Sender Score:  Credit Scores for Emailers

Yesterday, I wrote about email authentication, and why, although it’s great, it won’t stop spam without the emergence and scaling of accreditation and reputation systems.

Today, Return Path has announced the beta launch of Sender Score, our new reputation management system.  Sender Score is a groundbreaking service that we’ve been working on for a long time here.  The best way to think about it (or the analog analog, as Brad might say) is as a FICO or credit score for email.

We’ve gone out and compiled TONS of data about emailers, much as the credit bureaus do when they gather financial profile and transaction data about individuals and businesses.  But our data, when aggregated and modeled, represents an emailer’s reputation — are they a “good risk” to let into your email network, or are they a “bad risk” to be treated separately?

What kind of data?  It’s the same data that ISPs and sys admins use to block and filter most emailers…variables such as complaint data, e-mail send volume, unknown user volume, security practices, identity stability, and unsubscribe functionality.  The system tracks 60 different data points and draws data from a diverse sample of more than 40 million email boxes.  The data comes from lots of different places, some from our own systems, and some from partner ISPs and other tech/filtering/data companies we’ve partnered with such as Cloudmark and Lashback.

This is powerful stuff.  The main thing we do with the data is provide it back to email marketers and publishers in a format that’s easy to understand and act on.  It’s like the free credit report many banks offer their customers so their customers can see themselves as potential creditors see them, then work to shore up the weak spots in their profile so they’re more likely to get the next loan/mortgage/approval.

Sender Score rounds out our Delivery Assurance offerings by adding reputation management to accreditation, monitoring, and professional services offerings.  With authentication gaining steam out there as a backdrop to all of this…we’re a lot closer to solving spam and false positives than we’ve ever been.

Why We Love Email Authentication, But Why It Won’t Stop Spam

Microsoft made a big announcement today that they’re taking email authentication, in the form of Sender ID, very seriously.  They’re using a stick, not a carrot.  Emailers who do not publish a proper Sender ID record are now going to (a) find themselves in the bulk mail folder at Hotmail and MSN, and (b) have a big fat disclaimer thrown on top of their emails from Microsoft warning users that the email’s source can’t be authenticated.

At Return Path, we’re big fans of authentication, and we’re sponsoring the upcoming Email Authentication Summit in a couple of weeks in New York as one way of supporting the effort — encouraging our clients to get on the ball with authentication is another one.  Here’s what we think it will (and won’t) do:

– It WILL make a big dent in spoofing, phishing, and fraud, right away.  Why?  Because those particular elements of the Internet Axis of Evil are identity-based…therefore, identity authentication will either stop those things, make it easier for consumers to steer clear of them, or make it easier for law enforcement to go after them.

– It WILL NOT make a big dent in spam right away.  Why?  Because spam is much more nuanced than fraud.  If I’m Microsoft, and I know that you are the particular sender of an email into my network, that’s all good and well, but I might not have any idea if I want to accept that mail or not.  Another way of saying this is that spammers can publish Sender ID records, too.

– It WILL lay the foundation for longer-term spam solutions.  Why?  Because it’s important to understand exactly who is sending mail into a network in order to answer that next question of “do I want to accept your mail or not?”  We think the answers to that question lie with accreditation and reputation services.

Obviously, I have my biases.  Return Path owns Bonded Sender, the leading accreditation service, which answers that question by saying “yes – you want to accept this mail, because Return Path and TRUSTe have examined me thoroughly and are vouching for my integrity, they’re measuring how many people are complaining about my mail, and if I get too many complaints, they fine me and kick me out of the program.”

Look for another announcement from us soon about what we’re up to in the reputation space, which is a more complex cousin to accreditation in answering that same question.

Chink in the Open Source Armor?

I discovered something by accident yesterday about Firefox (which I love) that is giving me a little pause around the beauty of open source.  Maybe I’m missing something – if I am, please comment.

I went to download some new extensions into Firefox, and the Mozilla site said I had to upgrade to the new version of Firefox (1.0.4) in order to access any extensions.

