David Cummings on Startups

Category: Tech

  • The Real-Time Entrepreneur

    As I was switching through different web apps and reports today, it struck me how real-time information is today as an entrepreneur. I had just published a new post on the Kevy blog titled Managing a SaaS Metrics Dashboard With Pardot (check it out for an example on how to use a marketing automation system to feed the top-of-the-funnel SaaS metrics). Right after hitting publish and sending out a couple tweets about it, I was immediately able to see clicks and prospects interacting with it. As an entrepreneur that loves results, it doesn’t get much better than that!

    Think about information from the most common apps:

    • Salesforce.com – Watch sales rep activities, opportunities, and deals
    • Pardot – Watch anonymous visitors, leads, and digital fingerprints
    • Google Analytics – Watch information on macro hits and visitors
    • GitHub – Watch pull requests and progress on the current sprint
    • Zendesk – Watch support tickets and customer interaction

    Of course, a dashboard with all the critical data in one place would be cool (like Geckoboard), but the fact that each system is there and can be left open in a browser tab makes it readily accessible. It’s great to be a real-time entrepreneur.

    What else? What are your thoughts on the real-time entrepreneur?

  • 5 Challenges for Automation in the API Economy

    TechCrunch has a piece up today by Alex Williams titled Speed and Automating the Connections Between Humans and Machines in the API Economy. In the article, Williams argues that speed of an API, especially under large load, is a real challenge, just like scaling a large website (they are in fact very similar with APIs potentially having more write load than read load, in some cases). In addition to speed, he highlights automating the connections between APIs as a challenge, where automating means integration and connection of disparate systems.

    Peeling back API automation to a more detailed level, here are five challenges I see:

    • Data Interoperability – Synchronizing data between different systems is challenging due to different standards in types of data allowed (e.g. challenges with date/time stamps, number of characters allowed, translating fields like ‘GA’ to ‘Georgia’, etc)
    • API Authentication – While there are standards like OAuth and OAuth 2.0, many APIs were built before the standards were established and have their own form of authentication, requiring more effort to integrate as well as more ongoing maintenance
    • Recent Data Polling / Ping Backs – To connect disparate systems there’s a requirement to constantly check for recent data, or set up a ping back to be notified of new data, only many systems are still immature when it comes to this functionality by simply returning all data or only returning data in a paginated form (instead of being able to query against a specific data/time)
    • Bidirectional Syncing – It’s fairly straightforward to set up one-way syncing where one system is the master and the other system only takes, but doesn’t give data. Things become much more complicated when true bidirectional syncing is required and data can flow either way between system.
    • Custom Fields / Ad Hoc Customizations – Many of the more powerful systems, including Salesforce.com, allow for infinite customization, which makes for more complexity when trying to integrate products.

    The API economy is going to be a major driver of innovation over the next 5 – 10 years, and getting the automation piece right is a big opportunity.

    What else? What are some other challenges for automation in the API economy?

  • Are we in a tech bubble?

    Last week a colleague asked me if we were in the middle of a tech bubble and I immediately said “no way.” He theorized that five years from now things will have settled down and tech would not be getting the attention it gets now. I fumbled through a response and thought to myself that I needed to better articulate why we aren’t in a tech bubble.

    Here’s why the tech renaissance is going to last:

    • Fast internet access is prevalent everywhere — both wired and wireless
    • Widespread smart phone adoption means most people have a powerful computer on their person at all times
    • Costs to build and deploy a web/mobile app have gone down significantly due to open source, cloud computing, and new technologies
    • Startup funding, especially outside of Silicon Valley and New York, has been relatively steady, if not declining, meaning we aren’t seeing an unsustainable level of investment like in the late 1990s
    • Development of startup communities is more well understood, especially the concept of startup density, serendipitous interactions, strong networks, and more
    • Methodologies like the lean startup and customer development help de-risk part of the equation
    • Software-as-a-Service (SaaS) is a real phenomenon driving down the cost of IT while improving adoption and effectiveness

    Overall, we’re only scratching the surface with how the internet and mobile are changing the way people work and live. We’re not in a tech bubble and the future is bright.

    What else? What are your thoughts on a current tech bubble?

  • Thoughts on Salesforce.com Acquiring ExactTarget/Pardot

    Wow! Earlier today Salesforce.com announced it was buying ExactTarget (which includes Pardot) for $2.5 billion in cash (yes, cash). This is a great acquisition for Salesforce.com as they have a strong sales and service cloud but a weak marketing cloud (Buddy Media and Radian6 are social media marketing but not core marketing). Way back in 2009, I was pitching VCs to invest in Pardot (we didn’t raise money) and one of the most common questions was “What’s the exit strategy for Pardot?” My immediate response was that Salesforce.com was the most logical acquirer and that every CRM customer should also be a marketing automation customer. Well, the idea will finally come true.

