David Cummings on Startups

Blog

  • Challenges from a Poor Initial Target Market

    One of the challenges I’ve seen is when an entrepreneur gets positive initial feedback from their target market on a new idea, builds the product with customer feedback, and then realizes the initial target is not actually the right market to go after. Thankfully, this realization almost always arises in the race to 10 unaffiliated customers as paying customers provide the best feedback.

    Here are a few challenges that might indicate a poor initial target market:

    • Sales cycles, even when it’s a perfect fit prospect, are substantially longer than expected
    • Customer budget isn’t commensurate with the complexity of integration (e.g. the customer can only pay $250/month but it will cost $10,000 just to set things up)
    • Product usage is sparse, even after paying for the product (likely indicates a nice-to-have for that market)
    • Even with regular product usage, customer feedback and feature requests are limited, indicating lack of engagement and value

    Once it’s clear that the initial target market isn’t right, it’s time to either change markets (typically go up-market, which has its own set of challenges) or to change product directions (sometimes a pivot and sometimes a heavy iteration). They key is to move fast and work to find product/market fit followed by a scalable customer acquisition process as quickly as possible.

    What else? What are some more challenges from a poor initial target market?

  • Founder DNA in a Company

    One of the most important early elements of a startup is the imprint of the founder DNA on the business. As the company grows, and more team members join, the original DNA continues to permeate all aspects of the business.

    Here are some areas of the founder DNA in a company:

    Of course, these aspects evolve over time but elements of the initial founder DNA stay on forever. Founders would do well to be intentional about the type of organization they want to create and nurture it over time.

    What else? What are some more areas of founder DNA in a company?

  • 8 Sales Lessons for Entrepreneurs

    Last week I was talking to an entrepreneur that’s in the process of scaling out his sales team. Scaling a sales team is much harder than it sounds. Sales people, as you’d expect, are great at selling themselves, but not always great at selling to prospects. Then, sales reps often want to be sales managers, and managing people is a very different skill than selling to people. Here are seven sales lessons for entrepreneurs:

    1. Learn modern BANT qualifications
    2. Do the match to ensure inside sales makes sense
    3. Align special incentives with desired outcomes
    4. Plan out the first 30 days for a new sales rep
    5. Develop a sales playbook
    6. Model the time it takes to ramp up sales reps
    7. Hire reps ahead of plan at scale
    8. Implement a sales development process

    Bonus: Every entrepreneur should read these four sales books.

    Entrepreneurs need to understand sales even if they aren’t a “salesy” person. Start with these eight sales lessons and read the four books to build a solid foundation.

    What else? What are some more sales lessons for entrepreneurs?

  • Video of the Week: What is leadership?

    Several years ago I enjoyed hearing David Marquet give a talk at a YPO event. For our video of the week, hear him talk about his experiences as the captain of a nuclear submarine and lessons learned on leadership. Enjoy!

  • Stage-Specific Startup Advice

    After yesterday’s Growth Stage Entrepreneur Summit, one of the entrepreneurs mentioned to me how even though he’d heard a few of the best practices before, now that his company was much bigger, the ideas resonated and he was going to implement them. This got me thinking about the importance of stage-specific startup advice. When hearing advice, apply a startup stage lens and ask these questions:

    • Is this advice for idea, seed, early, or growth stage startups?
    • Is this advice relevant for us now or do we need to be at a different stage?
    • What’s the context of the size and scale of startups this person has worked at in the past?

    The next time someone offers advice, put it in the context of a specific startup stage.

    What else? What are some more thoughts on stage-specific startup advice?

  • Takeaways from the Growth Stage Entrepreneur Summit

    Earlier today we had a Growth Stage Entrepreneur Summit at the Atlanta Tech Village. The idea was to get a group of 15 entrepreneurs together that have 20 – 100 employees and share best practices for scaling a startup.

    Here are a few takeaways from the presentations and discussion on scaling a startup:

    • Plan for different “missions” as the startup hits different stages
    • Know that not all early team members will be able to make the transition to the next stage as the business grows
    • Spend more time on communication as the company grows (alignment and focus gets harder and harder)
    • Move from generalists to specialists (e.g. hire specialists like sales engineers to make your best sales reps even more productive)
    • Build a Simplified One Page Strategic Plan and update it quarterly
    • Ensure a culture of accountability
    • Hire for culture fit
    • Develop a meeting rhythm

    Today’s event went well and we’ll likely do it again. Know any entrepreneurs in the Southeast in the growth stage? Send them our way.

    What else? What are some more thoughts on scaling a startup?

  • The On-Purpose Person

    I just started reading the book The On-Purpose Person: Making Your Life Make Sense after a friend recommended it. Most of it is commonsense, as expected, but it does a good job of driving home the message that it’s important to be intentional (on-purpose) with your time.

    One of the exercises is to map out The 24-Hour-Day Time Budget and allocate hours for the following:

    • Financial/Material
    • Vocational/Career/Work
    • Social/Community
    • Family
    • Physical/Health/Recreational
    • Mental/Intellectual/Emotional
    • Spiritual
    • Other

    Once you’ve mapped out what you want to do, it’s important to compare that to what you actually do, and adjust accordingly.

    Next, the author writes:

    To be on-purpose, we begin with your being (purpose). It sparks your seeing (vision) which you then put into action or doing (mission). This linkage of purpose, vision, and mission is governed by your choosing (values) how to think, act, and respond.

    Read the book if you’re working towards more clarity and focus in your life. Everything is straightforward and readily understood in The On-Purpose Person.

    What else? What are some more thoughts on The On-Purpose Person?

  • End of Quarter Review

    With the end of the quarter only a couple weeks away, it’s a great time to review. Depending on the size and stage of the startup, there are a number of items to do:

    Every startup needs a rhythm. Build a process to run at the end of the quarter and continually refine it.

    What else? What are some other steps in your end of quarter review?

  • 3 Quick Tasks at the Start of the Week

    At the start of every week it’s a great time to be intentional and do some prep work to make the most of it. I don’t have a complex process but I do three quick tasks each week:

    1. Calendar Review – What’s on tap for the week? Anything pressing? Is there a good mix of scheduled time and flex time?
    2. Progress Review – How do the numbers look? Anything out of whack? Anything of note in the weekly updates?
    3. Top 3 – What are the three most important things to accomplish this week? What needs to happen to make sure they get done?

    This simple process gets me focused for the week and helps me stay on target. I’d recommend it to all entrepreneurs.

    What else? What are some more tasks you like to do at the start of a new week?

  • Where are the Startup Goals?

    One of the lessons I’ve learned recommending the Simplified One Page Strategic Plan to entrepreneurs is that they often don’t have goals. Crazy, right? When asking for the one pager before a meeting, most of the time I get a response that they don’t have any goals yet but will put some together and send it over. After enough of these conversations, I’ve realized there are a few factors at work:

    • Entrepreneurs are focused on the here-and-now. It’s hard to work on the business when the business isn’t working yet (it’s a startup!).
    • Goals are a form of commitment. If I make a goal, it means that I want to hit it. Without goals, I can keep ambling along.
    • With goals, there’s a scorecard. With a scorecard, it’s black-and-white as to how well things are going. Many entrepreneurs struggle with admitting they’re failing.

    My recommendation is to at least track the weekly operational metrics. Start with metrics, then add goals as the business matures.

    What else? What are some more thoughts on entrepreneurs not tracking progress against goals?