Counter Cliche:  As Simple As the Wheel

Fred’s VC cliche of the week this week is about the analog analog.  It builds on one of Brad’s great concepts which he blogged about here.  The concept is that figuring out how a digital idea mirrors an offline idea is a better way of handicapping future success of a venture than understanding pure technology analogs. 

I tend to agree with Fred, that it’s one useful lens with which to evaluate a new idea, but not the only one.  So my counter cliche for the week is to look for something As Simple As the Wheel. 

At Return Path, by the way, nearly every business we’re in has a clear analog analog (Email Change of Address = Postal Change of Address, Email List Rental = Postal List Rental, Email Market Rearch = Telephone Market Research, and on and on) and has been the result of real brainstorming processes and complex, nuanced thinking.

But innovation doesn’t have to be all that complex.  One of my favorite examples of this is luggage.  Somehow, for decades, we all travelled with suitcases or garment bags or duffel bags creating pinched nerves as they hung from our shoulders or bad backs as we gripped them and sprinted through airports.

Then someone decided to put litle wheels on luggage and change the luggage industry and the way we travel for the better.  WHEELS, for goodness sake.  Not ASP, not B2B, not CRM, not ERP, not the human genome project, not cold fusion.

What’s the wheel that your industry or product needs?  Don’t search for the analog analog if there’s something more simple staring you in the face that can explode your market.

Why Email Lists Need to Be More Like Toothpaste

My colleague Mike Mayor’s column this week in iMedia Connection is a great quick read for anyone connected to the email list business.  Warning!  Reading this article may cause you to ask some more probing questions before your next list management or list rental event…

Counter Cliche:  Don’t Just Do Something, Stand There

Fred had a great posting the other day about Analysis Paralysis.  And he’s right, a lot of the time.  But I’ve always thought that Newton’s third law of motion can be applied to cliches — that every cliche has an equal and opposite cliche (think “Out of Sight, Out of Mind” vs. “Absence Makes the Heart Grow Fonder”).

The counter cliche to Analysis Paralysis is “Don’t Just Do Something, Stand There” — another great lesson taught to me by my old boss at MovieFone.  While startup businesses generally do need to move quickly and nimbly, there are times and places, particularly when negotiating something, where stopping or moving very slowly works to your advantage.  This can be true in any situation — hiring someone, working on a strategic partnership, acquiring a company or selling your own company, and yes, on occasion, even in closing business with a client.

Slowing down or stopping a negotiation helps you accomplish two critical things to achieving an optimal result:

1. It allows you to gain a little perspective on what you’re negotiating and consider other alternatives.  It’s easy to get caught up in the heat of a negotiation.  While that negotiating process can be addictive, you always want to make sure you really want what you’re going after and that you’ve taken every step you can to shore up your alternatives.

2. It lets you see how important the deal is to the other party.  If you change the pace of a negotiation, you can more easily see how the other party responds to that change of pace.  Do they fade away, or do they keep calling and pressing for forward movement?

There’s a time and a place for everything in a startup.  Sometimes it’s to run hard, but sometimes it’s to stand still.

10 Candles

My colleague Mike Mayor and I were reminded that yesterday was the 10th anniversary of the founding of the web design firm that would eventually become NetCreations (a company Return Path acquired last year) by Rosalind Resnick and Ryan Scott.  Also, today apparently Yahoo! turns 10 (and is giving away free ice cream to commemorate the event).

In different ways, and obviously at different scales, both serve as proof that one of the Internet’s most enduring concepts is to simply allow consumers to tell you what it is they are looking for and then to give it them. Think of the hundreds of companies that did not make it to their 10th birthday partly (or even their 1st) because they didn’t get this simple concept.

Thanks to Mike for his contribution to this posting.

A Different Take on The Gates

We went up to Central Park today to see The Gates.  We thought it was ok, but boy was it a madhouse up there. 

Anyway, we were struck at some angles by the similarity between the gates of the gates, and one of the most famous gates in the world which we saw on our trip through Asia last year:  the O-torii.

