How to Get Laid Off – an Employee’s Perspective

One of my colleagues at Return Path  saw my post about How to Quit Your Job about 5 years ago and was inspired to share this story with me.  Don’t read anything into this post, team!  There is no other meaning behind my posting it at this time, or any time, other than thinking it’s a very good way of approaching a very difficult situation, especially coming from an employee.

In 2009 I was working at a software security start up in the Silicon Valley.  Times were exceedingly tough, there were several rounds of layoffs that year, and in May I was finally on the list. I was informed on a Tuesday that my last day was that Friday.  It was a horrible time to be without a job (and benefits), there was almost no hiring at all that year, one of the worst economic down turns on record.  While it was a hard message,  I knew that it was not personal, I was just caught up on a bad math problem.

After calling home to share the bad news, I went back to my desk and kept working. I had never been laid off and was not sure what to do, but I was pretty sure I would have plenty of free time in the short term, so I set about figuring out  how to wrap things up there.  Later that day the founder of the company came by, asked why I had not gone home, and I replied that I would be fine with working till the end of the week if he was okay with it.  He thanked me.

Later that week, in a meeting where we reviewed and prioritized the projects I was working on, we discussed who would take on the top three that were quite important to the future of the company.  A few names were mentioned of who could keep them alive, but they were people who I knew would not focus on them at all.  So I suggested they have me continue to work on them, that got an funny look but when he thought about it , it made sense, they could 1099 me one day a week.  The next day we set it up.  I made more money than I could of on unemployment, but even better I kept my laptop and work email, so I looked employed which paid off later. 

That one day later became two days and then three, however, I eventually found other full time work in 2010.  Layoffs are hard,  but it is not a time to burn bridges.   In fact  one of the execs of that company is a reference and has offered me other opportunities for employment.

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!

I was trading emails a few weeks ago Elliot Noss from Tucows about the current state of the economy after being on a panel together about it, and he wrote:

The market is fascinating right now. Heated competition AND layoffs and hiring freezes. It feel like an old European hotel where there are two faucets, one is too hot and the other too cold.

While a quick rant about European hotel bathrooms could be fun…we’ll just stick to the sink analogy. As anyone who has ever tried to use one of these sinks that Elliot describes knows, they’re hard to use and illogical. Sure, sometimes you want freezing water and sometimes you want scalding water (I guess), but often, you want something in between. And the only way to achieve that is to turn on both freezing and scalding at the same time? That’s weird.

Then I was on another email thread recently with a group of CEOs, when John Henry from Ride With Loop said this:

Whatever the climate, we all surely agree there is no bad time to build a good business.

How true that is!

But here’s the worrisome part. It’s impossible to predict what’s going to happen next. We are in uncharted territory here with a land war in Europe, a partial global oil embargo of a top tier oil producer, a pandemic, supply chain problems, etc. etc. There are days and circumstances where everything feels normal. Plenty of businesses, especially in the tech sector, are kicking ass. And yet there are days and circumstances that feel like 2001 or 2009. It’s tough to navigate as a startup CEO. Yes, it’s obvious you should try to have a couple years of cash on hand, and that you should be smart about investments and not get too far ahead of revenue if you’re in certain sectors (presumably if you’re in an R&D intensive field and weren’t planning to have revenue for years on end, life isn’t all that different?). But beyond that, there’s no clear playbook.

And that’s where the worrisome line comes in. I saw Larry Summers on Meet the Press last weekend, who predicted that

a recession would come in late 2023.

Wait, what? Aren’t things messed up now? Yes, inflation is high, the stock market is down, and interest rates are creeping up. But the economy is still GROWING. Unemployment is still LOW. Summers’ point is a reminder that contraction is likely, but it may still be a ways off, it depends how the Fed handles interest rate hikes (and about a zillion other things), and it’s impossible to predict. That was more worrisome to me. If we’re navigating choppy waters now, it may not just be for a couple of quarters. It may be that 4-6 quarters from now, we are in for 2-3 quarters of contraction. That is a more than most companies are able to plan for from a cash perspective.

