David Cummings on Startups

Blog

  • Scholarship Criteria at the Atlanta Tech Village

    One of the projects we’re working on at the Atlanta Tech Village is setting up a scholarship program for entrepreneurs and startups. The idea is that internally as well as sponsors might want to support certain areas that aren’t as represented like social enterprises, student entrepreneurs, B2C startups, specific industry verticals, etc. We’re confident that our strength is going to be B2B/enterprise software but part of our overall mission is to support the entire tech and startup ecosystem.

    Besides the obvious question of how many scholarships will we have, which will be determined by sponsorships, the next question is: what criteria will we use to decide?

    Here are some criteria ideas we’re currently brainstorming (it would be a combination of attributes):

    • Startups that haven’t raised any money
    • Startups that have less than a certain amount of total revenue (e.g. $10,000)
    • Startups with specific founder characteristics (e.g. certain demographics)
    • Startups targeting a vertical desired by a sponsor (e.g. a large digital media company that wants to help other digital media startups)
    • Startups with a double or triple bottom line (e.g. a social enterprise that helps the community and makes money)

    Over time we’ll figure out what does and doesn’t work with scholarships. Right now, we’re looking forward to trying it out and learning as we go.

    What else? What are some other ideas for scholarship criteria?

  • 7 Ideas for Startup Metrics to Track

    With so many metrics out there, it’s easy for a startup to get bogged down looking for the elusive “perfect” KPIs to monitor. From a CEO perspective, I always like to focus on keeping it as simple as possible with no more than two high-level numbers for each department to report on weekly. Now, of course, there are many more metrics tracked behind-the-scenes, but a small number makes it easy to concentrate.

    Here are seven ideas for startup metrics to track on a weekly basis:

    1. Annual recurring revenue — the current run rate of the business, which represents the health of the enterprise from a top-line, financial vantage point
    2. Lost recurring revenue — the amount of annual recurring revenue that churned in the previous week
    3. Weighted sales pipeline — the amount of new annual recurring revenue expected to be added in the next 30 days, weighted by likelihood of closing
    4. New marketing qualified leads — the number of new leads that came in the past week that meet marketing’s definition of a qualified lead
    5. New marketing pipeline value — the dollar amount of sales opportunity pipeline added in the past week from marketing qualified leads (the marketing qualified leads don’t have to have come in the same week)
    6. New on boarded customers — the number of new customers that have finished the quick start/on boarding process in the past week
    7. Net promoter score — the percent likelihood of customers surveyed in the past week to recommend the product to a colleague or friend

    Bonus: if the startup is venture backed, another important metric is burn rate or number of months until the business runs out of money.

    Tracking metrics on a weekly basis, displaying them on a public LED scoreboard, and making sure everyone knows where the startup stands, is a great way to align the company and hit the goals.

    What else? What are some other startup metrics you really like to track?

  • 7 Ideas from Today’s Interview at the Insights with Entrepreneurs Series

    Earlier today I had the opportunity to be interviewed by Sam Williams of the Metro Atlanta Chamber in front of 100+ people as part of the Insights with Entrepreneurs series. We covered a variety of topics ranging from Atlanta entrepreneurship to Pardot to the Atlanta Tech Village.

    Here are a few notes from today’s conversation:

    1. Atlanta has all the natural resources to be a top 10 tech startup city due to Georgia Tech, a low cost of living, many young professionals, the world’s busiest airport, and great internet connectivity (Atlanta is the number one place in the country for data centers)
    2. Pardot’s success came down to culture, timing, and execution
    3. Pardot’s culture was defined by the following:
      Be the best place to work and the best place to be a customer
      Good work, good people, and good pay
      Core values are positive, self-starting, and supportive
    4. Most often, the original business idea isn’t the idea that ends up being successful — Pardot started as a PPC bid arbitrage platform before pivoting into marketing automation software
    5. Atlanta Tech Village’s goal is to be a rainforest where chaos and weeds ensue instead of being a planned farm with organized crops
    6. The Atlanta Tech Village, at 103,000 sq ft, is the largest tech entrepreneur center in the Southeast and the largest coworking space in the Southeast (25,000 sq ft)
    7. Atlanta Tech Village has sold over 100 memberships in the first 75 days purely through word of mouth, Twitter, and PR

    Bonus: I shared my work / life balance strategy.

