David Cummings on Startups

Blog

  • SaaS/Web is Ideal for ADHD Entrepreneurs

    A common trait you’ll find among entrepreneurs is that they have tons of ideas and routinely can be described as ADHD. Due to this phenomenon, SaaS products, and the web in general, make for an ideal medium as it affords an elegant manner with which to constantly tinker. In many cases, you can have an idea, see it live in production, and get customer feedback in a matter of days or weeks (with strong automated testing, of course!). What other types of products allow you to do that? Physical goods? No. Services? Rarely.

    Constant iteration and innovation really is adrenaline for enterpreneurs. It doesn’t get much better than SaaS/Web for products.

  • Some Thoughts on Sales Commission Strategy

    Sales commissions are a tricky thing. Once you put them in place, it is difficult to change them without the sales team being demoralized that their compensation is going to go down (even if it isn’t!). The goal, generally, is to minimize base salary and maximize performance based compensation. Here are some thoughts on strategy:

    • Align company interests with the commission (e.g. have commission percentages based on the profitability of the item being sold such that things like license revenue have a higher percentage commission than services revenue)
    • Significantly reduce compensation if quota isn’t hit (e.g. cut the standard commission in half if quota isn’t reached for the designated time period)
    • Don’t limit the up-side (e.g. don’t put a cap on the maximum amount a sales rep or account manager can make)

    Sales, and management of a sales team, is one of the most difficult, and rewording, aspects of a business. Good luck!

  • Time for Twitter

    My new year’s resolution last year was to write one or more blog posts per week. I’m happy to say I achieved that goal and it’s time for my next resolution: use Twitter several times per week by posting tweets and joining the conversation. I’m not going to post a ton but I will try to capture thoughts, anecdotes, and anything else that is interesting to me.

    Follow me on Twitter: @david_cummings

  • What are your three most important business measurements?

    It’s that time of year to start next year’s planning. We’re currently debating the three most important items to measure and set goals against. Here are the current three we’re working on:

    • Employee satisfaction
    • Customer renewal rate
    • Revenue bookings
    What are your three?

  • The Broken Windows Theory Applies to Business

    This Economist article on the Broken Windows Theory has been making its rounds on the blogosphere. The theory goes that the small things, left unchecked, lead the way for more serious problems. In criminology, an example is not dealing with graffiti and minor infractions giving way to people committing more serious crimes. In business, an example is not dealing with little headaches or friction that impede doing a better job leading to more complacency. I’m fan of asking the “five whys” and drilling down into the core issue. 

    What are some “broken windows” in your business?

  • Debt is Your Friend

    This one is for entrepreneurs and not consumers: debt is your friend. Too often, first time entrepreneurs think the first step to starting a business is raising money from other people or venture capitalists. My recommendation is to get the business off the ground doing whatever it takes — including using your credit cards. I used credit cards for my business eight years ago and even played the game of applying for new cards that had no interest for the first X months and transferring balances between cards in an effort to minimize the interest rate. Having tens of thousands of dollars of credit card debt, like I had, isn’t for the faint of heart, and is not recommended for most people, but it is often times the only way to get access to money.

    As for banks, the truth is that most entrepreneurs will never get a loan from a traditional bank unless you have collateral for 80% of the value (e.g. stocks, bonds, real estate, accounts receivables, etc). People think banks are in the market of loaning money but they are really in the market of buying physical goods on your behalf and letting you pay them back for it. They aren’t there to fund your dreams that involve intangible assets.

    My advice is to seriously consider debt whenever possible.

  • Jack Welch on the Four Types of Employees

    My younger brother is a first year student at Harvard Business School and was recently discussing a case in class on Jack Welch’s management style. After 35 minutes of discussing the case, the professor surprised the class by having Jack Welch come in personally and answer questions. The key message by Welch was that of the four types of employees and what you should do with them:

    • High performer that buys into the corporate culture — promote and empower them as much as possible
    • Low performer that doesn’t buy into the corporate culture — fire them as quickly as possible
    • Low performer that buys into the corporate culture — give them a second chance in a different position to see if they can be an ‘A’ player
    • High performer that doesn’t buy into the corporate culture — do a public hanging where you fire them and then discuss with other managers their short comings
    Of course, the last two types are the ones that provide the most difficulty for companies. I thought it was an interesting perspective from a very decorated business person.

  • Hiring Inside Sales Reps

    Last week I looked for my first crowdsourced answer to a question by posting to my network on LinkedIn. This was the first time I’d asked a question, and I must admit I was surprised by the variety and quality of the responses. It isn’t that I didn’t think that my network would have good responses, but rather that very few people would respond. I had many more responses than expected. Here were some of the consistent themes to the question “What are some recommendations for finding good inside sales reps”:

    • Hire a “Sales and Marketing Assistant” that does all of the coordinating work with prospects so that current sales people can spend more time on serious leads
    • Use a staffing firm that specializes in sales reps as well as uses TopGrading to evaluate candidates
    • Use job boards from local colleges and universities focused on management majors and general business majors
    I wanted to say thanks to everyone that responded.

  • Product Speed as a Feature

    One of the things I like to focus on is speed as a feature. What this means is that the performance and responsiveness of the web application is an important factor in success. With the web and web browsers working over long distance high-speed connections, there are still delays and headaches that differ from standard client-side applications.

    The speed of the application should be treated as a feature and time should be appropriately allocated for the engineering team on a regular basis to continually fine-tune the application. Here are some quick tips for improving the performance of web applications, but remember that premature optimization is also a cause of failure:

    • Offloading anything that doesn’t need to be processed in the current request to be a background job
    • Use asset hosts to request things like images, JavaScript, and CSS from different hosts
    • Use memcached along with database query caches to reduce the database load
    • Make sure your HTML is compliant and conforming to the appropriate DTD
    • Use tools like YSlow to measure performance

    Good luck in making your application as fast as possible and remember that speed is a feature.

  • 3 Reasons I like Google Chrome

    I’ve been using the Google Chrome browser as my main browser for the past couple weeks and I’ve been very impressed. As a multi-year Firefox user, I was loathe to move on but the number of times Firefox would freeze on me on a daily basis was beginning to get annoying (probably partially related to too many add-ons installed). Here are three reasons why I made the switch:

    • Speed — Chrome runs a separate application process for each tab open resulting in a significant performance boost
    • Access Keys — Chrome has Alt and the access key enabled by default whereas other browsers require Alt + Ctrl and the access key (unless you manually change configuration settings)
    • Universal URL/Search Bar — Chrome has a single text box at the top that is used for both URLs as well as Google searches making it fast to enter URLs, search, and pull up previous sites
    I recommend Google Chrome for PC users everywhere.