David Cummings on Startups

Category: Entrepreneurship

  • Entrepreneurs and Relationship Networking

    At this morning’s Atlanta Business Chronicle Pacesetter awards event, the keynote speaker, Harvey Mackay, focused his message on the power of relationship networking and a Rolodex. Here’s some of his advice:

    • File away every person you meet and follow-up with them on a regular basis
    • Capture as much person information as possible (e.g. personal preferences, trips, likes, etc) and use that as a foundation for future conversations
    • Always seek ways to help your network and never expect to receive something in return
    • Dig your well before you need it (build your network and relationships before you need to tap into it)

    I don’t consider myself a good networker but I feel I’m decent at it. I do appreciate the value it provides and I recommend employing these concepts to other entrepreneurs.

    What do you think? Is networking important to you? What advice do you have on networking?

  • The Two Most Common Entrepreneur Mistakes

    I was on an American Marketing Association (AMA) panel today with Reggie Bradford of Vitrue and Joel Lunenfeld of Moxie Interactive — moderated by Benjamin Rudolph of Relevance Advisers. Reggie made a comment that stuck with me saying he received advice early on from a VC who’s been investing in startups for 20 years. The VC told him these are the two most common mistakes made by entrepreneurs:

    1. Not firing poor performing/bad fit employees fast enough. As an entrepreneur, there’s an effusive optimism that plays out in the tendency to believe everyone can be successful on your team. That’s just not the case — be slow to hire and quick to fire.
    2. Pricing the product or service too low. When first launching a product or service, the natural inclination is to price it in a way that makes it appealing to large group of buyers, which usually means a lower price. Unfortunately, a lower price can mean the difference between success or failure as it signals a quality message and affects margins.

    What do you think? What are the most common entrepreneur mistakes?

  • Thinking About the Three Year Goal

    Today I had the opportunity to talk with two different potential EO Accelerator entrepreneurs. One of the questions I always ask is “What are your revenue and company size goals three years from now?” I don’t ask that question because I believe having a large company is the only way to go, in fact, here is info on my ideal company. Rather, I ask because the goal of EO Accelerator is help entrepreneurs with revenues under $1 million grow their business to the $1 million mark so that they can then join EO. If the entrepreneur doesn’t mention a three year goal of at least $1 million in revenue, then they aren’t a good fit for EO Accelerator.

    So, with that in mind, here are some things I’ve noticed:

    • Some entrepreneurs give the three year goal but then go into their grandiose plan for five or ten years from now, showing that they are ambitious
    • Some entrepreneurs say they haven’t thought it too much and just want to grow their business
    • Few entrepreneurs give concrete numbers, instead offering vague ranges of values, showing they haven’t mapped out where they want to be, and worked backwards from it to now what they need to do to get there

    My advice to entrepreneurs is to think hard about your three year goal and spend time working backwards from it to come up with a plan for what you need to accomplish in the interim. The best time to start is now.

  • Boredom in Startups

    Boredom and startups don’t go together. By the very nature of a startup there are always 100 things to do because there is a lack of resources and people to execute on all the ideas. At today’s EO Accelerator accountability group, one of the entrepreneurs mentioned he was bored with doing a certain part of the business related to a third-party service. When he used the word bored I knew what he really meant: that function was no longer adding value to the business.

    My takeaway from that conversation was that as soon as something becomes boring or doesn’t add value, immediately kill it. Too much cruft gets added along the way as the business grows and leaving things in there that you don’t care about only makes it worse.

    What do you see that should be stopped in your business? Can you get rid of it?

  • User’s Conference Planning

    We’re deep into the process of planing our annual user’s conference. I really underestimated the power and importance of user’s conferences before we put on our first one a few years ago. There’s something incredibly powerful about spending a day or two with customers, learning how different clients use your product, and talking about the future vision. It really is a great morale builder and helps nurture and deepen relationships.

    Here are a few general items we think about as part of our user’s conference planning:

    • Charge a reasonable fee that barely covers costs but still allows for a great event
    • The venue is extremely important and should be recently renovated and professional (don’t skimp on the venue!)
    • Have as many clients speak as possible — customers love to learn from other customers
    • Provide a back channel for clients to communicate including a Twitter hashtag
    • Line up the conference dates at least six months in advance and solicit speakers for the agenda
    • Get partners/resellers involved in addition to customers and employees
    • Include a happy hour or field trip to help foster relationships
    • Buy the best internet access you can afford and get backup options like 4G wireless
    • Make it fun!