    I enjoyed the Metro Atlanta Chamber event and it was fun to meet several new people.

    What else? If you were at the event, what are some ideas you took away from it?

  • 7 Ideas for X Blog Posts

    Last week I ran an experiment where I published seven blog posts that had seven ideas each on a specific topic. The goal of the exercise was to see if that style of post, with a specific number of items, was more successful in terms of visitors and retweets.

    Here are the seven posts:

    Now, I don’t know how the above content compares to the standard content, but the stats are dramatically different: the 7 ideas for X blog posts received an average of 25% more visitors and 3x the number of retweets. People like numerated lists and it drives more traffic.

    What else? What are your thoughts on using lists as a theme for content marketing?

  • How Important are B2C Startups in a Tech Ecosystem?

    Atlanta is strong at B2B startups and weak at B2C startups. Why is Atlanta strong with B2B startups? In the late 1970s Atlanta was home to the largest software company in the world, Management Science America (MSA), which in turn spawned many other B2B tech companies. Generally, there’s also a more conservative, pragmatic ethos about the region that results in a let’s-solve-a-problem approach to entrepreneurship. So, should much weight be put on growing the B2C startup community?

    Here are a few thoughts on the importance of B2C startups in a tech ecosystem:

    • B2C startups, when successful, generate significantly more press and media coverage, on average, compared to B2B startups, which in turn makes it easier to recruit talented people and highlights the city
    • B2C startups are riskier and more likely of a binary outcome, making it harder to raise capital, providing a virtuous cycle of few B2C startups (people successful in a B2C startup are more likely to invest in other B2C startups)
    • B2C startups are seen as cooler because they generally influence a larger number of people and have a greater chance of changing the world
    • Several of the largest tech success stories over the past decade are B2C: Facebook, Twitter, Instagram, Zynga, etc

    B2C startups aren’t better or worse than B2B startups but they do have different characteristics and fewer strong ecosystems. My belief is that B2C startups are important to support, yet overall, the best thing to do is accentuate the existing ecosystem strengths.

    What else? What are your thoughts on the importance of B2C startups in a tech ecosystem?

  • Atlanta Tech Village Observations After 10 Weeks

    The Atlanta Tech Village has been open for 10 weeks now and we’ve been having a great time. Real estate and community building, as an entrepreneur, are very different from enterprise software, but still the same regarding the need to constantly learn, talk with customers, and iterate.

    Here are some observations and lessons learned after having the Atlanta Tech Village open for 10 weeks:

    • Community support has been phenomenal and hundreds of people have reached out to see how they can help
    • 102 paying members have joined so far (a paying member is someone that has a membership with a desk)
    • To have greater density of people, and drive down the per person costs, parking is going to be the limiting factor (we can get to 450 members with our current parking deck and we’re going to have 600 desks once our renovations are finished — many parking decks are in the area)
    • Demand has exceeded expectations for people wanting a spot to go to one or two days a week (we thought more people would be in three to four days per week)
    • Companies with two or more people prefer a private room instead of being in a large coworking area (we knew that was the case but we didn’t realize to what extent)
    • High end, locally ground coffee has been a big hit
    • Super short contracts/agreements are a big draw for entrepreneurs
    • Serendipitous interactions are already happening and creating value for the community
    • Simple programs like Free Food Fridays, where we have catered lunch for everyone every Friday, are some of the best ways to bring the community together

    10 weeks in, the Atlanta Tech Village is exceeding my expectations and I’m looking forward to the continued enhancements and changes.

    What else? What are some other observations about the Atlanta Tech Village you didn’t expect 10 weeks ago?

  • Differentiating Tech Startups from Service Providers

    At the Atlanta Tech Village we’re reserving 80% of the space for tech companies and tech startups while leaving 20% for tech-related service providers. Of course, the next question that comes up is “how do you define a tech startup?” Some companies that we believe fall in the service provider category claim they are actually a tech startup, so we’ve been debating how best to handle it and have a few ideas.

    Here are some ideas on how to differentiate between a tech startup and a tech-related service provider:

    • Tech startups generate the majority of their revenue from proprietary technology
    • Tech startups have a scalable product and actively strive for a reproducible customer acquisition process
    • Tech startups have product managers and software engineers on staff (service providers could have them but rarely do)

    We don’t have all the answers but we’re actively working on ideas. Over time, we’ll have a better understanding and ways to clearly differentiate tech startups from service providers.

