David Cummings on Startups

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  • Atlanta Tech Village for Talent Retention and Recruiting

    Last week I was talking to a local technology executive that wanted to start a new software company at the beginning of 2014. During the conversation, he volunteered that six months ago he was all ready to move his family to California to start the business, but with the advent of the Atlanta Tech Village, he felt Atlanta finally had the critical mass of entrepreneurs and community he desired to help his startup be successful. Thinking more about it, there’s a real desire to be in a community that has enough scale and density such that there’s peace of mind that if a startup doesn’t work out that there are other jobs in the area.

    Several startups in the Atlanta Tech Village moved to Atlanta in 2013 to be a part of the Atlanta community. BitPay moved to Atlanta from Orlando. CheckAction moved to Atlanta from New Orleans. Over the next few years, I expect to see many more startups move to Atlanta to take advantage of all the great resources and community.

    I knew the Atlanta Tech Village would help with recruiting but talent retention didn’t cross my mind. Now, I’ll add it to the list of Village benefits.

    What else? What are your thoughts on the Atlanta Tech Village for talent retention and recruiting?

  • Driving an Emotional Reaction

    One of the things Pardot is really known for is amazing customer service. Over the years, we received hundreds of unsolicited compliments from customers praising how thorough, attentive, and friendly everyone was on the team. The services team is so good it drives an emotional reaction.

    Jason Cohen, founder of WPEngine, recently wrote a piece titled Imbalanced People where he talks about the difference in results between an average team member and an extraordinary team member. In the piece, Cohen writes, “A great customer support rep thrilling customers and causing love on Twitter versus 100 others…never invoking an emotional reaction.” The emotional reaction, while hard to measure, is one of the most powerful services of a great team member.

    Much like Dan Martell sent the tweet “Support is the new marketing” earlier this week, delivering an experience that results in an emotional reaction, whether via support, sales, or something else, creates an entirely different kind of relationship. When thinking about experiences, think about driving an emotional reaction.

    What else? What are your thoughts on experiences interacting with people that drive an emotional reaction?

  • Domain Experts Requested with No Technical Co-Founder

    One of the ongoing questions in the startup world is around the importance of having a technical co-founder. The idea is that by having a strong technical person on the founding team, the startup will be able to move faster, make more intelligent architectural decisions, and build a better product. Several days ago PandoDaily published an article about Quotidian Ventures and their focus on “founders who have domain expertise in large, opaque old school industries.”

    I agree that having a technical co-founder is great, but is no longer a requirement. Here are a few reasons why it isn’t as important as it used to be:

    • Cloud computing, and specifically Amazon Web Services, are much better understood and have more ready-to-use scripts and tools that remove many of the previous challenges
    • Languages and frameworks, like Ruby on Rails, have significantly reduced the learning curve to not only get up-and-running but to also be productive in a short amount of time
    • Pre-built libraries to build interfaces, like Bootstrap, enable the development of high quality front-ends, and new tools have emerged enabling non-technical people to build interfaces, like Divshot

    Now, if the founding team doesn’t include a technical person, the first hire should be an in-house lead engineer. Overall, a technical co-founder is no longer a requirement and domain expertise with an idea in a big market is much more important.

    What else? What are your thoughts on the idea that domain experts no longer require a technical co-founder?

  • Personal Financial Goals – An alternative to cash in the bank

    When asking entrepreneurs about personal financial goals, the most common response is “I want to have enough money in the bank to not have to worry about making money.” Drilling in a bit deeper, and asking for a specific dollar amount, it’s usually liquid assets between $5 million and $10 million. With $5 million liquid, and an expectation of earning 4% per year, that results in $200,000 per year in annual income before taxes.

