David Cummings on Startups

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  • Front-End Only Minimum Viable Product

    Steve Blank and Eric Ries helped popularize the concept of the minimum viable product (MVP) as a way to get a functional prototype into the hands of potential customers as quickly as possible. Previously, too many entrepreneurs built complex, elaborate products without incorporating customer feedback, resulting in failure.

    Now, with some of the latest JavaScript frameworks, the minimum viable product is even simpler: a front-end only MVP. Here’s how it might work:

    Really, the key difference with traditional web-app MVPs is putting more logic and data storage on the client side (the browser). Functionally, to the end-user, it feels and operates like a fully-functional application, only long-term persistence and back-end processing isn’t present. Much like Parse provides a flexible backend with little work for mobile apps, these modern, MVC-based JavaScript frameworks make for a front-end only minimum viable product.

    The next time the minimum viable product topic comes up, consider a front-end only MVP as a simpler starting point.

    What else? What are some more thoughts on a front-end only minimum viable product?

  • Review of the Previous Quarter

    With Q1 2015 wrapped up, now’s a great time to reflect on the previous quarter. Did anything dramatic happen? Why, yes, there were some serious ups and downs. From a rhythm, data, and priorities perspective, there are several items to review:

    • Simplified One Page Strategic Plan – The one pager is the overall business alignment doc. Priorities change every quarter, along with the basic metrics, but much of the document stays the same. 
    • Quarterly Check-ins – Whether it’s monthly sit-downs or quarterly, it’s critical to spend time with team members and constantly calibrate. With tiny startups, it’s more ad hoc and formalizes as the business grows.
    • Monthly SaaS Metrics – While the one pager has great high-level info, the monthly SaaS metrics sheet breaks it down into dozens of data points and provides a fine-grained view into the performance of the business.
    • Start, Stop, Continue – What’s working well, not working, and needs to change in the business? Just like a scrum meeting, it’s important to evaluate the overall business functions as well.

    The quarterly review of rhythm, data, and priorities feels frequent enough to be useful and infrequent enough to not be burdensome. Entrepreneurs would do well to implement a personal quarterly process whereby key aspects of the startup are reviewed.

    What else? What are some more thoughts on a review of the previous quarter?

  • High EQ, High IQ, and Strong Work Ethic

    A few days ago I got into a conversation about what makes for a great founding team. Of course, we hit the normal topics like passion, resourcefulness, and vision. Then, I heard it summarized in a way I hadn’t heard before: amazing founding teams have high EQ (emotional quotient), high IQ (intelligence quotient), and a strong work ethic. Now, if the founders have all three characteristics, that’s incredible, but founding teams typically have more variability around EQ, and, ideally, all have high IQs and a strong work ethic.

    Here are a few thoughts on each:

    • High EQ – Excellent soft skills are critically important, especially for founders that are in an executive role with direct reports. Leading other people isn’t easy, and there are many fuzzy, human elements that are difficult to master.
    • High IQ – Smarts. Understanding how to build things and being able to ask the right questions is hard. While it isn’t a requirement to be the smartest person in the room, it’s still important for founders, especially technical founders, to have a high IQ. In fact, it takes a level of intelligence to realize someone else is smarter, and to create an environment where each new hire raises the IQ of the whole company.
    • Strong Work Ethic – With high EQ and IQ, the final piece of the equation is a strong work ethic. I’ve seen teams out-execute much more heavily funded competitors because they worked harder and smarter. No matter how much talent a team has, a tremendous amount of effort is required for success.

    The next time you meet a team of entrepreneurs, evaluate where they fit on the EQ, IQ, and work ethic scale. If they have all three, the chance of success increases dramatically.

    What else? What are some more thoughts on high EQ, high IQ, and strong work ethic as key founding team characteristics?

  • The Gap Between Selling a Company and Telling the World

    At 11:05am on Tuesday, October 9th, my co-founder and I finished digitally signing all the legal documents. Pardot was officially acquired by ExactTarget. At lunch that day, with three other senior leaders from the team, I looked up, smiled, and commented that we were all unemployed.

    See, as part of the selling the company, each member of the executive team signed a legal agreement resigning from Pardot. Then, after the deal went through, everyone but myself signed an employment agreement to be a part of ExactTarget. For a period in the middle, technically, we were unemployed.

    More important than being unemployed, we had sold the company, but we couldn’t tell the staff until 3pm on Thursday, and couldn’t tell the world until the public markets closed at 4pm on Thursday. For 51 agonizing hours, we tried to continue on as usual, all the while knowing that we’d sold the business and huge changes were imminent. Life was never going to be the same.

    What would our team members say? Were we a sell out? Would we really be able to grow faster with more resources? How would the culture, the thing we valued the most, change? What’s next? We didn’t have all the answers, but we knew that there was a huge opportunity to lock in a “win”, and have a chance at becoming the most widely used B2B marketing automation platform in the world.

