Getting Good Inc., Part II

It was a nice honor to be noted as one of America’s fastest growing companies as an Inc. 500 company two years in a row in 2006 and 2007 (one of them here), but it is an even nicer honor to be noted as one of the Top 20 small/medium sized businesses to work for in America by Winning Workplaces and Inc. Magazine.  In addition to the award, we were featured in this month’s issue of Inc. with a specific article about transparency, and important element of our corporate culture, on p72 and online here.

Why a nicer honor?  Simply put, because we pride ourselves on being a great place to work — and we work hard at it.  My colleague Angela Baldonero, our SVP People, talks about this in more depth here. Congratulations to all of our employees, past and present, for this award, and a special thanks to Angela and the rest of the exec team for being such awesome stewards of our culture!

I Love My Job

The picture below is a picture of my dress shoes in my closet at home.  You may note that they all have dust on them.  That's because I didn't put them on once for six weeks.

When we started Return Path back in 1999, we sat down to write our employee handbook, and all I could think was "what things can we add in here that will make this company a unique place to work?"  And one of them was a six week paid sabbatical after 7 years.  It didn't occur to me that we'd even exist after 7 years.  Then for good measure, we said, "7 years and every 5 years after that."

I'm happy to report that everyone who has hit their 7 year anniversary has taken the time off.  Some have traveled around the world, some have rented a house or villa somewhere, others (like me) did a "stay-cation."  Although my sabbatical was delayed (and quite hard to schedule), it was a fantastic experience.  I completely unplugged from work.  Cold turkey.  No email, no calls.  Spending time with Mariquita and my kids, which I never get to do much of, was completely refreshing and energizing.  And everything went fine at work, as I expected.  Business is in the best shape it's ever been in, and my amazingly talented executive team and assistant handled everything without missing a beat.

But back to the subject line of this post.  I figured a few things out while I was away.  One was that I haven't actually become a workaholic over the years despite working hard.  I *could* unplug without feeling aimless.  Another was that it's really nice to be untethered from the Internet, but it's near impossible to go through life now without some minor usage of the web and messaging.  But by far my biggest insight is plain and simple:  I love my job.  It's not that I didn't know that before, but I had more thoughtful time to break that down while I was away:

1. I love what I do:  I consider myself extremely fortunate to love the substance of my job.  The diversity of experiences that I have within a given week or day as a general manager, the interactions with people, shaping the business strategy, travel — it's all right up my alley. So many people out there don't have that match between interest, passion, skill, and reality. 

2. I love who I work with:  I have to admit that I stack the deck here since I do the hiring and firing, but the reality is that my colleagues at work are also my friends.  Not working was one thing.  Not talking to one particular subset of my life for six weeks was something else and just plain weird.  I just missed them and the interactions we have, which always blend the professional with the social. 

3. I love what we are working on:  We have an incredibly interesting business at Return Path.  It's very intellectually engaging, sometimes to a fault.  The spam problem is incredibly complex, and we're coming up with some extremely innovative approaches to reduce its impacts and hopefully someday eradicate it.  We're not curing cancer as I always say internally, but we're also engaged in some high impact problem solving that I just love.

So there you have it.  My work shoes are now dusted off and back in action.  It's great to be back.  We'll see how long I can stay in "mental vacation" mode, how much more time I can try to make for my family now that I'm back in my work routine, and whether the fresh perspective translates into any new actions or decisions at work.  But the best thought of all is that my 12 year anniversary is only another year and a half away!

Book Short: There is No Blueprint to $1B

Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth, by David Thomson (book, Kindle) sounds more formulaic than it is. It’s not a bad book, but you have to dig a little bit for the non-obvious nuggets (yes, I get that growing your company to $1B in sales requires having a great value proposition in a high growth market!). The author looked for commonalities among the 387 American companies that have gone public since 1980 with less than $1B in revenues when they went public and had more than $1B in revenue (and were still in existence) at the time of the book’s writing in 2005.