Frothy macro environments lead to bad businesses getting created, too many lookalike businesses popping up, or weak teams getting funded. When the tide goes out, as they say, you can see who is swimming naked. But if you’re building a good business, one that has staying power and a clear value proposition, with real people or clients paying real money for a real product or service, and if you’re serious about building a good company, keep on keeping on. Be smart about key decisions, especially investment decisions, but don’t despair or give up.

We’ll all get through this.

Book Short:  Be Less Clever

In Search of the Obvious: The Antidote for Today’s Marketing Mess, by Jack Trout, is probably deserving of a read by most CEOs.  Trout at this point is a bit old school and curmudgeonly, the book has some sections which are a bit repetitive of other books he and his former partner Al Reis have written over the years, he does go off on some irrelevant rants, and his examples are a bit too focused on TV advertising, BUT his premise is great, and it’s universally applicable.  So much so that my colleagues Leah, Anita, and I had “book club” about it one night last week and had a very productive debate about our own positioning and marketing statements and how obvious they were (they need work!).

The premise in short is that, in advertising:

Logical, direct, obvious = relevant, and

Entertaining, emotional = irrelevant

And he’s got data to back it up, including a great case study from TiVo on which ads are skipped and not skipped – the ones that aren’t skipped are from companies like Bowflex, Hooters, and the Dominican Republic, where the presentation of the ad is very direct, explanatory of the product, and clear.  His reasons why advertising have drifted away from the obvious are probably right, ranging from the egos of marketing people, to CEOs being to disconnected from marketing, to the rise in importance of advertising awards, and his solution, of course is to refocus on your core positioning/competitive positioning.

It is true that when the only tool in your box is a hammer, everything starts to look a bit like a nail, but Trout is probably right in this case.  He does remind us in this book that “Marketing is not a battle of products. It is a battle of perceptions”– words to live by.

And some of his examples of great obvious advertising statements, either real or ones he thinks should have been used, are very revealing:

• Kerry should have turned charges that he was a flip-flopper in 2004 around on Bush with the simple line that Bush was “strong but wrong”
• New Zealand: “the world’s most beautiful two islands”
• The brilliance of the VW Beetle in a big-car era and “thinking small”
• Johnny Cochrane’s winning (over)simplification of the OJ case — “If the glove doesn’t fit, you must acquit”
• BMW is still, 30 years later, The Ultimate Driving Machine
• “Every day, the Kremlin gets 12 copies of the Wall Street Journal. Maybe they know something you don’t know.”

If you are looking for a good marketing book to read as a refresher this year, this one could be it.  And if you’re not a very market-focused CEO, this kind of thinking is a must.

And for the record, the library of books by Trout and/or Reis (sometimes including Reis’ daughter Laura as well) that I’ve read, all of which are quite good, is:

• Positioning: The Battle for Your Mind – the original – a brilliant, short, classic
• The New Positioning (link, post) – good refresher on the original, gets into repositioning
• Marketing Warfare –
• The Fall of Advertising and the Rise of PR – excellent but pre-social media
• The 22 Immutable Laws of Branding –
• The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk! –
• Bottom-up Marketing –
• Differentiate or Die: Survival in Our Era of Killer Competition –
• In Search of the Obvious: The Antidote for Today’s Marketing Mess – the current book

Welcome to the new StartupCEO.com!

I started writing this blog in May of 2004 with an objective of writing about the experience of being a first-time entrepreneur — a startup CEO — inspired by a blog post written by my friend, long-time Board member and mentor Fred Wilson entitled “You’re only a first time CEO once.”  The blog and the receptivity I got along the way from fellow startup CEOs encouraged me to write a book called Startup CEO:  A Field Guide to Scaling Up Your Business, which was originally published in 2013 and then again as a second edition last year in 2020.

