David Cummings on Startups

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  • Keep a Google Spreadsheet of Business Ideas

    Some entrepreneurs come up with ideas at a rapid rate while others struggle on the ideation side and are amazing at execution. Regardless of entrepreneur type, there’s a little idea I’m a big fan of: keep an ongoing Google Spreadsheet of business ideas. It could just as well be in Evernote or some other system, but I like Google Spreadsheets for quickly glancing at ideas and sorting them by different categories.

    Here are some situations that are great for generating business ideas:

    • When you’re shopping for a good or service and get price quotes that are significantly higher than what you expected, there could be an opportunity
    • When you find a business problem and can’t find a solution (this is how Pardot came about)
    • When you encounter a business challenge where there are solutions but they aren’t elegant
    • When you see a trend emerging that is clearly going to have a major impact, especially if you’ve seen a pattern before (e.g. analytics are a big deal for web sites and with the rise of mobile apps, analytics wil be a big deal for them as well)

    Yes, keeping a spreadsheet of ideas is common sense, but most people don’t do it. If you are an entrepreneur or want to be an entrepreneur, start recording your ideas now.

    What else? What are some other situations that are great for generating business ideas?

  • Core Values Aren’t a New Concept

    I love talking about core values. You know, the essence of the people in an organization. At the Atlanta Tech Village, we can’t pick good ideas from bad, but we can create an environment that follows these four core values: be nice, dream big, pay it forward, and work hard/play hard. Some people don’t understand the importance of strong core values, and that’s fine. I’ll keep preaching anyway.

    Yesterday I was listening to a colleague tell the story of Mindspring/Earthlink in the early days. The Mindspring founder, Charles Brewer, was fanatical about their core values, and rightly so. Back in 1994, when he started the company, the first thing he did is define the core values, before he even decided the nature of the business! At it’s peak, Mindspring had over 1,000 people, and hired in a way that kept their culture strong and customer service great.

    It took me seven years to appreciate the importance of strong core values. In retrospect, core values aren’t a new concept and I just needed to experience things not working to feel the pain and search for a solution. Well, for the entrepreneurs in the audience, core values are a proven concept and they really matter. Trust me.

    What else? What are some other examples of companies that have had strong core values for decades?

  • Eat the Dogfood You Serve Customers

    In the book American Icon: Alan Mulally and the Fight to Save Ford Motor Company (referred to me by a talented local entrepreneur), Mulally was mentioned as commenting how the Ford headquarters executive parking lot was filled with Jaguars and Range Rovers when he started as company CEO. Ford owned those brands at the time, but they were a small product line and not core to the business. Ford executives weren’t eating the dogfood they made for their customers.

    For the first two years at Pardot we had separate production versions of our product for customers and product demos. The original thinking, which was my fault, was that we needed separate instances so that it would be easy to reset the database to have a consistent sales demo and test drive experience. It was the typical “data in the system will be reset every hour” type demo configuration. Only this proved to be a poor idea since it created more core engineering headaches (the code base had specific checks to see if it was in production or demo) and dev ops headaches (different databases, one had a load balancer and one didn’t, etc). Eventually, the two systems were updated on different schedules with production being a high priority over demo, resulting in demo constantly being behind. We didn’t let the sales team eat the dogfood we served customers and things suffered as a result.

    Only when you’re living with the same experience as your customers can you deliver the best product. For the organization to achieve it’s full potential, it’s critical that you eat your own dogfood.

    What else? What are some other examples of companies not using their own core products or services?

  • Entrepreneur Acquisition Interest Anxiety

    So, you’re cruising along, growing your company at a nice clip, and an email pops in your inbox with a vague subject line saying “Potential Interest.” Normally, you’d immediately delete the email but out of curiosity you open it and read the contents. It’s from a corporate development person at a potential acquirer asking to set up a conference call. With a big smile on your face, you quickly reply back saying that sounds great and proposing a few times to talk.

    The initial call goes well. Now, there’s a request to come on site for a few hours and talk more. After the first in-person meeting, things start to get serious. A request is made to visit the exec team of the potential acquirers at their headquarters and, if it goes well, a formal acquisition offer will be issued.

    As an entrepreneur, especially an entrepreneur that hasn’t gone through an exit, this process is filled with incredible anxiety. When a potential acquirer comes knocking, most entrepreneurs start seeing dollar signs in their eyes. It’s human nature to dream about all the different scenarios, possibilities, and, of course, valuation. The challenge is that you still have a business to run and there aren’t many people you can talk about it with. More anxiety.

    Here are a few recommendations when you run into the acquisition interest anxiety zone:

    • Remember that most acquisition encounters don’t turn into anything
    • Run your business as if a deal isn’t going to happen
    • Never go out and buy anything until after the deal has been signed, and even then wait a few months to let things settle in (I heard of a guy going out and buying a Bentley the day before he was to sign the closing documents the afternoon of September 11, 2001, and the deal fell through)
    • Find something to distract you during your personal time so that you don’t keep replaying everything over and over in your head (e.g. go on more walks, do yard work, etc)
    • Seek out a trusted advisor or peer group and use them as a sounding board
    • Write out everything you can think of related to deal terms, cash, stock, etc at the earliest signs of acquisition interest, so that when things get more emotional and heated, you’ve already grounded yourself when you had a clear head (this is especially important to do with your cofounder)

    The acquisition dance is fraught with anxiety. Make sure you have a peer group like EO or YPO to be a sounding board and continue growing your business as if a deal wasn’t going to happen.