Thompson classifies the blueprint into “7 Essentials,” which blueprint companies do well on across the board. The 7 Essentials are:

– Create and sustain a breakthrough value proposition

– Exploit a high growth market segment

– Marquee/lighthouse customers shape the revenue powerhouse

– Leverage big brother alliances for breaking into new markets

– Become the masters of exponential returns

– The management team: inside-outside leadership

– The Board: comprised of essentials experts

As I said above, there were some nuggets within this framework that made the entire read worthwhile. For example, crafting a Board that isn’t just management and investors but also includes industry experts like customers or alliance partners is critical. That matches our experience at Return Path over the years (not that we’re exactly closing in on $1B in revenues – yet) with having outside industry CEOs sit on our Board. Our Board has always been an extension of our management and strategy team, but we have specifically gotten some of our most valuable contributions and thought-provoking dialog from the non-management and non-investor directors.

Another critical item that I thought was interesting was this concept of not just marquee customers (yes, everyone wants big brand names as clients), but that they also need to be lighthouse customers. They need to help you attract other large customers to your solution – either actively by helping you evangelize your business, or at least passively by lending their name and case study to your cause.

The book is more of a retrospective analysis than a playbook, and some of its examples are a bit dated (marveling at Yahoo’s success seems a bit awkward today), and the author notes as well that many of the “blueprint” companies faltered after hitting the $1B mark. But it was a good read all-in. What I’d like to see next is a more microscopic view of the Milestones to $100 Million!

Call Me

A fine song by Blondie from 1980 and from the soundtrack of the movie American Gigolo.  And also something that reminded me about the importance of not relying too much on email this past month. 

 I had surgery on my left wrist in early March to hopefully fix a nagging tendonitis problem.  And while I could still write and type post-op, I got sore pretty quickly every day, so I tried to keep those activities to a minimum.  As you might imaging, I do an awful lot of email and IM in my line of work.  So what was my short response to a huge number of emails and IMs for a few weeks?  “Call me.”

 My communications, especially with remote employees, not only didn’t suffer while I couldn’t type a lot – they were stronger than ever.  Even short, two-minute phone conversations – the remote equivalent of someone sticking their head in my office – are preferable to IM or email in many cases.  There’s nothing like the sound of someone’s voice to add real texture to a dialog and to avoid misunderstandings.

Yiddish for Business

 

Contrary to popular belief, Yiddish isn’t “Jewish slang” (I hear that a lot).  According to Wikipedia, Yiddish is a basically a High Germanic language with Hebrew influence of Ashkenazi Jewish origin, spoken throughout the world. It developed as a fusion of German dialects with Hebrew, Aramaic, Slavic languages and traces of Romance languages.  It is written in the Hebrew alphabet.

 

I don’t speak Yiddish.  Like many American Jews whose families came to America in the late 19^th and early 20^th centuries, my grandparents spoke it somewhat, or at least had a ton of phrases they wove into everyday speech.  Presumably their parents spoke it fluently before coming here and Americanizing their families.  My own parents have a handful of stock phrases down.  My brother and I have even less.

 

What I like best about Yiddish is that I find it to be a very descriptive and also onomatopoetic language.  I can never verbally describe a Yiddish word without a lengthy description and some examples, and usually some level of gesticulation.  I’ll try to be more succinct below.  But in the end, words mean a lot like what they sound like they should mean.  A lot of New Yorkers who aren’t Jewish end up knowing a handful of Yiddish words because they’re pretty prevalent in the City, but many people outside New York don’t.  So I thought I’d have a little fun here and do something different on the 6^th anniversary of launching this blog (today) and list out some of my favorite Yiddish words and describe them with a business context.  In no particular order…

 

–          Schmooze – to chat someone up, work them, frequently with some kind of hidden agenda in mind.  Business application:  “She showed up at the charity event just to schmooze Alice, who was a potential client.”

–          Chutzpah – nerve, as in “wow, he has some nerve.”  My dad always said the classic description of chutzpah was the kid who murdered both of his parents, then pleaded with the judge for leniency because he’s an orphan.  Business application:  “He missed all his goals this quarter and asked for his full bonus and a raise?  Now that takes real chutzpah!”

–          Spiel (pronounced schpeel) – a monologue or lengthy pitch.  Business application:  “I’m raising money, so I have to really organize my spiel before I go talk to the VCs.”

–          Schtick – someone’s standard song-and-dance.  Business application:  “I stood up in front of the room and gave my usual schtick about our values and mission.”  Kind of like Spiel.

