For eight years, entrepreneur and investor David Cummings posted on his blog — a usually-pithy couple of paragraphs on a lesson he wanted to impart, observation or commentary — each and every single day (yes, including weekends). With impressive regularity and valuable content, Cummings built up a sizable dedicated audience that looked forward to his succinct advice on entrepreneurship, business, investing, and SaaS. After hitting the 3,000 posts milestone this summer, he decided to end the daily routine, but still writes frequently on topics he considers important.
One would think that Cummings would hold his knowledge closer to the vest — the serial entrepreneur is by no means done building businesses, currently serving as the CEO of Leadtime, investor and advisor to rapidly-growing companies like SalesLoft, Terminus, Rigor and more, and co-founder of the 4th largest startup hub in the country, Atlanta Tech Village. But he’s adamant that growing entrepreneurial activity, even without a direct benefit for his own endeavors, will benefit the region overall.
“I’m a big believer that you just plant a thousand seeds and hope that some flowers will bloom. So I think it’s about generating more activity and then just playing the law of averages,” says Cummings.
It’s why the Tech Village is not only a space for members, but a gathering spot for the whole startup community — the team gives away multiple scholarships and host hundreds of free events per year. Cummings also plays a role in other startup catalyst programs, serving on the Atlanta chapter board of global entrepreneur support program Endeavor.
Cummings shares more on his journey from entrepreneur to investor, the top emerging tech industries in Atlanta, and why the southern startup scene needs even more entrepreneurs.
Have you always been an entrepreneur?
You know, I think for some people they start as a kid selling lemonade on the corner and then for other entrepreneurs it happens later in life — but for me it’s definitely as far back as I can remember. I was just fascinated by technology, so in eighth grade I decided I’d teach myself C [programming language]. I taught myself how to program and build apps — I got really focused on the idea that if you know your way around a computer, around software, there’s really nothing holding you back.
That year I built software to check that my math homework was right, and in ninth grade I had the idea to build software around these little word of the day flash cards, the ones that sit on your desk that you flip through each day with a word of the day, or a Spanish word of the day or famous quote of the day. I got the idea to make a software version of that, where you would get a word of the day every time you open the computer. I sold it as an app online, and that was my first real foray into entrepreneurship.
How’d you transition from being an entrepreneur to becoming an investor?
The investor part actually happened earlier than a lot of people realized because really, the origin of Pardot was almost like I was acting as an investor. I had started Hannon Hill, which does content management software, and as part of Hannon Hill I identified the idea for what eventually became known as marketing automation software. At the time, that just meant software built for the marketing arm of a B2B company. I had the idea, got some people together to start working on it separately [from Hannon Hill], but still in the same office — it became Pardot.
Pardot started to take off in 2007. Then in 2010, a Pardot sales guy introduced me to one of his friends who was interested in some business ideas; we collaborated and what came out of that was another company in that same office — Rigor. Then in 2011 I was introduced to another person in town who I tried to recruit to Pardot, but he said he wanted to start a sales technology company — that was Kyle Porter of SalesLoft. We got together at the Pardot office.
So my investing really started years ago as side projects, all while I was growing companies as an entrepreneur. As ideas came along or people came along that wanted to start companies that I saw value in, I was investing in them and putting them all under the same roof.
What do you look for in an investment now?
The three things I talk about are: the team, the stream, and ‘not a meme’. The team is the entrepreneurs who are hungry and ambitious and resourceful, all the things that people talk about that are critical to get stuff done. The stream idea is to think of a fast stream, with lots of disruption taking place. From a company point of view, there needs to be market disruption, something new, changing, something that makes it open for new opportunities.
So for example, at Pardot the disruption was the shift in tools for a B2B marketer. The consumer marketer had already gotten beautiful tools for marketing, advertising integrations, the works, but the B2B marketer didn’t have those tools. The big disruption for SalesLoft was the rise of inside sales function — salespeople moving from door-to-door to phone calls, email and video conferencing.
Then the final qualifier is ‘not a meme.’ Memes are funny, silly, but with a short lifespan. There was a Chuck Norris meme that I thought was funny that said ‘Chuck Norris is the only person who can eat Chick-Fil-A on Sunday’. Memes can be witty and clever, but they are a nice-to-have. So the ‘not a meme’ idea means to pursue something that isn’t short-lived; it fundamentally makes things better. It’s proven, it’s measurable and sustainable.
So team, stream, not a meme. It took me years to figure that phrase out, though.
How does that strategy apply to the Atlanta Tech Village?
So the stream at the Village was the need for community, for a creative space that was more than just office space. The team is made up of people that I’ve worked with in the past, that have built companies with me. And ‘not a meme’, well, office space is obviously never going to go away. The Village is really much more than office space, but the idea that people are always going to need a place to work has lasting power.
We’re coming up on our five year anniversary, and back before us there really wasn’t anywhere in town to go if you had an idea and just wanted to be around like-minded entrepreneurs. Timing-wise, we were still coming out of the great recession, especially on the commercial real estate side. So it was very fortuitous to be able to sell Pardot, have the cash, and buy a building right away.
There was really just this huge, massive gap in the market for an entrepreneur center.
In those 5 years, how have you seen the startup scene in Atlanta change?
It’s much stronger now, and much bigger. On the real estate side, we have a place downtown with Switchyards, centers in Midtown at ATDC and TechSquare Labs, and Buckhead has the Tech Village. Many of the suburbs have innovation and co-working spaces. Then, from a community point of view there are tons of sub-markets for sharing ideas and helping each other and paying it forward. From an exit point of view we routinely have 3-5 nice exits per year. There’s more angel investors now, there’s more entrepreneurial activity.
What remains as the biggest weakness of the Atlanta startup scene, or even the southeastern startup scene?
We just need more entrepreneurs trying things out. We need more first-time entrepreneurs, more entrepreneurs taking risks. You can measure this as the number of new businesses starting per capita. From a city and regional perspective, the thing we really need more of is more entrepreneurs taking their first time at bat.
So you don’t think it’s a lack of funding?
There definitely isn’t much funding for idea-stage products — but that’s not exclusive to the region. For entrepreneurs with a minimal level of traction — so they have a product that looks good, they have a strong team, they have initial customers — there’s plenty of funding. For the earliest entrepreneurs there is less funding, but that’s everywhere. The difference is that other areas have a higher number of startups per capita, so with more at the top of the funnel, you’ll inevitably have more at the next stage and the next stage and the next.
On the other hand, Atlanta is different than most other markets in that cost of living is so reasonable. One of the entrepreneurs I know would drive Uber on the weekends and nights to make enough money to pay for his apartment, and then work 50-60 hours a week on his startup. He did that for a couple of years, got a handful of paying customers, got it off the ground, and now they’ve raised more money and are off to the races.
Atlanta is unique in that you can drive Uber and have enough money to live, and still work on your idea. But most people aren’t willing to take that risk or make that effort.
What do you think is the next big tech industry in Atlanta?
The one that already has so much momentum, but still is rarely talked about, is one we’ve already mentioned: Martech. The other one is IoT. There are a number of startups working on Internet of Things, taking regular devices and connecting them and Internet-enabling them. We have quite a few in the Village. IoT is fascinating.