David Cummings on Startups

Blog

  • What VCs Look for in Startups

    My younger brother is in his final year at HBS and had as a guest speaker today a partner from one of the oldest and most prestigious venture capital firms. Here’s what the partner said they look for in startups:

    1. Does it create value for customer and will they pay for it
    2. What is required for strong execution of the idea
    3. Who comprises the team
    4. What’s the valuation and is there a big upside

    One key aspect is that he didn’t directly mention the market as one of the four items. I believe you need a good management team but that a great market is more important than a great management team. That’s right, I’d prefer a good management team with a great market over a great management team with a good market.

  • Quick Email Marketing Design Best Practices

    Gmail's logo
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    Email marketing continues to be an effective part of integrated marketing. Amazingly, companies still don’t follow some of the simplest design best practices when it comes to building email creative. Here are some quick tips to follow:

    • The majority of email clients have images turned off by default, so design for that lowest common denominator
    • Test the design in the most prevalent email clients (e.g. Outlook, Lotus Notes, Yahoo! Mail, Gmail, etc)
    • Seriously consider text-only emails, especially for B2B audiences
    • Remember to have calls to action throughout the email
    • Spend as much time on the subject line as on the email content
    • Invest in a good email marketing platform
    • Try using existing email templates as a foundation
    • Design for recipients to scan the message, with visual nuances like bold and bullet points
    • Know that the preview pane is only a few hundred pixels tall

    What else? What are some other email marketing design best practices?

  • Presentation Slides Should be Simple

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    We try our best at our annual user’s conference every year but inevitable one issue always crops up: way too many words on presentation slides. It’s frustrating to sit in the middle of the room and have a hard time paying attention to the speaker because the current slide has 100 words on it in a small font.

    Here are some simple rules to follow:

    • Reduce the number of words per slide as much as possible, and then cut them in half
    • Follow Guy Kawasaki’s rule that the font size should be no smaller than half the age of the oldest person in the audience (e.g. a 60 year old person present would result in a font no smaller than 30 point)
    • Shoot for no more than 10 words per slide, if possible
    • Remember that presentation slides are different than slides that you email to people, which can be fancy and detailed
    • Include a photo or visual cue for each slide to add visual interest

    What else? What other tips do you have for presentation slides?

  • Publishing a Product Roadmap

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    One aspect of our annual user’s conference is publishing our product roadmap. Now, we don’t publish our entire roadmap as the market is too dynamic and we’d rather under commit than over commit and have to remove functionality. The challenge is to balance the desires of customers, employees, prospects, and the general vision for the application. Most important, it is critical to be opinionated about the software.

    Here’s what we consider in building our product roadmap:

    • Internal vision and opinion for the software
    • Customer ideas and votes on our idea exchange
    • Services and support team member input on ways to make their lives easier
    • Marketplace input from prospects and analysts

    My recommendation is to make the roadmap development process a regular strategic action item.

    What else? What other aspects would you add to the product roadmap process?

  • Hold an Annual User’s Conference

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    Every year in the Fall we hold an annual user’s conference. In fact, our conference for this year is right around the corner. The user’s conference is one of the highlights of my year as it is the best time to meet with many clients over a two day period. Our business model is primarily selling direct with an inside sales team, so we rarely meet prospects and clients face to face. Over time we build rapport with our users as our services, support, and engineering departments regularly interact with clients, but there’s something lacking without face time. An annual user’s conference fills that gap.

    Here are a few benefits of holding an annual user’s conference:

    • Cheerleading – Provides a great experience for team members to understand how much customers really value what we do
    • Feedback – Allows us to capture feedback and input on how we’re doing and the direction of the product
    • Excitement – Gets customers energized about our software as well as helps with any challenges they might have encountered

    Now, a user’s conference is a big production and takes considerable planning. I’d recommend ensuring at least 30 people can attend (we average a little over 100 people at our conference each year). My advice is to seriously consider having an annual user’s conference as my experience with them has been exceptional.

    What else? Have you hosted or attended a user’s conference and found it valuable?

