David Cummings on Startups

Blog

  • Software Roadmap Process

    In addition to watching the U.S. Open tennis tournament, I’ve been thinking about our product roadmap process. The previous roadmap process for our SaaS product hasn’t kept up with the pace of product demands due to success in the marketplace. Here are the general ideas for our new process:

    • Shared Google Spreadsheet with individual tabs for each department, a tab for the actual roadmap, and a tab for customer ideas from our idea exchange
    • Each department keeps a laundry list of what they’d like to see in the product in their respective tab
    • The sheets have the following columns:
      – Item
      – Description
      – Sponsor
      – Priority
      – Difficulty
      – Discussed
    • Department managers come together once a month to discuss items that haven’t been discussed yet and to lobby for their requests to be moved to the main roadmap
    • The product manager makes the final decision, based on input from the key stakeholders

    It’s a new process for us and I’m excited to see the results. The most important aspect of product management is to be opinionated about the product vision and fanatical about what does, and what does not make it into the application.

  • Software Pricing Proportionate to Sales Cycle

    Two days ago I had the opportunity to meet with a local entrepreneur who’s working on a SaaS product geared towards pharmaceutical sales reps. The gentleman and his co-founder are working on the business part-time while outsourcing the engineering to a contractor in NY. After the usual chit chat, he drilled into the area that he was struggling with the most: pricing.

    His product is currently priced at $99/month/user, and has one add-on with a per usage cost. Having a medical sales background, he’s enlisted several independent, commission-only reps to help sell the product, but with no luck. I asked him about the sales cycle and he said it usually takes a couple weeks for a rep to sell the product once the prospect is in the buying cycle. What’s the problem with this situation? A product that sells for $99/month, and requires a trained sales rep, isn’t going to work unless it can be done in a call center and is a mass market application (think cell phones or cable TV). Software needs to be priced in direct, proportionate relation to the sales cycle.

    My advice to him was to either make the web application more self-service with a price point that is in the $10 – $30/month range, or to go much more up-market and sell a $1,000/month product to departments. At $99/month, his product is too expensive to sell without an inside sales team, and not expensive enough to compensate trained sales reps. It requires selling, not order taking.

    Pricing is difficult and should not be under estimated. For more software pricing thoughts, please visit Joel Spolsky’s post from 2004.

  • Quick Thoughts on PowerPoint Presentations

    Last week I had the opportunity to hear two entrepreneurs give a PowerPoint presentation about their business. The delivery of the content was good but the slides were horrible. Absolutely horrendous. It’s beyond me why they used a deck with upwards of 100 words on each slides. Yes, 100 words.

    My advice for entrepreneurs pitching their company is simple: follow Guy Kawasaki’s 10/20/30 Rule of PowerPoint. I have nothing more to say on the topic.

  • One-Page Strategic Plan Templates

    The Gazelles website was recently redesigned, and as part of the redesign, the One-Page Strategic Plan (OPSP) templates and examples have been updated. The OPSP is an extremely valuable tool for articulating all aspects of your company on a two-sided piece of paper. Here are direct links to download different formats for yourself:

    I hope you find these resources as useful as I have. They really will make a difference!

  • Monthly and Quarterly Meetings

    Following up on my previous post about our weekly meeting rhythm, I wanted to make sure and capture what we do for our monthly and quarterly meetings. I’m a big fan of Patrick Lencioni’s book Death by Meeting, so we’ve implemented a schedule that is a hybrid of Lencioni’s recommendation combined with our own adaptations. Here are my monthly and quarterly meetings:

    • Monthly
      – Financials review
      – All hands meeting (company-wide update)
      – Leadership strategic meeting (on occasion)
    • Quarterly
      – Celebration
      – Leadership off-site

    Having a consistent rhythm, with different, special purpose meetings, has proved to be very effective for us and I recommend it to other entrepreneurs.

  • TechDrawl Awesomeness

    I wanted to talk briefly about one of the greatest additions to the Southeast technology community in the past two years: TechDrawl.com. From their site:

    TechDrawl is a blog showcasing emerging technology and new media businesses fresh from the South.  Our mission is to bring to the national stage the newest and most promising privately owned companies and entrepreneurs from D.C. to Texas (the U.S. Census South) and to report on their concepts and accomplishments.