    While having the cash in the bank earning passive investment income is awesome, I like to point out that it’s often more attainable to build a business with recurring revenue that pays out $200,000 in annual dividends. Meaning, a better goal is to build a company that is self sustainable without the entrepreneur that then helps the entrepreneur meet his or her financial goals without the requirement of a large liquidity event. Liquidity events are rare, incredibly rare. 99% of companies sell for less than $30 million and only a handful of companies sell for over $100 million each year. The odds of a large exit aren’t great, while the odds of building a business that can make money on an annual basis in a manner that provides individual freedom are 100x better.

    What else? What are your thoughts on personal financial goals and the idea of a sustainable business paying dividends as more achievable than a large exit?

  • Highlights from Venture Atlanta 2013

    Today wrapped up another very successful Venture Atlanta event at the Georgia Aquarium. Every year 40 of the best and brightest startups present for six minutes in front of an audience of 700 people.

    Here are some of the highlights:

    • Alan Dabbiere, chairman of AirWatch, gave a great keynote talking about some of his lessons learned, which included an awesome quote, “Atlanta is like a shaken up champagne bottle – ready to explode”, when referring to Atlanta’s entrepreneurial potential
    • Megan Burton, CEO of CoinX, did a great job articulating the value proposition of a Bitcoin exchange that has all the required licenses and state-level regulations to grow the $1.5 billion dollar market
    • Terry Kim, CEO of CheckAction, brought some levity to the event and mixed humor with the otherwise dry topic of I.T. project management software
    • Lucie Ide, CEO of Rimidi, presented one of the biggest ideas of the event with the harnessing of big data to deliver better outcomes for patients with diabetes
    • Tony Gallippi, CEO of BitPay, painted a picture of world-wide frictionless payment processing devoid of transaction fees
    • Devon Wijesinghe, CEO of Insightpool, fired up with the crowd with tales of winning Fortune 500 customers and instilling a healthy level of fear around social media tracking of people in the audience
    • Kurt Uhlir, CEO of Sideqik, highlighted successful case studies of customers and educated the attendees on the power of online partner marketing

    Overall, the event was a major success and I’m glad I had the opportunity to attend.

    What else? What are your thoughts on Venture Atlanta 2013?

  • Never Forget the Golden Data Rule

    Recently I was talking to an entrepreneur and we were discussing the importance of data control in business applications. Now, this is control in the sense of which application dictates who gets access to the data as opposed to which company owns the data (the customer always owns the data). During the conversation it occurred to me that there’s the Golden Data Rule just like there are the two common Golden Rules.

    Golden Rule A: do to others what you would have them do to you.

    Golden Rule B: he who owns the gold, makes the rules.

    Golden Data Rule: he who controls the data, makes the rules.

    This comes into play when considering business ideas and strategies that involve other application data (whether accessed through a plug-in, an API, or some other means). Big risks here include being a sharecropper on someone else’s land (they can take away access), “borrowing” the most successful features from your product and incorporating them into their product, or charging increasingly higher fees to access the data (taxes to access SaaS systems are more common than people realize).

    At the end of the day, never forget the Golden Data Rule when building your company.

    What else? What are your thoughts on the Golden Data Rule?

  • Atlanta Tech Village Accelerates Results for Ambitious Entrepreneurs

    Much has been written here about the Atlanta Tech Village and lessons learned over the past 10 months, including the benefits as a sales and recruiting tool, instant community, and more. There’s another observation that crystallized for me recently: the Village accelerates results for entrepreneurs that work hard and take advantage of what the community has to offer. Let me explain.

    With a large, active entrepreneurship center, there are always opportunities to move a startup forward. Here are a few examples:

    • Learning programs for continuing education (it’s important to pick the ones that are the most relevant and not waste time)
    • Guest speakers, panels, and VIP tours that also double as a prospect hunting ground (be tactful and pleasantly persistent — it’s very easy to cross the line and be annoying)
    • Media events where journalists come through to meet startups, and the more relevant and timely the entrepreneur story, the better

    So, the takeaway is that the entrepreneurship center provides a number of great resources but just being in the community doesn’t translate into results. Getting involved and being smart about it results in significantly more progress than working on an island.