    Selling a company is an incredibly emotional experience, and, one of the most anxiety-ridden parts is the time between closing the deal and telling the world.

  • 9 Entrepreneurial Team Member Traits

    Sam Wheeler of PayRight Health Solutions posted a great comment yesterday about traits he finds in entrepreneurial team members at thriving startups. After seeing the list, I readily agree.

    Here are his nine entrepreneurial traits of successful team members:

    1. Flourish with ambiguity.
    2. Love constant change.
    3. Feel as if they are on a mission.
    4. Comfortable being misunderstood.
    5. Can make decisions and move quickly.
    6. Willing to discard prior beliefs when proven wrong.
    7. Always try to hire smarter and better employees.
    8. Don’t give up, but know when to move on.
    9. Think of themselves as builders.

    The next time you’re recruiting a candidate, or thinking through your core values, reference this solid list.

    What else? What are some other entrepreneurial team member traits you like?

  • More Confidence With Each Customer Count Milestone

    The early days of a startup are the hardest. So many ups and downs, incredible amounts of uncertainty, and the realization that startups are actually much less glamorous than they seem. And, every time a potential customer says “no”, a potential employee says “no”, and a potential investor says “no”, the entrepreneur’s confidence is slowly chipped away. Only, something special starts happening as customers sign on and revenue starts to grow. Suddenly, thoughts like “this thing is going to work” and “this market actually needs our solution” start entering the mind. Confidence and customer wins beget more confidence and more customer wins.

    Signing the first 10 customers is dramatically harder than signing the next 10. After signing 10 customers, especially 10 customers that didn’t come from existing relationships (e.g. non-friendlies), the product messaging improves, customer use cases become more compelling, and confidence grows.

    Signing the first 100 customers is dramatically harder than signing the next 100. With 100 customers, testimonials become more plentiful, reference accounts more abundant, edge cases ironed out, and a repeatable customer acquisition process clear. Confidence continues to grow.

    Signing the first 1,000 customers is dramatically harder than signing the next 1,000. With 1,000 customers, economies of scale start entering the financial equation, possibilities of dieing a quick death are no more (assuming recurring revenue with contracts), industry analysts are providing regular coverage, and the brand is becoming well known. The freight train has left the station and has tremendous momentum.

    While the beginning is the most challenging, entrepreneurs can take solace in the confidence that builds with each customer count milestone. Then, at some point, the momentum is so palpable that it becomes clear a level of success will be achieved.

    What else? What are some more thoughts on the idea that there’s more confidence with each major customer count milestone?

  • SalesLoft Badge Unlocked: $10M in Fresh Fuel

    Today, SalesLoft announced that they raised a $10 million Series A, lead by Jason Green of Emergence Capital, with participation from Jason Lemkin of Storm Ventures and Tom Noonan. Now, this is a huge milestone for the company, but only one of many required to build a great business. Let’s dig into how SalesLoft got here.

    Back in 2011, I was introduced to Kyle Porter, via a mutual friend, as someone who’s a young entrepreneurial sales executive with big aspirations. After meeting Kyle, I immediately tried to recruit him as a sales manager to help grow the Pardot team. Quickly, it became clear that running a sales team wasn’t his goal. Not having a position at Pardot that he was interested in, I invited him to the Ruby Tuesday’s next to the Pardot office with a different idea: let’s start a technology company together focused on making sales people more productive.

    Several weeks later, after many conversations and hours of brainstorming, SalesLoft was started around the idea of building a sales intelligence platform (working tag line: sales intelligence — no longer an oxymoron). The original product would scrape the web for compelling events sales people needed to know about. For example, if a company was expanding offices or merging with another company, those were potential opportunities sales people needed to know about, especially if the company is one that’s already a prospect.

    After struggling with adoption for the first product (it was a vitamin and not a painkiller), a new, simpler product was introduced called Job Change Alerts (JCA). JCA was easier and more actionable for a sales rep to reach out to a lead or contact with a congratulatory note in an effort to stay top-of-mind. The product grew nicely from a users perspective, but was difficult to monetize as it was still more of a nice-to-have rather than a must-have. Then, LinkedIn introduced a more enhanced version of their job change notification service at no charge, and it was clear JCA was doomed.

    All throughout this iterative process, whenever a sales manager or sales rep was asked what they really wanted, the overwhelming response was that they wanted fresh, high quality prospect data with which to do more outreach. As a side project, an intern was tasked with building a tool to scrape data online in an effort to build the most accurate list of prospects. After the list-building tool, called Prospector, was introduced to SalesLoft prospects, the immediate response was incredible. Finally, something that did the job quickly and helped sales reps generate more leads.

    JCA was put to rest and all the efforts were focused on Prospector. Immediately, Prospector took off, due in part to providing tremendous value with minimal effort and in part because of the large following SalesLoft earned via content marketing and Kyle’s evangelism. After multiple product reboots, and a full team reboot, SalesLoft was growing faster than any B2B SaaS product I’d ever seen.

