David Cummings on Startups

Category: Strategy

  • Startup Docs to Create in Month One

    I was recently looking through Google Docs for my company to get an idea of what documents we put together in the first month. The idea is to get a bit of introspection on what we felt were important to iron out right away. Really, these are very much strategy and alignment docs to get the founding team on the same page.

    Here are some of the Google Docs we put together:

    • Company Overview (official company name, market description, positioning, team, etc)
    • Customer Acquisition Strategy
    • Pricing
    • Road Map
    • Action Items
    • Passwords
    • Technical Setup

    Note that there were no KPIs, one page strategic plans, etc in the initial docs. Operational items like those come with time as the business develops. Strategy documents like those outlined above are critical for getting everyone on the same page.

    What else? What other documents do you recommend creating when getting a new business off the ground?

  • The Pardot Name

    Way back in 2006 I had an idea for marketing software that would help with lead generation and management. Not owning any good domain names that met my criteria, I set out to find a domain name as the basis for the company name.

    After using several domain name finding tools (like BustAName.com) and not having any luck I went to Dictionary.com and typed in “marketing.” At the time, Dictionary.com returned translations of a word in 29 different languages. Nothing useful turned of for “marketing” so I tried the derivative of the word and did a search for “market.” Of the translations that came back, one caught my eye — pardot.

    Pardot is the Latvian (not Latin!) verb meaning “to market” or “to sell.” I liked that it was easy to pronounce and spell, so I headed over to BustAName to see if it was unregistered, and, much to my surprise, it was available. I registered it immediately for $8 and the rest is history.

  • The Domain Name Challenge

    I believe a good domain name, and thus company name, is absolutely critical for a software/web-based business. The challenge, naturally, is that it is difficult and/or expensive to find a good name that isn’t already taken. Here are  some rules I try to follow:

    • 10 characters or less
    • Must be a .com and not a secondary extension
    • Should be phonetically spelled and easily spoken in English
    • Always purchased and not rented/leased from someone else
    • Ideally relevant to the business, but this is more optional

    To meet these requirements I’ve generally found it takes a budget of $500 – $1,000 and the buying of an existing domain on Sedo.com. It is still worth trying a site like BustAName.com to find an unregistered domain, but I haven’t had luck going that route in several years.

    What else? What other attributes do you look for in a good domain name?

  • The Latent Market Demand Question

    One of the questions I like to ask entrepreneurs is “Are you unleashing latent demand for your product or are you taping into existing demand?” This question is another way of asking “Do most of your clients have an existing vendor that you replace or are you the first vendor they ever use?” Here are a few questions that come up with this important question:

    • Why isn’t there more demand already?
    • What can you do to help grow the market?
    • Can you solve the problem(s) that is/are holding back the growth of the market?
    • Is it a timing issue (e.g. the market is about to explode) or is it so early that you risk not getting to scale?

    The question also helps determine if it is an innovative or replicative business. My recommendation is to think through this topic as part of strategic positioning for the business.

    Do you agree? What other questions would you ask related to market demand?

  • Lessons Learned in Writing a Business Book

    We’re getting close to the launch of our first book and it has been quite the learning experience. I sprearheaded the process and worked on it with my co-founder as well as several other great people on my team. From start to finish it took a solid eight months.

    Here are some book details:

    • 160 page trade paperback
    • Seven chapters
    • Published through a local publisher
    • Printed through CreateSpace.com

    Here are some lessons learned:

    • Plan for it to take 50% longer than expected — the post writing process is still time consuming
    • Get stakeholders involved in the editing process throughout the writing and not all at the end
    • Use the book content for company white papers
    • Prepare for several rounds of printed proofs to work out kinks in formating
    • Build a spreadsheet of people to be sent a copy at launch and ask for an Amazon.com review

    If you’d like a free copy of the book, please post a comment here and I’ll have one sent to you. Yes, the topic is a surprise until a week from Tuesday when it comes out. Thanks!

  • The Perfect Product Challenge

    One of the major challenges with a web application is the allure of making it perfect. Who doesn’t want the perfect product? Perfect is the enemy of good. A good product gets out the door and is put in the hands of prospects. A perfect product doesn’t exist, and while it is being built, time, energy, and especially money is being consumed.

    My recommendation is to get the product into the hands of prospects as quickly as possible. And when I say prospects, I’m thinking about random ones, not just warm intros. Warm intros are definitely worthwhile and should be used, but also make things too easy that an objective buyer might not provide.

    I’ve seen too many startups never fully get a product out the door. Don’t join the crowd! Launch early and often.

  • Ways to Grow a SaaS Business Faster

    Earlier today we were talking about ways to grow a SaaS business faster. SaaS, with almost all recurring revenue, is a great business model once the machine is humming. SaaS is so desirable because it provides consistent cash flow and makes it easy to budget during growth. Thinking about the ways to grow faster, at the most basic level, here’s what we came up with:

    • Sign up customers faster
    • Sign up customers at the same rate but at a higher revenue amount
    • Up-sell existing customers
    • Reduce customer churn

    Now that we have the most basic ideas, it is time to work on different strategies for each category.

    What else? What are some other ways to grow a SaaS business faster?

  • Customer Development Challenges in Obvious Markets

    Late last week I was talking with a friend who’s thinking about launching a new product in the web application testing and monitoring market. The question he was trying to answer was “If there’s such an obvious need for the SaaS product, why haven’t more companies already purchased one?” To put it another way, there’s such a clear pain solved by the product, yet several potential customers that were surveyed knew they needed something but haven’t purchased anything without a good reason.

    As part of the customer development process, one of the most important pieces is to come up with the right questions to ask potential customers. It is more difficult than it sounds. Here were some of the questions asked:

    • Have you looked at any webapp/website testing and monitoring products?
    • What are some issues you’ve had with your webapp/website?
    • What type of system would you be interested in?
    • How much would you pay for a system that provided xyz piece of mind?
    • Why haven’t you already purchased such a system?

    It is especially challenging since the answers he shared with me from talking to potential customers didn’t provide any clear resolution. Even with no obvious outcome, customer development is an exceptional process when launching a new company and/or product.

    What else? What other questions would you ask a potential customer?

  • Three Ways to Think About Business Focus

    At the EO Atlanta Strategy Summit today, where we planned high-level goals for next year, one of the board members talked about a book (I don’t remember the name) where the author argued that there are three main areas of business focus:

    • Operational excellence
    • Product innovation
    • Customer intimacy

    The main thesis is that a business needs competency in all three, but should only focus on one. For example, Walmart leads at operational excellence, Apple leads at product innovation, and Starbucks leads at customer intimacy.

    What are some other examples for the the three categories? What one does your business focus on?

  • Herb Kelleher + Richard Branson Primary Attitudes

    I just started reading Richard Branson’s new book Business Stripped Bare and am enjoying learning about his approach to business. Richard Branson exudes such a passion for creating new products and businesses, while ensuring an outstanding customer experience. In the book he mentions that he believes in Herb Kelleher’s primary attitudes espoused at Southwest Airlines. Here are those attitudes:

    1. Employees are number one. The way you treat your employees is the way they will treat your customers.
    2. Think small to grow big.
    3. Manage in the good times for the bad times.
    4. Irreverence is OK.
    5. It’s OK to be yourself.
    6. Have fun at work.
    7. Take the competition seriously, but not yourself.
    8. Think of the company as a service organization that happens to be in the airline business.
    9. Do whatever it takes.
    10. Always practice the Golden Rule, internally and externally.

    These are strong primary attitudes and I believe in them as well.

    Do you agree? What attitudes would you add?