David Cummings on Startups

Blog

  • Iterate or Die: Life in a Startup Slides

    Following the TAG/ATDC presentation from yesterday, I had several requests for the slides. I just finished uploading them to SlideShare and have embeded it below:

    Thanks again to everyone that attended.

  • Public Speaking Thoughts

    This morning I had the opportunity to talk at the TAG/ATDC Entrepreneurs group using the material from my Iterate or Die articles. I wanted to say thanks to TAG and ATDC for inviting me to speak as well as say thanks for everyone who attended. As for public speaking, I always enjoy the opportunity to speak in front of an audience and talk through something I feel strongly about, like the need to pivot and change directions in a startup. Here are a few things I try to do when given the opportunity to speak publicly:

    • Develop slides that tell a story with simple pictures and as few words as possible (see Beyond Bullet Points)
    • Respect the time of the event and leave a few minutes at the end for questions
    • Thank the people that invited me as well as the audience for attending
    • Emphasize a theme and takeaway message from the talk (ideally most people will take away one or two items from the talk)
    • Make my email address available for people to ask questions after the event has finished

    Of course, there’s nothing revolutionary here but I find that following these simple tactics results in a good outcome.

  • Idea Exchanges for Employee Feedback

    One of my favorite things we do each month is honor an internal hero and choose the most pressing hassle/best idea. The hero and hassle of the month is chosen by everyone through directly voting with an idea exchange. For us, we use UserVoice.com and just close the ideas out each month. The winner of the hero of the month and the provider of the most pressing hassle/best idea each get a $100 bill at our monthly all hands meeting. Here are some key benefits:

    • Employee recognition is done in a consistent and company-wide fashion
    • More pressing hassles and good ideas are generated, and documented, using this methodology
    • Departments and team members talk about the recognition and ideas on a daily basis at our morning check-ins
    • Each winner gets a fun lawn ornament (think little sumo wrestler and big foot character) to keep at their desk for the month to highlight that they won

    I’d recommend looking for ways to recognize employees and capture good ideas in a systematic fashion. Idea exchanges provide just the medium for us.

  • Sales Rep as Consultant

    One of the core values for our sales approach is to follow a consultative model (solution selling) whereby we work to understand the needs of our prospect in a non-pushy fashion. Unfortunately, we have a couple competitors that follow the pushy approach and spread FUD (fear, uncertainty, and doubt) about our product and company. Naturally, the immediate reaction is to belittle the competitor and talk about their inferiorities. Instead of taking a fight-negative-with-negative approach we strive to address any incorrect assertions as well as to emphasize what we do well and why we’re a good fit.

    I recommend making an explicit decision as to your approach to the market, brand value, and what your company will do when situations like this arise. It is important to maintain a consistent position, whichever direction you choose.

  • TAG/ATDC Talk: Iterate or Die

    This Thursday morning I’m giving a talk in Midtown Atlanta for the TAG/ATDC Entrepreneurs Series on my Iterate or Die articles on TechDrawl.com. Here are some of the items I cover:

    • How I funded development of our first product
    • How September 11, 2001 proved beneficial for us
    • Why I shelved our first product and found funding for our second product
    • What I learned that didn’t work in sales and marketing
    • What I learned that did work to develop a leadership position in a vertical

    Please join me for the event this Thursday morning at 7:30 by signing up online for the talk.

  • eBoys: The First Inside Account of Venture Capitalists at Work

    After reading Mark Suster’s blog post where he mentioned the book eBoys: The First Inside Account of Venture Capitalists at Work, I new I had to read it right away. Well, I just finished the book and I highly recommend it for anyone interested in learning about the go-go Internet dot com days of the late 1990s, venture capitalists, or entrepreneurs looking to raise venture capital. The book details the formation of Benchmark Capital, started in 1995, and chronicles their inner working, investments, successes, and failures in the late 1990s. Here are a few of my takeaways:

    • Benchmark pioneered the concept of having equal partners (no junior or non-general partners), no associates, and limiting themselves to eight boards instead of the usual 12, so as to have more time for entrepreneurs
    • Benchmark made the single best VC investment of all time by investing $6 million into eBay, at a $40 million valuation, which was the only money eBay raised, and resulted in a 100,000% return on investment (eBay is worth $30 billion today)
    • Benchmark had the opportunity to invest in Priceline.com at an $80 million valuation, but deemed it to expensive (Priceline.com then IPO’d and shot to a value of $20 billion, before crashing many years ago and has now risen to a value of $8.6 billion today)

    Again, if you’re interested in venture capital or are an entrepreneur raising money from venture capitalists, I’d recommend reading the book.

