David Cummings on Startups

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  • 4 Reasons to Add an SDR Team

    Earlier today I was talking with a couple of sales leaders about Sales Development Reps (SDRs). One leader was a big proponent of SDRs and the other didn’t have any experience with them. From the discussion, I took away four reasons to add an SDR team:

    1. SDRs help make the more expensive, and more experienced, account executives more productive
    2. SDRs, with their focus on appointment setting, are more efficient than full-stack sales reps, which are spread thin across a variety of functions (setting appointments, doing discovery calls, facilitating meetings, delivering proposals, and closing deals)
    3. SDRs are effectively a training ground for future account executives thereby acting as a talent development pipeline
    4. SDRs are also a training ground for non-sales roles like support and customer success

    Startups should evaluate these four reasons to add an SDR team, and once a positive decision is made, review these 7 Quick SDR Tips for Startups.

    What else? What are some more reasons to add an SDR team?

  • Hindsight, Insight, and Foresight

    Lately I’ve been thinking more about about going beyond merely looking at backward-looking data and metrics (e.g. The Definitive List of Weekly Operational Metrics for SaaS Startups) and learning how historical data can be used to inform what will happen (predictive analytics). Derek Kane has a Slideshare titled Building and Sustaining Predictive Analytics Capabilities. On slide 26 he defines hindsight, insight, and foresight.

    • Hindsight – What is happening?
    • Insight – Why is it happening?
    • Foresight – What will happen? What should happen?

    http://www.slideshare.net/DerekKane/data-science-i-sustaining-predictive-analytics-capabilities

    As startups mature and improve their operational excellence, insight and foresight become logical additions to the weekly business review. Entrepreneurs would do well so start asking the questions “Why is it happening?” and “What will happen?”

    What else? What are some more thoughts on hindsight, insight, and foresight?

  • 7 Quick SDR Tips for Startups

    As more startups hire sales development reps (SDRs) to set appointments and schedule demos, it’s important to learn best practices and increase the chance of success. Building an SDR team, like any job function, takes time to figure out what does, and doesn’t work. Thankfully, there are a number of great resources online. Here are seven quick SDR tips:

    1. Start by reading the Predictable Revenue book
    2. Build a sales playbook
    3. Hire sales reps ahead of plan
    4. Always hire reps in pairs
    5. Make sure inside sales makes sense
    6. Require a written assessment in the hiring process
    7. Map out the sales process

    Use these seven SDR tips and build a great team. The SDR function is the most important sales process innovation in the last 10 years.

    What else? What are some more SDR tips for startups?

  • Build a Sales Playbook

    One of the first things a new sales leader (or entrepreneur running sales) should do is build a sales playbook. A sales playbook, put simply, is a central resource for tracking everything from the basics, like the elevator pitch, to the more advanced items, like differentiating from specific competitors. With more knowledge and training, sales reps speak more confidently and intelligently, helping win more deals.

    To start, make a Google Doc sales playbook and include these items:

    • Corporate information
    • Sales pitch
    • Elevator pitch
    • Market space
    • Recent trends
    • Target customer
    • Types of buyers
    • Features and benefits
    • List of references
    • Sales process
    • CRM process
    • Competitors and differentiators
    • Objection handling
    • Glossary

    Revisit the playbook on a weekly basis and ensure that the team contributes to it. With sales, the more you know, the more you sell.

    What else? What are some more thoughts on building a sales playbook?

  • Analyzing Data Over Time

    Every entrepreneur I know loves to analyze data and metrics about their business over time. How’s our revenue growing? How many daily active users are we averaging? Only, the data is often in summary form in a spreadsheet making it hard to analyze. Eventually, an analytics and reporting system is necessary to better analyze data over time and present it in an actionable manner.