Before I did the upgrade on my machine, I upgraded my colleague Lisa’s (I was about to show her what extensions were, so I figured it would be best to make a clean start there with 1.0.4).  But once I upgraded her, I discovered that none of the extensions I use in Firefox are compatible with the new 1.0.4 version.

So, I can’t download any new extensions until I upgrade…but I can’t upgrade if I want to keep my existing extensions.  Seems like this is a problem with community-based development, although as my colleague Jack says, “I am surprised FireFox doesn’t build the backwards compatibility since open source extentsions are so important to their business model.”

Counter Cliche:  Sleeves, or Shoes?

Fred’s VC Cliche of the Week this week is about "rolling up your sleeves."  It’s a good one about how investors need to really understand a business inside and out in order to be effective board members – that they have to believe that they work for the CEO as much as the other way around.

One of my very first posts on this blog over a year ago talked about the fact that as a CEO, you have to remember that you don’t just work for your board, but you also work for your customers and your employees.  It’s the same principle.

My counter cliche this week is that Sometimes You Have to Walk in the Other Person’s Shoes.  It’s the same principle but focused a little differently on employee relations instead of CEO-Board relations.  Everyone inside an organization has internal customers and hand-offs with peers in other departments, or within the same department. 

The healthiest thing people can do when they’re in that type of relationship is make sure they have a full understanding of what their colleagues do — the scope of their job, their external and internal hurdles, and their success metrics.  That understanding makes the relationship much stronger.  And one of the ways to achieve that understanding is to literally walk in the other person’s shoes from time to time. 

If your internal hand-off is to sales, get out there and talk to some customers with a sales rep.  If your internal hand-off is to operations, spend a day putting out fires.  If it’s to customer service, answer the 800 number for 15 minutes once in a while.  You’ll be amazed at how much even a few minutes of walking in the other person’s shoes can help you be more effective in working with that person.

It’s Easy to Feel Like a Luddite These Days

You know, I feel like I’m a pretty progressive, early adapter kind of guy.  I’m a technology entrepreneur.  We got the iPod for Windows the minute it came out.  TiVo Series I.  One of the very first wireless hubs to create our own wireless LAN at home.  I blog.  I have an RSS feed.  But it’s hard to stand still these days, even for a few months.

So here’s my big admission — I still don’t entirely “get” tagging or podcasting.  But I’m making a big push to try them out over the next couple of weeks and see where it goes.  I’ll try tagging first, using, of course, del.icio.us.  Fred and Brad have both posted extensively about del.icio.us and tagging, Fred as an investor in the company and both as users.  So look for the next posting to be a few things I read today on the web and tagged and should automatically become part of my RSS feed courtesy of my friends at Feedburner (but presumably not a blog posting).  We’ll see if this all actually works.

With apologies to all those progressive Luddites out there, of course.

Who Said VCs Don’t Add Value?

In case there’s anyone out there who reads my blog but not Brad Feld’s — if you’re a Firefox user, you have to read this posting about pipelining and take the two minutes to implement it.  It’s phenomenal.

Thanks, Brad!

Counter Cliche:  Who’s The Dog in this Scenario?

Fred’s VC cliche of the week is a good one — “If you lie down with dogs, you’ll come up with fleas.” His point is a good and simple one, that VCs shouldn’t take people risks in deals and shouldn’t try to back management teams they have serious concerns about (ethical or otherwise) in the hopes of trying to change the team or change management.

The obvious counter cliche is that entrepreneurs run that same risk in accepting capital from less-than-savory venture investors.  An ethically-challenged investor can wreak havoc on a young company, potentially tying the company up with peripheral legal problems or even damaging the company’s attempts at raising future rounds of capital.  So, VCs can be the dog in the scenario as well.

But I think there’s a broader counter cliche here, which is that one’s reputation in business is always tied, to some extent, to the company one keeps.  This applies to investors, and also to clients, vendors, and partners.  The appearance of a connection to an unsavory character, even if it’s just an appearance, and even if “unsavory” is in the grey area instead of black-and-white, is almost as problematic as a real connection.