    Here are a few thoughts on Salesforce.com acquiring ExactTarget/Pardot:

    • ExactTarget has an amazing culture (called “Orange”) with strong mid-western values whereas as Salesforce.com is typical Silicon Valley
    • Email marketing has been the #1 most requested feature for Salesforce.com on their idea exchange for as long as I can remember (ExactTarget is more for the mid-market and enterprise, but will finally allow Salesforce.com to check off that feature)
    • Marketing automation vendors like Marketo and others have real challenges ahead of them since over 80% of their customers use Salesforce.com (Salesforce.com will keep integrating with all the marketing automation vendors but now Pardot becomes the default standard)
    • Cloud marketing software as a fast-growing opportunity has really been validated lately with all the large acquisitions
    • Pardot has an opportunity to be a billion dollar a year business for Salesforce.com within 5 – 7 years due to how complimentary it is to their core sales offering

    Overall, it’s been amazing to be part of the marketing automation industry and I’m excited that Pardot ended up with the cloud leader.

    What else? What are some other thoughts on Salesforce.com acquiring ExactTarget/Pardot?

  • The Unfortunate Case of the Expired Domain Name

    Over sixteen years ago I put together a simple website for my dad’s business at DrCummings.com. Nothing special really, just a standard brochure site with information about the business, pictures, etc. A year later I went off the college and didn’t think much of it until I received a frantic phone call from my dad: DrCummings.com was now a porn site and they had called the police to find the culprit.

    Explaining the site probably got defaced by some script kiddies, I fired up my FTP client to restore the site. Only, I couldn’t login — it was worse than I had expected. The domain name had expired and someone else registered it, likely owning to the fact that the longest serving professional porn actor shares our last name (and my full name, to be clear). To make matters worse, the domain name was prominently featured in my dad’s new Yellow Pages ad strewn about Tallahassee.

    Naturally, I did what any desperate kid would do and I pulled up the WHOIS registry to get the email address of the person that had registered the domain. I shot off a quick email to the new domain owner in New Jersey asking if it was for sale and how much he wanted for it. By a miracle, the domain owner quickly responded and said he would happily sell it for $1,000. I swallowed my pride and did a PayPal transfer spending $1,000 of my personal savings to fix the situation and move on. Everything was back to normal.

    The moral of the story: pay the extra money and do a five or 10 year registration for your domain and make sure the associated email address is correct.

    What else? Have you had this happen to you and how did it turn out?

  • Notes from the Tableau S-1 IPO Filing

    Last week Tableau Software filed their S-1 with the SEC as part of the process to go public. Tableau, a business intelligence enterprise software company, is different from many of the IPO filings mentioned recently in that the company is already profitable, has been incredibly capital-light for their level of success, and is based in Seattle.

    Here are some notes from the Tableau S-1 IPO filing:

    • Common business intelligence use cases include increasing sales, streamlining operations, improving customer service, managing investments, assessing quality and safety, studying and treating diseases, completing academic research, addressing environmental problems and improving education (pg. 1)
    • “Land and expand” business model that starts with a free trial and then grows from there (pg. 2)
    • Over 10,000 customers (pg. 2)
    • Revenues (pg. 2)
      2010 – $34.2mm
      2011 – $62.4mm
      2012 – $127.7mm
    • Profits (pg. 2)
      2010 – $2.7mm
      2011 – $3.4mm
      2012 – $1.6mm
    • 17% of revenues are outside the U.S. and Canada (pg. 6)
    • Growth strategy (pg. 6)
      – Expand customer base
      – Further penetrate existing customer base
      – Grow internationally
      – Innovate and advance products
      – Expand distribution channels and partner ecosystem
      – Foster passionate user community
      – Cultivate exceptional culture
    • 749 employees (pg. 16)
    • Sales and engineering groups have the most hiring growth (pg. 16)
    • 239 orders over $100,000 in 2012 (pg. 20)
    • Using NetSuite for financial management and salesforce.com for CRM (pg. 24)
    • Currently does not offer a SaaS product (pg. 25)
    • Limited use of indirect sales channel partners (pg. 25)
    • Class B common stock has 10 votes per share and is concentrated among officers and directors (pg. 38)
    • 321 people in sales and marketing (pg. 55)
    • Transactions over $100,000 take over three months to close with transactions below that amount taking less than three months (pg. 56)
    • 25% of purchase price for maintenance and support contract (pg. 57)
    • Insiders took $32mm off the table in 2010 by selling shares to existing VCs (pg. 122)
    • Co-founders own 49% (pg. 125)
    • VCs own 44% (pg. 125)

    Tableau has had amazing growth, especially considering they’ve only raised $15mm total from venture capitalists ($15mm for growth and more than that for insiders to sell their shares). The big wild card is their ability to transition from installed software to cloud-based software. If they can do that, they’ll have even more upside potential.

    What else? What are some other thoughts on the Tableau S-1 IPO filing?

  • Real-Time Lightweight Business Dashboards

    One of the trends we’ll be seeing this decade is more intuitive reporting and real-time dashboards. At Pardot we employed LED Scoreboards whereby we had a large TV mounted on the wall with our current quarter’s goals displayed in a Google Spreadsheet that was manually updated daily. From a technology standpoint, we had looked into real-time business dashboards but hadn’t gotten around to implementing one.

