David Cummings on Startups

Blog

  • Trends in Entrepreneurship

    At a recent EO event the topic of trends in entrepreneurship came up. We spent a good bit of time discussing ideas and changes that were affecting entrepreneurship, in order to think bigger about where want EO to excel and provide the most value.

    Here are some of the trends we identified that will play an important role with entrepreneurs:

    • Globalization
    • Social media
    • Crowdsourcing
    • Mobile
    • Internet everywhere

    What else? What are some other trends that will affect entrepreneurs over the next decade?

  • SaaS SMB Web Testing and Monitoring Software

    So, we’re starting to evaluate upgrading our in-house web testing and monitoring software to a commercial solution (we use several free and open source products now). Here’s what we’re interested in from a single provider:

    • Pinging a variety of ports and servers from different locations in the world
    • Browser emulation with pre-defined scripts and paths
    • Checking of SSL certs, domain names, etc
    • Web services (REST) testing
    • Web services API for us to inferface with
    • Priced under $1,000/mo

    We’re looking for recommendations and best practices. What do you recommend?

  • What People do Absent Information

    We’ve all heard the saying that it is better to over communicate than under communicate. One of the things that’s been proven to me time and time again is that absent information, people make up ideas to fill the void. This isn’t a malicious act, rather it is human nature.

    My recommendation for entrepreneurs is to pursue a multi-modal communication strategy including some of the following mechanisms:

    • Daily stand-up scrums
    • All-hands meetings
    • Department briefings
    • Email (keep it concise!)
    • Breakfast/lunch
    • Phone including voicemails

    Again, over communicating is better than a lack of communication. Remember to control the message and not let false information fill the gaps.

    What else? What other strategies work well for communication?

  • Tony Robbins on Startups

    Most of us have heard of Tony Robbins, likely the best known self-help guru of the past 30 years. I had heard of him but didn’t know much about his philosophies until a friend of mine said he’s a big fan of Tony’s work, so I decided to pick up his book Awaken the Giant Within. The book, published in 1991, has one of the best strategies for startups I’ve read, and it isn’t even geared towards them (written for people to help themselves).

    Here’s what Tony writes about harnessing the power of decision, and indirectly, building a successful company:

    1. Remember the true power of making decisions.
    2. Realize that the hardest step in achieving anything is making a true commitment — a true decision.
    3. Make decisions often.
    4. Learn from your decisions.
    5. Stay committed to your decisions, but stay flexible in your approach.
    6. Enjoy making decisions.

    Sounds a bit like iterating/pivoting, doesn’t it?

    What do you think? What else would you add about decision making?

  • Ways to Grow a SaaS Business Faster

    Earlier today we were talking about ways to grow a SaaS business faster. SaaS, with almost all recurring revenue, is a great business model once the machine is humming. SaaS is so desirable because it provides consistent cash flow and makes it easy to budget during growth. Thinking about the ways to grow faster, at the most basic level, here’s what we came up with:

    • Sign up customers faster
    • Sign up customers at the same rate but at a higher revenue amount
    • Up-sell existing customers
    • Reduce customer churn

    Now that we have the most basic ideas, it is time to work on different strategies for each category.

    What else? What are some other ways to grow a SaaS business faster?

  • The Co-Founder Complement

    It seems there’s been a surge in activity lately of people reaching out to me for help finding a co-founder for their idea. Of course, I tell them the best thing to do in Atlanta is to start going to ATDC events. Absent the tactical tips to actually find someone, I believe it is important to think through the complementary attributes desired in the ideal co-founder.

    Here are some topics where you might be one side and could benefit from a co-founder with the other side (these aren’t opposites):

    • Sales / engineer
    • Big picture / tactical
    • Aggressive / laid back
    • No fear / measured concern
    • Ideas / details
    • Passion / passion (everyone needs this!)

    Finding one or more co-founders that complement your attributes, talents, and skills is one of the most important steps in a startup. I recommend thinking through it carefully.

    What else? What other complementary attributes do you find important?

  • Customer Development Challenges in Obvious Markets

    Late last week I was talking with a friend who’s thinking about launching a new product in the web application testing and monitoring market. The question he was trying to answer was “If there’s such an obvious need for the SaaS product, why haven’t more companies already purchased one?” To put it another way, there’s such a clear pain solved by the product, yet several potential customers that were surveyed knew they needed something but haven’t purchased anything without a good reason.