The O-torrii is one of the most recognizable images of Japan.  It is a 53 foot high vermilion gate rising out of the sea in front of the Itsukushima Jinja shrine on the island of Miyajima, off the coast of Hiroshima.  It was built out of trunks of local camphor trees in 1875.  Due to its location, it was one of the few landmark structures we saw in Asia that hadn’t burnt to the ground at least once or twice.

Check this out – perhaps it’s not entirely coincidental?

Oh, Behave!

This week, we launched behavioral targeting for email through our PostMasterDirect group.  This is a great development for us and will produce great value for clients over time by increasing response rates.  It may seem like a bit of buzzword bingo since BT is the phrase of the year in the online media world, but it’s actually a product we’ve had in development for some time now.

Our VP Engineering for list and data products, Whitney McNamara, had a great posting on his blog about BT and how we do it.  The whole thing is worth a read, but the real gem in my mind (and what’s most consistent with Return Path‘s philosophy about consumers and targeting in general) is at the end:

As a final note, it’s critical to remember that none of this means that the people who are collecting the data know better than that actual people on the receiving end what is appropriate and interesting. Ideally (as in the case of PMD/RP’s behavioral targeting), BT is a technique that supplements — not replaces — targeting based on people’s explicit requests for information.

And yes, I have to admit that at least a small part of the reason for this posting is the title.

Spam, Hot Spam, Now Only $0.10 Each!

By now, you may have seen news of the report from Ferris research citing the annual global economic impact of spam at $50 billion (apparently the U.S.’s share, $17 billion, is 0.17% of our gross national income).

I have no doubt that spam is an expensive problem.  IT managers and sysadmins spend lots of time dealing with it, and much hardware, software, and bandwidth are consumed.

But the one number that strikes me as odd in the report is that the economic impact of not having a spam filter (i.e., manually filtering spam, more commonly known as hitting the delete key) is $718 per user per year.  I guess it depends how you measure cost, but since the average user — not people who live on email like people who, oh, say, work at an email company or who blog compulsively — only get something like 20-30 emails per day, even if most of it were spam, that cost translates into something like $0.10 per spam.  That’s a lot of economic cost associated with a push of the delete key.

Interestingly, the antidote to the $718/year problem is a good desktop filter product like Cloudmark’s SafetyBar, which costs something like $30/year.

Everyone’s a Direct Marketer, Part III

With every company as a direct marketer, and with (hopefully!) every company embracing some of the best DM principles, what does this shift mean for the way companies will be structured in the future?

First, let’s talk about the internal structure of a company.  The biggest shift going on here is that customers are becoming a more important part of all employees’ daily lives, not just those in the advertising department.  I wrote an earlier posting called Everyone’s a Marketer which applies here.  Most likely, more and more members of your organization are touching customers every day — and they need to be trained how to think like marketers.

But beyond that, companies will be constructed differently in the future as well.  While not true in some industries, there are many industries founded on the “mass” which will never be the same again.  Here are three examples of how direct marketing is infiltrating — but enhancing the opportunities of — corporate America.

– Disney’s film unit used to make movies only for theatrical release.  Today, they have an enormous volume of direct-to-video (or DVD) movies that never see the big screen but that drive huge sales numbers when marketed to Disney’s customer email database.

– Ralph Lauren used to make Polo shirts with a fixed number of configurations of shirt color and knitting color of the logo.  Now, you can go onto Polo.com and custom build a personalized shirt for someone with the right size and color combination of their college or company or favorite baseball team.

– Barry Diller used to run a studio, then he bought a TV network called the Home Shoping Network (and, I’d add, a lot of people laughed at him for doing so).  He has now turned HSN into InterActive Corp, a true convergence company that mixes content and media with commerce and direct marketing with brands like Match.com, Ticketmaster, eVite, CitySearch, and Expedia.

That’s it for this series.  All thoughts and comments are welcome.

Anything Worth Doing is Worth Doing Well, Part II

I posted Part I a really long time ago — it’s pretty self explanatory.  I was given a related gem today from fellow blogger Hawaiian leadership coach Rosa Say:

"If you don’t have the time to do it right, when will you have the time to do it over?"

Now there’s something to keep in mind every time you’re doing something halfway!

