David Cummings on Startups

Blog

  • Complex Sale or Order Taking Sales Organization

    Do you have a direct sales team that works hard selling or do you have an order taking call center and website? That’s an important distinction when building a business. With a direct sales team, you have the following characteristics:

    • Bigger deal sizes
    • Longer sales cycles
    • Complex sales cycle and pricing model
    • More expensive personnel

    When sales come from an order taking call center and website, you see these characteristics:

    • Larger marketing budget as a percentage of revenue
    • Smaller deals
    • Shorter sales cycles
    • Free trials as well as “free” editions

    It is important to consider both of these options when thinking through the possibilities of a new business application.

  • Products Roadmaps

    Does your company make product roadmaps available? I’ve always tried to avoid providing product roadmaps for prospects and customers for several reasons:

    • Agile products need to adapt on a monthly or quarterly basis
    • Similarily, the market changes too fast to know what will be important in 12 months
    • If they see something they want and it doesn’t get done they won’t be as satisfied (better to under promise and over deliver)

    Instead of providing a roadmap, find out what is important to your prospect or customer and make sure it meets their needs now. Sure, it won’t be 100% of what they want but it is better to provide real value now than to hope it will be ready in the future. Hope is not a strategy.

  • Always People, Process, and Technology

    Whenever an issue is brought up to me, I always like to think of it in terms of people, process, and technology. In the two markets that I’m intimately involved with, web content management and web marketing automation, we try to stress that it isn’t just the software or technology that will result in a successful client.

    • People – are the right people involved?
    • Process – how are things currently being done?
    • Technology – what tools and applications are involved?

    This simple framework goes a long ways.

  • Productizing Services Work

    One of the best moves we’ve made for our consulting and services teams is to “productive” the work. What does that mean? That means that instead of quoting project work as a “bucket of hours” (e.g. 100 hours at $200/hour for $20,000) you have different “products” available like a Professional Quick Start Package that gets a client up and running, or a Newsroom Package that delivers a certain number of templates, pages, workflows, etc.

    Productizing the services work aligns interests from both the client and vendor to focus on the benefit and outcome of the work — not how long it takes. This took a long time to realize, and we’re not completely away from quoting hours of work for certain projects, but the majority of consulting work around a product should be productized.

  • Example B2B App SaaS Infrastructure

    After our hosting provider had internal network issues last week, setting up redundant datacenters became a top priority. After much debate, here’s what we decided on for our new SaaS infrastructure:

    • Enterprise-class round robin DNS with automatic fail-over
    • Two datacenters with identical infrastructure:
      • One Linux load balancer (1 dual core CPU, 2 GB of RAM)
      • Two Linux app servers (1 quad core CPU, 4 GB of RAM)
      • High-end MySQL database server (2 quad core CPUs, 12 GB of RAM, RAID 5)

    The database servers are configured in a master-master replication setup such that each datacenter is fully autonomous.

    Now, time to get to work and set things up.

  • Speaking @ Tallahassee Tech Expo

    I’m speaking on Tuesday afternoon at the Tallahassee Tech Expo. My talk is entitled Marketing Streamlined: Using Social Media and Web 2.0 Tools for Facilitating Community Collaboration. Please join me if you have the opportunity.

  • One more thing put into the cloud

    After reading Nicholas Carr’s book, The Big Switch (as recommended by my friend Wayt King), I’ve been trying to be more cognizant of what my company can put into the cloud and no longer worry about. Well, yesterday, we put our Asterisk PBX into the cloud courtesy of Aretta Communications. I must say, we should have done it a long time ago. Several benefits include:

    • Fully managed by a specialist
    • Daily back-ups
    • Phones still work even if the multiple T1s in our office go down

    For $100/month, we should have done it a long time ago. I love the cloud.

  • SMART Goals

    I was at TAG’s Georgia Technology Summit last week and enjoyed hearing a variety of presenters (thanks Appcelerator for the ticket!). Don Tapscott, author of Wikinomics (which I just ordered) did a great job talking about mass collaboration. The last speaker of the day, Michael Gelb, outlined a nice approach to innovation including a little method to better achieve goals:

    • Specific
    • Measurable
    • Achievable
    • Relevant
    • Timeline

    Very smart indeed.

  • Where’d all the spam go?

    So, a couple months ago we switched from an in-house Linux email server to Google Apps for Your Domain. There were some hiccups like migrating legacy email (we paid the $50/user for the premier edition to get email migration support but it was still a pain) but overall it has been great. The most notable change has been the superb spam filtering. Literally, I don’t remember the last time I’ve received a piece of spam since the switch. That’s right, spam is no longer a problem as far as I’m concerned.

    I highly recommend Google Apps for Your Domain.

  • Company-wide Goals and Tracking

    I’ve been spending a great deal of time lately working on company-wide goals. It is important to keep them simple and memorable. For us, our goals are based on the following items:

    • Customer renewal rate – this reflects how well we’re doing providing on-going value to customers, our support team, product enhancements, and overall community
    • Recognized revenue – this combines new license revenue, maintenance and support fulfilled (recognized monthly), and services delivered (consulting and training)
    • Booked revenue – this reflects how well our sales team is doing, the competitiveness of our software, and the quality of our marketing

    The goals are laid out for the current month, quarter, year, and following year. We don’t go further out than the following year (e.g. five year goals) as we like to focus on the most tangible timeframes where we have control.

    Individual goals, department goals, and leadership goals build up to the company-wide goals. The company-wide goals are always quantitative whereas the individual and department goals are a combination of quantitative and project goals. With this methodology in place, everyone in the company always knows what we’re working towards and our current progress is reiterated on a consistent basis.