    Here are some common questions to ask when analyzing data over time:

    • How are we doing this month/quarter compared to this time last month/quarter (ideally with a chart showing both lines)?
    • What’s our trailing 30-day average as measured on a daily/weekly basis?
    • What’s the rate of change on a weekly/monthly/quarterly basis (are we accelerating or decelerating)?
    • What’s our expected results for the rest of this month/quarter based on the previous data and corresponding results (predictive analytics)?

    Analyzing data over time is a critical part of every weekly leadership team. Use analytics and data platforms to automate the collection of data and generation of reports that show both the metrics and more detailed analysis.

    What else? What are some other common questions to ask when analyzing data over time?

  • 4 Team Rapport Building Questions

    As part of creating a high performance team, it’s important to build rapport and understanding of each person at the human level. I’ve found that introducing an ice breaker or personal sharing element to off-sites or planning sessions is a great way to get to know each other and develop a foundation of trust.

    Here are four simple team rapport building questions:

    1. Where are your from and what was it like growing up there?
    2. How many siblings do you have and what’s each one like?
    3. Where do you fall in the sibling order and how did that impact growing up?
    4. What was your most interesting or difficult challenge as a kid?

    The next time you’re planning the agenda for a team meeting, whether it’s a one-off strategy session or a weekly meeting, consider adding a personal element for people to get to know each other better.

    What else? What are some more thoughts on team rapport building questions?

  • Recruiting is Sales

    Recently I was talking to a product-oriented entrepreneur and after sharing the 6 Ideas for Finding Great People, it was clear that recruiting was much more work than he had hoped. Pausing, I asked how much he enjoyed the sales process and selling to customers. As expected, he answered that he doesn’t like sales and views it more as a necessary annoyance. Aha! Recruiting is a sales process, and if you don’t like selling in general, then recruiting isn’t going to be fun.

    Here are a few ways to think of recruiting as a sales process:

    • Some candidates come in as referrals but most have to be targeted and marketed to (e.g. job postings, ad campaigns, etc.)
    • Great people have a number of job options, making it critical that they have a clear understanding of the why this is an excellent career move (just like when selling a product, the prospect needs to understand why this is the right choice)
    • Every entrepreneur must be passionate about their own company, and that passion needs to come through when selling the candidate on the position (buying something, including a career move, has much more emotion in it than people like to admit)
    • Even when the candidate verbally accepts, it’s not a done deal. Effort and care needs to be placed in ensuring the verbal turns into a signed offer letter. And, even then it’s important to follow up (I know one startup where the CEO personally calls every candidate immediately once they sign the offer letter to tell them how excited they are that they’re joining the team).

    Recruiting is a sales process and needs to be treated as such. If a sales process doesn’t come naturally to you, consult a sales person and get them to go through their process — most of it can be easily translated to recruiting.

    What else? What are some more thoughts on the idea that recruiting is sales?

  • 6 Ideas for Finding Great People

    Every time I talk to entrepreneur that’s just raised their first institutional round, the topic of finding great people always comes up. Of course, great people are always in high demand, so it’s never an easy process. With that said, here are six ideas we use to find great people:

    1. Startup Specific Job Boards – At the Atlanta Tech Village, we have a healthy job board that attracts people that are interested in startups generally, which creates a nice pipeline for everyone on the board.
    2. Local College Alumni Career Fairs – Schools like Georgia Tech have separate career fairs for students and alumni, making it easy to target different types of positions.
    3. Internal Referral Bonuses – Referrals from existing employees are always the best, and it’s effective to add an incentive like a $2,000 bonus for referring a new hire that stays six months (make it a $10,000 bonus for hard-to-find positions like software engineer).
    4. LinkedIn Targeted Emails – Use LinkedIn to find people that are currently employed and email them directly from the hiring manager (not a from a recruiter) explaining why it’s a great company and that their resume looks like a perfect fit. Also, ask if they know anyone that might be a good fit.
    5. Local Meet Ups – Spend time at the local meet ups for sales, marketing, product management, and engineering (specifically for the role needed e.g. iOS, Node.js, Ruby, Python, etc.) to find people that are actively working to improve their craft, and ask them directly for referrals.
    6. Twitter Mentions – Find people on Twitter that are potential candidates and mention them (or DM them if they’re a follower) saying that a new positioned opened up and if they know anyone that might be a good fit.

