David Cummings on Startups

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  • Thought Exercise: Describe a new medium

    Cover of "Burn Rate: How I Survived the G...
    Cover via Amazon

    Last night I finished the book Burn Rate describing one founder’s journey through the craziness of the dot com hey day. I enjoyed it — it’s a really good book, not quite as good as Startup, but it’s worth reading nonetheless. On the last page of the book, the author Michael Wolff, recalls an assignment he had in school:

    Describe in a one-page essay a completely new medium. Not television. Not radio. Not records. Not movies. Not magazines. Not newspapers. Not books. Something else.

    Go on, take 60 seconds to think about that. What would a new medium look like? How would it work? What would it do? Where would it fit in? Who would invent it?

    The iPodTouch/iPhone/iPad family of touch-screen iOS devices strikes me as a new medium. Twitter is a new medium. What’s the next new medium? What’s your new medium?

  • Perfect is the Enemy of Good (for Product Management)

    Artist's rendering of a Mars Exploration Rover.
    Image via Wikipedia

    As I help out startups that are pre-product/market fit as well as ones that have serious traction, I continually come back to Voltaire’s quote: the perfect is the enemy of good. There’s a serious challenge with startup products pilling on functionality to try to please everyone, which pleases no one. It is much better to create a good product for a focused base of users than it is to try to create the perfect product for all users. A perfect product will never happen. A perfect product management decision will never happen.

    Instead, a culture of short, fast iterations with opinionated product management is best. A culture where new features can be brainstormed and implemented faster than the time it takes to wire-frame and detail a perfect plan. Perfect plans only need to exist for NASA. Perfect plans shouldn’t exist for startups. Startups need beta users, oxygen for the product, so that engineering is paced with customer feedback.

    Release early and often.

    What else? What are some other product management challenges with iterations and feedback?

  • DISC Profile of Entrepreneurs

    My favorite place [@dailyshoot #ds217]
    Image by ConnectIrmeli via Flickr

    If you follow the DISC (dominance, influence, steadiness, conscientiousness) personality profiles that attempt to categorize everyone with primary and secondary attributes, almost all entrepreneurs have a “strong D.” According to DiscProfile.com, a strong D:

    • is motivated by winning, competition and success.
    • prioritizes accepting challenge, taking action and achieving immediate results.
    • is described as direct, demanding, forceful, strong willed, driven, determined, fast-paced, and self-confident.
    • may be limited impatience and lack of concern for others.
    • may fear being seen as vulnerable or being taken advantage of.
    • values competency, action, concrete results, personal freedom, and challenges.

    Of course, an entrepreneur need not have these characteristics but almost all the entrepreneurs I’ve met do have them.

    What else? What are other personality traits of entrepreneurs?

  • Not All Seemingly Core Strategies are Employed by Other Startups

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    After talking with several technology startups in town I realized that some of our core strategies, which I believed most others would employ, are in fact fairly unusual. Of course, each company has their own strategy and approach, and it’s important to experiment. Here are a few items we do that aren’t as common:

    • Spend 1/3 of our sales time making cold calls
    • Provide a LCD scoreboard in our lobby with our quarterly goals including financial info
    • Require that all potential employees write a two page essay as part of the process (five short answer questions)
    • Conduct Quarterly Check-ins where we answer four quick questions about ourselves (what did you do, what are you going to do, how can you improve, and how are you following the values)

    I’m sure there are additional unique items we do on a regular basis but this is a good start. My recommendation is to continually try new initiatives, keep the ones that are working, and throw out the ones that are stale.

    What else? What are some core strategies you employ that are unique?

  • Happy and Meaningful Work

    My sister and her baby.
    Image via Wikipedia

    One form of real joy in life, for me personally, is through happy and meaningful work. In my company, we talk about the three core tenets: good work, good people, and good pay. There’s a reason the three tenets are put in that order as most people spend more time on work than interacting with co-workers (people). Compensation is important, but less so than the first two assuming it is reasonable. Some of my team members value the good people more than the good work, and I appreciate that, but I would venture that most of the company truly enjoys the work they do the most.

    Happy and meaningful work is a joy.