  • Simplifying the Rockefeller Habits One Page Strategic Plan

    We employ many of the strategies from the book Mastering the Rockefeller Habits including the One Page Strategic Plan (OPSP). For this year, and going forward, we decided to simplify and develop our own one page plan, as a hybrid between the Rockefeller Habits approach and the Patrick Lencioni organizational clarity approach. Here are some of the challenges we had with the Rockefeller Habits one:

    • Too much stuff on one page front and back
    • Terminology wasn’t clear (what’s the difference between a key thrust, rock, objective, initiative, and actions)
    • Jargon for our own goal categories (most people didn’t remember that A/R – DSO stood for accounts receivables – days sales outstanding, which translates to how many days, on average, does it take for us to get paid)

    We’re still working on what this simplified document will contain, and when we’ll roll it out, but my guess is that we’ll be ready within the next two weeks.

  • Search Engine Optimization Recommendations

    At the time of this writing, Pardot ranks on the first page of natural search results for our industry term marketing automation. I’ve been asked for recommendations and best practices on how to rank well with search engines (search engine optimization or SEO). Here’s my advice:

    • Write for humans and not computers (computers, known as bots, crawl websites indexing the content for the search engines and people sometimes try to cheat)
    • Make the most important search term the first words in the title of the homepage
    • Keep the title and largest heading (h1) present and consistent on the all pages other than the homepage
    • Publish two new blog posts per week on the site, in addition to constantly adding other content
    • Include a sitemap that links to all the relevant pages
    • Ensure the pages are well-formed and standards compliant so as to demonstrate to search engines that you care about the quality of your HTML
    • Publish a separate, industry-specific blog that is company agnostic on a domain that incorporates the most important search term (see ours at marketingautomation.net) and link back to your site
    • Participate professionally in Twitter, Facebook, LinkedIn, etc with links to your site and others in the industry, on a daily basis
    • Use a content management system that is search engine friendly (good HTML and human-friendly URLs with keywords)
    • Ask partners and resellers to link back to your site with the appropriate keywords

    At the end of the day, the most important thing is to publish new, high quality content on a weekly, if not daily, basis. Good luck!

  • What does it take to encourage entrepreneurship?

    Today I had the opportunity to grab lunch with Howie Rhee, the Managing Director of the Center for Entrepreneurship and Innovation at Duke University and talk about what the university is doing to encourage entrepreneurship. Stepping foot on Duke’s campus a dozen years ago as a student, I wanted to get involved with entrepreneurship programs, only to find that the university lacked them. That’s right, there was almost nothing related to entrepreneurship on campus. Thankfully, that has changed. Here are the top six entrepreneurship programs at Duke, according to Howie:

    1. Duke Start-Up Challenge – annual business plan competition with $25,000 grand prize to the winner
    2. Entrepreneurship and Venture Capital Club – I would argue these should be two separate clubs but it is successful as-is, and is one of the strongest clubs on campus making it a winner
    3. Duke Entrepreneurship Education Series – weekly guest speaker every Thursday of the school year
    4. Entrepreneurship Week at Duke University – one full week annually filled completely with entrepreneurship events
    5. Duke Global Entrepreneurship Network (DukeGEN) – LinkedIn group for Duke alumni with 1,700 members
    6. DUHatch Student Business Incubator – on campus incubator for student-run businesses

    I must say I’m impressed with the progress and I look forward to seeing even more encouragement of entrepreneurship.

  • Startup Potential Revenue and Market Size

    A reader of this blog sent me an email asking for advice about his startup. After hearing the pitch on the phone I told him that I didn’t think it was a large enough market to be worth his time. He then sent me an email with some stats about the market and a statement like:

    2 million potential customers * $100/year * 1% = $2 million/year business

    I quickly replied back saying that I don’t like doing the top down approach for how big a company can be but rather doing a bottom up approach is the way to go. What’s a bottom up approach look like? I’d recommend doing something simple like:

    • A typical customer will pay us $1,000/year
    • We’ll hire five sales reps
    • Each rep will sell 10 per month
    • We’ll lose a certain percentage of customers per year (churn)
    • We’ll up-sell a certain percentage of customers
    • With this math we’ll add approximately $600,000 in annual recurring revenue per year assuming churn and up-sell equal out

    Here’s a good review of market sizing on DocStoc titled A Startup’s Guide to Market Sizing.