    What else? Have you been to a user’s conference that was especially memorable?

  • Thinking About the Perfect Office

    We’re a little over nine months out from finishing our current office lease. You see, historically, we’ve always done subleases, and we plan on continuing to do so. The big difference this time is that we plan on heavily customizing our space, unless an awesome creative space comes along, which isn’t likely in the financial district of Buckhead in Atlanta.

    A sublease usually only needs to be negotiated 3-4 months before assumption of the lease. But, when building out or modifying an office, it’s usually good to add another 3-4 months for pulling permits, doing construction, etc.

    Now, if you had a clean canvas and could paint a perfect of the perfect office, what would it look like? That’s a question we’ve been debating for a few days now. Here are some of the initial ideas:

    • Open, collaborative space with no cubes or individual offices
    • Lots of conference rooms and phone booths for privacy
    • Awesome kitchen with free food
    • Bright colors and modern decorations
    • Lounge area with sofas for hanging out
    • Multi-purpose area that can host events, all hands meetings, etc
    • Balcony or patio outdoors
    • High in the sky with great views or a loft style space with tall ceilings
    • Shower and relaxation room

    What else? What should we add to the list? Do you have any good examples?

  • Where do Entrepreneurs Hang Out

    I was talking with Mike Landman, the incoming President of Entrepreneurs’ Organization (EO) Atlanta, earlier today about how to spread the word and recruit more members into EO. EO is the organization that entrepreneurs who’ve been in business for a few years, and have over a million dollars in revenue, wish they would have known about all along. It’s an exclusive non-profit for entrepreneurs to network with other entrepreneurs with a strict non-solicitation rule, participate in peer-to-peer experience sharing forums, and learn from some of the best speakers around.

    So, our discussion today was about where entrepreneurs hang out, and how to reach them. We identified the obvious places:

    What else? What are some other places entrepreneurs hang out in Atlanta?

  • Entrepreneurs that Don’t Adapt

    I love talking to entrepreneurs and hearing about progress, current challenges, and the vision for the business. Naturally, I have one or two ideas on their business, and know that many of my ideas are worth what they cost ($0). So what’s the challenge? The challenge is entrepreneurs that keep talking about their issues and don’t make progress. Entrepreneurs need to adapt.

    Once I hear the same issue two, three, and even four times from an entrepreneur I start to get disillusioned with trying to help. My mentality is to tackle an issue head-on and start talking about progress, not about the issue that hasn’t been addressed yet.

    Any advice? How do you deal with people that talk about the same problems, yet aren’t making progress?

  • Marketing in a Web World

    I spent time today talking with the marketing team of a successful financial-related technology company in town. It was a good opportunity to dig into their online marketing strategy — something they are in the progress of moving from primarily off-line to almost all online. Here are the categories they broke things into:

    • Buying leads (e.g. BuyerZone, VendorSeek, etc)
    • SEO/natural search
    • Paid search
    • Email
    • Webinars
    • Display ads
    • Original content sites
    • Affiliates

    I think online marketers often get focused on the most obvious categories — like paid search, SEO, and email — and don’t allocate enough dollars to experiment with other areas like buying leads or sponsoring webinars. My recommendation is to carve out a piece of the annual budget, say 5- 10%, and allocate it to experimenting with different options.

  • Develop a Routine with Potential Investors

    Say you’re thinking of raising money from investors (angels or VCs), when’s the best time to start the process? This is a trick question. The answer: when you don’t need the money.

    Hopefully you’ve heard this before, but investors like to invest when things are going so well that you don’t need the money. Why? You’re doing great and have mitigated much of the business risk, presumably by being profitable and consistently signing new customers. If you’re not at this stage of the business, and an investor expresses interest but isn’t ready to invest, I’d recommend developing a routine as follows:

    • Ask permission to provide periodic updates, which is a great way to show progress and dependability
    • Choose a timeframe for the updates (e.g. quarterly) and stick to it
    • Keep the updates short and to the point, with meaningful information (e.g. number of customers signed, revenue growth, etc)
    • Always ask if it is OK to continue to provide these updates as you don’t want to be burdensome

    Have you tried this? Does it work for you? What else would you recommend?