    Here are the real-time lightweight business dashboards I’ve seen on the market:

    • Geckoboard –
      $19/month for 20 connections
      12 employees on LinkedIn (source)
    • Cyfe –
      $19/month for unlimited everything
      1 employee on LinkedIn (source)
    • Leftronic –
      $42/month for 2 dashboards
      10 employees on LinkedIn (source)
    • Ducksboard –
      $25/month for 3 dashboards
      9 employees on LinkedIn (source)

    At a glance, it looks to be a small but competitive market. Real-time lightweight dashboards will become even more common as more and more businesses switch to products in the cloud with open APIs. I’m looking forward to trying them out.

    What else? Do you use a real-time lightweight business dashboard and what do you think of it?

  • The Future has Arrived with the Tesla Model S

    Three days ago my new Tesla Model S electric car arrived. After reading so many articles and reviews online I knew I wanted to try one out but I didn’t want to wait six months before I could get one (each car has to be custom ordered and there’s a long waiting list). So, naturally, eBay is the next logical place to look and there was exactly what I wanted — a black one with the extended battery (rated at 265 miles on a single charge) and the technology package.

    I can’t say enough good things about the car — it truly is amazing.

    Pros:

    • Pure electric (crazy to think I’ll never need a gas station for the car)
    • Roughly $1 of electricity to go 30 miles (compare that to a $4 gallon of gas to go 30 miles)
    • Unbelievable acceleration (0-60 in 4 seconds)
    • Stunning 17″ touch screen in lieu of a center console (no buttons!)
    • 7 seats for a large family (mine came with the optional jump seats that are rear facing)
    • Smooth ride quality and no noise (the electric engine is basically silent, like a golf cart)
    • Great range at 265 miles
    • Excellent Google Maps navigation system and Slacker internet radio built-in

    Cons:

    • No long road trips off the beaten path (as more electric car superchargers are installed this goes away)
    • High price relative to a similar-sized sedan
    • No parking sensors, blind spot monitoring, etc (gadgets you would expect in a high-end car)
    • Awkward placement of the interior door handles and area to pull the door shut (it’s about six inches too high and too close to the dash)

    Overall, the future is bright and the Tesla Model S is now the standard for all cars, electric or otherwise, going forward. Electric cars are going to succeed and be common on the roads within 10 years.

    What else? What are your thoughts on the Tesla Model S?

  • 3 CRM Trends on the Horizon

    Continuing with yesterday’s post, Will the Next Major CRM Provider Please Stand Up, there are a number of trends on the horizon that will have a major impact on CRM. CRM, or Customer Relationship Management, is such a large market that a number of trends, like social media, have already started changing the product landscape. I’d like to talk about three specific trends.

    Here are three trends in CRM that are on the horizon and will have a serious impact:

    1. Decline in Sales People — just like travel agents, as markets mature and web technologies get better, more and more products and services will be bought in a self-service manner online, reducing the number of sales people (sales people will never go away but technology is going to replace a number of them)
    2. Industry Specific CRMs — one size doesn’t fit all and as more people are exposed to modern, web-based CRMs, the opportunity also grows for a more specialized system that takes into account nuances relevant to that vertical and market (generic systems are already customized to be industry specific, but they aren’t as elegant as a custom built system that achieves a critical mass of customers)
    3. Ease of Integrating Cloud Apps — AppExchange, and the number of third-party apps that integrate into Salesforce.com, is often cited as one of the main reasons Salesforce.com is such a dominant force in the industry, only now there are a number of robust third-party APIs and cloud middleware applications that make it easier than ever to integrate apps, slowly removing one of the biggest barriers to adoption

    CRM serves as the core of many B2B businesses. Over the next 3 – 5 years, we’re going to see many changes and industry trends play out in the market.

    What else? What are some other trends on the horizon that will affect the CRM market?

  • Will the Next Major CRM Player Please Stand Up

    Customer Relationship Management (CRM) has been around for decades. Over the past 10 years, Salesforce.com has risen to prominence as both the largest Software as a Service (SaaS) company in the world and the largest CRM company in the world. Salesforce.com has an incredibly powerful product that is now geared towards the enterprise and over time has moved away from the small and even low mid market segments. Also, at a price point of $65 – $125/user/month (retail), the pricing is more inline with what larger organizations can afford to spend. The product is the most robust and most well integrated with other applications.

    Market wise, there exists an opportunity for a lighter weight, more end-user friendly CRM that’s in the $5 – $15/user/month for the small to mid-sized business segment of the market. It doesn’t need to be as comprehensive as Salesforce.com, but it does need to be fairly customizable, and just as important, integrate with a large number of third-party apps (one of the most challenging things). SugarCRM, NetSuite, and Microsoft Dynamics CRM have strong products, but all target the enterprise with products that are north of $30/user/month.

    Here are some of the current contenders in the SMB market:

    So, the SMB market is clearly healthy with a number of competitors, but talking to other entrepreneurs, no system dominates. I believe over the next 2-3 years another CRM player will emerge as the leading SMB provider, and it’s only a matter of time before the winner becomes apparent.

    What else? Do you use any of these products and who do you think will be the next major CRM player?