David Cummings on Startups

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  • Document the Organizational Process

    With the start of Q3 upon us, it’s a great time to reflect on last quarter and go through the exercise of what should we start doing, what should we stop doing, and what should we continue doing (start, stop, continue). As part of this exercise it’s important to have the organizational process documented in something simple like a Google Doc. Similar to how the Simplified One Page Strategic Plan is updated quarterly, this document should be updated on a regular basis as well.

    Here are some example items that would be included in an Organizational Process document:

    Entrepreneurs need to document the organization process and be intentional about how their organization runs.

    What else? What are some more thoughts on the idea of documenting the organizational process?

  • Build a Bottom-up Sales Forecast

    When talking to entrepreneurs about their sales forecast, they love to talk about the market and say “if we only get 1% of XYZ we’ll do great.” Of course, the real world doesn’t work that way. Instead, it’s best to build a bottom-up sales forecast that takes into account the current sales performance and extrapolates it out based on growth rates.

    Here are a few factors to keep in mind with a bottom-up sales forecast:

    • How does the corresponding volume of sales qualified leads need to grow? Do the current marketing campaigns have capacity for more volume (many campaigns get more expensive with more volume like pay per click ads)?
    • How many sales reps need to be hired for one to work out (it’s important to note when planning that all new hires don’t work out)?
    • How long does it take for a new sales rep to ramp up and be fully trained?
    • What’s the attrition rate of existing sales reps?

    Often, if a startup wants to triple sales next year (see Triple, Triple, Double, Double, Double), they need to expand the sales and marketing team well in advance of the new year.

    My recommendation: build a bottom-up sales forecast.

    What else? What are some more thoughts on a bottom-up sales forecast?

  • The Origin of Fireworks

    On Independence Day here in the United States, we love to watch fireworks and feel the boom of the explosion in the sky. For today’s post, watch a video titled What’s the origin of fireworks? from Mental Floss.

    Happy 4th of July!

  • User Experience to Get Small Committments Early

    Continuing with the Science of Persuasion video, at the 6:20 mark in the video the author talks about the importance of consistency. From the video:

    Look for, and ask for, commitments that can be made

    This is a valuable technique in the software world, especially during free trials or onboarding new users. Instead of saying “hey, we’re a great software product with 100 features, good luck” the idea is to direct the user to accomplish something small and simple, as quickly as possible (e.g. connect your Twitter account and we’ll show you three immediate insights). Then, once the small commitment is made (e.g. using a simple feature) the user is much more likely to take the next step and use the more complicated feature (e.g. now that we’ve given you these three insights, answer these 10 questions and we’ll suggest 100 new people to follow on Twitter).

    Start small. Get the user to do something. Show value. Build on the experience and get the user more involved. Much like micro apps for lead generation, give value as quickly as possible and ask for small commitments.

    What else? What are some more thoughts on the idea of getting small commitments early to help with persuasion in the user experience?

  • Monthly MEPS Reflection

    One of the exercises we learned at YPO forum training was the monthly MEPS reflection. MEPS — Mental, Emotional, Physical, and Spiritual — are four areas of life that are essential to well being. Here’s how the exercise works:

    • Mental – How am I feeling, 1-10 (10 is best), mentally? How would I describe my mental state?
    • Emotional – How am I doing emotionally, 1-10? How would I describe my emotional state?
    • Physical – How am I doing physically, 1-10? How would I describe my physical state?
    • Spiritual – How am I doing spiritually, 1-10? How would I describe my spirituality?

    Go through the MEPS reflection with a close friend or small group on a monthly basis and use it as a way to continuously reflect on life and work to focus more attention on areas that need help.

    What else? What are some more thoughts on the monthly MEPS reflection?

  • Video of the Week: Science of Persuasion

    For our video of the week, watch the Science of Persuasion where the famous Dr. Robert Cialdini (author of Influence) explains his learnings. Enjoy!

    From YouTube: This animated video describes the six universal Principles of Persuasion that have been scientifically proven to make you most effective as reported in Dr. Cialdini’s groundbreaking book, Influence.

