Category: Operations

Results matter. I’d much rather hear from an entrepreneur about their traction metrics than an idea with no results yet. Once the team and product are in place, it’s time to focus on traction. TechCrunch has a piece up titled Want to Raise a Million Bucks? Here’s What You Need where the author provides five categories of initial traction milestones for startups:

• B2B SaaS: 1,000 seats at $10/month (or the equivalent $10k/month revenue with a higher priced SaaS offering)
• Enterprise Application: 2 paid pilot contracts for at least $100k combined
• Social: 100,000 downloads/signups
• Marketplace: $50k revenue/month
• Ecommerce: $50k revenue/month

Here’s an idea: start a Traction Club for startups in your city that exceed these metrics. Make metrics a badge of honor and get more people talking about results, not ideas.

What else? What are your thoughts on these five categories and amounts as initial major milestones for startups?

Recently I read about using employee count as a solid proxy for revenues of a given startup. The idea is to look at three factors a) the number of employees found in LinkedIn b) the amount of venture capital raised and c) the recency of the last fundraising round.

Here’s the idea to determine the amount of revenue for a startup:

• Non-venture backed startups: multiply the LinkedIn employee count by $200,000
• Venture backed startup with a recent large round of funding: multiply the LinkedIn employee count by $100,000
• Venture-backed startup without a recent large round of funding: multiply the LinkedIn employee count by $150,000
• Note:  if in a more affordable region, like Atlanta, subtract $25,000 from the above multipliers

So, the next time someone ponders how much revenue a startup has, use these simple formulas to generate a directionally correct value, especially for technology startups.

What else? What are your thoughts on using employee count as a proxy for startup revenue?

Every few months someone comes out with a new article on how to defeat email overload, and like the most recent diet fad, it gets some love and then goes away. Only, the volume of email continues to grow and the death of it is greatly exaggerated. I have a few friends that prefer texting and/or DMing over Twitter, but overall email dominates, big time.

Here are three simple ideas to conquer email overload:

1. Only read emails in your inbox once and reply immediately if it’ll take less than two minutes to handle, otherwise promptly sort it into an appropriate folder
2. Don’t — I repeat don’t — set your email program to automatically retrieve email, instead make it a manual process to get new messages (with Gmail make “Sent Mail” your homepage so that you don’t see when new messages come in)
3. Allocate five time slots per day to check email, put them on your calendar as recurring events, and stick to it — don’t let email own you

Handling email is like handling anything else: make a plan, keep it simple, execute, and iterate. Conquer email with these three simple ideas and don’t look back.

What else? What are your thoughts on these three simple ideas to conquer email overload?

With so many metrics out there, it’s easy for a startup to get bogged down looking for the elusive “perfect” KPIs to monitor. From a CEO perspective, I always like to focus on keeping it as simple as possible with no more than two high-level numbers for each department to report on weekly. Now, of course, there are many more metrics tracked behind-the-scenes, but a small number makes it easy to concentrate.

Here are seven ideas for startup metrics to track on a weekly basis:

1. Annual recurring revenue — the current run rate of the business, which represents the health of the enterprise from a top-line, financial vantage point
2. Lost recurring revenue — the amount of annual recurring revenue that churned in the previous week
3. Weighted sales pipeline — the amount of new annual recurring revenue expected to be added in the next 30 days, weighted by likelihood of closing
4. New marketing qualified leads — the number of new leads that came in the past week that meet marketing’s definition of a qualified lead
5. New marketing pipeline value — the dollar amount of sales opportunity pipeline added in the past week from marketing qualified leads (the marketing qualified leads don’t have to have come in the same week)
6. New on boarded customers — the number of new customers that have finished the quick start/on boarding process in the past week
7. Net promoter score — the percent likelihood of customers surveyed in the past week to recommend the product to a colleague or friend

Bonus: if the startup is venture backed, another important metric is burn rate or number of months until the business runs out of money.

Tracking metrics on a weekly basis, displaying them on a public LED scoreboard, and making sure everyone knows where the startup stands, is a great way to align the company and hit the goals.

What else? What are some other startup metrics you really like to track?

Many people think startups should be devoid of most meetings. In large companies, people have meetings just to discuss other meetings. At a startup, it should be all doers and not administrators. Even with doers, meetings are important for alignment, communication, and calibration.

Here are seven ideas for types of meetings in startups:

1. Daily check-ins for 10 minutes where each person stands and answers the following questions: what did you accomplish yesterday, what are you going to accomplish today, and do you have any roadblocks
2. Weekly tactical meetings where you discuss KPIs, what was accomplished last week, and what will be accomplished next week
3. Weekly show-and-tells for product-centric companies where new features/products/ideas are shown, discussed, and cheered
4. Weekly company-wide lunches with no agenda other than to hang out and enjoy each other’s company
5. Monthly strategic meetings where you discuss big topics that take 30+ minutes each
6. Quarterly off-site where the previous quarter/year is reviewed and the next quarter/year is planned, goals are set, and big items tackled
7. Quarterly one-on-one check-ins where four questions are answered: what did you accomplish last quarter, what are you going to accomplish next quarter, how will you improve, and how are you following the values?

This might feel like too many meetings but each has a specific goal and is short with most well under one hour. The net effect is that meetings are more meaningful, take up less time overall, and people look forward to them.

What else? What are some other types of meetings in startups?

Offices have always fascinated me. Much like a house is a personal reflection of your tastes, interests, and style, so is a startup’s office. In 2001 I rented my first office space while still an undergrad in college — it was one single 12×12 interior room in an old three story brick office building on 9th Street in Durham, NC. My nickname for the room was the “Prophet Profit”, which, while wasn’t correct in the sense that I didn’t make any money, but was correct in that I learned an immense amount that later paid off.

That first office/room was very simple: four plain glass desks and chairs from Office Depot, tall glass shelves with a stereo on top, a dart board, four used PCs, and four giant 21″ CRT monitors. That’s it — a simple office outfitted by Office Depot and Dell. From there, my tastes and ideas evolved considerably.

Here are seven ideas for a great startup office:

1. Tons of natural light
2. Nice open areas as well as several little rooms
3. Large eating area for team meals and events
4. Aeron chairs (used!) and IKEA furniture
5. Massive LED TVs with attached Apple TVs for AirPlay
6. Location convenient to restaurants, public transportation, exercise options, etc
7. Visual ways to reinforce the corporate culture (e.g. a culture book, painted picture, etc)

A great startup office sets the tone for employees, recruiting new hires, customers, and more. Figure out how to make it cool in a cost-effective manner and improve it as the business becomes more financially viable.

What else? What are some other ideas for a great startup office?