    My recommendation is to not only create a great corporate culture but to also work hard understanding the strengths of each team member and getting them in a spot where their work is happy and meaningful. There’s a time and place for paying your dues and working towards better opportunities. Companies with happy and meaningful work for employees are more successful.

  • Most Employees aren’t Focused on Startups

    The Varsity restaurant in Atlanta, Georgia. Ta...
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    Hanging around other entrepreneurs and constantly talking about startups makes me forget sometimes that most startup employees, especially in Atlanta, aren’t focused on the startup community. In fact, many of the people at my company have degrees and backgrounds in different fields, but work in the technology field because there are good opportunities. They are smart people who get things done.

    Here are some examples:

    • Desire to be a school teacher but instead train clients on how to use the software
    • Divinity degree that works in customer support
    • Journalism degree that works as a client advocate
    • English major that works as a software engineer

    The most important thing is to find people that align with your corporate culture and then figure out what they do well. Don’t worry if they aren’t focused on startups or have an unrelated degree: get the right people on the bus and provide the best environment for them to flourish.

  • Winner Take Most Markets

    Yesterday’s TechCrunch post titled Why We Invested in Groupon: The Power of Data mentioned something that isn’t talked about often enough in startup circles: winner take most markets. Winner take all markets, like eBay with online auctions and Microsoft with operating systems (for many years), are much more commonly talked about.

    What are some winner take most markets? Here are a few ideas:

    • Groupon in the local deals market (there are tons of smaller competitors but I’m sure Groupon’s revenues are more than all the others combined)
    • Wal Mart in the local goods market (Target and other brands do well but Wal Mart takes most of the revenue)
    • Constant Contact in the small business email marketing market (even though iContact and MailChimp continue to do great and will probably change this one day)

    Winner take most markets, also known as one company having the majority of revenue in a market, is much more common than winner take all. Entrepreneurs should be talking about winner take most markets more frequently than winner take all.

    What else? What are some other winner take most markets?

  • Products that Make or Save Money

    Art on Display, Disney Consumer Products Pavil...
    Image by Mastery of Maps via Flickr

    I’m a B2B guy. I really am. I don’t understand how to make a consumer product successful. For B2B technology products, especially more complex and costly ones, you listen to prospects and customers, innovate, collect a tidy sum, then rinse and repeat. There’s one line, when considering startup strategy, that should be repeated over and over in the founder’s mind:

    Are we helping people make money or save money?

    This is critical to keep in mind as it drives several aspects of the business, including:

    • Who’s our target buyer?
    • What verticals/industries make the most sense?
    • How should we price it?
    • How should we position it?

    Products geared towards making money are often sold to sales and marketing. Products that save money and drive efficiency are often sold to IT and finance. There are big implications here. There’s no right or wrong answer but I believe it is important to ask yourself that question when generating product ideas as well as finding product/market fit.

    What else? What are some other considerations related to products making money or saving money?

  • Sports Bookies and Startups

    1892 Centre College football team

    In reading about tonight’s BCS College Football Championship Game I came across the Vegas odds line from the sports bookies. Now, the actual line (who’s favored to win and by how many points) isn’t what’s important. What’s important is understanding how bookies work.

    Sports bookie lines aren’t designed to pick the winner but rather to ensure that bookies make money.

    For startups, there’s an important lesson: a marketplace of buyers and sellers can provide a “good deal” where one party still always money. The marketplace always makes money.

    Whenever a friend says they should bet on a game because the line doesn’t make sense, I always think that the line moves based on the bets for the house to make money, not based on the particularities of the teams that are playing (the line does start out trying to be reasonable based on the teams playing).

    Groupon always makes money. eBay always makes money. Is there an opportunity for your startup to be a marketplace?

  • Insights into Blog Traffic

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    Continuing yesterday’s post titled Thoughts on Inbound Marketing, I want to highlight the power of driving traffic to blogs by way of examples from previous posts on this blog. Inbound links, social media, search engines, RSS subscribers, and email subscribers drive the vast majority of traffic.

    Some numbers and details on traffic to this blog:

    The morale of the story: high quality inbound links drive the most one-off jumps in traffic, which slowly grows repeat visitors over time.