David Cummings on Startups

Category: Entrepreneurship

  • The Rise of Limited/No Visual Interface App Interaction

    Over the last few months I’ve been playing with our Amazon Echo and it’s amazing. When a song pops in my head, I just ask Alexa to play it. When I need to set a timer in the kitchen, I just tell Alexa to set it. This concept of interacting with an app with no visual interface isn’t new. What is new is that it works well, very well.

    Here are a few examples of limited/no visual interface app interaction:

    • Voice – Whether it’s Siri or Alexa, voice recognition technology is getting really good. I find talking to an app and interacting with it through voice much faster and more natural than clicking/touching a screen for simple interactions (assuming the app works well).
    • Email – More apps are using email as way to interact where the system sends an email to a user and the user then responds to the email with data, content, etc. that then gets ingested and processed. Interacting over email, when done well, feels elegant and frictionless.
    • Slack / Chat Rooms – Central chat rooms like Slack are becoming two-way communication services with outside apps (check out Slackbot). Similar to replying to an email to interact with a system, Slackbots can programmed to take in certain commands and inputs.

    Look for this trend of limited/no visual interface app interaction to grow and become more commonplace.

    What else? What are some more examples of limited/no visual interface app interaction?

  • New Product Categories Require Salespeople

    While it’s awesome to read about companies like Atlassian getting to $100 million in revenue with no salespeople, the reality is that almost all B2B tech startups require salespeople. Why is that? Well, 9 out of 10 times it’s a new product category and new product categories, by their very definition, don’t have an existing base of buyers that are actively seeking out a solution. While the potential buyers might have a problem or opportunity, if they don’t know what the product or category is called, or the latent demand hasn’t been magnified, they won’t go shopping for a system (it’s the same reason inbound marketing doesn’t work for new markets). Salespeople are needed to take new buyers through the purchasing process.

    Here are a few thoughts on new product categories requiring salespeople:

    • Uncovering or exposing a potential buyer’s latent pain takes time and effort, requiring a salesperson to be pleasantly persistent
    • Even if a qualified prospect expresses interest, they have a number of existing priorities and obligations, necessitating a salesperson to help keep the proposed solution top-of-mind
    • When a new product requires change management salespeople help build the support and get buy-in from the necessary stakeholders to take action (no small feat for more complicated systems)

    New product categories, like Pardot with marketing automation almost 10 years ago, are challenging and exciting at the same time. Assuming the market timing is right (the most important consideration), new product categories are the most fun, and require the help of great salespeople.

    What else? What are some more thoughts on the idea that new product categories require salespeople?

  • Product Pricing Doesn’t Matter Pre Product/Market Fit

    Recently I was talking with an entrepreneur about product pricing and positioning ideas. Only, this startup was pre product/market fit and didn’t have 10 passionate customers. My advice: product pricing doesn’t matter when searching for product/market fit. What matters is getting the product in the hands of as many potential customers as possible and iterating based on feedback.

    Here are a few thoughts on product pricing pre product/market fit:

    • Charge something, even if it’s nominal, so as to get quality feedback
    • Pricing is fluid and will change several times per year, even after product/market fit (see Pardot’s pricing progression through the years)
    • Start pricing higher than initially thought as prospects are more likely to give pricing feedback that things are too high than they are that it’s too low. Also, it’s easier to offer discounts to test different pricing strategies than it is to try and retroactively raising prices.

    When debating product pricing pre product/market fit, ignore coming up with a perfect price and instead focus on customer delight.

    What else? What are some more thoughts on product pricing pre product/market fit?

  • 2 Metrics Startups Need to Start Tracking

    After seeing dozens of Simplified One Page Strategic Plans, it became apparent that there are two metrics that most startups aren’t tracking and need to add to their main KPIs. But first, let’s back up. What’s the lifeblood of every business? Answer: employees and customers. If those are at the core, then their happiness should be tracked.

    Startups need to start tracking these two metrics:

    Entrepreneurs would do well to start tracking employee and customer satisfaction as part of their key metrics. Happy employees and happy customers are the core to every successful business.

    What else? What are some more thoughts on tracking employee and customer satisfaction scores?

  • Accelerate the Inevitable

    One of my favorite lines from yesterday’s video of the week of Elon Musk being interview by Steve Jurvetson was mid-way through. Elon was talking about Tesla building an electric car for a variety of reasons including no emissions, more power, etc.. Major auto manufacturers would have eventually gotten around to producing something similar, but it could have been another 10 – 20 years. Musk emphasizes that Tesla was a way to “accelerate the inevitable.”