Today I am relaunching the blog as StartupCEO.com both to reflect that relevance of that brand as the book continues to get good traction in the startup ecosystem, and to reflect the fact that I’m now on my second startup as CEO, so “Only Once” doesn’t seem so fitting any more.

The web site has a very minimalist design – and I realize many of you read posts on either RSS or email — those will still operate the same as they have been (no new RSS feed).

As I approach the first anniversary of starting our new company, Bolster, where we help startup CEOs scale their teams, themselves, and their boards, I am recommitting to this blog and will try to post at least once a week.  Because there is a lot of overlap between this blog and Bolster’s blog (which I’d encourage you to subscribe to here either by email or RSS), posts will occasionally show up on both blogs, or I’ll put digests of Bolster blog posts here.  

But the Bolster blog will be broader and will also have many additional authors besides me, while this blog will remain distinct about some of the experiences I’m having as a startup CEO.

I realize I haven’t posted much lately.  As you may know, the title of this blog, OnlyOnce, comes from a blog post written by my friend and board member Fred Wilson from Union Square Ventures entitled You Are Only a First-Time CEO Once, which he wrote back in 2003 or 2004.  That inspired me to create a blog for entrepreneurs and leaders.  I’ve written close to 1,000 posts over the years, and the book became the impetus for a book that another friend and board member Brad Feld from Foundry Group encouraged me to write and helped me get published called Startup CEO:  A Field Guide to Scaling Up Your Business back in 2013.

Today is a special day in my entrepreneurial journey and in the life of the company that I started back in 1999 (last century!), Return Path, as we announce that Return Path has entered into a definitive agreement to be acquired by an exciting new company called Validity.  Press release is here.

Over almost 20 years, we’ve built Return Path into one of the largest and (I think) most respected companies in the email industry.  We’ve had a culture of innovation that has led to some groundbreaking products for our customers and partners to help make email marketing work better for consumers as well as marketers, and to help keep inboxes safe and clean for mailbox providers and security companies.  

But the company is unusual in many respects.  One of those is longevity. I’m not sure how many Internet companies started in 1999 are still private, backed and led by the same team the whole time, and generally in the same business they started in.  Another is our values-driven “People First” culture. From Day 1, we have believed that if we attract and retain and develop and invest in the best people, we will make our customers successful with great products and service, and that if we do right by our customers, we will do right long term by our shareholders.  While I know that not every employee who ever walked through our doors had a great experience, I know most did and hope that all of them realize we tried our best. Finally, I’m proud that our company gave birth to a non-profit affiliate Path Forward a few years back at the hands of executives Andy Sautins, Cathy Hawley, and Tami Forman.  Path Forward helps parents get back to work after a career break and helps companies improve their gender diversity and hiring biases and has already been a game changer for dozens of companies and hundreds of women.

Today, Return Path serves almost 4,000 customers in almost every country on the globe, with $100 million in revenue, profitable, and excited about the next leg of our brands’ and our products’ lives in the care of Validity.  If you haven’t heard of Validity before today, watch out – you will hear a LOT about them in the weeks and months ahead. They are an incredibly exciting new company with a vision to help tens of thousands of companies across the globe improve their data quality but also help them use data to improve business results.  That vision, inspired by a new friend, CEO Mark Briggs, is a wonderful fit for Return Path’s products and services and people.

To finish this post where I started, Fred’s exact words in that post which got this blog going were:

What does this mean for entrepreneurs and managers? It means that the first time you run a business, you should admit what you are up against. Don’t let ego get in the way. Ask for help from your board and get coaching and mentoring. And recognize that you may fail at some level. And don’t let the fear of failure get in the way. Because failure isn’t fatal. It may well be a required rite of passage.

All of that is true and has been great advice for me over the years.  But Fred left out one important piece, which is that entrepreneurs need to constantly thank the people around them who either work their butts off as colleagues in the business or who give them helpful advice and coaching.  Return Path’s journey has been a long one, longer than most, and the full list of people to thank is too long for a blog post.

