David Cummings on Startups

Blog

  • Transitioning from Services to Products

    Today, I had the opportunity to meet with a successful entrepreneur who is working on transitioning his 18-person company from services only to a mix of software products and services. I think this is a common occurrence with service businesses: the business owner gets tired of selling labor-intensive work and looks for product ideas related to his or her core competencies.

    I offered up the following advice:

    • Hire completely new people to work on the product. It is very difficult to transition existing people out of their current roles, especially if you don’t already have excess capacity in the business.
    • The best new product development teams I’ve worked with combined a full-time marketing product manager and a full-time lead software engineer (you really only need two good people to prototype normal web apps).
    • Plan for it to take a solid three to six months to get the first worthwhile beta release into the hands of potential users.
    • Budget for 12 – 24 months of expenses to see the new product through to product/market fit.

    I haven’t done it, but I can imagine transitioning from a services company to a services and products company is very difficult. I hope he’s successful!

  • More Lessons Learned from Shotput Ventures

    After posting my first round of lessons learned from Shotput Ventures, and successfully completing Demo Day yesterday, I wanted to capture some more thoughts related to our first class. Let’s jump right in:

    • In the future, the Demo Day event should not be held on a Monday because most VC firms hold their partner meeting on that day
    • Pairing one mentor with each team at the beginning of the program would be better than having several mentors that work with multiple teams
    • Funding companies using the formula of $6,000 per co-founder is probably more aligned with each team’s actual financial needs for the three month program (as compared to the $5,000 per team and $5,000 per co-founder model we used)
    • While the ATDC did an awesome job setting us up with the 100-person TSRB event facility, we could have easily filled up a room that accommodates 200 people
    • Having a few graphic designers available for the teams would have saved them valuable time in designing their logos and web app user interfaces

    Again, I’m very proud of our first class and think that everyone involved did a great job!

  • Shotput Ventures Demo Day

    Today was Demo Day for our inaugural Shotput Ventures class of 2009. Over 120 people attended the event and had the opportunity to watch eight young startups present their products and businesses. Here are the eight companies and a brief description of what they do (in my own words):

    • Looxii – Looxii makes it easy to monitor and analyze terms across the social web
    • ShoutNow – ShoutNow allows users to send broadcast voicemail to telephones, as well as to incorporate audio snippets into Facebook and Twitter
    • OpenHatch – OpenHatch is essentially a LinkedIn for open source developers, designed to showcase projects people have worked on and connect companies that need help with developers
    • ZETA – ZETA analyzes several different factors related to user generated content online to come up with an objective score measuring the authority of the information
    • Ninja Post – Ninja Post is a modern message board platform that incorporates real-time updates into the user experience
    • KHU.SH – KHU.SH’s LaDiDa reverse karaoke iPhone app allows users to sing into the phone and test different matching accompaniments in order to make their own music
    • EventHive – EventHive provides technologies to make conferences more interactive, including audience polling, Q&A, and other services
    • SocialGuides – SocialGuides is a location-based service for restaurant reviews that is like an intersection of Twitter and Yelp

    The event today was a big success and I hope you’ll take the time to visit and support the different Shotput companies.

  • Some Lessons Learned from Shotput Ventures

    As we finish our last minute preparations for tomorrow’s Shotput Ventures Demo Day, I wanted to reflect on some of the lessons I’ve learned. This is not an exhaustive list, but rather a few quick thoughts based on my experiences over the past three months. Without further ado, here they are:

    • Offering a co-working space as part of the program is a better way to go than no office space in a spread-out city like Atlanta
    • I saw the most progress and excitement in the final 30 days of the program, correlated with having tangible products to test
    • Letting a team change product directions mid-course is a good idea if they still have time to build something solid for Demo Day
    • Community support is invaluable and Atlanta has been amazing at helping out
    • The teams didn’t interact with each other as much as I would have liked, and we could have done a better job promoting and facilitating them spending time together
    • Developing a timeline with general deliverables at the start of the program would have been beneficial (e.g. product user interfaces, roadmaps, potential beta testers, etc)

    After Demo Day, and having more time to reflect, I’ll work to come up with additional lessons learned. I’m excited about tomorrow!

  • Deciding to Build a New Product

    After today’s entrepreneurship talk for one of Emory’s MBA classes, several of the students lined up to ask me questions. One of the questions was essentially “Do you have a finance person that helps decide when to build a new product?” I quickly said that we didn’t have a finance person help us decide and that it was still based on a gut decision and customer driven input.