    What else? What are some other thoughts around entrepreneur acquisition interest anxiety?

  • Wouldn’t it be cool if…

    Recently I was talking to an entrepreneur about a conference he’d attended in Chicago. After hearing some of the event details I asked about his biggest takeaway. He said that one of the speakers had a “wouldn’t it be cool if…” program at his startup where he’d solicit ideas from team members as well as present his own on a weekly basis at their all hands meeting. Every week, five “wouldn’t it be cool if…” ideas had to be presented.

    Sure, anyone can ask for ideas, but the key for “wouldn’t it be cool if…” is to ingrain trying new things into the core of the culture. Most companies are risk averse, and as the business grows and scales, risk aversion grows as well. Every day team members come up with new ideas to change and improve things, but without the right ethos, many ideas are never shared. Incorporate a “wouldn’t it be cool if…” program and increase idea sharing.

    What else? What are your thoughts on using the phrase “wouldn’t it be cool if…” more frequently as a preface to sharing ideas?

  • Atlanta Tech Village as Instant Community

    Recently I was talking to an entrepreneur that was excited about moving into the Atlanta Tech Village. Me being naturally curious, I asked the entrepreneur what made it so exciting. Immediately, the entrepreneur said that it provided instant community for their employees. I probed deeper and quickly found that by having a small number of employees, it’s hard to have a critical mass to do programs, events, and build community.

    Here are examples of instant community at the Atlanta Tech Village:

    • Weekly Friday lunches at Startup Chowdown
    • Running club
    • Weekly huddle groups for subjects like sales, marketing, and software engineering
    • Frequent happy hours
    • Regular office hours with subject matter experts
    • Multiple events and programs each week

    The idea is that when you join a larger company, there are so many people and resources that help create community. Startups don’t have the same luxury, until now — Atlanta Tech Village provides an instant community.

    What else? What are your thoughts on an instant community for startups?

  • Finding Your Focus

    One of the biggest challenges for entrepreneurs is finding their focus. Entrepreneurs, by their very nature, are full of ideas and energy, which works well to get things going, but can be a liability as the organization grows.

    Two weeks ago I was talking to an entrepreneur that had built a small business in a hot market but didn’t have the kind of growth that would be expected based on the success of several competitors. Tactfully, I asked him about this and he immediately chalked it up to trying to be all things to all people. Put more simply, he didn’t find his focus.

    We’ve all read stories of entrepreneur CEOs asked or pushed aside to be replaced by a professional CEO. Typically, if they don’t leave their company, they often become head of their area of expertise e.g. technical, marketing, etc. This act of going from CEO to department leader is a focus forcing function.

    The next time you are considering a new idea for your business, ask if it is increasing or decreasing focus. Activities increasing focus should happen with much great frequency than activities decreasing focus.

    What else? What are your thoughts on entrepreneurs finding their focus?

  • It’s All About the People

    Earlier today I was talking with some colleagues about cultures at different startups. One company was mentioned and everyone promptly said they knew someone that used to work there and didn’t have a good experience. Now, the takeaway isn’t that the company doesn’t have a strong culture, rather, they bring on people that aren’t a good fit, and those people often self-select out. The stronger the culture, the more people that don’t fit because it’s so well defined and tight. Two successful companies can have very different cultures.

    In a startup, and every business, it’s all about the people.

    Ask anyone about their job and what’s the first thing they say? They say the people are great (assuming they like the job). Things like the market opportunity, compensation, and office environment always come after how they feel about the people. What’s the number one reason cited for people quitting a job? Answer: dislike of their manager. It all comes down to people.

    What else? Do you agree that it’s all about the people?

  • Signs the Economy is Picking Up

    Every week I have the opportunity to talk to entrepreneurs and hear the good, and the bad, about their business. Naturally, entrepreneurs are an optimistic bunch, so it’s important to peel back the layers and get a deeper understanding of reality. Over the past month, I’ve seen several signs the economy is picking up:

    • Entrepreneurs with non-tech businesses are reporting solid growth and many are on pace for their best year ever
    • Multiple tech entrepreneurs have recently told me their business is at break-even or near break-even, providing more options for the future, like growing the company without more/any outside capital
    • Two entrepreneurs in the past week told me they are tired of being on cruise control with their business and are ready to put more resources into growth
    • On my 1.6 mile drive to ATV, there are five houses under contract and four new ones being constructed from the ground up

    This is a small sample size but things are picking up nicely. I’m optimistic for more growth on the horizon.

    What else? Have you seen signs the economy is picking up?

  • Food for My Soul or Help by Volunteering on the Front Line

    Today, two separate entrepreneurs mentioned to me another category I had missed in my post on Developing a Rhythm for Life: community service. Each entrepreneur presented it in a different light.

    The first entrepreneur said as part of a life rhythm he’d recommend volunteering on the front line of a non-profit. His point was that as a successful leader it’s easy to serve on non-profit boards and be abstracted from the real work. Rather, by serving in the trenches of a non-profit, you get an opportunity to experience the gift of giving back in a more meaningful, personal manner.

    The second entrepreneur, completely unrelated to the first, offered up that being heavily involved in a large non-profit, and serving as the board chairman, is food for his soul. He talked about his excitement and sense of fulfillment seeing positive change in peoples’ lives. As an ambitious entrepreneur, he’s done very well for himself, yet he spends a significant amount of time giving back.

    So, when thinking about the rhythm of your life, consider community service and non-profits in there as well.

    What else? What are your thoughts on food for my soul and help by volunteering on the front line?