David Cummings on Startups

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Prototyping as Fast as Wireframing

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We don’t build wireframes for new features. Did we do it before? Yes. What changed? Development technologies, including open source libraries, made it just as fast to build a prototype as to build a wireframe. I prefer the build it and “feel” it approach to the wireframe approach. Being able to use and interact with the new feature allows us to decide if we’re on the right track and make changes as necessary. Of course, once the application’s user interface has been fleshed out and many of the common user experience interactions are in place, developing a quick mock-up is literally as fast as making a wireframe.

In order to prototype as fast as making a wireframe it also helps to be on a modern platform like Ruby on Rails or PHP on symphony. If you find that assembling the front-end components is laborious and slowing you down it is likely you aren’t getting the benefits of the latest frameworks and approaches. At some point you’ll be better off bitting the bullet and migrating to a newer technology. But, naturally, beware the rewrite of death.

What else? What other thoughts do you have on prototyping vs wireframing first?

February 17, 2011
Thoughts on Startup Riot 2011
Image by Sanjay Parekh via Flickr

Today’s Startup Riot 2011 in Atlanta was definitely the best one yet. Now in its fourth year, this year’s event had a better venue (The Tabernacle), better internet access, better swag, and, most importantly, great startups. Here are a few quick thoughts on the event:
- Several startups focused on social proof by showing slides with logos of existing customers or prospects in their pipeline
- Most startups were looking to raise angel rounds of $250k – $500k
- Most startups were pre-revenue and a fair number were pre-product launch
- The table areas to meet the startups were packed throughout the day — a great sign that attendees were spending time with the companies
- 90% of the startups were from Atlanta but at least one was from South Carolina, Boston, Germany, and Australia
- One presenter said, when trying to build up the credibility of his management, that someone said his team was too good to do a startup (which is ridiculous to me)
Overall it was a great event. Well done Sanjay!

What else? What other thoughts did you have about Startup Riot 2011?
February 16, 2011
Startup Riot 2011 Tomorrow
Tomorrow Atlanta’s very own Startup Riot takes place at the Tabernacle downtown. Sanjay Parekh puts on a great show every year and I’m sure tomorrow’s event won’t disappoint. The idea is to have 50 startups give three minute pitches with two keynotes mixed in. Whenever I mention the event to people they are always impressed that 50 startups are pitching — I must say that I think it is impressive as well. Now, all 50 startups aren’t local, but the vast majority are local (I don’t have any insider info but I’d guess 45 will be local).

Here are a few questions I’ll be asking myself when I hear the pitches tomorrow:
- Will this entrepreneur be successful?
- Would I invest in this company?
- Is this a product or a feature?
- Is this an idea for a company or a business already operating?
I’m looking forward to tomorrow’s Startup Riot event.

What else? What other questions would you ask when you hear the startups pitch?
February 15, 2011
Product Review: The Resumator Applicant Tracking System
Last week I was talking about our hiring process with my friend who runs the best IT support shop for creative firms in Atlanta and he referred me to The Resumator applicant tracking system. We promptly implemented it on our site and have been really impressed. Here’s why it resonated with us:
- Clean, modern user interface that is fast and not Flash
- Pricing model based on number of job postings with unlimited users works great for us (we pay $49/month for up to five jobs and they do have a free account for one job)
- Integration with Scribed to view the submitted resume right inline (yes, it’s Flash but you can download the file)
- Simple reports based on positions, candidates, pipelines, etc.
- Embeddable job board and widgets to incorporate it in your site with basic color and logo customization
I’m a fan of automating as much as possible and this is one more item to make us more efficient. If you’re looking at applicant tracking systems or want to see a good example of a well done marketing site and web app I’d recommend taking a look at them.

What else? What other thoughts do you have about The Resumator?
February 14, 2011
Revisit KPIs at Least Quarterly

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Key performance indicators (KPIs) have been discussed several times before (here, here, and here). In general, we do two KPIs per department and discuss them at our weekly tactical if a value is out of line. There’s always the tendency to try and complicate things by adding one, two, or three more per department but I’ve found that it is hard enough to concentrate on a couple things let alone five different items multiplied out by several departments (sales, marketing, services, support, operations, and engineering).

One thing to note is that KPIs should be revisited at least quarterly for both the goals for that quarter as well as the items being measured. I’ve found that we usually change one KPI completely each quarter to try a new metric to see if better represents one of the two most important numbers for a department. Most individual KPI goals change each quarter in an upward manner but some stay pretty steady (e.g. engineering average of 32 burn down hours per week per developer).

My recommendation is to keep KPIs simple and to revisit them at least quarterly. KPIs should be fluid metrics that are constantly improving, but not complicated.

What else? What other tips do you have about revisiting KPIs?

