David Cummings on Startups

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  • Show App Value with Regular Results Emails

    One of the tactics we employed early on was taking a page out of salesforce.com’s playbook by sending an opt-in daily email to users of our app highlighting results. What I mean is users get spoon feed an email report detailing all the visitors and prospects that have been recently active. This type of feature has several benefits:

    • Removes friction with more passive users so that they see value from the product on a regular basis
    • Makes it easy for the stakeholder to forward the results to his or her boss
    • Helps keep the product top-of-mind with users while encouraging them to use the app more frequently by clicking through to see more details
    • Sets the tone for many of our users to be one of the first emails they look at each day because the data is so valuable

    My recommendation is for entrepreneurs to provide daily or weekly metrics to their customers to help drive product value and customer satisfaction.
    What else? What other benefits are there for showing app value with regular results emails?

  • Inbound VC Calls to Entrepreneurs

    On a weekly basis I receive 2-3 inbound calls and emails from VC firms asking to set up a meeting. The cold calls are typically from an Ivy League educated associate who’s taking his or her time until business school or fresh out of business school, and has never been a full-time entrepreneur. As an entrepreneur, the challenge is always time allocation as there are many more things to do than hours in the day.
    Here are a few tips for handling inbound VC calls:

    • If you are interested in talking with the firm insist on a partner on the first call to make it worth your time as associates are nice but often don’t have the required domain expertise for a quality call (I experienced this first hand when I got on a call with an associate who promptly asked what SaaS stood for).
    • Regardless if you’re not raising money, VCs have a wealth of information and can share relevant best practices and introductions (the best ones are always trying to provide value well in advance of investing).
    • Consider setting aside one afternoon a month to take these calls so that you can use the time more efficiently and build off the information gathered in each call.

    Inbound calls from VCs are flattering, especially if you’ve tried to reach out to VCs in the past and didn’t get your call returned. Take these calls with a grain of salt and use your time wisely knowing that the associates making the calls have much more time on their hands than you do on yours.
    What else? What other tips do you have for handling inbound VC calls?

  • Online Advertising Options for Startups

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    There are so many different online advertising options out that there that I wanted to enumerate over a few we’ve experimented with and provide some simple thoughts. Here we go:

    • Google AdWords – the most financially successful pay-per-click advertising medium in the world generates results but cost per lead has steadily gone up over the years
    • LinkedIn Ads – very targeted, successful when you get impressions but not much volume unless you bid high or pay on a CPM model
    • Social Networks – low cost-per-click but people are generally on them to socialize and not as much for business, though that’s rapidly changing
    • Niche Community Sites – much more manual process to place ads but can be extremely effective to get in from of the right audience with a variety of different campaigns (sponsored emails, banners, download offers, etc)
    • Retargeting – displaying ads to people if they’ve previously visited your site is powerful and cost effective (take a look at fetchback.com or the Google AdWords offering)

    These are just a few online advertising options. My recommendation is to try several different ones and see what does and doesn’t work for your startup.

    What else? What are some other online advertising options?

  • Should Entrepreneurs Study Entrepreneurship in College

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    Entrepreneurship is a contact support. Entrepreneurs studying entrepreneurship in college so that they can then start their own company after college are missing the point — the best time to start a company and be an entrepreneur is right now. Starting a company doesn’t mean quitting everything and throwing caution to the wind, rather, you can start a business on the side and learn as much as possible. Do I advocate running a startup part-time? No. Do I know anyone that’s been successful doing it? No. Is it still a great way to learn? Yes.

    Here’s what entrepreneurs should do in college:

    • Start a business on the side offering a service that you’re good at or selling a product that you’re passionate about
    • Build deep relationships with classmates as your network is forever valuable
    • Spend time with other like-minded entrepreneurs to develop a peer group
    • Take practical and/or challenging subjects like accounting, finance, software development, and engineering classes

    There is no pre-requisite for entrepreneurship, especially not college. Entrepreneurs should focus on building their social networks and technical skills while running a business on the side in college.

    What else? What other thoughts do you have on entrepreneurs studying entrepreneurship in college?