–          Schlep – to make a long, pain-in-the-ass kind of trip.  Business application:  “I had to schlep all the way to Toledo for a meeting with that guy, and he didn’t even end up signing the deal.”

–          Mazel tov – literally means “good luck” but usually used in regular conversation to mean “congratulations.”  Business application:  “You got a promotion?  Mazel tov!”

–          Noodge – someone who inserts himself into a conversation in a somewhat unwelcome manner.  Related to Kibbitz – to give unsolicited advice from the sidelines. Business application:  “Sally is such a noodge.  She kibbitzes about my unit’s strategy all the time and just stirs up trouble.”

–          Maven – an expert, even a self-styled one, in a very niche area.  Business application:  “You want to figure out what smartphone to  buy?  Ask Fred – he’s the maven.”

–          Kosher (a Hebrew word as well) – completely by the books, originally referring to dietary laws that religious Jews follow.  Business application:  “Ask Marketing if it’s kosher to use our partner’s logo like that.”

–          Verklempt – choked up, overcome.  Business application:  “When I got my review and promotion and raise, I was so verklempt that I couldn’t speak for a minute or two.”

–          Schlock, Dreck, Chazerai, Bupkis – all have slightly different literal meanings (apparently Bupkis means “goat droppings”), but I use all of them somewhat interchangeably to mean junk or something of limited or no value.  Business application:  “That presentation was nothing but chazerai.  What did I get out of it?  Bupkis.”

–          Kvell – to beam or burst with pride, related to Nachus – warm “gooey” feeling of pride.  Business application:  “I had so much nachus when my company won that award for being the best place to work, I was just kvelling.”

–          Mishegas or Bubbamyseh – craziness or self-imposed silliness.  You might have heard the word Meshugenah before, which means crazy.  Business application:  “I can’t get all caught up in his mishegas.  I’m going to make my own decision here.”

–          Kvetch – either a noun or verb meaning complain, in a harpy kind of way.  Business application:  “Frank is such a kvetch.  He is just never happy.”

–          Mensch – a good guy.  Business application:  “Michael is such a mensch.  He always helps his colleagues out even when he doesn’t have to or doesn’t get credit for it.”

–          Fercockt (pronounced Fuh-cocktah) – crazy, messy.  Business application:  “John’s project plan is totally fercockt.  No one can follow it even when he tries to explain it.”

–          Mishpochah – family.  Business application:  “Welcome to the company – we’re happy to have you in the mishpochah.”

–          Tsuris – heartache or sadness.  Business application:  “Boy that’s one client that gives me nothing but tsuris.”

–          Tchotchke (pronounced chach-kee) – a trinket or little toy.  Business application:  “What kinds of tchotchkes are we giving away at our booth at the upcoming trade show?”

 

Pull one of these out in your next meeting – see what it gets you!

New People Electrify the Organization

 

We had a good year in 2009, but it was tough.  Whose wasn’t?  Sales were harder to come by, more existing customers left or asked for price relief than usual, and bills were hard to collect.  Worse than that, internally a lot of people were in a funk all year.  Someone on our team started calling it “corporate ennui.”  Even though our business was strong overall and we didn’t do any layoffs or salary cuts, I think people had a hard time looking around them, seeing friends and relatives losing their jobs en masse, and feeling happy and secure.  And as a company, we were doing well and growing the top line, but we froze a lot of new projects and were in a bit of a defensive posture all year.

 

What a difference a year makes.  This year, still not perfect, is going much better for us.  Business conditions are loosening up, and many of our clients have turned the corner.  Financially, we’re stronger than ever.  And most important, the mood in the company is great.  I think there are a bunch of reasons for that – we’re investing more, we’re doing a ton of new innovation, people have travel budgets again, and people see our clients and their own friends in better financial positions.

 

But by far, I think the most impactful change to the organizational mood we’re seeing is a direct result of one thing:  hiring.  We are adding a lot of new people this year – probably 60 over the course of the year on top of the 150 we had at the beginning of the year.  And my observation, no matter which office of ours I visit, is that the new people are electrifying the organization.  Part of that is that new people come in fresh and excited (perhaps particularly excited to have a new job in this environment).  Part of it is that new people are often pleasantly surprised by our culture and working environment.  Part of it is that new people come in and add capacity to the team, which enables everyone to work on more new things.  And part of it is that every new person that comes in needs mentoring by the old timers, which gives the existing staff reminders and extra reason to be psyched about what they’re doing, and what the company’s all about.