    This provided a good segue into describing what I think is necessary for new product development and what I think our core competency is as a company. As for a new software product, assuming you are already following Steve Blank’s advice, I think it is critical to have a domain expert product manager and a separate lead developer software engineer. With today’s awesome web app frameworks, a small, two person team can really put together a prototype of just about anything. In my company, I believe our core competency can be distilled down to three main areas:

    • Scalable web applications
    • Online lead generation and marketing
    • High quality customer service

    So, while I don’t have more specifics on deciding to build a new product, I look at what we do best generally, solicit feedback on the idea from internal and external stakeholders, and then make a decision one way or another. Also, don’t be afraid to kill a product if it isn’t going to be successful. We stopped development of a product over two years ago after working on it for several months, and we should have stopped even sooner.

  • Iterating in a Startup Slideshow for Emory

    I’m giving a lecture tomorrow for an Emory MBA class on entrepreneurship. As for the topic, I’m basing it on my previous blog post series titled Iterating in a Startup. The slides were my first attempt at using the Beyond Bullet Points style of presentation. I hope you enjoy the embedded slideshow below:

  • Google Spreadsheets for KPI Dashboards

    My main project this week has been redoing the tracking of our key performance indicators (KPIs) so that they are centralized in a shared Google Spreadsheet with automatic color coding to indicate where we are in relation to our goals. We’ve been monitoring KPIs for years but never had a system that was as transparent and simple as I would have liked. With that said, our existing One Page Strategic Plan does contain our goals for the current quarter, current year, and next three years in a readily digestible format.

    Google Spreadsheets proved to be a logical choice as the framework for tracking our KPIs on a weekly basis due to its flexibility with conditional formatting as well as its team collaboration functionality. The spreadsheet has the following three tabs and content:

    Data

    • Department in column one
    • KPI categories in column two
    • Columns three and beyond each represent a week, with the current week in column three
    • Each row with the KPIs has a corresponding row beneath it with the calculated percent of goal in a color coded cell (based on percentages outlined in a previous post)

    Goals

    • Similar to the Data tab with departments in column one and KPI categories in column two
    • Columns three and beyond each represent the goal for that KPI in a specific quarter, with column three always being the current quarter

    Explanation

    • Columns one and two are the same as in the previous tabs
    • Column three has a paragraph explanation of the KPI and why we track it

    I’m excited about tracking our KPIs in this new dashboard format and seeing how it helps us focus on areas where we can improve our business. Please let me know how your organization implements KPI dashboards and any ideas for improvement of ours.

  • Preparing for a Scheduled Demo

    Yesterday, after talking about preparing for a sales call, the next part of our workshop was focused on preparing for a scheduled demo. A scheduled demo is the first real phase in our sales process, usually takes an hour, and is conducted with the phone and GoToMeeting for screen sharing. Depending on the product line being sold, my sales people came up with the following items to do in preparation for a scheduled product demo:

    • Send a demo confirmation email 24 hours in advance
    • Read the Wikipedia page on the organization, if present
    • Read the three most recent press releases on the organization’s website
    • Research everyone who will be present on the call, their job titles, roles, and responsibilities
    • Develop a list of questions to ask to understand pain points and BANT (budget, authority, need, and timeline)
    • Find a reference customer in the same industry or geographic region to mention

    These items are generally common sense but they are an important part of the sales process. Web demos with a screen sharing program have significantly reduced the cost of sales for many companies and I’m a big advocate of them.

  • Preparing for a Sales Call

    During our weekly sales training workshops, we pick two topics and go around the room sharing our experiences and personal best practices on the topic. The goal is for sales managers, cold callers, and sales reps to learn from each other in a collaborative, peer-to-peer environment.

    Today, one of the discussion topics was how to prepare for a sales call.  We broke it down into two sub-categories: cold calls and scheduled demos. The following best practices emerged for cold calling:

    • Look up the person in LinkedIn and record relevant pieces of information in your CRM (we use Salesforce.com)
    • Google the person’s name and spend no more than two minutes looking for additional information
    • If possible, stand up when making the call
    • Smile when talking
    • Think positive thoughts about how the call is going to be a success once the phone starts ringing

    Of course, this amount of preparation is for selectively calling companies that fit your ideal customer profile; it is overkill for trying to make 80 calls per day.

    Preparation makes all the difference between success and failure, assuming you put yourself out there. Making a sales call is already a challenge and going into it with these tips will increase your odds of success. Stay tuned for part two – talking about preparation for a scheduled demo.

  • Employee Continuing Education

    Each month I meet with a group of entrepreneurs to talk about how we can make our respective companies great places to work. We typically spend three hours in the meeting divided into two topics. One of our topics today was continuing education for employees, as defined as internal training and development as well as external programs and courses.

    At my company, we do the following continuing education and training programs:

    I picked up some new ideas at the meeting today that I’m looking forward to implementing. After we try some, I’ll report back here on their effectiveness. Continuing education is a critical part of a fast growing company and I’m a big proponent of it.