February 13, 2011
Startups Should Develop a Sales Playbook
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After a startup achieves product/market fit one of the most important next steps is to develop a sales and marketing machine. The sales team should be working towards a reproducible, and profitable, sales process. As part of that iteration, a sales playbook should be at the top of the sales manager or entrepreneurs list of items. A sales playbook is the how-to manual for a sales rep. The goal is to document and categorize as much sales related information as possible in a digestible format.

Here are some items for a sales playbook:
- Corporate information
- Sales pitch
- Elevator pitch
- Market space
- Recent trends
- Target customer
- Types of buyers
- Features and benefits
- List of references
- Sales process
- CRM process
- Competitors and differentiators
- Objection handling
- Glossary
As you can tell, the sales playbook is very detailed covering upwards of 50+ pages. A key aspect is that it should be a living, breathing document that is constantly updated (e.g. a shared Google Doc). Startups should develop a sales playbook.

What else? What other items do you include in your sales playbook?
February 12, 2011
Bottom-Up or Top-Down Financial Projections
Continuing the post from earlier in the week titled Startup Financial Models after Product/Market Fit, I wanted to talk a bit more about financial projections. Too often an entrepreneur asks for feedback on their executive summary, slide deck, and financial model only to have the financial model show a top-down projection. A bottom-up projection is a much better way to do it. Let’s look at a few details:
- A top-down projection is often something like “we’ll sell $500k the first year, $3 million the second year, and $10 million the third year” without detailing what it takes to actually achieve those results
- A bottom-up projection details the tactical items like number of sales reps, sales rep quota, hiring plan, percent of sales reps that won’t work out, ramp up times for sales reps, ad spend per rep or per new client, etc
- A bottom-up projection more accurately outlines the assumptions and thought process of the entrepreneur, which then allows advisors or investors to offer more valuable feedback
- A bottom-up projection helps the entrepreneur better budget for the startup and it often shows it’s more expensive than expected to reach the goals
My recommendation is to do bottom-up financial projections to better understand the business and what it takes to be successful.

What else? What other ideas do you have about financial projections?
February 11, 2011
Send Sales Proposals Within 48 Hours

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Lately I’ve been talking to a number of service providers as we continue to expand — everything from office space to marketing firms to recruiting agencies and I’m amazed at how long it takes to get proposals from people. Optimistically, I like to think it’s a good thing — their business is doing well and they’re busy. In reality, I’m guessing they aren’t being prioritized like they should.

Take note: proposals should be sent to the prospect within 48 hours.

Yes, some business proposals are more custom and complicated but the majority are boiler plate requiring less than 30 minutes of customization. For our own sales team — yes it is a product and not a service — we strive to get proposals over to prospects the same day they ask for them. Of the 10+ proposals I’ve received over the past 45 days, the majority took over 48 hours to get back to me and the content didn’t appear to be customized beyond 10-30 minutes of work. Service providers need to sign up customers when they are ready to buy.

What else? What have you seen with proposal response times?

February 10, 2011
Four Years on Average for Startup Success

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There’s a variety of opinions online about how long it takes to start a company from scratch and have it be successful (depends on your success definition but for me it is $1 million+ gross margin (not revenue), growing, profitable, and not dependent on a single key person). I’ve talked to entrepreneurs that were able to do it in 18 months and I’ve talked to entrepreneurs where it took 10 years (most fail).

After being in the technology startup community for 10 years I’ve come to believe it takes four years, on average to be successful, if the company is ever going to be successful. That’s four long, hard years to be successful. I’ve also found it takes two years, on average, to know if the business is viable and on the right track. It’s a marathon, not a sprint.

What else? What timelines have you seen to know if a startup is viable and if a business is a success?

February 9, 2011
Increase Site Lead Conversion Rate First
Image by Adrian Eden via Flickr

Earlier today I was talking with a SEO expert about online lead generation, marketing automation, and other topics. One of the points he made was that there are two major levers for website leads: traffic to your site and the conversion rate of visitors on your site into leads. Pretty simple, right? Now here’s the kicker – most people focus on driving more traffic to their site as opposed to increasing their conversion rate.

If you double your conversion rate that’s the equivalent of doubling your traffic with the previous conversion rate.

Most entrepreneurs should work on their conversion rate before working on increasing site traffic. Here are a few quick tips for increasing conversion rates:
- Don’t assume the homepage is the starting point for most visitors (search engines make it so that all pages are entry points)
- Incorporate a call to action on every page (e.g. a link to download a white paper, sign up for a free trial, or join a newsletter list)
- Think through site personas for your different types of visitors (e.g. technical buyer, executive decision maker, junior researcher, etc)
My recommendation is to look at your conversion rate and work to improve it first before other web marketing activities.

What else? What are some other tips to increase site lead conversion rates?
February 8, 2011