David Cummings on Startups

Category: Entrepreneurship

  • 4 Team Rapport Building Questions

    As part of creating a high performance team, it’s important to build rapport and understanding of each person at the human level. I’ve found that introducing an ice breaker or personal sharing element to off-sites or planning sessions is a great way to get to know each other and develop a foundation of trust.

    Here are four simple team rapport building questions:

    1. Where are your from and what was it like growing up there?
    2. How many siblings do you have and what’s each one like?
    3. Where do you fall in the sibling order and how did that impact growing up?
    4. What was your most interesting or difficult challenge as a kid?

    The next time you’re planning the agenda for a team meeting, whether it’s a one-off strategy session or a weekly meeting, consider adding a personal element for people to get to know each other better.

    What else? What are some more thoughts on team rapport building questions?

  • Recruiting is Sales

    Recently I was talking to a product-oriented entrepreneur and after sharing the 6 Ideas for Finding Great People, it was clear that recruiting was much more work than he had hoped. Pausing, I asked how much he enjoyed the sales process and selling to customers. As expected, he answered that he doesn’t like sales and views it more as a necessary annoyance. Aha! Recruiting is a sales process, and if you don’t like selling in general, then recruiting isn’t going to be fun.

    Here are a few ways to think of recruiting as a sales process:

    • Some candidates come in as referrals but most have to be targeted and marketed to (e.g. job postings, ad campaigns, etc.)
    • Great people have a number of job options, making it critical that they have a clear understanding of the why this is an excellent career move (just like when selling a product, the prospect needs to understand why this is the right choice)
    • Every entrepreneur must be passionate about their own company, and that passion needs to come through when selling the candidate on the position (buying something, including a career move, has much more emotion in it than people like to admit)
    • Even when the candidate verbally accepts, it’s not a done deal. Effort and care needs to be placed in ensuring the verbal turns into a signed offer letter. And, even then it’s important to follow up (I know one startup where the CEO personally calls every candidate immediately once they sign the offer letter to tell them how excited they are that they’re joining the team).

    Recruiting is a sales process and needs to be treated as such. If a sales process doesn’t come naturally to you, consult a sales person and get them to go through their process — most of it can be easily translated to recruiting.

    What else? What are some more thoughts on the idea that recruiting is sales?

  • 6 Ideas for Finding Great People

    Every time I talk to entrepreneur that’s just raised their first institutional round, the topic of finding great people always comes up. Of course, great people are always in high demand, so it’s never an easy process. With that said, here are six ideas we use to find great people:

    1. Startup Specific Job Boards – At the Atlanta Tech Village, we have a healthy job board that attracts people that are interested in startups generally, which creates a nice pipeline for everyone on the board.
    2. Local College Alumni Career Fairs – Schools like Georgia Tech have separate career fairs for students and alumni, making it easy to target different types of positions.
    3. Internal Referral Bonuses – Referrals from existing employees are always the best, and it’s effective to add an incentive like a $2,000 bonus for referring a new hire that stays six months (make it a $10,000 bonus for hard-to-find positions like software engineer).
    4. LinkedIn Targeted Emails – Use LinkedIn to find people that are currently employed and email them directly from the hiring manager (not a from a recruiter) explaining why it’s a great company and that their resume looks like a perfect fit. Also, ask if they know anyone that might be a good fit.
    5. Local Meet Ups – Spend time at the local meet ups for sales, marketing, product management, and engineering (specifically for the role needed e.g. iOS, Node.js, Ruby, Python, etc.) to find people that are actively working to improve their craft, and ask them directly for referrals.
    6. Twitter Mentions – Find people on Twitter that are potential candidates and mention them (or DM them if they’re a follower) saying that a new positioned opened up and if they know anyone that might be a good fit.

    Assume 10 – 25% of your time as a leader in a fast-growing company should be spent on recruiting great people. Finding great people isn’t a one-time event, rather it’s a process that needs an on-going commitment.

    What else? What are some more ideas for finding great people?

  • Transitioning from Free Flowing to Structured Organization

    As a new startup is getting off the ground, and the team is focused on product/market fit, there’s often little organizational structure. Everyone is heads-down focused on building something people want to buy and, with a small team, everyone knows what everyone is working on. Only, as product/market fit is found, and the organization grows, the need for organizational structure grows. Yet, many entrepreneurs, especially first-time entrepreneurs, are so caught up in the whirlwind of the business (especially when it’s going well!) that they don’t step back and start to put in more process and structure. I’ve even seen an entrepreneur scale well beyond the $1M run-rate milestone and not even have regular leadership meetings.

    Here are a few thoughts on transitioning from free flowing to structured organization:

    • Implement a Simplified One Page Strategic Plan immediately (even while in the free flowing stage)
    • Don’t add too much structure too early, but do take time to ensure everyone is aligned with the organizational goals or OKRs
    • Consider the appropriate meeting rhythm, and if more frequent communication produces better team results, implement daily check-ins for everyone
    • When the team is the size that everyone doesn’t know what everyone else is working on, more structure is needed

    9/10 times when I ask someone in a startup what their company values and goals are, they can’t provide a consistent answer. While the free flowing style works at the beginning, over time more organizational structure and process is needed.

    What else? What are some more thoughts on transitioning from free flowing to structured organization?

