Author: Gordon Daugherty

hiring your first sales employees

Hiring Your First Sales Professional

You built your MVP, got it launched to the delight of some paying customers and just raised some seed funding to move to the next phase of your company’s evolution.  You…

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Misuse of Open Source Software Can Kill Your Acquisition Exit

How can something that’s free and openly available cause so much unintended harm to your business?  The availability of open source software has contributed as much to lowering the cost…

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Mark Twain – Vigor

"It's not the size of the dog in the fight, it's the size of the fight in the dog." - Mark Twain

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website conversion rates

10 Ways to Improve Website Conversion Rates

Regardless of your ideal mix of demand generation programs, I’m willing to bet that most of them are designed to bring prospects to your website in the hopes of later…

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code names

A Secret to Securing a Strategic Partnership with a Major Player

Most startups desperately crave a partnership with a big, strategic player that could offer them significant leverage and credibility.  Just think about the giants in your particular industry.  That’s who…

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Investors Write Checks for Outcomes, Not Activities

In a previous article, I described various ways to determine how much money to raise (you can read it here).  If you’ve decided and communicated how much you are raising, you might…

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first board meeting

Your First Board Meeting

When you first incorporated as a C-corporation, probably only you and your co-founder were named as board members. You never really had official meetings or voted on anything, that you…

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Friedrich Nietzsche – Strength

"That which does not kill me makes me stronger" (German: "Was mich nicht umbringt, macht mich starker") - Friedrich Nietzsche (from Maxims and Arrows)

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The Internet of Everything – Market Projections

Wow, what a plethora of trends, projections and factoids from Business Intelligence.  Great material for IoT startups looking to add market sizing and trending data into their pitch. http://read.bi/1BUGhHg  (click...

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management system

Establishing a Management System

I know what you’re thinking.  “We don’t even have 20 employees, so why do we need a management system?”  You might be thinking this because you previously worked for a larger…

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market sizing

Sizing Your Market

Market sizing is a very important element of your business plan and pitch deck.  The size of your market a question you’ll get asked all the time by investor prospects. …

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acquisition M&A

A Tale of Two Acquisitions – Part 2

Common perception is that in an acquisition the acquirer has all of the power.  After all, they are the one that’s writing the check and they can walk away at…

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acquisition M&A

A Tale of Two Acquisitions – Part 1

For every headline you see about a tech company being acquired for some huge multiple of revenue or profit there are literally hundreds of other acquisition approaches that either ended in nothing…

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the CTO title

The Dilemma of the Startup CTO Title

You see it all the time.  A young, invincible hustler-hacker team join together as startup co-founders to pursue a dream of becoming the next Google or Facebook.  The hustler takes the CEO…

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hiring your first sales employees

Compensating Your First Employees When You are Cash Poor

Many startups begin with a founder that spends part-time on the idea while still having a paying job.  Another common approach is to secure a small amount of funding via…

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Setting the Max Authorized Amount on Your Convertible Note

Let’s assume you have already determined $500K is the ideal amount of money to raise in your current fundraising round (see related article titled “How Much Should You Raise”) and…

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sales commission plan

Documenting Your Sales Compensation Plan

I can’t tell you how many startups go through the effort to think through the best method to compensate their sales team but don’t take the next step to document…

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stock pricing

Pricing Your Stock in the Early Days

I get this question all the time from US-based startups: how should we price our Common stock?  It’s a very simple question with a not-so-simple answer.  The reason is that in…

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reducing legal costs

10 Tips for Controlling Legal Costs

It’s amazing how quickly legal costs can add up. If you’re running a startup, it’s possible that your legal costs are second or third highest amongst all of your expenses….

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convertible note extension

Extending Your Convertible Note

You didn’t plan for it to happen this way but you’re reaching the maturity date (end of term) on your convertible note and didn’t raise money in an equity round to cause…

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code names

Cool Code Names

How cool is it to use a code name for an important project rather than “version 2.5” or “next gen”?  Same for a game-changing initiative that will fundamentally change the…

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product roadmap

Prioritizing Your Product Roadmap

If you already have an experienced product manager on your team, they are probably/hopefully following some well-established product management process. But what about the early days of company formation before…

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When Offered Help, Be Ready

Throughout your startup’s evolution you’ll find that you do a lot of networking with others that can potentially help you.  This includes potential business partners, employees, advisors, angel investors and VC’s.  Regardless…

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Visualizing the Interactions Between CAC, Churn and LTV

Anyone that has taken an accounting class or learned basic business financials knows the interaction between key elements of a P&L (revenue, cost, expense) and a balance sheet (assets, liabilities,…

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maintaining focus

Tools for Maintaining Focus

Regardless of a company’s size and stage, maintaining focus is often a critical success factor.  This doesn’t suggest nimbleness and flexibility are bad.  Quite the opposite, as focus and flexibility…

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sales commission compensation plan