    Assume 10 – 25% of your time as a leader in a fast-growing company should be spent on recruiting great people. Finding great people isn’t a one-time event, rather it’s a process that needs an on-going commitment.

    What else? What are some more ideas for finding great people?

  • 4 Reasons for a Lack of Local Institutional Capital

    Continuing with yesterday’s post on Rating the Atlanta Startup Scene, several people have asked how we get more local institutional capital. Institutional capital, like it sounds, is capital provided by institutions like university endowments, pension funds, etc. Generally, institutional capital is a much larger source of capital, as compared to angel capital, and thus an important part of a thriving startup scene, especially for startups that hit the growth stage (see Scaling a Startup is Expensive).

    Here are four reasons there’s a lack of institutional capital in Atlanta (and all areas outside the Bay Area, Boston, and NYC):

    • Track Record – New funds are forming all the time but most of them only have high net worth individuals and family offices as limited partners since institutional investors always require an investment track record of one or two funds (e.g. get started with a small fund from personal investors, show great results, and then raise money from institutions).
    • Pedigree/Background – There’s a certain resume and pedigree that institutional investors look for, often including a name-brand college, work on Wall St., etc. that’s not as common outside the money centers.
    • Big Exits – The goal of any fund is to make great returns, and that requires big exits, yet there are so few exits, let alone big ones, that the story of low cost of living and low valuations doesn’t resonate. Meaningful returns and exits resonates.
    • Dot Com Bust – Many regional funds that had institutional capital went out of business after the dot com bust as they didn’t have strong enough returns to raise another fund. A whole generation of funds were wiped out and it’s 7+ years to build a new fund that gets to the point that fits the institutional capital model.

    As expected, the answer to having more local institutional capital is to have more successful startups with solid exits that generate returns for first-time funds so that they can then raise another fund with institutional capital. It’s a multi-stage process that requires a decade or more to see results. The best thing we can do as a community is to help produce more successful startups.

    What else? What are some other reasons for a lack of local institutional capital?

  • Rating the Atlanta Startup Scene

    Two years ago I put together a few thoughts on the Atlanta startup scene and gave ratings for each of the major components. Well, it’s time for an update. We’ve made good progress in a few areas and moved backwards in others.

    Here’s my rating of the Atlanta startup scene:

    • Office Space (A)
      Unlike several years ago, there are a number of great options for startups to find their first office and even grow to 20 or 30 employees. Post 30 employees, there aren’t any turnkey office options and thus the growth stage startups are sprinkled all over the different submarkets.
    • Community (A-)
      Combined with the office space function, there are a number of great startup communities in Atlanta with different focuses like B2B SaaS, consumer apps, etc. One area that needs more attention is scale ups, and that’ll develop with time as more startups reach the growth stage.
    • Exits (C-)
      Things have been really quiet on the exit front for a while. With Cisco’s acquisition of Lancope for $452M and SecureWorks going public earlier this year there’s some minimal activity, but generally things have been much too quiet to be a healthy ecosystem.
    • Angel Capital (C)
      A steady number of angel investors write checks with most of the money coming from the usual sources (local non-tech professionals) and a small handful of successful tech entrepreneurs continue to write invest in 2-3 deals per year.
    • Institutional Capital (C-)
      Deals continue to get done (usually two Series A rounds per quarter and one Series B or later per quarter) and 95% of the institutional capital is from out of state. In the grand scheme, it’s a tiny number of deals but there’s a continual flow of activity.

    Overall, I’d give the community a B with a quality foundation and significant room to grow and improve. As a community, the most important thing is to increase the number of startup success stories. Results matter.

    What else? How would you rating the different components of the Atlanta startup scene?