    With Prospector providing great data, customers started asking for a way to more effectively manage the inside sales process. CRMs like Salesforce.com are excellent, but are primarily a contact and opportunity database. Instead, SalesLoft customers wanted a business process management application of record that worked in conjunction with a CRM (or can function standalone). Imagine an application that helps enforce business rules around number of phone calls per day, number of emails per day, etc. all tailored to the type of sales rep, combined with an execution engine whereby the software actually dials the phone and sends the emails. The result is a huge increase in productivity and sales. Another way to think about it: take the Predictable Revenue methodology and build a product to repeatably execute it. That, essentially, is the Cadence product, and it now represents the fastest-growing product line within SalesLoft, and the future of the company.

    Congratulations to Kyle, Rob, Tim, and the rest of the SalesLoft team for achieving this milestone!

    For entrepreneurs, this is a good case study of just how challenging it is to get a company going and what it takes to be in a position to build something special.

    What else? What are some other thoughts on the SalesLoft story?

  • Gmail Productivity Tips

    Personally, I enjoy figuring out ways to be more efficient and more productive. One area that I’ve developed several shortcuts and optimizations is Google Apps, specifically Gmail. For two decades, I did email in a native app (Pine, Thunderbird, and Outlook) before switching exclusively to Gmail. After being Gmail-only for several years, I recommend it to everyone.

    Here are a few Gmail productivity tips:

    • Send and Archive – For almost all email responses, I use the optional Send and Archive button available through Gmail Settings. The idea is that once I send a response, I don’t want to see the email again unless the recipient responds back. With one click, the response is sent and I likely won’t ever see that email again.
    • Auto-Advance Emails – Every time I respond to an email, Gmail automatically takes me to the next oldest email in the Inbox without showing the Inbox via auto-advance, making it easy to rapid-fire process emails.
    • Canned Responses – Many of the common emails I send, like scheduling a meeting or introducing another person, are a canned response, making the email process faster and more consistent.
    • Calendly Signature Link – For sales reps and customer-facing roles, adding a Calendly link to the signature (see Jason’s post on Calendly) makes it easy for prospects and clients to schedule a meeting with limited friction.
    • Hide Unread Email Counts – As I don’t want to be distracted by the number of unread emails, I click on the “Starred” folder on the left navigation to change the page title and thus not show new emails in the inbox.
    • Native Mobile App – On iPhone, the native Gmail app is much better than using the standard email program, but doesn’t support all the above features.

    Gmail is an amazing tool, and with these productivity tips, an even better and more efficient experience.

    What else? What are some more Gmail productivity tips that you like?

  • What did you do to prepare for this interview?

    As a continuation of last week’s posts on 360 Degree Review Improvements Question for Job Interviews and The ‘Why’ Around Job Changes in Interviews, there’s another interview question I really like: what did you do to prepare for this interview? Much like Louis Pasteur’s quote that “Fortune favors the prepared mind”, the goal is to better understand how the candidate thinks and acts. Here are a few questions to think through when asking candidates about their preparation:

    • How detailed and thoughtful is the candidate’s response?
    • How comprehensive was the interviewee’s preparation? How does it compare to other candidates?
    • How does the amount and type of preparation work compare to what’s necessary to be successful in the desired job?
    • What did they do that was new or different compared to other responses heard in the past?

    Just like a written assessment in the hiring process helps companies understand a candidate, so too does drilling into how a candidate prepared for an interview. Too often, candidates don’t prepare well enough for interviews and should do a better job. What else? What are some other thoughts on asking about meeting preparation as part of an interview?

  • Rise of the On-Demand Marketplace

    One of the fastest-growing, and most fascinating, type of tech business in the last five years is the on-demand marketplace. Services like Uber (taxis) and Instacart (groceries) take something that was inefficient in the past and make it frictionless. And, all the while, creating jobs and growing the economy.

    Here are a few trends contributing to the rise of on-demand marketplaces:

    • Smart phones – With a super computer in the pocket, the process is seamless to both pinpoint a location based on GPS and provide a rich experience for the end user
    • Health insurance – Now that individuals can more readily obtain health insurance, the desire for many people to have employer-sponsored health insurance has declined (workers for on-demand marketplaces are independent contractors)
    • Cloud computing – Getting to market quickly, and scaling processing power up and down, is 100x easier than 10 years ago, allowing more marketplace flexibility
    • Economy – While unemployment has come down substantially over the past five years, in reality the number of people that have left the workforce, but would traditionally be working, is much higher than normal, combined with a number of part-time workers that want full-time work, make for a larger number of people that are a good fit for these marketplaces

    Over the next five years, look for many more on-demand marketplaces to emerge, and many more to become mainstream. On-demand marketplaces are a huge growth opportunity.

    What else? What are some more thoughts on the rise of the on-demand marketplace?