    What else? What are your thoughts on the idea that the Atlanta Tech Village accelerates results for ambitious entrepreneurs?

  • Entrepreneurs Should Hire a Sales Assistant Sooner than Expected

    Early on in the B2B startup adventure, the majority on an entrepreneur’s time is tasked with finding product / market fit through customer discovery and sales. While cold calling and emailing (see Predictable Revenue) isn’t a high priority on most people’s to do list, it works for getting in front of prospects and gathering information. Because it’s so valuable, entrepreneurs should hire a sales assistant sooner than expected as it helps the entrepreneur make better use of his or her time.

    Here are a few reasons why hiring a sales assistant makes sense for an entrepreneur:

    • Building lists of companies, names, emails, and phone numbers is time consuming and easily delegated (see the SalesLoft Prospector tools)
    • Coordinating meetings, web demos, and conference calls takes more time than people expect (see Calendly)
    • Staying top-of-mind with personalized, relevant email is a key way to continue dialogue with leads, and a sales assistant can handle most of the heavy lifting

    Yes, a sales assistant will cost $15 – $20/hour, but it’s well worth it if the startup can afford it. When budgets and future hires are being discussed, consider a sales assistant.

    What else? What are your thoughts on the idea that entrepreneurs should hire a sales assistant sooner than expected?

  • 3 Future Trends for Marketing Automation

    During the Q & A session of my talk today at Drupal Camp Atlanta, one of the audience members asked the question, “where do you see marketing automation going?” Thinking about it for a second, I answered that I saw several trends on the horizon for marketing automation.

    Here are three future trends for marketing automation:

    • Benchmarking – With vendors like Pardot signing up a critical mass of customers, there’s an opportunity to benchmark results anonymously across different categories and become the Nielson Ratings of B2B marketers (e.g. for companies of this industry, size, and price point, here’s the average sales cycle, conversion rates, ROI, etc).
    • Big Data / Machine Learning – Most lead scoring is done with a very static model of assigning values to certain web pages, forms, activities, etc. such that it doesn’t take into account actual data from previous prospects that turned into customers. Using big data tools and machine learning, marketing automation systems will be able to automatically build scores around a prospect’s propensity to buy that will be much more accurate.
    • 3rd Generation Platforms – With Eloqua being a first generation platform and Pardot being a second generation platform, in the next few years a strong 3rd generation platform will emerge that’s simpler and cheaper, just like Mailchimp did to the email marketing space.

    So, there you have it: three future trends for marketing automation. Marketing automation as an industry is still only getting started with less than a 10% adoption in the market. These three future trends are the natural evolution of the market and we’ll see them within three years, if not sooner.

    What else? What your thoughts and these three ideas and what are some other future trends you see for marketing automation?

  • Thinking About the Intersection of Content Management and Marketing Automation

    Tomorrow I’m honored to speak at Drupalcamp Atlanta about the Pardot story. Drupal, best known as an open source content management system, is now used as a full blown platform for building dynamic websites. Before I co-founded Pardot, I founded Hannon Hill, a content management company and spent many years in the industry. So, then, where does the Pardot story and marketing automation fit in with content management?

    Here are a few thoughts on the intersection of content management and marketing automation:

    • More and more sites, especially sites that are brochureware, incorporate marketing functions like anonymous visitor tracking, contact us forms, trackable site search, and more
    • As sites collect additional data on visitors through custom or turn key modules (e.g. social sign-on systems), more information is available to do targeted lead nurturing
    • For a non-transactional site, it’s difficult to prove return on investment, but by adding marketing automation, it’s easy to show value

    In the near future, the majority of sites will have some form of marketing automation and it’ll be commonplace for content management systems and marketing automation systems to have a much tighter integration.

    What else? What are some other thoughts on the intersection of content management and marketing automation?