David Cummings on Startups

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  • Video of the Week: Blitzscaling 19: Jeff Weiner on Establishing a Plan and Culture for Scaling

    For our video of the week, watch Blitzscaling 19: Jeff Weiner on Establishing a Plan and Culture for Scaling. Enjoy!

    From YouTube:
    This is session 19 of Technology-enabled Blitzscaling, a Stanford University class taught by Reid Hoffman, John Lilly, Allen Blue, and Chris Yeh. This class features Reid Hoffman interviewing Jeff Weiner, the CEO of LinkedIn.

  • Software 2017

    Battery Ventures put out a great slide deck on the state of the software industry in 2017 as part of the recent CloudNY event.

    https://www.slideshare.net/Battery_Ventures/software-2017

    Here are a few notes from the slide deck:

    • 18.3% expected compounded annual growth for SaaS companies over the next four years (compared to 6.9% for general software)
    • Software industry in the United States supports 10 million jobs
    • The Five Forces of Software’s Accelerating Growth
      • Existing software markets are growing over time
      • Software is infiltrating what were once niche markets
      • Software is displacing hardware
      • Every company is becoming a software company
    • 60% of organizations to increase spending on cloud applications
    • The global software industry is $500 billion per year
    • Continuing at a 5% compounded annual growth rate, software will be $1 trillion/year by 2030
    • Category kings consistently captured more than 70% market share
    • Tactical considerations:
      • Software innovation is now global
      • There are competitors in all segments of the market
      • Product now drives software sales
      • Network effects and ecosystems build moats and drive stickiness
      • AI and machine learning are enabling applications
      • Microservices architectures and rapid product delivery are now must haves
      • Culture is paramount and employee feedback is public
      • Find a wedge and change the market dynamic
      • Grow fast or die slow

    Check out the slide deck on the state of the software industry in 2017.

  • Assessing Product/Market Fit

    One of the never-ending startup discussions is around assessing product/market fit. Product/market fit is the idea that the product’s form and functionality meets the needs of the market. Fit isn’t an on/off item, rather it’s a continuum with various dimensions. And, for entrepreneurs without product/market fit, not much else matters.

    Here are a few ideas for assessing product/market fit:

    • Passionate Customers – If you told your customers that the product would be shut down tomorrow, how loud would they complain?
    • Customer Requests – How well does the product solve the customer’s problems today in it’s current form as opposed to needing further customizations?
    • Customer Referrals – Of the last 10 customers signed, how many referred another potential lead?
    • Limited Product Issues – Of the last 10 customers signed, how many ran into product issues or bugs?
    • Daily/Weekly Active Users – Do the customers use the product in a consistent daily or weekly fashion over an extended period of time (e.g. 4-6 weeks)?

    Ultimately, assessing product/market fit is about assessing how much value customers are receiving from the product and the actions they are taking (e.g. regular usage, referrals, etc.). Product/market fit is the first critical milestone in the entrepreneurial journey.

    What else? What are some more thoughts on assessing product/market fit?

  • SingleOps Announces $1M Seed Round

    Earlier today I closed on a $1M seed round in SingleOps (see the Atlanta Business Chronicle article on the SingleOps funding). SingleOps is a SaaS platform for mobile field workforces like tree care services, landscaping, pest control, healthcare — anyone who regularly coordinates employees in the field. The platform combines estimates, scheduling, time tracking, CRM, invoicing, and QuickBooks syncing with a mobile-first interface for teams on the go. Think of it as a cloud-ERP solution like NetSuite, but much easier to use and geared towards field service companies.

    Sean McCormick and his team have built the foundation of a great business over the last three years achieving product/market fit last year and a repeatable customer acquisition process this year (see the four stages of a B2B startup). Now, it’s time to accelerate the growth and build a category-winning company.

    I’m thankful to Sean for letting me be part of the journey and I’m looking forward to helping SingleOps realize its potential.

    Interested in learning more? Check out SingleOps.

  • Benefits of Sales Territories in a Startup

    After the post on Startups Should Avoid Sales Territories, several people reached out and offered reasons why they like sales territories for startups. Here are a few benefits of sales territories in a startup:

    • Face-to-Face Selling – With up-market, enterprise deals, prospects often expect some amount of face-to-face meetings, and that’s easier being in a specific territory.
    • Coordinating In-Person Meetings – Even with an inside sales team, some companies do quarterly trips to major population centers for relationship building (e.g. hey, I’m going to be in Atlanta next week for two days, do you have time to get together at your office for 30 minutes?). With reps working specific territories, it’s easier to meet with multiple prospects on the same trip.
    • Reputation in the Local Community – Another element of sales territories is to have field sales rep that lives in the territory. By living in a major population center, it’s easier to build a reputation in the community and work through a variety of civic and philanthropic channels to build rapport.