 

Whether it’s one of these things or all of them, I’m not sure I care.  I’m just happy the last 18 months are over.  The world is a brighter place, and so is Return Path.  And to all of our new people (recent and future), welcome…thanks for reinvigorating the organization!

 

Not Dead Yet

 

Ah Spring.  Flowers bloom.  Love is in the air.  And it’s time for the annual round of “email is dead” articles and blog posts.  With apologies to Monty Python, and on the heels of last week’s fracas about social networking having more users than email, once again I say, email is Not Dead Yet!

 

Three articles of late are pretty interesting and point out that the trends in online channel usage are far murkier than meets the eye.

 

First, Sherry Chiger’s story in Direct that One in Five Merchants Shuns Marketing Email has a poor headline for an interesting, data-rich article.  The article should be about how “Four in Five” adopt.  The article has links to a bunch of interesting in-depth reports you can download, but some of the eye-catching stats include the fact that more B2C companies use email than their own web site for marketing (96% vs. 90%); that the #1 use of “if I had more money in my marketing budget, it would go to” is “creating more sophisticated email”; and that email is the “most valuable online strategy,” beating out SEO and materially ahead of Social Media, SEM, sending offline traffic online, affiliate, display, and abandoned shopping cart marketing.

 

Sherry’s follow up article entitled E-mail and Social Media: The New Chocolate and Peanut Butter

 and Liana Evans’ article in ClickZ, Email Can Be Social Media’s Best Friend, both explain the interplay of email and social media nicely.  You can’t, or at least shouldn’t, have one without the other.  This matches our experience at Return Path, where a number of our largest clients are the biggest social networks.  We always say that “social networking runs on email.”  Look at your inbox sometime and see how many messages are from Facebook, LinkedIn, Twitter, etc., which prompt you to create page views for them, um, I mean, visit their sites.

 

And of course the recent Morgan Stanley data is somewhat problematic (chart published here among other places).  First, I’m not sure where their base data came from, but I’ve never seen an estimate of worldwide email users that’s only 850MM.  The Morgan Stanley report says there are 1.8B people online worldwide, and there are been stats consistently published over the years that between 80-95% of people online use email.  This report from Radicati has the number of email users worldwide growing from 1.4B last year to 1.9B over the next few years. That sounds more like it.  

There’s no question that people spend more time in social networks and will continue to. They’re more multi-faceted. But that “error” in reporting on number of email addresses pretty dramatically changes the two charts. Plus, don’t you have to have an email account to sign up for most social networks?  And as my colleague Ezra Fischer noted, how the counting works in these two charts is important. For example, I have 2-3 email accounts, but I have 10-12 social network accounts. Am I counted once in each category, or 2-3 in the first and 10-12 in the second? Or worse, once in the first and 10-12 times in the second?

 

Anyway, every time I write one of these “in defense of email” posts, I get criticized for having too vested an interest in the subject matter to be objective.  If that’s the case, so be it – but who else is going to highlight the positive counterpoints when the buzz is all pointed to the demise of email?

The Human Whiteboard Syndrome

I am working on a project with someone now (not at Return Path) who is proving to be a very frustrating colleague with whom to collaborate.  He has a condition that a friend of mine once referred to as “The Human Whiteboard Syndrome,” which means that his thoughts always reflect the last thing he heard on any given subject.  

This condition is unhealthy.  It leads to the following symptoms:

• Whiplash:  you send people in one direction one day, another direction the next day
• Fatigue:  rework is exhausting for those who are constantly in fluid situations, especially if they don’t have full access to information flow
• Headaches:  it turns out that constantly changing one’s mind is painful for ones self, not just others

If you suspect you have shades of this condition – act quickly and go see a doctor.  Fortunately, it’s not contagious, but it could lead quickly to your professional demise.  If you have friends or colleagues who suffer from The Human Whiteboard Syndrome, mention it to them politely but firmly and recommend they seek immediate treatment, which generally takes the form of seeking out and synthesizing information from multiple sources, making a decision, and then communicating it clearly and loudly.

