David Cummings on Startups

Category: Entrepreneurship

  • The Three Main Functional Categories for B2B SaaS Apps

    When analyzing B2B SaaS opportunities, I like to think through things like nice-to-have vs must-have, market size, point on the lifecycle adoption curve, etc. There’s another area that I like to bucket SaaS apps: functional categories. Functional categories are a big, general way to think about what the app does and how it fits in with the user.

    Here are the three main functional categories for B2B SaaS apps:

    • Major Job Function (Workflow) – This is for apps where the app is one of the top three apps used daily by the person (e.g. SalesLoft and Gmail would be the main apps for an SDR).
    • Specialized Job Function – This is for apps where the app is used at least weekly to accomplish a function but aren’t an app that the end user “lives” in daily (e.g. Calendly for automating meeting scheduling).
    • Utility – This is for apps that are always running in the background acting as a utility for a specific function (e.g. Rigor for performance monitoring).

    Look at the public SaaS companies and you’ll be able to easily categorize each one into one of the three main functional categories for SaaS apps. Also of note is that the largest SaaS companies by revenue are all major job function apps (there are plenty of successful specialized job function and utility apps as well, but they aren’t nearly as large as the major job function apps).

    What else? What are some more thoughts on the three main functional SaaS app categories?

  • Ask the Start, Stop, and Continue Questions

    One of the techniques I picked up from the agile software development world that I apply to many things outside of software development is the concept of start, stop, and continue. Generally, the idea is to evaluate what happened and ask these three questions:

    1. What should we start doing?
      What’s something new we should add?
    2. What should we stop doing?
      What’s something we’re doing that we don’t need to do anymore?
    3. What should we continue doing?
      What are we already doing that’s going well?

    The next time you have a meeting, event, or program, ask the start, stop, and continue questions at the end. This is a great process to aid with continual improvement.

    What else? What are some thoughts on using the start, stop, and continue model for improvement?

  • How Can I Help a Startup?

    Yesterday I had the chance to spend time with a top executive from a large tech company. After touring the Atlanta Tech Village, and sharing the story, he asked, “How can I help a startup?” Great question. Here are four ways to help a startup:

    1. Potential Customers – Startups are always looking for new business. Know a potential prospect? Make an intro.
    2. Potential Employees – Finding great people that believe in the mission is a key to success. Know someone that might be a good fit? Make an intro.
    3. Potential Partners – Relationships and connections are tough, especially for startups without social proof. Know a potential partner? Make an intro.
    4. Customer Discovery – Startups are always looking to better under the market and potential customer needs. Have feedback or insight? Share it with a startup.

    Want to help a startup? Start with these four ideas. Startups are always looking for help.

    What else? What are some other ways to help a startup?

  • Make Company Name and Product Name the Same

    At Pardot, we originally named our product Prospect Insight, thinking we were cool with a product that was abbreviated PI (Note: You can still go to prospectinsight.com and it redirects to Pardot). Only, at the time, we didn’t understand that it was a bad idea to have a product name separate from the company name. As we started to gain traction, customers would refer to the product as Pardot, and not Prospect Insight. Eventually, we realized that to our customers the product was one and the same as the company, and we dropped the product name Prospect Insight.

    The company name and product name should be the same. It’s hard enough to build one new brand, let alone two simultaneously. Make things easy and simple: keep the names the same.

    What else? What are some more thoughts on making the company name and product name the same?

  • Thinking about Thinking

    One of the questions I like to ask is “Where do you do your best thinking?” Of course, we do thinking all the time. Yet, when I ask that question, people immediately know what I mean. While we’re always thinking, there are certain times, locations, activities, and events that routinely deliver better thinking.

    Here are a few questions to ask when thinking about your best thinking:

    • What was a recent breakthrough? What were you doing when it happened?
    • Who is a great collaborator that helps with your thinking?
    • Are there certain activities, hobbies, or sports that really help your thinking?
    • Where’s your favorite thinking spot? At home? At the lake?
    • What can you do to improve your thinking? What are some next steps?

    While it’s meta, spend some time thinking about thinking and figure out how to make your time more productive and efficient.

    What else? What are some more thoughts on thinking about thinking?