I’ve noted Fred and Brad in this post already and I want to thank them and also thank Greg Sands from Costanoa Ventures, the third member of our “dream team” investor syndicate, for their friendship and unwavering support and good counsel for me and Return Path for almost two decades, as well as many other board members we’ve had over the years including long-time independent directors Jeff Epstein, Scott Petry, and Scott Weiss.

I want to thank my co-founders Jack Sinclair and George Bilbrey, and anyone who has ever been on my executive team, including long-time execs Ken Takahashi, Shawn Nussbaum, Cathy Hawley, Dave Wilby, Anita Absey, Angela Baldonero, Andy Sautins, Louis Bucciarelli, Mark Frein, and David Sieh.  There’s nothing quite like being in the proverbial foxhole with someone during a battle or two or ten to forge a tight bond. I want to thank Andrea Ponchione, my extraordinary assistant for 14 years, who keeps me running, sane, and smiling every day. I want to thank my executive coach Marc Maltz and the members of my CEO Forum for allowing me to be unplugged and for their friendship and advice.  I want to thank all of Return Path’s 430 employees today and over 1,300 ever for their hard work in building our company and culture together and for our 4,000 customers and partners for putting their faith in us to help them solve some of their biggest challenges with email.

Finally, no thank you list for this journey would be complete without saying a special thank you to my wonderful wife Mariquita and kids Casey, Wilson, and Elyse.  They deserve some kind of special honor for being inspirational cabin-mates on the entrepreneurial roller coaster without ever being asked if they were up for it.

This event may inspire me to begin writing more regularly again on OnlyOnce.  Stay tuned!

Starbucks, Starbucks, Everywhere, Part II

In 2004, I blogged about Starbucks’ implausible Forbidden City location (post includes picture) in the heart of one of China’s most prominent national monuments.

Today, under pressure from the Chinese government, Starbucks announced that they’re closing the location, reflecting “Chinese sensitivity about cultural symbols and unease over an influx of foreign pop culture,” according to a very short blurb about this in today’s Wall Street Journal.

It must be indescribably different to live in a society that’s so tightly controlled.

What Kind of Entrepreneur Do You Want to Be?

I had a great time at Princeton reunions this weekend, as always.  As I was talking to random people, some of whom I knew but hadn’t seen in a long time, and others of whom I was just meeting for the first time, the topic of starting a business naturally came up.  Two of the people asked me if I thought they should start a business, and what kind of person made for a good entrepreneur.

As I was thinking about the question, it reminded me of something Fred once told me — that he thought there were two kinds of entrepreneurs:  people who start businesses and people who run business. 

People who start businesses are more commonly known as serial entrepreneurs.  These people come up with ideas and love incubating them but may or may not try to run them longer term.  They:

– generate an idea a minute
– have a major case of ADD
– are easily distracted by shiny objects
– would rather generate 1 good and idea and 19 bad ones than just 1 good one
– are always thinking about the next thing
– are only excited by the possibility of what could be, not what is
– are more philosophical and theoretical
– probably shouldn’t run the companies they start for more than a few months, as they will frustrate everyone around them and get bored themselves
– are really fun at cocktail parties
– say things like “I thought of auctions online way before eBay!”

The second type of entrepreneur is the type who runs businesses (and may or may not come up with the original idea).  These people:

– care about success, not just having the idea
– love to make things work
– would rather generate 1 idea and execute it well than 2 ideas
– are problem solvers
– are great with people
– are maybe less fun at cocktail parties, but
– you’d definitely want them on your team in a game of paintball or laser tag

Neither one is better than the other, and sometimes you get both in the same person, but not all that often.  But understanding what type of entrepreneur you are (or would likely be) is probably a good first step in understanding whether or not you want to take the plunge, and if so, what role you’d like to play in the business.

(This post is running concurrently on the Return Path blog.)