Two Variants of the Straight Line Sales Commission Plan

In the spirit of keeping a sales commission plan simple, many business owners or sales executives choose to use a simple straight-line methodology.  In other words, 88% achievement of the…

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Absolute Versus Relative Sales Commission Plans

Compensating a sales team is a tricky and sensitive endeavor that requires a lot of advanced planning.  I previously wrote about my 5 Golden Rules of Sales Compensation.  But even if…

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MBO bonus

MBOs Demystified

Certain roles in the company call for a bonus as part of the total compensation plan.  But what criteria should be used for determining the bonus payout?  Common choices include company-level,…

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exit strategy

Answering the “Exit Strategy” Question

You’ve just completed a great investor pitch with heads nodding and good interaction.  You’re about to ask “Does this opportunity interest you enough to explore an investment?” when instead you get…

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comparing to market leader

Comparing Yourself Publicly to the Market Leader

Market leaders almost never compare themselves to competitors publicly because it gives their competitors legitimacy and potentially shows nervousness about them.  But what if you’re #2, #3 or worse in your market…

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The “Yeah, Right” Rule

Similar to the “So What” rule, every time you make a claim, prediction or forecast, imagine your audience is thinking to themselves “yeah, right!” in skeptical fashion immediately after seeing/hearing your…

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SAFE versus convertible note

Comparing the SAFE to Convertible Notes

Made available by Y Combinator in 2013, the SAFE investment instrument was intended to improve on the highly popular convertible note used by startups during the seed stage or as a short-term bridge between…

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trial conversions

Optimize Free Trial Conversions via Nurturing

Are you a SaaS company that has an icon like this on your website to promote a free trial offer to interested prospects?  If so, once they start the free trial do…

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establishing valuation

Establishing Valuation Before Revenue Traction

Once you have a product in the market with an increasing number of paying customers, your valuation will increasingly be driven based on financial and operational metrics.  Don’t get me wrong,…

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acquisition LOI

Revealing Company Info Before Getting an Acquisition LOI

When an interested acquirer approaches you, they will naturally ask for as much information as you are willing to give them.  But how much and what type of information should…

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unfair advantage

An Unfair Advantage All Startups Have Against Big Companies

It’s not innovation or company culture or a desire to win.  Those are important but successful big companies have at least some of those things too.  It’s nimbleness (aka –…

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choosing an advisor

Selecting an Advisor

The title of this article suggests you’ve already decided that you need an advisor.  But spend time with your co-founders discussing this to make sure you agree it is something…

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advisor compensation

Compensating an Advisor

How much equity should you give an advisor?  Should the shares carry any special provisions like anti-dilution or change-of-control acceleration?  What about giving the advisor cash compensation?  Tough questions for…

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advisor value

Maximizing Value From Your Advisor

Startups commonly give 0.5% equity or more to attract an experienced advisor (see related article titled “Compensating an Advisor”).  Sometimes after a few months they find themselves wondering if they…

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Da Vinci – Simplicity

"Simplicity is the ultimate sophistication" - Leonardo de Vinci

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elevator pitch

Your Elevator Pitch Only Needs to Accomplish One Thing

There’s a reason it’s referred to as an “elevator pitch” – it must be expressed in a couple of sentences and no more than 10 seconds.  And that might even be…

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Unknown – Preparation

"Measure twice, cut once" - Unknown (English proverb) - H. Ross Perot (US Presidential debate, Oct 1992) - C. Gordon Daugherty III, M.D.

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When is Achieving a Nice Round Number of Customers a Meaningful Milestone?

The answer is, it depends on how you derive the number and how you communicate it.  I’m wearing my angel investor hat as I write this article.  I hear a common…

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investor research criteria

Investors’ Research Varies Widely Before Making a Decision

It stands to reason that each investor is different in the way they go about making their investment decisions, both in terms of time spent and the type of research…

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Evolution of Marketing Roles in the New Era

Wow has the world of marketing changed with the introduction of social media, marketing automation and other digital capabilities.  Not only is the way we “do” marketing different but the…

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strategic partnership

Get the Strategic Alliance Partner to Come After You

The courtship almost always starts with the small company approaching the HQ of the big company they desire as a strategic partner.  Usually, the big company is too distracted or…

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Unknown – A Turn in the Road

blank line "A turn in the road is not the end of the road unless you fail to make the turn."

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improving webinar attendance

Increasing Webinar Attendance

Business prospects are now accustomed to taking themselves through 60% of the sales journey (see related article titled “Prospects Take Themselves Through 60% of the Sales Journey“) but at some point…

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setting strategy

Try Strategy Horizons Versus a Timeline

Here’s the scenario.  You’ve got people asking you to express your strategy as a set of milestones extending through a certain amount of time.  This puts you in the mindset…

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exclusivity

Exclusivity – Run Away or Embrace?

It finally happened.  You’ve been trying to get the attention of a huge strategic partner and finally they gave you a chance to explain the value you can bring them. …

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