Our business at Return Path is a good illustration of this principle, as is the case with many companies in email marketing, since email marketing has some very visible bad guys (spammers), good guys (think eBay and Expedia), and lots of companies that operate in shades of grey in between.  One of our lines of business, Delivery Assurance Solutions (email deliverability), is particularly critical in terms of us having a great reputation in the industry, since we work on behalf of email marketers to get their mail accepted (not blocked/filtered) at major ISPs.  No matter how you cut it, this business invariably involves making some judgment calls from time to time on who’s a “good guy” vs. a “bad guy” in the email marketing world.

We try to be as clear as possible with our prospects and clients about what kinds of behavior we wil or will not accept from clients, since our reputation in this business is everything to us.  We won’t, for example, help a client with ISP relations or monitoring tools if they don’t sign reps and warrantees in our contract about their email practices that go well beyond CAN-SPAM in terms of compliance with industry best practices.  We can’t accept clients into the Bonded Sender whitelist program unless they jump through all kinds of hoops with our third-party watchdog partner, TRUSTe.  And as painful as it is from a revenue perspective, we do fire clients periodically who we discover to be either not in compliance with their reps and warrantees to us, or who we discover to have a particularly poor reputation in the industry.  All of these things are designed to make sure we stay flea-free.

One area that’s particularly tricky for us is what to do with a “bad guy” who comes to us asking for help to become a “good guy.”  While it’s hard to be completely objective about this type of situation, we have an emerging policy around it.  We WILL work with clients who the world perceives as a “bad guy,” but only on a consulting basis to teach them email best practices and how to become a “good guy” (one of my Board members, Scott Weiss from IronPort Systems, calls this Return Path’s 12-step program).  If those clients take our advice and make meaningful and measurable changes to their email programs, we will continue to work with them and will slowly allow them to use our other services over time.  If those clients resist our advice or are too slow to change their ways, we will stop working with them immediately.

I guess the point of the counter cliche is that sometimes it’s hard to tell, as Sally told Harry in the movie, who is supposed to be the dog in a particular scenario.

The (Email) Elephant in the Room

Email marketing continues to be under attack by some members of the media who are looking to stir up melodrama and controversy and seem to be uninterested in or unwilling to look at real metrics from real companies who are enjoying unparalleled success with email.

I can’t say this any better than Bill McCloskey from Email Data Source, who writes in MediaPost:

The Elephant in the Room that no one is willing to talk about is that Spam is not the problem. The problem is the OVERREACTION to Spam. This overreaction is not something that is hurting e-mail marketing communications–it is hurting all communications.

Read the full column here.  It’s great.

UPDATE:  Apparently, the column is only available if you register for MediaPost (grrr…).  It’s good enough, and free, but don’t feel compelled.  Two other useful paragraphs to read are below:

And all this hysteria is wiped up without looking at the facts. Because if you look at the facts, you’d see a pattern emerge. For instance, according to the DMA, e-mail has the second-highest ROI of any direct marketing channel, even with reduced deliverability and open rates. The fact is that if you examine the clickstream data from companies such as Hitwise, you will see that the biggest traffic driver time and time again is e-mail. E-mail is not just an important interactive marketing channel, it is the most important marketing channel–but you’d never know it judging by today’s trade shows and industry publications.

In the name of keeping us free of viagra ads in our inbox, we have crippled the most efficient communications system ever developed. We have allowed the free flow of information to be hijacked by fanatics. And because no one speaks for the e-mail industry, this is going on under our noses with no cry of protest.

What a View

We’ve done 360-degree reviews for five years now at Return Path.  Rather than the traditional one-way, manager-written performance review, we instituted 360s to give us a “full view” of an employee’s performance.  Reviews are contributed by the person being reviewed (a self assessment), the person’s manager, any of the person’s subordinates, and a handful of peers or other people in the company who work with the person.  They’re done anonymously, and they’re used to craft employees’ development plans for the next 12 months.

The results of 360 are a wonderful management tool.  Mine in particular have always been far more enlightening than the one-way reviews of the past.  The commonality in the feedback from different people is a little bit of what one former manager of mine used to say — when three doctors tell you you’re sick, go lie down.

I know a lot of companies do 360s, but we had two great learnings this year that I thought were worth noting.  First, we automated the process (used to manual in Excel and Word) by using an ASP solution called e360 Reviews from Halogen Software.  It was GREAT.  The tool must have saved us 75% of the administrative time in managing the process, and it made the process of doing the reviews much easier and more convenient as well.  I strongly recommend it.

