David Cummings on Startups

Blog

  • Metrics Spreadsheet for Every SaaS Company

    Lately I’ve been talking to more entrepreneurs that have product/market fit and are working to find a repeatable customer acquisition process (see 5 Steps to Startup Success in 30 Words). Now, sales and marketing metrics become critical and it’s time to figure out what works. Christoph Janz has the best Google Sheets Dashboard for SaaS companies:

    Visitors & Signups

    • Visitors
      m/m growth
    • Signups beginning of the month
    • New signups
      – Organic
      – Paid
    • Total new signups
      m/m growth
    • Visitor-to-signup conversion rate
    • Signups end of month

    Paying Customers

    • Customers beginning of the month
      – New customers
      – Conversion rate
      – Lost customers
      – Churn rate
    • Net new customers
    • Customers end of month
      m/m growth

    Monthly Recurring Revenue

    • MRR beginning of the month
    • New MRR
      – New MRR from new customers
      – New MRR from account expansions
    • Total new MRR
    • Lost MRR
    • MRR churn rate
    • New new MRR
    • MRR end of month
      m/m growth
    • Avg. revenue per customer
    • Avg. revenue per new customer

    Customer Acquisition Costs (CAC)

    • Marketing spendings
      – Marketing spendings per signup (blended)
      – Marketing spendings per paid signup
    • Sales spendings
      – Sales spendings per new paying customer
    • Total CAC (blended)
    • Total CAC (paid signups)
    • Time-to-recover CAC for paid signups (months)
    • CLTV (e)
    • CLTV/CAC (paid signups)

    Cash

    • Cash beginning of month
      – Cash coming in
      – Cash going out
    • Net cash burn
    • Cash end of month
    • Runway at current burn (months)

    SaaS entrepreneurs would do well to use the Google Sheets Dashboard for SaaS companies. And, if inside sales is employed, take a look at the Google Sheets Dashboard with Inside Sales.

    What else? What are your favorite metrics for SaaS startups?

  • Atlanta Startup Village #37

    Next Monday is Atlanta Startup Village #37 at the Atlanta Tech Village. Atlanta Startup Village is the largest monthly gathering of entrepreneurs in the Southeast. Every month five entrepreneurs give five minute pitches followed by five minutes of audience question and answer. For Monday’s event, there’s a strong showing of portfolio companies from Atlanta Ventures:

    Join the meetup and come to the Tech Village on Monday night.

  • Inside Sales Plus Face-to-Face Events

    Earlier today Stuart McLeod tweeted they do inside sales combined with face-to-face events for his startup Karbon.

    I’ve seen several startups follow this same strategy with strong results and I expect more to emulate it. Inside sales is great for all the reasons talked about before (see Rise of the Inside Sales Rep). Only, it doesn’t have the same human element that comes with being in-person that expensive field sales provides. Face-to-face events act as an efficient way to build stronger rapport and connections that are required in B2B sales.

    Here are a few more thoughts on inside sales plus face-to-face events:

    • Inside sales is used to both close deals (account executives) as well as drive prospects to demos and face-to-face events (sales development reps)
    • Running events in the major NFL cities covers the population centers so that a large number of prospects are within a short distance of a program
    • Stronger relationships result in better communication, feedback, and experiences (B2B products are much more dependent on people helping people than most technologists like to admit)
    • Modern tools like Attend for B2B events combined with Pardot for marketing automation help orchestrate the face-to-face programs

    Look for more B2B startups to employ an inside sales plus face-to-face events approach as the core to their customer acquisition strategy.

    What else? What are some more thoughts on the inside sales plus face-to-face events customer acquisition strategy?

  • Account-Based Marketing for Dummies

    Tonight Terminus launched their new book Account-Based Marketing for Dummies (disclosure: I’m an investor). From the publisher:

    This practical guide takes the intimidation out of account-based marketing in today’s highly digitized world. You’ll be armed with the knowledge you need to increase your reach in real time, giving you greater exposure to other decision-makers and influencers within an account. You’ll discover how, through a combination of marketing technology and online advertising, your messages can be displayed where and when your customers already engage online.

    • Align your sales and marketing teams for greater success in your ABM efforts
    • Analyze data to identify key accounts
    • Target your messages for real-time interaction
    • Integrate your campaign with marketing automation software

    Want to learn about account-based marketing? Buy the book today. Also, learn more about Terminus.

  • 90% Marketing, 10% Product

    As a follow up to yesterday’s post 5 Things for Every SaaS Founder, the comment about “90% marketing, 10% product” has elicited a good deal of feedback. I do believe the 90/10 ratio is directionally correct, if a bit exaggerated. Marketing in this author’s example really means sales and marketing (in her case a self-service SaaS product that’s all marketing driven vs other SaaS products that require marketing and sales people to sell it).