  • Developing a Sales Demo

    Have you ever sat through a poor product demo by a sales rep? We all have. Sales demos are a great time to connect with prospects at the one-to-one level and the demo process is critical.
    Here are a few thoughts on developing a sales demo and process:

    • The sales rep’s goal is to build trust and understanding with the prospect
    • The sales rep should tell a story and articulate product benefits using features as evidence
    • The demo should be scripted in advance but mastered so that the sales rep can deliver it without notes
    • There’s no substitute for passion, and the best sales reps are passionate about their product while still being great listeners
    • Sales reps should ask for a next step at the end of the demo

    Demos are an integral part of the B2B sales process and should be scripted and constantly refined.
    What else? What other thoughts do you have about developing a sales demo?

  • Developer Tools in the Cloud

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    One advent of software development that everyone talks about is how much easier and faster it is to build a scalable web app compared to 10 years ago. Of course, there are many good reasons for this including open source code, frameworks, cloud hosting, APIs available to mash up data, and more. Another reason is great developer tools and systems in the cloud.Here are a few developer tools in the cloud we use:

    • Lighthouse app and JIRA – issue trackers and ticket systems
    • GitHub and Beanstalk app – source code control platforms
    • Hudson – continuous integration server for automated testing (not delivered as SaaS but hosted on a cloud instance)
    • Rigor.com – web performance management and end user experience monitoring

    These developer tools and more make our software development process much more efficient and collaborative. What else? What other developer tools in the cloud do you recommend?

  • Common User Experience Mistakes

    The web app user experience is one of the most critical parts of a successful startup. It doesn’t matter how much funding, lead gen spend, or passion you have if users don’t have a great experience. Here are some common user experience mistakes:

    • Too much work to get value from the system (give users value as quickly as possible)
    • Inconsistent navigation controls making it difficult to traverse through the product
    • Programmer-centric naming of product modules and functions as opposed to using the user’s terminology
    • Inadequate attention to detail (get your most meticulous employee or friend to analyze the app)

    Pay attention to user experience and users will pay attention to your app.

    What else? What are some other common user experience mistakes?

  • Live Chat for Sales and Customer Service

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    Live chat is incredibly powerful for sales and customer service. For entrepreneurs, there’s a tendency to try it out before there’s enough traffic or client engagement, not get any inquires, and think live chat isn’t worthwhile. If you can staff it with a product expert, it’s worth running a two week trial and assessing the results.

    Here are a few tips when using live chat:

    • Consider using it on more critical pages like pricing and FAQ instead of all pages
    • Running it inside the web app for support is a great way to engage with customers and trial users in the context of their product usage
    • Connect the live chat with your marketing automation system and CRM so that the chat transcripts are in your prospect and contact records

    A live chat platform to look at is Olark and an outsourced company that will do live chat for you and answer simple questions is WebGreeter. Live chat is a great communication medium that adds value for prospects and customers alike.

    What else? What other tips do you have about live chat?

  • Speed of App Development vs Size of Customer Base

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    Many times I’ve heard an entrepreneur say they can’t compete with a larger, well funded competitor due to the number of software developers in their startup vs the competition. Immediately, I like to remind them that the speed of application development is correlated with the size of the customer base for most companies. That is, as the number of customers on a platform grows the pace of new feature development and expansion slows for several reasons:

    • More process and QA is introduced
    • More time is spent on scaling the app’s infrastructure
    • More bugs and edge cases are found
    • More people are involved in the product management decision making

    Startups often win by moving faster than the competition, staying closer to the customer, and timing the market. Startups are better off going deeper in a specific area and using that as differentiation rather than trying to be as broad as another company with many times the resources.

    What else? What other thoughts do you have on speed of app development vs size of customer base?

  • Keep a List of People You Want to Hire

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    When building a startup you often come across a variety of people, some of which you think would be great for your team but you can’t afford or don’t need just yet. As your startup takes off and gains traction, more and more people will come out of the woodwork and express interest in working for you. People want to be part of a successful organization, especially one that has the potential to be a rocket ship.

    Entrepreneurs should keep a list of people they want to hire.

    Much like recruiters and sports agents work hard at networking and developing relationship with potential clients, you need to do the same with talented people you want on your team. Developing relationships and a pipeline of talent in advance of needing it is much more preferable to doing it while things are going so well that you don’t have time for it. Of course, this is a high class problem to have. Regardless, you need to keep a list of people you want to hire.

    What else? What should be kept in mind when developing a list of people you want to hire?