading questions!)
- Explain how the system will work
- Ask for a commitment for them to use the system once it is ready
- Get at least three commitments in advance of development
- Work with the committed parties during the development (it’s much better to make it too simple rather than too complicated)
My recommendation is for entrepreneurs to better clarify their product’s functionality with potential prospects before building the actual system.

What else? What other tips do you have during customer discovery?
November 5, 2010
Two Ears and One Mouth for Sales Reps
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Earlier today I sat in on a product demo with one of our top sales reps. By the end of the demo, I was reminded of the old adage: we have two ears and one mouth and we should listen twice as much as we talk. As a sales rep the beginner inclination is to excitedly talk about all the amazing bells and whistles, both to show how great the product is as well as to show off your knowledge. Successful sales reps know that asking the right questions and listening is more important than doing all the talking.

Our successful sales reps did the following today at the second product demo for a prospect:
- Explained his understanding of the top five pain points for the prospect
- Articulated what areas would be covered during the demo
- Gave a two minute background on the company (no slides ever)
- Presented a story of a user performing common actions
- Showed the results of those actions and our system
- Paused and asked if there were any questions at every step in the demo
- Respected the prospect’s time and ended promptly after 25 minutes
- Received an affirmative response at the end signaling the prospect is likely to move forward
Again, two ears and one mouth for a reason. Listening is one of the most important traits for sales reps.

What else? What listening tips do you have?
November 4, 2010
Where’s the Value Created
Image by Randy Lemoine via Flickr

A few weeks ago I mentioned something similar but I think it is important to understand that value in a startup and established companies isn’t always obvious. There are many different ways to create value and the public perception of how money is made by a certain company can often be good to obfuscate the real value being created. Let’s look at a few examples:
- Someone once told me the market capitalization of airlines is equal to their frequent flier points. Meaning, one significant way airlines make money is by selling frequent flier miles to other companies like credit card issuers.
- There’s an Internet company that recently received a good deal of bad press about their selling social media data. One of the strongest ways they make money is by acting as a credit score of sorts for email addresses, even though you’d never know from their main website.
- In Atlanta there are several retail store fronts in expensive areas for a company that helps people find apartments. Of course, they pitch the service as free and make money by referral fees from the apartments. This one is a bit more obvious but it shows that there are non-obvious ways to build a business.
What else? What are some other examples of non-obvious ways companies create value?
November 3, 2010
Explain What Your Startup Isn’t
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Startup founders love to explain their vision, strategy, and rattle off all the product features. I’m a fan of offline analogies as well as creating mindshare hooks. Startups also fall prey trying to be all things to all people, but with such little resources it is best to do one thing and do it extremely well. One of the things I’d like to see more founders do is think through what their startup isn’t. Here are some examples:
- We don’t target companies with more than 300 employees
- We don’t target B2C companies
- We don’t sell with field sales reps
Yes, the opposite could be articulated but it’s easy to say “we focus on B2B companies” while also seeking out B2C companies. The key with explaining what the startup isn’t is that it makes it more clear where you stand, helping enrich your core focus.

My recommendation is to make a list of what your startup isn’t.

What else? What are some other benefits of explaining what your startup isn’t?
November 2, 2010