  • Questions to Develop the Ideal Customer Profile

    One of the terms I hear a fair amount from entrepreneurs is Ideal Custom Profile, commonly shortened to ICP. ICP, as it sounds, is a way to hone in on your desired customer by describing as many elements and attributes as possible. When I ask an entrepreneur about their target customer, and the response is vague, I know that they haven’t developed a strong ICP.

    Here are a few questions to help develop the ideal customer profile:

    • What’s the typical company size and geography?
    • What’s the target job title?
    • How much money should they already spend on a related element?
    • What’s the required technology stack?
    • What are some other defining characteristics?

    For last couple years before the Pardot acquisition, we defined our ICP as follows:

    • Company or division with 20 – 200 employees of which 5 – 50 are in sales and marketing
    • At least one full-time in-house marketing manager
    • Already run an email marketing newsletter program and purchase Google AdWords for lead generation
    • Job title of Marketing Manager, Marketing Director, or VP of Marketing

    Build an initial ICP, socialize it with team members, and continuously iterate on it. The better the ICP, the higher the close rate.

    What else? What are some more questions to develop the ideal customer profile?

  • Networking Questions When Looking for the Next Opportunity

    Recently I’ve had the chance to talk with two different entrepreneurs that have moved on from their ventures and are looking for the next opportunity. In each of the conversations we talked about what went well, what didn’t go well, and general learnings. Then, we talked through a few different questions:

    • What’s your ideal role at the next company?
    • What size company? Seed stage? Early stage? Growth stage?
    • What verticals or trends interest you?
    • What’s your risk appetite regarding salary vs equity trade-off?
    • What companies in town interest you?
    • What else is important to know?
    • Who else should I meet with?

    Looking for a new opportunity? Use these simple questions to get the conversation going.

    What else? What are some other networking questions to use when looking for the next opportunity?

  • Sales Training

    As the startup progresses beyond product/market fit and finds a repeatable customer acquisition model, it becomes time to really scale out the sales team. As the sales team grows, one of the common tasks is to develop sales training. But wait, we’re just selling software, can it be that hard? Yes. There’s a huge difference between a sales rep that’s well trained and one that isn’t.

    Here are a few popular sales trainers:

    • Sandler Training – One of the largest and most well known sales training organizations.
    • salesOctane – Jim Ryerson did several training programs for our team at Pardot and is a master of his craft.
    • Jack Daly – Super high energy and compelling sales trainer. Highly recommended.

    Sales training is well worth the expense. When you can afford it, I’d recommend putting it in the budget and investing in sales team training.

    What else? What are some other sales training programs and instructors you recommend?

  • Ideas for Sports Venue Apps from the Braves App Challenge

    Tonight I had the opportunity to hear the pitches from the Braves App Challenge (think hackathon) at the Atlanta Tech Village. The goal was to reimagine the experience at the new Atlanta Braves stadium, SunTrust Park, complete with multi-terabit internet access.

    Here’s a brief synopsis of most of tonight’s ideas:

    • Stadium access driving direction app that takes your current location and all the potential ways to get to the different stadium entry points while optimizing for traffic (think Google Maps/Waze integration checking several different routes)
    • Stadium experience customization based on preferences like shade/sunny, first date/romantic, rowdy/noisy section, etc
    • Referral rewards app (e.g. tweet a picture with your Braves hat on in the stadium and get a free Coke)
    • Image overlay app where you can swap out the text or plug in a Braves player digitally (think Snapchat filter)
    • Meet like-minded people in stadium and make new relationships
    • Virtual trading cards where you can only get certain ones by attending games (think Pokémon Go but for digital baseball cards)

    Congratulations to the winner Mixle:

    Thanks to all the teams that entered and the Braves for sponsoring the event.

    What else? What are some more ideas for sports venue apps?

  • How Much is Enough

     

    From a sign on the wall at a Jimmy John’s comes a great little tale titled How Much Is Enough:

    The American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

    The Mexican replied, “only a little while.”

    The American then asked why he didn’t stay out longer and catch more fish?

    The Mexican said he had enough to support his family’s immediate needs.

    The American then asked, “but what do you do with the rest of your time?”

    The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life.”

    The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats. Eventually, you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”

    The Mexican fisherman asked, “But, how long will this take?”

    To which the American replied, “15-20 years.”

    “But what then?”

    The American laughed and said that’s the best part. “When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.”

    “Millions?” asked the fisherman, “Then what?”

    The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evening, sip wine and play your guitar with your amigos!”

    (Author Unknown)