David Cummings on Startups

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  • 5 Quick Tips for Finding Employees

    A fair ride taken with a long shutter speed.
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    Finding great employees is hard. Very hard. As a startup CEO, recruiting great talent is one of the three most important functions. In addition, a strong corporate culture is the only sustainable competitive advantage, and it starts with the team members.

    Here are some quick tips for finding employees:

    1. Referrals – referrals from employees, friends, and family should be at the top of your list. Offer referral bonuses, even ones to people not associated with your company.
    2. Job Boards – look to specialty boards like ones for software engineers, sales reps, etc. Go to online communities where your type of team member hangs out and participate.
    3. Craigslist – great for entry-level jobs and interns. Yes, there is tons of noise but it is still worthwhile.
    4. Career Fairs – local college and university career fairs are often designed for students about to graduate, but also look for career fairs the cater to experienced graduates looking to make a change.
    5. Recruiters – work hard to find recruiters that align with your values, and make it a collaborative relationship

    Finding great employees is hard. Use these five quick tips to cast a wide net.

    What else? What are some other tips for finding employees?

  • Why Email Marketing was a Successful Services to Products Switch

    I know of at least three successful email marketing companies that started out as web design firms doing custom web app development. As with most startups, the ideas that result in success come from trying something first that didn’t work out (from personal experience, my original business idea has never been what resulted in success). My question today is as follows: why is there a pattern of successful email marketing companies that originated as web development companies? Entrepreneurs continually ask me how to make the transition from consulting services to product-oriented businesses and I don’t have any silver bullets. Email marketing has some interesting aspects that made it more attainable before the market became commoditized.

    Here are some thoughts on why email marketing was especially suitable for consulting companies that transitioned into a products business:

    • Web application consulting lent itself well to building a SaaS web app for email marketing
    • Email marketing, like any SaaS offering, is difficult to get going but once a modest amount of revenue is recurring the ability to scale it out becomes more apparent
    • Customer acquisition is the most difficult part of any product-based business and many web development companies developed areas of expertise in lead generation, search engine optimization, and search engine marketing through client work

    Converting from a services company to a products company is extremely difficult. Email marketing is one of the few SaaS product markets that has several successful companies that made the switch from services to products.

    What else? Why do you think so many email marketing companies started out as web development companies?

  • Common Mistakes in a Business Plan Competition

    Photographer Joshua Cuneo agreed to license th...
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    Tonight I had the opportunity to judge the business plan competition for the MBA program at GA Tech (the site is powered by Hannon Hill). Personally, I’m against doing business plans as the time and effort required to do a quality one is better spent on a two page executive summary combined with talking to 50 potential customers. There is value in thinking through the different sections but I’ve never seen a business become successful by doing exactly what they set out to do with their original plan. Unfortunately, too many people start believing what they wrote in the plan and not spending time finding out what the market needs.

    Here are the common mistakes we saw tonight while judging the business plan competition:

    • Not clearly articulating the pain or problem being solved
    • Not providing a memorable anecdote or hook for the idea
    • Not painting a clear picture as to what they wanted from the presentation (e.g. a second meeting with investors)
    • Using slides with too many words and too small of a font (the slides were designed as handouts and not for presenting)

    Writing and presenting a comprehensive business plan is difficult. The students did a good job, the event was well done, and I was honored to be invited.

    What else? What other problems do you commonly see in business plans?

  • To Spread or Not Spread FUD

    FUD
    Image by Brett L. via Flickr

    Spreading FUD is a common tactic from traditional, old fashioned enterprise technology companies. Fear, uncertainty, and doubt (FUD) combined with patently false claims (e.g. the product doesn’t do X when it clearly does) are a way for companies to try and persuade a prospect that the other product and company are inferior. Startups with integrity and strong values don’t participate in slinging mud and prefer to stay above-board by focusing on solving customer problems instead of putting down the competition.

    Here are some ways companies spread FUD about their competition:

    • Cite things the product does or doesn’t do when two minutes of web research show the truth
    • Talk about lack of funding or institutional investors in an attempt to imply that money makes a company successful (what happened to Webvan?)
    • Provide anonymous quotes claiming to be from customers that switched products

    Sales reps that spread FUD act like used car salesman in the worst of ways. Startups and sales reps should focus on solving customer problems and not putting down competitors.

    What else? What do you think about startups that spread FUD?

  • Multi-Tenant SaaS and Virtualization are Two Different Things

    Saas-Grund mit Plattjen
    Image via Wikipedia

    Recently I talked to two companies that said they were Software-as-a-Service (SaaS). After asking more questions and drilling into details for a bit I came to the realization that what they were referring to as SaaS was independent virtualized instances of their product in the cloud. SaaS, to me, is very different.

    Here’s how I define multi-tenant SaaS:

    • Application servers that support multiple clients
    • Databases that support multiple clients in the same tables
    • Infrastructure (load balancers, fail-overs, etc) to support many customers

    Virtualization of the application delivered via the cloud is essentially a more manageable version of the late 1990s Application Service Provider (ASP) model, and not SaaS. A major benefit of SaaS is the engineering efficiencies and scalability of multi-tenant application services and multi-tenant database instances. Multi-tenant SaaS and virtualization are two different things.

    What else? What do you think of people calling their business model SaaS when it isn’t multi-tenant?