  • Building the Talent Pipeline in Advance of a Raise

    One of the most common mistakes I see from entrepreneurs that are raising their first institutional round of financing is not building a talent pipeline in advance of the expected close. Meaning, the vast majority of planned new expenses after raising money is to hire more people. Only, if there isn’t a talent pipeline, once the money is raised, it’ll take six weeks to build up the recruiting functions and then another 2-3 months to find great people (hopefully!) such that it’s now 3-4 months from close before the new money is earnestly being put to use.

    The solution: build a talent pipeline in advance of a raise. Here are a few thoughts:

    Great people are the heart of every successful business. Entrepreneurs need to build a talent pipeline, especially in advance of raising money.

    What else? What are some more thoughts on building a talent pipeline in advance of raising money?

  • Video of the Week: David Skok on the 3 Stages of a Startup

    For our video of the week watch David Skok talk about the 3 Stages of a Startup. David is the author of the extremely popular forEntrepreneurs blog and one of the best startup thought leaders. Enjoy!

    From YouTube: At the Matrix Partners’ SaaS meetup , David Skok, a five-time entrepreneur turned General Partner at Matrix Partners, gave a few insights on SaaS economics. In his talk, David explained that SaaS businesses are fundamentally different from traditional businesses, and have their own model and metrics. His hour long presentation can be read in detail – the SaaS business model and metrics http://www.slideshare.net/DavidSkok/the-saas-business-model-and-metrics

  • Platforms and Microservices

    Steve Yegge has an epic rant on Amazon being a poor place to work but more brilliant than Google when it comes to innovation at platform scale from 2011. David Skok recently published a post on his blog titled Microservices Essentials for Executives: The Key to High Velocity Software Development. The idea is that tech companies start out building their product as one large, monolithic system because it’s simpler and faster. Then, as the startup achieves greater levels of success, innovation slows down considerably even though more and more people are added to the product team. What gives?

    The larger the product, the harder it is to make changes to it due to all the dependencies. Amazon was the first major technology company to realize that Internet scale, and it’s greater levels of complexity, requires a new way of building large-scale systems: microservices. Microservices are simply smaller, self-sufficient special purpose products that form a platform (e.g. tiny apps that are used to make a big app). Amazon went further and built Amazon Web Services (AWS) to make the backend of these microservices even easier to manage and scale, and now AWS is one of the fastest products to $10 billion in annual revenue, ever.

    Tech entrepreneurs need to understand the benefits of microservices and start planning them once they hit the growth stage, but not before. All major platforms going forward are going to have some form of microservices underpinning them.

    What else? What are some more thoughts on platforms and microservices?

  • Document the Organizational Process

    With the start of Q3 upon us, it’s a great time to reflect on last quarter and go through the exercise of what should we start doing, what should we stop doing, and what should we continue doing (start, stop, continue). As part of this exercise it’s important to have the organizational process documented in something simple like a Google Doc. Similar to how the Simplified One Page Strategic Plan is updated quarterly, this document should be updated on a regular basis as well.

    Here are some example items that would be included in an Organizational Process document:

    Entrepreneurs need to document the organization process and be intentional about how their organization runs.

    What else? What are some more thoughts on the idea of documenting the organizational process?

  • Build a Bottom-up Sales Forecast

    When talking to entrepreneurs about their sales forecast, they love to talk about the market and say “if we only get 1% of XYZ we’ll do great.” Of course, the real world doesn’t work that way. Instead, it’s best to build a bottom-up sales forecast that takes into account the current sales performance and extrapolates it out based on growth rates.

    Here are a few factors to keep in mind with a bottom-up sales forecast:

    • How does the corresponding volume of sales qualified leads need to grow? Do the current marketing campaigns have capacity for more volume (many campaigns get more expensive with more volume like pay per click ads)?
    • How many sales reps need to be hired for one to work out (it’s important to note when planning that all new hires don’t work out)?
    • How long does it take for a new sales rep to ramp up and be fully trained?
    • What’s the attrition rate of existing sales reps?

    Often, if a startup wants to triple sales next year (see Triple, Triple, Double, Double, Double), they need to expand the sales and marketing team well in advance of the new year.

    My recommendation: build a bottom-up sales forecast.

    What else? What are some more thoughts on a bottom-up sales forecast?

  • User Experience to Get Small Committments Early

    Continuing with the Science of Persuasion video, at the 6:20 mark in the video the author talks about the importance of consistency. From the video:

    Look for, and ask for, commitments that can be made

    This is a valuable technique in the software world, especially during free trials or onboarding new users. Instead of saying “hey, we’re a great software product with 100 features, good luck” the idea is to direct the user to accomplish something small and simple, as quickly as possible (e.g. connect your Twitter account and we’ll show you three immediate insights). Then, once the small commitment is made (e.g. using a simple feature) the user is much more likely to take the next step and use the more complicated feature (e.g. now that we’ve given you these three insights, answer these 10 questions and we’ll suggest 100 new people to follow on Twitter).

    Start small. Get the user to do something. Show value. Build on the experience and get the user more involved. Much like micro apps for lead generation, give value as quickly as possible and ask for small commitments.

    What else? What are some more thoughts on the idea of getting small commitments early to help with persuasion in the user experience?