    Think about that for a second: accelerate the inevitable.

    What do you see that’s going to happen in the future but the pace of progress is slow? What change do you expect to see? How can you accelerate the inevitable?

    The next time you’re searching for potential startup ideas, use the concept of “accelerating the inevitable” as a framework.

    What else? What are some more thoughts on accelerating the inevitable?

     

  • Video of the Week: Elon Musk at Stanford GSB

    For our video of the week, hear from one of the top entrepreneurs of our era: Elon Musk. From Tesla to SpaceX to SolarCity, the level of success is astounding. Enjoy!

  • Questions to Ask When Hearing Startup Advice

    Recently I was talking to a tech investor about giving advice to portfolio companies. What’s mandatory for the entrepreneur to do vs only a suggestion or recommendation? This made me think: entrepreneurs need to ask a series of questions whenever hearing startup advice. Here are a few questions to start with:

    • What’s the startup stage for this advice? Startups trying to find product/market fit have much different challenges than early stage and growth stage ones.
    • Who’s giving me this advice? What was his or her background and experiences that shaped this advice?
    • Why is this person giving me this advice? What’s their motivation?
    • Who can I corroborate this advice with? What’s another person that would have an opinion on this advice?
    • Is this advice I can act on now or should I file it away for a later time?

    People love to give advice and I’m no different. As an entrepreneur, it’s important to ask questions in the context of the advice and figure out its potential applicability.

    What else? What are some other questions to ask when hearing startup advice?

  • Biggest Difference Between Corporate Intrapreneur and Startup Entrepreneur

    Recently I was talking to an entrepreneur that had previously done several stints as a corporate intrapreneur building new business units for large companies. Now that he’d been out on his own as the CEO of a startup with no big company behind it, I wanted to find out what was most different. Simple, he said, “Recruiting is 100x harder in a startup.” At the big company, people are lining up out the door to get a big company salary and the perceived stability of a corporate job. In the startup world, recruiting talented people requires more selling of the vision, convincing people to take salaries well below the big company salaries, and helping with the mental shift required to jump into startup life.

    Here are a few more thoughts on the recruiting challenge between corporate intrapreneur and startup entrepreneur:

    • HR teams, existing recruiting pipelines, and more are taken for granted at big companies where in a startup none of that exists
    • Most cities don’t have a strong startup community making startups seem more risky because of a lack of local lore, and if the startup fails, it’ll be harder to find another job
    • Places like the Atlanta Tech Village are especially helpful for recruiting talent

    Being a startup entrepreneur is very different from a corporate intrapreneur and recruiting talent is especially challenging as a startup entrepreneur.

    What else? What are some more thoughts on the recruiting challenge difference between corporate intrapreneur and startup entrepreneur?

  • Entrepreneurs Almost Always Burn the New Cash in 18 Months

    Entrepreneurs are an optimistic bunch. Just the nature of building something from nothing lends itself to people that believe they can figure things out (high locus of control). After investing in over a dozen startups, I’ve encountered a phenomenon that makes sense but wasn’t apparent before: entrepreneurs almost always burn the new cash in the bank in 18 months. Whether the entrepreneur raises $300,000 or $3 million, 18 months later the cash is gone.

    Here are a few thoughts on entrepreneurs burning new cash in 18 months:

    Entrepreneurs have big dreams, and after raising money, almost always spend the cash in 18 months. Entrepreneurs would do well to recognize this and plan accordingly.

    What else? What are some more thoughts on entrepreneurs almost always burning new cash in 18 months?

  • 6 SaaS Product Management Tips

    Product management in a Software-as-a-Service (Saas) startup is one of the most important functions, and one of the most difficult — great product managers are hard to find. While product management is hard, there are a number of great resources online. Start with David Cancel’s blog (former head of product at HubSpot) and go from there. Here are six SaaS product management tips I’ve found valuable:

    1. Use dark features to roll functionality out to select accounts
    2. Develop a product management planning process
    3. Follow Covey’s four quadrants when thinking through functionality
    4. Find a daily, weekly, monthly, and quarterly product rhythm
    5. Eliminate the five mistakes first-time product managers make
    6. Perfect is the enemy of good for product management

    SaaS entrepreneurs would do well to embrace product management as a core function and follow these six tips.

    What else? What are some more SaaS product management tips you like?