  • The Power of Twitter in Conferences

    Image representing Twitter as depicted in Crun...
    Image via CrunchBase

    Twitter really shines in conferences. Let me explain. Conferences, even with the advent of wonderful technology, are about the sharing of ideas. Some of the best idea sharing takes place between speakers and presentations. That’s right, the hallways and rooms between sessions are just as important as the speakers because it opens up the conference for attendees to talk to other attendees.

    Twitter makes conferences that much better.

    Twitter, combined with hashtags, provides a universal mechanism for like minds to connect more efficiently at events. At recent conferences I’ve attended, people in the audience constantly tweeted, providing their opinion and analysis of the presentation on the fly. With the hash tag of the event, I’m able to follow the conference-specific tweets and reach out to like-minded people in the same room. This then leads to quality conversations with people I might not have met otherwise.

    There’s also better feedback via Twitter to the people that put on the conference. The feedback is faster, the information is more accessible, and the messages can be saved for future reference. As a conference organizer, it’s better to know what’s working and not working while it is happening rather than after the event has already finished.

    Twitter makes conferences better and is a great communication mechanism for events.

    What else? What are your thoughts on Twitter at conferences?

  • Notes for Putting on an Annual User Conference

    Three Rivers Petroglyph Site

    The Fall is a common time of year for annual user conferences. Salesforce.com had their Dreamforce conference recently and I know of many more happening now or shortly (Hannon Hill and Pardot). User conferences are an amazing time to bring together customers, prospects, partners, and employees to spend time face-to-face and talk about best practices, the past year, and what’s on the horizon.

    For companies thinking about or doing an annual user conference, here are some notes:

    • Splurge for a great venue — with people traveling to the conference it’s important to invest in the facility and make it memorable (I highly recommend auditorium-type seating with power outlets and great wifi for everyone)
    • Find ways for attendees to intermingle and meet new people (mixers, receptions, consistent Twitter hash tags, etc)
    • Give the conference a consistent name (user conference, users conference, user’s conference, or users’ conference — it doesn’t matter as long as it’s consistent)
    • Put the attendees first name in big letters on their badge (it’s common for the first and last name to be the same size and hard to read amidst all the other text on the badge)
    • Let customers do most of the talking and presenting during the sessions (avoid the tendency to have employees do most of the presentation)

    Annual user conferences are great way to bring an eco-system together and I highly recommend them.

    What else? What are some other notes from user conferences you’ve attended?

  • 5 Ways to Increase the Value of Existing Marketing

    megaphone

    Entrepreneurs spend incredible amounts of time and energy to generate leads and drive traffic to their website. One area that is often overlooked is increasing the value of existing marketing efforts. Think about it: if you wanted to double the number of leads generated from your website you could either double the amount of traffic to the site or double the site’s conversion rate. Which one is easier? Increasing the conversion rate is always easier than increasing traffic. In addition to focusing on the conversion rate, it is also important to take the current marketing efforts and automate ways to improve their value, much like improving the conversion rate.

    Here are five simple ways to increase the value of existing marketing efforts:

    1. Retargeting – Retargeting allows you to show banner ads on a large number of different sites exclusively to people who have already been on your site (I’m generally against banner advertising with retargeting being the one major exception)
    2. RSS Broadcasts – Take an RSS feed of blog posts, press releases, or whatever else you like of yours and have Twitter, Facebook, and LinkedIn automatically updated when each new item is published
    3. Newsletter Sign-up Option – Add a sign-up link or text box on your site and encourage people to give their email address to get your newsletter (the contents of the newsletter should be repurposed blog posts)
    4. Live Chat – Engage with your site visitors through live chat to answer their questions as well as convert anonymous visitors into identified prospects
    5. Company IP Address Lookup – automatically identify companies on your site based on their IP address

    Existing marketing efforts are easily augmented and improved with these tactics and more.

    What else? What are some other ways to increase the value of existing marketing efforts?

  • 5 Steps to Action

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    Whether you’re trying to sell a product or recruit a new team member to you join your team, there are five steps to action. These have been talked about for decades in marketing textbooks and were first made popular by Madison Avenue firms.

    Here are the five steps to action:

    • Unaware – the person doesn’t know the product exists
    • Aware – the person knows the product exists but doesn’t understand it
    • Understand – the person comprehends the product but hasn’t established a position
    • Believe – the person has bought into the product but hasn’t pulled the trigger on it
    • Action – the person buys the product

    Thinking through these five steps, especially with regards to sales and marketing, helps increase the effectiveness of your team. Sales and marketing messages (e.g. email communication) should be tailored to the respective stage of the prospect.

    What else? What do you think of these five steps to action?

  • The Daily Scrum in a Startup

    No Competitive Advantage

    Every day we do a bottom-up daily scrum. Every person in the company participates in one or more daily scrums so that there’s an effortless flow of information. We believe that staying closest to the customer and having the shortest feedback loop to make decisions provides us a competitive advantage. The daily scrum allows us to do just that.

    Here’s how the daily startup scrum works:

    • 9:30 – 9:40 manager with team members
    • 9:40 – 9:50 C-level with managers
    • 9:50 – 10 CEO and C-level execs

    We answer three simple questions: What did you accomplish yesterday, what are you going to accomplish today, and do you have any roadblocks? This daily scrum makes it so that everyone knows the top three key items for each person in daily chunks allowing up to make decisions quickly and execute fast.

    What else? What are your thoughts on doing a daily scrum?