Second, we started a new tradition of doing Live 360s for the senior staff here.  All people who filled out a review for a senior staff member were invited into an hour-long meeting that was moderated by a great organizational development consultancy we work with, Marc Maltz and Nancy Penner from Triad Consulting.  The purpose of each meeting was to resolve any conflicting comments in the reviews and prioritize strengths as well as development objectives.  We also did a very quick session where the senior staff did “speed reviews” in person of the rest of the company’s leadership team that tried to accomplish similar objectives in a much more compressed time frame and format.

So far (we’re in the middle of them — actually, the team is doing my review as I write this), the results are wonderful.  We’re going to end up producing MUCH crisper and more actionable development plans for our senior staff this year than we ever have in the past.  And the tone of the meetings has been incredibly supportive and constructive.  Having an outside moderator made a huge difference.

And yes, just in case you’re wondering, it is a little bit unnerving to know that a room full of 15 people is discussing you.  Especially when you can hear them all laughing through the wall.  🙂

Shifting Gears

My Grandma Hazel has a Yiddish saying that she uses to describe me from time to time — "gor oder gornisht" — which means "all or nothing."  My Dad has a Greek saying that he uses to describe me from time to time — "meden agan" — which means "everything in moderation."  These two approaches to life seem diametrically opposed.  Which is right?

Being a successful entrepreneur requires BOTH approaches, each at different times, and more important, the ability to shift gears between the two and be clear about the shift to yourself and to others.

There are periods of time when you need to be in "all or nothing mode."  Push extremes.  Demand more from your team.  Drop lots of the items on your to-do list and grow a singular focus on The One Big Thing.  Don’t go for a light jog — train for a marathon.

Then there are periods of time when you’re in execution mode.  The path has been defined.  Things are working.  Put the "life" back in your "work-life" balance.  A marathon?  Are you nuts?  Just run 3 miles a day and stay in shape.

You — and your organization — need to be able to shift gears between the two modes.  An organization that never goes through extreme periods is in grave danger of stagnating.  No one in an exciting company ever has "business as usual" emblazoned on their to-do list 365 days a year.  Organizations tend to take their biggest leaps forward when there’s an extreme situation, an all-hands on deck, a crisis.

But an organization that ONLY knows how to exist in crisis mode can be miserable.  Trust me, I’ve worked in one before.  There’s a shiny new object every week that everyone has to drop everything to pursue.  Everything gets started, but nothing gets finished.  People are frustrated.  They burn out. 

Companies and people (most mortals, anywway) have to go through periods of time where they thrive on the routine and celebrate their everyday achievements.

The trick to getting this duality right is to make sure you are clear to yourself, and when necessary to others, about when you’re shifting gears.  For yourself:  when you go into "gor oder gornisht" mode, clear that calendar and set aside the time to do the job right.  For others:  don’t make them guess where you’re coming from.  If you’re hitting an extreme patch, let them know by meeting or email/memo.  And make sure you’re fair to them as well.  If you’re forcing people in the organization to focus on The One Big Thing, make sure you recognize the changes that forces in their goals, their deliverables, and their external commitments and give them the flexibility they need to succeed.  Going back into "meden agan" mode is easier, but still requires a note of closure to your team, celebrating the success of the big push.

Fortunately, I can tell both Dad or Grandma that they’re right (how would I ever pick?).  I just hope the ancient Greek philosophers and bubbies everywhere aren’t spinning in their graves over the mixing of metaphors.

Just Say No

A recent study by AOL (published here in CNET) says that on average, people in America check email five times per day and can’t go without it for more than three days at a time.  And six out of ten respondents said they check email on vacation.

While I’m as guilty as anyone of perpetuating these statistics, I am a big fan of taking regular time off from email.  Whether it’s a day each week, or a whole weekend here or there, or at least one week vacation per year, it’s important to Just Say No every once in a while.  Even Fred took an email holiday recently, to great success, I believe.  The great thing about email is that they’ll all be there waiting for you when you log back in.