Book Short:  Gladwell Lite

What the Dog Saw, And Other Adventures (book, Kindle) is Malcolm Gladwell’s latest book.  Unlike his three other books, which I quite enjoyed:

• The Tipping Point (about how trends and social movements start and spread)
• Blink (about how the mind makes judgments)
• Outliers: The Story of Success (about how talents are genetic, situational, and cultivated)

this was not a complete book, but rather a compendium of his New Yorker articles loosely grouped into three themes.

If you love Gladwell and don’t read The New Yorker, it’s not a bad read. He’s a fantastic writer, and his vignettes are interesting.  There are many “hmmm” moments as we learn why ketchup always tastes the same but mustard doesn’t; why Ron Popeil is a great salesman of kitchen gadgets; or why the inventor of the birth control pill thought the Pope would endorse it.  But it falls far short of his three books, which go deep into topics and leave a much more lasting impression/impact.

New Blog of Note in the Direct Marketing World

Gene Raitt, Chairman of the DMA, has launched a new blog today called DM Unplugged.  It’s not an official DMA property.  Gene won’t be the only contributor — over time, other DMA board members (including me) and thought leaders in the direct and interactive marketing communities at large — will contribute as well.

This is one small, though notable, development in a series of things the DMA is working on as it transforms itself.  Look for some truly “unplugged” commentary on this blog about both things happening in the industry and transparent views into things happening at the DMA as well as invitations to contribute to the discussion on both.

From Founder/Builder to Manager/Leader

After I spoke at the Startup2Startup event last month, one of the people who sat with me at dinner emailed me and asked:

I was curious–how did you make the transition from CEO of a startup to manager of a medium-sized business? I’m great at just doing the work myself and interacting with clients, and it’s easy for me to delegate tasks, but it’s hard to have the vision and ability to develop my two employees into greater capacity…

I’d be interested in reading a blog post on what helped you make that transition from founder/builder to manager/leader

It feels like the answer to this question is about a mile long, but I thought I’d at least start with five suggestions.

1. Hire Up!  The place where I see most founders fumble the transition is in not hiring the best people for the critical roles in the organization.  Sometimes this is for cash flow reasons, but more often it is either due to subconscious fear (“will I still be able to control the organization if this person is in it?”) or due to bravado (“I can do engineering way better than that guy”).  Lose that attitude and hire up for key positions.  Even if you COULD do every role better than anyone you’d ever hire, you only have so many hours in the day.
2. Learn the magic of delegation and empowerment.  You can never get as much work done on your own as you can if you get work done THROUGH others.  Get comfortable delegating work by setting clear expectations up front in terms of timing and quality of deliverables and giving your high level input.  And never be a bottleneck.  If people are waiting on you for decisions or comments, that means they’re not working…or at least that they’re not working on the highest value or most urgent things they could be working on.
3. Don’t fear some elements of larger organizations.  Larger organizations require some process so they don’t fall apart.  Make sure you pick your battles and accept that some changes, even if they feel bureaucratic, are critical to ensure success going forward.  I still get a queasy feeling in my stomach half of the times I see a new form or procedure or a suggestion from a lawyer, but as long as they are lightweight and constantly reviewed to make sure they’re having their intended impact AND ONLY their intended impact, some are inevitable.
4. At the same time, don’t lose the founder/builder mentality.  Your company may have grown larger, but if you’re still running it, people will naturally look to you and other founders for much of the energy, vision, and drive in the business.  You will also likely be more inclined to be scrappy and entrepreneurial, which are good traits for any business.  Don’t lose those qualities, even as you modify them or add others.
5. Look to the outside for help.  In my case, I’ve consistently done three things over the years to learn from others and to prevent myopia.  First, I have worked on and off with a fantastic executive coach, Marc Maltz from Triad Group. Second, I have always had one or two “CEO mentors,” e.g., guys who have built larger businesses than Return Path, on my Board, at all times, as resources.  Finally, I do a lot of CEO peer networking, some informal (breakfasts, drinks meetings), and some more formal (a CEO Forum group that I established) to make sure I’m consistently sharing information and best practices with others in comparable situations.

Any other entrepreneurs who have made the leap have other advice to offer?