    As part of the customer development process, one of the most important pieces is to come up with the right questions to ask potential customers. It is more difficult than it sounds. Here were some of the questions asked:

    • Have you looked at any webapp/website testing and monitoring products?
    • What are some issues you’ve had with your webapp/website?
    • What type of system would you be interested in?
    • How much would you pay for a system that provided xyz piece of mind?
    • Why haven’t you already purchased such a system?

    It is especially challenging since the answers he shared with me from talking to potential customers didn’t provide any clear resolution. Even with no obvious outcome, customer development is an exceptional process when launching a new company and/or product.

    What else? What other questions would you ask a potential customer?

  • The Power of EO and Stories

    At the end of last week I had the opportunity to attend the Entrepreneurs’ Organization (EO) Global Leadership Conference (GLC) for the second consecutive year. The two day event brings 400 EO chapter leaders from around the world together to share best practices, learn from expert speakers, and have a good time.

    As the upcoming membership chair on the EO Atlanta 2010 – 2011 board, I spent most of my time with other membership chairs in sessions facilitated by Branden Ames, CEO of Able Technologies. The most powerful takeaways from the sessions were that EO is really to facilitate the entrepreneurial lifestyle, not just building the better entrepreneur, and that telling personal stories are the most effective recruiting methods.

    During the membership track and the keynote remarks there were numerous personal stories shared. Here are a few told first hand by members (not secondary sources):

    • A member in EO Arizona crashed and died in his plane killing his business partner and COO as well. The EO Arizona chapter president jumped in and had his company, on his own dime, coordinate the funeral, brought in his forum members, and interfaced with the deceased member’s father to help with the business.
    • A member in EO South Florida died in a plane crash killing his wife and son, but leaving a daughter behind. The members of his forum reached out to the daughter to be there personally for her and help work through the devastation.
    • A Muslim EO member from Orange County met a Catholic EO member from Mexico City at an event in Mexico, only to learn that the Mexico City member’s son had late stage cancer and had run out of medical options in Mexico. The Orange County member immediately opened up his house in the U.S. and coordinated help with the best doctors in California. In the end, the son didn’t make it but the two EO members forged a deep relationship for life.

    While these are dramatic personal stories, they were told by a member involved firsthand, making them even more emotional. EO truly is for the entrepreneurial lifestyle and the relationships created are priceless. Stories make the power of EO even more compelling.

  • When Raising Money Makes Sense

    After looking at yesterday’s post on Where to Start with a Raw Idea, I realized that the link to startup advice and the link to the VC site in the comments might overly imply that raising money, especially VC money, is the way to go. 99% of entrepreneurs shouldn’t raise professional money. Let me state that slightly differently: the majority of entrepreneurs shouldn’t raise money and 99% of entrepreneurs shouldn’t raise money from professional investors.

    Here are some times when raising money does make sense:

    • There are some key mentors you’d really like to have a stake in the business, and have offered to invest for a small percentage of the business (e.g. Shotput Ventures)
    • The business you are in is a winner-take-all market where if you aren’t the leader you’ll likely be worthless (e.g. eBay for the online auction market)
    • The type of business is incredibly capital intensive such that there’s a large amount of investment required to be successful (e.g. certain hardware companies)
    • From a lifestyle perspective you need to be able to pay yourself a below market salary to keep your spouse happy, requiring outside capital (this is a tough one)

    As you can see, there aren’t too many reasons to raise money. And, most businesses shouldn’t raise money.

    What do you think? What are some other reasons to raise money?

  • Where to Start with a Raw Idea

    Last week I talked to a couple of good guys that had a raw startup idea who were looking for feedback. Of course, I had them go through the five startup questions in advance but the idea was at such an early stage the responses weren’t meaningful. There was also the challenge that they didn’t have enough startup background and context to provide meaningful answers. They tried but it still wasn’t good.

    Here’s what I’d recommend doing when starting out with a raw idea and no background in startups:

    • Spend three hours reading Mark Suster’s posts on Startup Advice
    • Spend an hour making a competitive matrix Google Spreadsheet listing out what search terms you Googled, the company name, company website address, company tag line, brief company description, and a high/medium/low rating of how close to a competitor they are
    • Spend an hour writing full answers to the Shotput Ventures application questions in a Google Doc

    I’m confident that going through this process will help set the foundation for more effective research and a more constructive conversations when talking through a raw startup idea.

    What else? What would you add to the list?