    What else? What are some other ideas to differentiate tech startups from service providers?

  • Google Reader End of Life

    Google Reader is one the few products I use every single day. There are a number of blogs and sites I enjoy staying up-to-date with, especially ones related to entrepreneurship and startups (my favorite blogs). Yesterday, like millions of other people, I read that Google is shutting the service down July 1st to focus on their core products.

    Here are a few thoughts on Google Reader:

    • As a product, it solves a real need in the market, but Google needs billion dollar opportunities, of which it is not
    • RSS, the XML format used to share information, caught on in the enterprise but never transcended to consumers
    • Twitter, as a way to share and find relevant content, fills the human desire to consume fresh information
    • Services like Feedly and NewsBlur are available providing similar functionality

    Google Reader is a valuable and useful tool that wasn’t able to meet its owner’s ambitions. RIP.

    What else? What are some other thoughts on Google Reader?

  • Notes from the Rally Software S-1 IPO Filing

    Rally Software Development Corp., makers of tools to help software engineers be more productive (agile software development lifecycle tools to be exact), just filed their S-1 to go public. S-1 IPO filings are a great way to really dig into a company and read about all the nitty gritty stuff that isn’t usually covered in such detail. Rally is interesting on a number of levels: it’s based on Boulder, CO which has a good tech startup brand but few public software companies, it’s been around for over 10 years (that’s how long overnight successes take), and it’s riding the trend in software development going from a waterfall to agile methodology.

    Here are notes from the Rally Software S-1 IPO filing:

    • 154,982 paid users and more than 1,000 customers, including 36 of the Fortune 100 companies (pg. 1)
    • Customer renewal rate of 129%, taking into account paid seat nonrenewals, upgrades, and downgrades (pg. 1)
    • Agile, as a software development methodology, was introduced in 2001 (pg. 2)
    • 13% of revenue derived from international customers (pg. 4)
    • Growth strategy (pg. 4)
      Increase sales to existing customers
      Acquire new customers
      Continue to innovate
      Expand international presence
      Increase market awareness and drive adoption of Agile
      Strategic acquisitions
    • Incorporated in Delaware in July 2001 under the name F4 Technologies, Inc. (pg. 5)
    • Revenues (pg. 8):
      2010 – $18.4M
      2011 – $29.7M
      2012 – $41.3M
    • Losses (pg. 8):
      2010 – $9.7M
      2011 – $9.9M
      2012 – $11.6M
    • Accumulated deficit of $71.5M (pg. 11)
    • Primary competitors are Atlassian, CollabNet, and VersionOne (pg. 13)
    • 343 employees (pg. 15)
    • $12M line of credit with Square 1 Bank (pg. 54)
    • Venture capitalists own 76.5% (pg. 106)

    Rally has all the makings of a successful IPO with strong recurring revenue and a high growth rate.    Losses are high but growth rate is more important at this stage of their lifecycle.

    What else? What are your thoughts on the Rally Software S-1 IPO filing?

  • 7 Ways to Increase Employee Retention

    Employees are the most important part of a business. Anyone who says otherwise hasn’t built and scaled a growth business from scratch. With the economy slightly improving and demand for talented team members continually increasing, it’s just as important to focus on employee retention  as it is on the recruiting and hiring proces.

    Here are seven ways to increase employee retention:

    1. Build an environment of autonomy, mastery, and purpose (see Drive by Dan Pink)
    2. Be the best place to work and the best place to be a customer
    3. Have all managers read Patrick Lencioni’s book Three Signs of a Miserable Job
    4. Define the culture and religiously enforce it (everyone has a culture but it’s rarely defined and consciously strengthened)
    5. Implement a consistent meeting rhythm and over communicate
    6. Regularly celebrate the small and large wins as a team, regardless of other challenges
    7. Anonymously survey the team members every quarter looking for ways to improve and asking the ultimate question to get a net promoter score

    Here’s my prediction: as the unemployment rate drops, employee retention will become a more popular topic. My recommendation is to create the best place to work and make employee retention a non-issue.

    What else? What are some other ideas to increase employee retention?