David Cummings on Startups

Blog

  • User Feedback

    One of the most profound changes the Internet has brought to the world of software companies, besides software-as-a-service, is that of user feedback. When I say user feedback, I don’t mean just getting emails with feedback on the product, rather I mean all the different ways people talk about the product with you, with others, and on their own. Think about some of the common ways people provide feedback now:

    • Email
    • Phone
    • Twitter
    • Facebook
    • Message boards
    • Idea exchanges
    • Blogs

    The list goes on and on. Generally, the key isn’t to try and be all things to all people. My favorite strategy is to keep track of feedback in a structured fashion (e.g. inside a CRM or Google Spreadsheet) and then once a change has been made that addresses one of those ideas, reach out to the person or all the people that submitted it, and tell them we listened to their request and made the change in the product. You’ve just won a customer for life.

  • Commercial vs Open Source

    I like to think of my company as being scrappy and resourceful. We love open source, looking to use it everywhere that makes sense. Up until 18 months ago we still had OpenOffice as the standard in the office, that was until the up-roar about incompatibility with MS Office documents became so loud that I caved and bought a license of MS Office for everyone. I wouldn’t say I’m an open source zealot, but I am a big proponent.

    My strategy has always been to start with open source and they look to commercial software once the open source doesn’t work out. As an example, we’ve used open source firewall software in our office for several years now, but it’s no longer meeting our needs. We evaluated bringing in a consultant and paying him several thousand dollars to make the changes we desired vs buying an off-the-shelf firewall appliance. The commercial firewall is being installed next week.

    My advice to entrepreneurs is to be scrappy with resources and to always evaluate open source solutions in addition to commercial systems (this from a guy who’s company makes and sells commercial software).

  • Generational Product User Experiences

    Have you ever used a web application and immediately thought that the interface was from a previous generation of software? Maybe I’m a technology snob, but I immediately notice it and start questioning the rest of the application. The front-end really sets the tone for the entire app.

    Of course, one of the big challenges for a successful product is to migrate to a new user experience, potentially alienating existing customers. Therein lies the challenge: people don’t like change. How do you manage that transition?

    I don’t have a solution here but I recommend entrepreneurs and product managers be cognizant of out-dated product user experiences.

  • Giving Back

    As an entrepreneur, the more successful you become, the more people outside of your company ask for your time. The challenge becomes balancing the desire to give back and help others with the demands of continuing to grow your business. There’s no silver bullet here but at the end of the day it comes down to having great people that you can trust so that you have time to give back and help others.

    My advice for entrepreneurs is to set aside 5-10% of their time from the beginning for giving back and helping others. You won’t regret it.

  • I Don’t Know

    Here’s one of the most important phrases entrepreneurs need to be able to confidently say: I don’t know. Too often, the reaction of confident entrepreneurs is to shoot from the hip and offer the first thing that comes to mind. I know I’ve been guilty of that many times. The key is to immediately follow-up and say “but I’ll find out and get back to you.”

    It doesn’t matter if you’re talking to employees, partners, customers, or investors — tell it like it is if you don’t know. The most important thing is to say you’ll follow up and to actually follow through on it. Give it a try — you’ll be amazed at its effectiveness

  • New Company Top Priority

    When starting a new company, one of the top priorities should be to get a simple website up and to start publishing new content on a daily basis. Why? This is so important because there’s a lag time from when you submit a site to Google to get indexed and when it’ll finally appear in search results. There’s an even longer lag time to get a PageRank from Google, resulting in less traffic and awareness in the interim.

    Once you have a site up with content, you should do the following:

    Of course, all of this is predicated on the desire to drive leads to your business and build brand awareness using the web. It is well worth the wait.

  • Moving from Consulting to Products

    I had lunch with a friend today that is working on shifting his company from being a consulting business to being a products business. No, it isn’t the same entrepreneur that I mentioned before, so there must a theme here: when the economy goes south, consultants think the grass is greener for recurring revenue software-as-a-service companies.

    Here’s the advice I gave him:

    • Cost of customer acquisition is going to be your number one challenge
    • Plan for the software process to take twice as long and cost four times as much as you think
    • Several employees that like the consulting business will be alienated by the software business — it is hard to shift the corporate culture to support the new way of thinking
    • Build metrics about everything that goes on from day one — Salesforce.com, or something similar, makes it easy to track many of these

    It’s going to be a challenging transition but well worth the effort.

  • Employee Hiring Tips

    Hiring is one of the hardest things an entrepreneur does on a regular basis. The actual act of hiring isn’t hard, rather, it is the difficulty of hiring the right people for your team. Building a great team is the number one priority of an entrepreneur. Here are a few tips that we’ve found to be successful for us during the hiring process:

    • Have an essay portion of the hiring process whereby the candidate has to answer five short answer questions that are specific to your industry
    • If you’re a software company, have an exercise for the candidate to complete certain tasks in the application and demonstrate technical proficiency
    • If it is a very senior position, go out to dinner with the candidate and his/her spouse so that you can see how they interact with their significant other
    • If anyone on your team objects to the candidate, immediately discontinue the process and move on — everyone needs to be on board 100%

    Hiring the right people is incredibly difficult. I hope these tips help.

  • Sales Data Augmentation

    Sales data augmentation, where information from third-party sources is used to better qualify prospects by sales reps, is invaluable. As you might have guessed, the latest generation of web applications provide even higher quality data with which to make sales teams more effective compared to legacy services. Some of the more popular ways to get additional data on leads include:

    • LinkedIn – the number one professional social networking site
    • Jigsaw – the number one user generated content site to buy business card information
    • ZoomInfo – crawls the web looking for lead information and making it readily accessible

    If your sales team isn’t using services like those listed above, they are missing out on effective data. I recommend they start using them.

  • Startups as Deer Hunters

    Mark Suster published the blog post Most Startups Should be Deer Hunters last month. It is, without a doubt, one of the five most important startup blog posts of the year. Every entrepreneur needs to read it.

    Here’s the general idea: startups need to focus their energies on deals that are big enough to be worthwhile but not so big that they overwhelm the company. Think of it this way:

    • Rabbits – Not much meat and they can be get away quickly
    • Deer – Enough meat to be worthwhile and once knocked down, aren’t going to get away
    • Elephants – Difficult and expensive to capture, and if you are lucky enough to get one, might be too much for the team to handle

    Go read Mark’s post right away.