    Here are a few thoughts on the idea of sales and marketing significantly outweighing product:

    The number one reason startups fail is that they run out of cash. The number two reason startups fail is that they don’t aquire enough customers — entrepreneurs need to understand the importance of sales and marketing. 

    What else? What are some more thoughts on sales and marketing being significantly more costly and time intensive compared to product development?

  • 5 Things for Every SaaS Founder

    Amy Hoy has a good article up titled 5 Things I Wish Somebody Told Me Before I Founded My SaaS. She’s been bootstrapping a SaaS time management and billing app for seven years and is getting close to the magical $1 million in annual recurring revenue milestone. In the article, she shares five lessons learned:

    1. There is always another inflection point coming
    2. Teams are not “just add water”
    3. 90% marketing, 10% product
    4. Focus on your BEST Customers, 100% of the time
    5. Just because it can make (good) money doesn’t mean you should do it

    Go read 5 Things I Wish Somebody Told Me Before I Founded My SaaS and learn some great lessons.

    What else? What are some other things every SaaS founder should know?

  • Video of the Week: How Airbnb designs for trust | Joe Gebbia

    Joe Gebbia, co-founder of Airbnb, gave a talk at the Atlanta Tech Village a couple years ago and did a great job sharing their founding story. For our video of the week, hear Joe’s TED Talk titled How Airbnb Designs for Trust. Enjoy!

    Joe Gebbia, the co-founder of Airbnb, bet his whole company on the belief that people can trust each other enough to stay in one another’s homes. How did he overcome the stranger-danger bias? Through good design. Now, 123 million hosted nights (and counting) later, Gebbia sets out his dream for a culture of sharing in which design helps foster community and connection instead of isolation and separation.

  • Product/Market Fit: Entrepreneurship 101

    The topic of product/market fit has come up several times recently. More and more entrepreneurs are beginning to understand that in the early stages of getting a startup off the ground, the most important thing is building something that people want. It seems so simple but in reality it’s incredibly difficult. If you haven’t already, go read The Pmarca Guide to Startups and learn more about product/market fit (incredibly good content!).

    Here are a few thoughts on product/market fit:

    One of the most important concepts first-time entrepreneurs need to learn is product/market fit. Read The Pmarca Guide to Startups and the additional thoughts outlined above.

    What else? What are some more good resources on product/market fit?

  • Top Entrepreneurial Trait: Continuous Learner

    Yesterday I was giving a talk to a group of entrepreneurs and one asked the question “what’s an entrepreneurial trait you look for that isn’t talked about as much?” Of course, traits like resourceful, persistent, and dreamer are common in entrepreneurs. One trait that I’m especially fond of is the continuous learner. This is someone who constantly seeks out new ideas, best practices, and ways to get better.

    Here are a few ways to gauge a potential continuous learner:

    • Are they consistently recommending books, blogs, or apps that they like?
    • Do they regularly ask what lessons were learned from different experiences?
    • Do they attend industry conferences and events for networking and content?
    • Do they share relevant ideas and best practices without being asked?
    • Are they collaborative and eager to learn, in general?

    The next time you’re meeting with an entrepreneur, ask yourself if they’re a continuous learner. Some of the most successful entrepreneurs I’ve met truly love learning and seek to learn something new everyday.

    What else? What are some more thoughts on this idea of being a continuous learner as a top entrepreneurial trait?

  • 5 Board Meeting Takeaways

    Earlier this afternoon I attended the board meeting of a fast growing tech startup. Board meetings are a great time to step back and look at a business from a high-level perspective while working through what is, and isn’t, going well. After reflecting on today’s meeting, I had five takeaways:

    • Forward Looking – It’s easy to talk about what just happened last quarter because it’s fresh on the mind. While it’s important to review, most of the time should be spent forward looking.
    • Strategy, not Tactics – Similar to reviewing what happened, it’s critical to spend the majority of the meeting on the strategic aspects of the business and not tactical, day-to-day elements (whenever possible).
    • People, People, People – As much as we technologists like to think it’s all about the latest releases, the reality is that 95%+ of what makes a startup successful is the people element. Board meetings are no different in that a significant amount of time is related to the people component.
    • Mission, Vision, and Values – Just like mission, vision, and values need to be reviewed constantly with team members, so too do they need to be reviewed at every board meeting. Everyone needs to buy in to them and know them by heart.
    • Plan It, Do It, and Review It – One important aspect of a board is to review the plan, follow the progress, and review the results. Put another way, the board needs to provide accountability. The management team needs to lay out what they’re going to accomplish and then provide updates on their progress against that plan. Finally, the board needs to ask the hard questions.

    Board meetings are an important part of the entrepreneurial journey and should help entrepreneurs achieve their goals.

    What else? What are some other takeaways from board meetings?