    This video is narrated by Dr. Robert Cialdini and Steve Martin, CMCT (co-author of YES & The Small Big). About Robert Cialdini: Dr. Robert Cialdini, Professor Emeritus of Psychology and Marketing, Arizona State University has spent his entire career researching the science of influence earning him a worldwide reputation as an expert in the fields of persuasion, compliance, and negotiation. Dr. Cialdini’s books, including Influence: Science & Practice and Influence: The Psychology of Persuasion, are the result of decades of peer-reviewed published research on why people comply with requests. Influence has sold over 3 million copies, is a New York Times Bestseller and has been published in 30 languages.

  • The Weekend Update Email

    One of my favorite management tools that I’ve seen entrepreneurs implement with great success is the weekend update email. Every Sunday night the entrepreneur sends out an update about the past week to all employees, advisors, mentors, and investors. The email has both qualitative and quantitative information and is a quick five minute read by the recipients.

    Here’s a simple weekend update email format:

    • Team greeting
    • Summary paragraph of the week and any highlights
    • Company goals for the quarter and current progress towards them
    • Sales, Marketing, Support, Customer Success, Product (individual sections for each of the major departments)
      • Metrics/Goals
      • Highlights
    • Customer stories
    • Culture stories
    • Closing

    Entrepreneurs that spend 90 minutes every Sunday night preparing and sending out the weekend update email will see greater focus, accountability, and alignment. While it’s a serious time commitment, the results are impressive.

    What else? What are some more thoughts on the weekend update email?

  • Entrepreneurs Need Grit

    Last week I heard about the book Grit: The Power of Passion and Perseverance in the context of raising kids. After hearing the person describe the idea, I immediately thought that it’s also applicable to entrepreneurs. In fact, every successful entrepreneur I know has grit.

    From the Englewood Review of Books:

    Divided into three parts, the book takes an in depth look at grit and why it is essential to success (Part I, a significantly beefed up version of Duckworth’s TED talk), looks at the virtues that converge to foster grit — interest, practice, purpose, hope — (Part II) and concludes with an exploration of how teachers, parents and other can nurture grit “from the outside in” (Part III).

    Here’s the author’s TED Talk on Grit:

    Finally, here’s the generic definition of grit from Wikipedia:

    Grit in psychology is a positive, non-cognitive trait based on an individual’s passion for a particular long-term goal or end state, coupled with a powerful motivation to achieve their respective objective.

    Terms like passion and perseverance have always been in my vocabulary when describing entrepreneurs. Now, I’m adding the word grit as well.

    What else? What are some more thoughts on the idea that entrepreneurs have grit?

  • A SaaS App for Every Department and Every Business Function

    Continuing with the idea that every spreadsheet shared is another SaaS app, there’s another way I like to think about potential opportunities in the SaaS world: there’s a SaaS app for every department and every business function. Meaning, every department should have an app they use (e.g. Pardot for marketing) and every distinct business function on the team should have one or more apps (e.g. SalesLoft for the SDR function in sales).

    Here are a few questions to ask when thinking about about SaaS app opportunities:

    • Is this a function that is broadly applicable across business functions (e.g. Calendly for scheduling) or very specific to one business function (e.g. Trustfuel for customer success)?
    • Is this resegmenting an existing market or creating a completely new one?
    • Of the three options better, faster, or cheaper, which two does it represent?
    • Is this app a must-have or a nice-to-have?

    The next time you hear a pitch for another SaaS app, see if it fits in this theory that there’s a SaaS app for every department and every business function — I bet it does.

    What else? What are some more thoughts on the idea that every department and business function will have a dedicated SaaS app?

  • Atlanta Startup Village #38

    Atlanta Startup Village #38 just kicked off. Watch it live streaming from the Atlanta Tech Village event center and check out the presenting companies:

    • UserIQ – interact in-app with users of your web and SaaS application.
    • VinWiki – Changing Automotive History.
    • BuffBoxx – the #1 fitness subscription box.
    • Saleswise  – driving sales organizations by empowering the enterprise.
    • Rented – connects homeowners with the best professional managers.

    Also, join the ASV Meetup group and get notified of future events.

    The Atlanta Startup Village is the largest monthly gathering of entrepreneurs in the Southeast.