    TechDrawl is so important because it gives a voice to the emerging technology community in one of the fastest growing portions of the United States. To me, TechDrawl has a done a great job with the following:

    If you haven’t visited TechDrawl lately, I’d recommend heading on over there.

  • Entrepreneurial Books on Tap

    I’m a junkie when it comes to buying and reading (sometimes partially) entrepreneur books. Part of it comes from me enjoying the process of studying topics on my own before reaching out to others for advice, and part comes from learning new ideas that might be applicable in my company. Here’s a list of the most recent books I’ve purchased:

    I’ll let you know which ones I find interesting and would recommend.

  • Five Habits of a Successful Entrepreneur

    Whenever people ask me the blanket question “What advice do you have for entrepreneurs?” I always hem and haw making up an answer on the spot. I spent a few minutes today thinking about the advice I’d tell myself if I knew what I know now when I started my company nine years ago. Here are the five habits of a successful first-time entrepreneur:

    1. Read one of the Personal MBA books every other week until you’ve finished all of them, and then never stop reading a highly recommended book every other week
    2. Have lunch with an entrepreneur you don’t know well every week and prepare a casual list of questions that you’d like to know his/her thoughts on
    3. Join an EO-like organization immediately for peer-to-peer accountability groups and get actively involved on the board in a leadership role
    4. Improve at least one thing in your business every week and don’t be afraid to try improvements that will fail
    5. Actively re-evaluate your company corporate culture on a monthly basis and continually make it better knowing that your corporate culture is the most sacred thing you’ll spend time on as an entrepreneur

    As you can see, success, in my opinion, comes from doing simple, but time intensive activities on a consistent basis. Notice that I didn’t say spend 100 hours per week on the business, develop a comprehensive business plan, or raise money from VCs. If you do the things outlined above, and apply your insights to your business, you will be successful.

  • Doug Tatum: No Man’s Land

    Doug Tatum, author of the book No Man’s Land, was the guest speaker yesterday at an intimate EO event in Norcross where he talked about his recent research and book. This No Man’s Land is unrelated to my No Man’s Land post from two days ago and is a complete title coincidence. Doug did a great job at outlining his experience building a company from scratch to 1,000+ employees and revealed some of the insights he learned about entrepreneurial companies. The firm he built was an outsourced CFO firm for fast-growing businesses, so his experience makes him uniquely qualified to be an expert on the subject.

    I have not had the chance to read the book but Doug went through a PowerPoint presentation that hit on the major points. The idea behind No Man’s Land is that when a company reaches 20 employees, it has outgrown being completely dependent on the founder(s), and has entered a period where it isn’t big enough to have scale, which is typically at 100 – 150 employees. This transition period from 20 to 100 employees is the most difficult, with many companies never making through it.

    A big theme in the book is how companies outgrow the four Ms:

    • Market
    • Management
    • Model
    • Money

    Doug did a great job presenting thoughtful evidence along with interesting anecdotes. I’ll leave it to you to read the book and learn more.

  • Employease: A SaaS Pioneer

    Yesterday afternoon I had the opportunity  to spend a few minutes with John Alberg and Michael Seckler, two of the co-founders of Employease. Employease, for those who grew up as part of the web-from-day-one generation, was the poster child for delivering enterprise applications over the web. What we now know as software-as-a-service has gone through several naming cycles, with application service provider (ASP) being one of the most well known during the dot com bubble.

    Employease was sold to ADP for $160 million several years ago and John and Mike are now working on their second venture called Euclidean Technologies — a hedge fund that uses advanced machine learning to do value investing in the public markets. John gave me an interesting account of just how difficult it was to do SaaS fourteen years. Here are some of the takeaways from the conversation:

    • Scripting languages like PHP didn’t even exist and their product was originally written in C and server-side JavaScript on the Netscape web server product
    • Load balancers weren’t available and had to be written from scratch
    • Internet access was spotty and would periodically go out for no reason, causing serious consternation from their customers
    • They made a big gamble, which paid off, in porting all their code to server-side Java
    • Being close to the client (a.k.a. customer-driven development) was their unique differentiator, and helped them win in the marketplace

    It was great fun listening to stories of the early days of the web, and I appreciate John and Mike sharing them with me.