    Overall, sales territories still should be avoided for most startups. Startups that have significant scale and/or large deal sizes that warrant face-to-face selling are good candidates for sales territories. Otherwise, it’s better to take advantage of the latest sales and marketing technologies to achieve greater levels of sales productivity without territories.

    What else? What are some more benefits of sales territories in a startup?

  • Terminus Raises a $10M Series B

    Earlier today Terminus announced that they had closed their $10.3M Series B financing from Atlanta Ventures and Edison Partners. Terminus is the pioneer of account-based marketing (ABM), one of the fastest growing areas of marketing technology. Here’s how Terminus describes the value of ABM:

    ABM enables B2B marketers to target key accounts, engage decision-makers, and accelerate marketing and sales pipeline velocity at scale

    As marketers look beyond inbound lead generation and become more focused on the account, they need corresponding tools and systems to orchestrate engagement across multiple systems, trigger the right ads to the right people, track behaviors across the account, and understand account-level analytics.

    Terminus created the FlipMyFunnel movement and is building a large, category-defining ABM company. Now, they have the resources to grow even faster and help more companies achieve ABM at scale. Congratulations to Eric and the entire Terminus team on their next milestone in the journey.

    Want to learn more? Check out Terminus.

  • Startups Should Avoid Sales Territories

    Recently I was meeting with an entrepreneur who’s startup is growing nicely. They just raised a round of financing and will be expanding the sales team. After catching up for a few minutes, he asked about implementing sales territories and I recommended against it.

    Here are a few reasons most startups should avoid sales territories:

    • Distribution of Best-fit Accounts – While sales territories are often divided based on certain states and their corresponding population centers, in actuality the ideal customer profile isn’t evenly distributed. Apps can automatically find the total addressable market and build smart lists of the best-fit accounts. Having each rep work a set of named accounts ensures all best-fit accounts get worked, not just the best in a certain territory (e.g. 250-500 accounts per rep is recommended).
    • Growth in Sales Reps – As the startup grows, and hires more sales people, territories for existing reps must shrink to make room. Shrinking territories results in disillusionment for the existing reps and creates ongoing realignment challenges.
    • Inbound Lead Distribution – Just as the ideal custom profiles aren’t evenly distributed across territories, quality inbound leads aren’t evenly distributed either. By not having territories, inbound leads can be qualified and parsed out in a more dynamic fashion.

    Sales territories are a relic of the pre-internet era and no longer make sense for most startups. Entrepreneurs would do well to avoid sales territories and take advantage of the opportunity to target the best accounts anywhere, not the best accounts in a certain territory.

    What else? What are some more reasons startups should avoid sales territories?

  • Video of the Week: Eric Schmidt, Alphabet Inc. – Just Say “Yes”

    For our video of the week, watch Eric Schmidt, Executive Chairman, Alphabet Inc.: Just Say “Yes”. Enjoy!

    From YouTube:
    Eric Schmidt, Executive Chairman of Alphabet Inc. on how to achieve success: Surround yourself with interesting, ambitious people, and always say “yes” to challenges. Read more leadership insights from the Stanford GSB View From The Top talk on Monday, April 24, 2017: http://stanford.io/2qBewA7

  • Feature Rich vs Feature Niche

    When building a software product, there’s a human tendency to go broad and add every feature a customer requests. Yet, some of the most successful products do a limited number of things well and eschew the bloat found in most applications.

    I call this the feature rich vs feature niche conundrum.

    Feature rich products have dozens of modules and hundreds of functions. Feature niche products have a select number of modules with only the most valuable functions.

    Pardot is very much a feature rich product with dozens of B2B marketing modules. Calendly is very much a feature niche product doing beautiful, simple scheduling.

    Entrepreneurs need to be intentional about their product strategy and consider the feature rich vs feature niche trade-offs.

    What else? What are some more thoughts on feature rich vs feature niche?

  • Taking a Customer Up the Value Curve

    One of the popular startup strategies is getting in the door with a customer at a basic level and then upselling them with more functionality so they get more value. Best known as taking a customer up the value curve or the trojan horse strategy, the key is providing value quickly to start building the relationship before working towards the more complex solutions.

    Here are a few thoughts on taking a customer up the value curve:

    • Start Quick and Easy – The consumerization of IT is real. Companies want the ease-of-use and feel of a consumer app to solve their business problems. Enable the customer to start quick and easy.
    • Provide Real Value – Quick and easy onboarding doesn’t matter if the product doesn’t provide real value. Ensure that it’s a must-have and not a nice-to-have.
    • Make Upselling Product-Native – Once the customer is in and getting value, incorporate nudges and upsells natively in the product. The most common example of this is an “invite people” feature to add more users in the product.

    Entrepreneurs would do well to think through ways to take customers up the value curve and ensure a thoughtful approach.

    What else? What are some more thoughts on taking a customer up the value curve?