  • Why Publish a Daily Blog Post

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    Image by daniel.julia via Flickr

    Continuing the introspection series from yesterday on why I like B2B startups, today I wanted to talk about why I do a daily blog post. Here are a few reasons why I write each day:

    • Writing something short every day is actually easier than writing one lengthly piece each week
    • Each day the process provides 10-20 minutes of reflection on what I did, experienced, and read in the past 24 hours
    • The writing helps clarify my thinking on the day’s topic
    • I’ve made an exceptional number of mistakes over the years and I’d like other entrepreneurs to not have to repeat them
    • Documenting my thoughts helps employees and business partners understand my approach and thinking
    • If I get hit by a bus I want my kids to know my thoughts on business and life

    I’d highly recommend writing a daily blog post for the above reasons and more. The biggest challenge is getting through the first 30 days. After a month it becomes an easy routine, like brushing your teeth before bed. Once you get used to it you won’t want to stop.

  • Why B2B Startups are for Me

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    There’s been a great deal of exposure and excitement about Web 2.0 companies, many of which are business-to-consumer (B2C) ventures. In fact, the majority of applicants to Shotput Ventures are B2C web companies. As for me, I’m focused on business-to-business (B2B) web companies. Here’s why I prefer B2B companies over B2C companies:

    • B2B companies typically sell a higher priced product or service, requiring fewer transactions to build a nice business
    • Business products and services are purchased to help make more money or to help save money, making it easy to highlight the requisite features and benefits
    • Business sales and marketing processes are well established making it easier to control your own destiny by building things companies need and finding buyers

    Now, you can’t argue with B2C fads like Beanie Babies, where Ty Warner, the owner of Ty Inc, personally made almost $1 billion in one year off the stuffed animals, but I’d rather focus on things I can control, and consumers aren’t one of them. B2B startups are for me.

    What else? Do you like B2B or B2C businesses more?

  • Big Cos Don’t Always Need a ROI

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    Recently I was talking to a hot startup in town that had completed a project with a Fortune 1000 company last month. After inquiring about the economics of the deal, goals, and outcomes it became readily apparent that there was no return on investment (ROI). Casually, I asked if the customer is going to continue with the next round of the project, which is almost the same as the first. The answer: yes, of course, they are going to continue working with us.

    It seems strange that the big co is going to move forward when the results show they’ll lose more money. The takeaway is that for certain leading edge technologies, a ROI isn’t critical if it enables the big co to learn about new tools and markets. At certain early points in the product adoption lifecycle, companies will spend money simply to experiment.

  • Shotput Venture’s Co PlacePunch Launches

    Shotput Ventures is excited to announce that our most recent portfolio company PlacePunch has launched. TechCrunch covered PlacePunch today saying:

    PlacePunch, which received seed funding from Shotput Ventures, allows businesses both big and small to run their own location-based marketing campaigns that integrate with Foursquare, Facebook Places, Twitter, Gowalla and other location-based social networks.

    The general idea is that companies can offer loyalty programs on top of existing check-in programs. As an example, a coffee shop can use PlacePunch so that for every five times a customer checks in at the store, the customer gets $2 off their next purchase. The name PlacePunch, as you might imagine, comes from physical places combined with the traditional punch cards restaurants use for loyalty programs.

    If you know any restaurant or store owners, please send them over to the PlacePunch site.

  • Benefits of a Third-Party Code Audit

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    One of the things a startup should do early on, if they can afford it, is a third-party code audit. The nature of software is such that suboptimal architecture decisions can lead to significant rework in the future. If best practices are followed from the beginning, functionality can be implemented at a faster pace. Here are some benefits of a third-party code audit:

    • The auditor reviews many projects and can share common best practices
    • A new set of eyes will see things that get missed with tunnel vision
    • Improving the code while the base is smaller will pay dividends in the future

    For example, if you have a Rails project you should talk to the good people at High Groove Studios. My recommendation is to consider a third-party code audit if you have any concerns about your current code and you have the money to afford it.

    What else? What are some more benefits of a third-party code audit?