David Cummings on Startups

Blog

  • Challenges of First Starting a Product

    Today we kicked off our first investment for Shotput Ventures 2010. Now, like Shotput last year, we don’t talk about the specifics of our portfolio companies until they launch, but one of the things I want to do is capture more of the lessons learned as we go through the 12 week mentoring process.

    During our discussions about their product today, which comprised most of the few hours, several issues were brought up:

    • What’s the right balance between working on code and talking to prospects?
    • How simple should a minimum viable product actually be?
    • What functionality can standalone and what is dependent on other items?
    • How should the features be prioritized?

    While there is no right or wrong answer, one piece we did quickly realize is that the team was building a good bit of functionality that was overkill for getting something out the door that added real business value. This is especially true when there’s such a clean slate with a new product — new features are incredibly easy and fast to add. The hidden problem, which most entrepreneurs don’t appreciate until after they’ve felt the pain, is that these quick-to-add features add code debt and actually slow down development in the future — when it is even more important to move fast.

    My advice: ask yourself “Do we really need this?” for every little feature or option of a feature when building a product — you’ll appreciate it in the long run.

  • What’s in a name (for this blog)?

    My initial inspiration for doing a post every day on my blog came from Fred Wilson’s blog over at avc.com. Amazingly, he’s already done 5,000 posts. Yes, 5,000. This post is actually my 365th post, and I’m feeling pretty good about things. One area that I’m still working on is the name for this blog.

    Here are some names I’ve used:

    • Entrepreneur Musings — not sure it is specific enough
    • B2B Tech Entrepreneur — possibly too generic
    • Startup Stammer — not a positive connotation with stammer although I do like the alliteration
    • 10,000 Startup Hours — the current title, which comes from the Malcom Gladwell book Outliers and is the idea that it takes 10,000 hours to become good at something

    My goal with the name is to be unique and memorable but also pretty relevant, whenever possible.

    What do you think of the new name? What are some blog names you like?

  • Entrepreneur Personal Growth Path

    One aspect of entrepreneurship that isn’t talked about very often is the personal growth path. What I mean by this is the necessary progression management progression during the lifecycle of a startup that scales from nothing to tens, hundreds, or even thousands of employees.

    Here are some sample inflection points:

    • 0 – 10 employees – doer and manager
    • 11 – 20 employees – mostly manager and some manager of managers
    • 21 – 50 employees – mostly manager of managers and some manager of manager of managers
    • 50+ employees – manager of manager of managers (e.g. manager of an executive team)

    There’s a book just about this subject — Leading at the Speed of Growth. My advice is for entrepreneurs to be cognizant of this path and to prepare and understand it as best they can.

  • The Startup Process

    The startup process: there is none. Much like the debate around business plan competitions being bad (too much making up stuff) and a potential solution being business model competitions, startups shouldn’t be viewed as having a formula. Rather, they should be viewed as a multi-year marathon with a series of iterations (some people say pivots, but I prefer iterations).

    Generally, from my experience, here’s one way to look at the startup process:

    • First six months – Build the beta product and get it in the hands of the early adopters
    • Second six months – Refine the product and get ready for launch
    • Second year – Focus on optimizing the customer acquisition process
    • Third year  and beyond – Scale and grow the business

    What else? What would you include in a simple startup process?

  • Lessons Learned in Writing a Business Book

    We’re getting close to the launch of our first book and it has been quite the learning experience. I sprearheaded the process and worked on it with my co-founder as well as several other great people on my team. From start to finish it took a solid eight months.

    Here are some book details:

    • 160 page trade paperback
    • Seven chapters
    • Published through a local publisher
    • Printed through CreateSpace.com

    Here are some lessons learned:

    • Plan for it to take 50% longer than expected — the post writing process is still time consuming
    • Get stakeholders involved in the editing process throughout the writing and not all at the end
    • Use the book content for company white papers
    • Prepare for several rounds of printed proofs to work out kinks in formating
    • Build a spreadsheet of people to be sent a copy at launch and ask for an Amazon.com review

    If you’d like a free copy of the book, please post a comment here and I’ll have one sent to you. Yes, the topic is a surprise until a week from Tuesday when it comes out. Thanks!

  • Proactively Offer Value as Lead Gen

    I’m a big fan of proactively offering value with little friction as a way to generate leads. The most common example of this is free white papers, webinars, and product demos/trials. There’s a newer class of this model that is even more compelling — one that is customized to the specific prospect, but completely self-service.

    Here are a few examples:

    I’m confident we’ll see more of these types of free, simple services in the future as a way to quickly provide value to prospects in an automated manner.

    What else? What are some other examples? Do you think we’ll see more?

  • The Perfect Product Challenge

    One of the major challenges with a web application is the allure of making it perfect. Who doesn’t want the perfect product? Perfect is the enemy of good. A good product gets out the door and is put in the hands of prospects. A perfect product doesn’t exist, and while it is being built, time, energy, and especially money is being consumed.

    My recommendation is to get the product into the hands of prospects as quickly as possible. And when I say prospects, I’m thinking about random ones, not just warm intros. Warm intros are definitely worthwhile and should be used, but also make things too easy that an objective buyer might not provide.

    I’ve seen too many startups never fully get a product out the door. Don’t join the crowd! Launch early and often.

  • Recommended Entrepreneur Books

    A lightening round topic came up at today’s EO Accelerator monthly accountability group meeting about good business/entrepreneur books to read. I named a few off hand and realized I needed to have a better list available. Here’s a list of books that I own and recommend, representing about 50% of the business books that I own:

    This is a pretty good list to start with. I recommend clicking through and reading about them on Amazon.com to learn more.

    What else? What other books would you recommend?

  • More Richard Branson Thoughts on Entrepreneurship

    I’m continuing to read the Richard Branson book Business Stripped Bare and am nearing the end. For me, I usually only read a few chapters (e.g. the first, last, and skim the middle) in a book before moving on to the next one (usually several books a month). Here are a few more pieces of information that caught my attention (text verbatim from the book):

    • Virgin’s normal rate of return in business around 30 per cent [what’s your target rate of return for your business?]
    • This is the point at which entrepreneurial functions become separated from management functions…Suddenly, innovating is seen as something extra, something special, something separated from the activities the company normally engages in.
    • Virgin’s management style is unique, designed to both empower employees and avoid a culture of fear.
    • …there is a fundamental difference between an entrepreneur and a manager…Although I’m sure there are entrepreneurs who could make good managers, my advice would be: don’t try to do both…Entrepreneurs have the dynamism to get something started…Yet an entrepreneur is not necessarily good at the nuts and bolts of running a business.

    Richard Branson ranks up there as one of the most influential entrepreneurs ever, and I enjoy reading his thoughts.

  • The Oz Principle: Above and Below the Line

    I just started reading The Oz Principle to learn new ideas about individual and organizational accountability. Right away, in the first chapter, the Oz Principle is described, and is acutely relevant to startups. The idea is that there are actions above the line and below the line, and all organizations need to focus on developing a corporate culture and management team that develop an environment of above the line actions. Start ups, moving so fast and so critical in having the right talent need to especially focus on above the line attributes. Here are those attributes:

    Above the line:

    • See it
    • Own it
    • Solve it
    • Do it

    Below the line:

    • Wait and see
    • Confusion / tell me what to do
    • It’s not my job
    • Ignore / deny
    • Finger pointing
    • Cover your tail

    I’m looking forward to reading the rest of the book and learning more about the Oz Principle.

    What else? What are some other above and below the line actions you’ve seen?