Now, This is What Blogs Are All About

In case you missed it, this article from Peggy Noonan in today’s Wall Street Journal is a great follow-up to my rant yesterday about how blogging isn’t going to eviscerate commercial email.  This is what blogging is all about, not replacing marketing tools and techniques.

The Rumors of Email’s Demise Have Been Greatly Exaggerated, Part IV

This one could also be entitled “What Are The Bloggers Smoking?”

Reports from last week’s Blog Business Summit like this one are starting to filter in (pun slightly intended).  This one gets a big yawn from me, even more so than the other times I’ve posted on this subject, here, here, and here.  I’m as much of a blogger and a believer in blogs and RSS as the next guy — maybe even more so — but honestly, people, blogs are going to replace email?

I’d like to address a few critical points here head on, although a large part of me doesn’t even want to dignify yet another empty “email is dead” quote with a response.

Basic error #1. The article seems to confuse blogs with RSS feeds.  RSS feeds are data streams coming into an RSS reader application.  Blogs are web sites.  Hello?!?

Fallacy #1. Because blogs/RSS are interesting new media, email will go away.  To paraphrase my colleague Mike Mayor, why is it that whenever something new comes along, its proponents have to bash the current paradigm to make their thing seem more important?  Let’s go through this one — TV came along, and people said radio would go away.  Cable came along, and everyone said the networks were toast.  The fax machine came along, and FedEx was said to be relegated to legal documents that needed to be signed personally.  The Internet came along, and people said everything else was insignificant (newspapers, TV, radio, snail mail).  So yes, new media do arrive on the scene and perhaps make a dent in all prior media, but I’m having a hard time thinking of that one comes in and clocks another one mano a mano.

Fallacy #2. Spam has made email more difficult, therefore email will go away.  There’s a whole industry out there fighting spam.  I know, I know, just because we want the problem to go away doesn’t mean that we can will it away — but filters are working better by the day (did everyone catch this posting about Postini this week?), false positives can be managed down by vigilant clients working with vendors like Return Path, and whitelists, whenever they start really working and charging money to clients to guarantee delivery, will still leave email as the cheapest medium for targeted commercial messaging out there.

Naive belief #1. Spam has harmed email, but blogs/RSS are immune to the same problems.  I’m sorry, do you think the bad guys, or as Fred always calls it, the Internet Axis of Evil (spam, viruses, spyware, DNS hacking, phishing, and the like) are going to leave blogs and RSS feeds alone?  Not a chance.  The bad guys are already hard at work expanding their Axis of Evil.  There’s already comment spam for blogs (or blam, as some call it).  People have and can hijack RSS feeds (no cool name yet).  There’s Instant Messenger spam (spim).  Last week, I heard about a new one that blew me away, which is that someone figured out how to hijack a Voice Over IP phone call and insert an audio ad/porn into the call (spip).

Naive belief #2. Blogs are truly interactive.  Other than a couple of very popular blogs during the height of last fall’s election, I just don’t think this is true for the mainstream.  There are certainly some people who have a little too much time on their hands who spend hours every day blogging, but most people skim most blogs as one-way communication.   While there are mechanisms for commenting, there aren’t ready mechanisms for publishing comments back to the blog audience (thank goodness), so this medium hasn’t turned out nearly as interactive as people had hoped at the onset.  RSS feeds, in case the writer/speaker was confused in this argument, are completely non-interactive.

Naive belief #3. People will read blogs with an agenda of marketing specific products and services.  The beauty of the blog is that it’s not corporate, and it doesn’t have marketing spin on it.  Blogs are much more journals and publishing tools than marketing vehicles.  Who the heck is going to read a blog on Coke?  Or Nike?  Or Microsoft?  Sure, I might read Howard Shultz’s blog if he had one (his book was good enough), but that’s very different than reading the Starbucks official blog.  Why bother?  Where’s the value there?

Ok, I’m done with today’s rant.  As I said, I love blogging as much as the next guy, but puh-lease!  And for the record, I do believe that RSS feeds and maybe even IM from marketers/publishers will supplement email and in some cases maybe even replace it, but email just isn’t going away any time soon.