It is now widely understood that the Internet runs on data. I first blogged about this in 2004—14 years ago!— here.  People have come to expect a robust—and free!—online experience. Whether it’s a shopping app or a social media platform like Instagram, these free experiences provide a valuable service. And like most businesses, the companies that provide these experiences need to make money somehow. Consumers are coming to understand and appreciate that the real cost of a “free” internet lies in advertising and data collection.

Today, the Wall Street Journal ran an article exploring the data privacy practices of Google and some of the third party developers who utilize their G Suite ecosystem. Return Path was among the companies mentioned in this article. We worked closely with the journalist on this piece and shared a great deal of information about the inner workings of Return Path, because we feel it’s important to be completely transparent when it comes to matters of privacy.  Unfortunately, the reporter was extremely and somewhat carelessly selective in terms of what information he chose to use from us — as well as listing a number of vague sources who claimed to be “in the know” about the inner workings of Return Path. We know that he reached out to dozens of former employees via LinkedIn, for example, many of whom haven’t worked here in years.

While the article does not uncover any wrongdoings on our part (in fact, it does mention that we have first-party relationships with and consent from our consumers), it does raise a larger privacy and security concern against Google for allowing developer access to Gmail’s API to create email apps. The article goes on to explain that computers scan this data, and in some rare cases, the data is reviewed by actual people. The article mentions a specific incident at Return Path where approximately 8,000 emails were manually reviewed for classification. As anyone who knows anything about software knows, humans program software – artificial intelligence comes directly from human intelligence.  Any time our engineers or data scientists personally review emails in our panel (which again, is completely consistent with our policies), we take great care to limit who has access to the data, supervise all access to the data, deploying a Virtual Safety Room, where data cannot leave this VSR and all data is destroyed after the work is completed.

I want to reaffirm that Return Path is absolutely committed to data security and consumer data privacy. Since our founding in 1999, we’ve kept consumer choice, permission, and transparency at the center of our business. To this end, we go above and beyond what’s legally required and take abundant care to make sure that:

1. Our privacy policy is prominently displayed and written in plain English;
2. The user must actively agree to its terms (no pre-checked boxes); and
3. A summary of its main points is shown to every user at signup without the need to click a link

While a privacy expert quoted in the article (and someone we’ve known and respected for years) says that he believes consumers would want to know that humans, not only computers, might have access to data, we understand that unfortunately, most consumers don’t pay attention to privacy policies and statements, which is precisely why we developed succinct and plain-English “just-in-time” policies years before GDPR required them. When filling out a form people may not think about the impact that providing the information will have at a later date. Just-in-time notices work by appearing on the individual’s screen at the point where they input personal data, providing a brief message explaining how the information they are about to provide will be used, for example:

It’s disappointing to say the least that the reporter called this a “dirty secret.”  It looks pretty much the opposite of a secret to me.

In addition to our own policies and practices, Return Path is deeply involved in ongoing industry work related to privacy. We lead many of these efforts, and maintain long-term trusted relationships with numerous privacy associations. Our business runs on data, and keeping that data secure is our top priority.

Further, I want to address the scare tactics employed by this journalist, and many others, in addressing the topics of data collection, data security, and who has access to data. It’s common these days to see articles that highlight the dangers that can accompany everyday online activities like downloading an app or browsing a retail website. And while consumers certainly have a responsibility to protect themselves through education, it’s also important to understand the importance of data sharing, open ecosystems, and third party developers.  And more than that, it’s important to draw distinctions between companies who have direct relationships with and consent from consumers and ones who do not.

While they may not be top of mind, open ecosystems that allow for third-party innovation are an essential part of how the internet functions. Big players like Facebook and Google provide core platforms, but without APIs and independent developers, innovation and usability would be limited to big companies with significant market power and budgets—to the detriment of consumers. Think about it—would Facebook have become as wildly popular without the in-app phenomenon that was Farmville? Probably, but you get the point: third party applications add a new level of value and usefulness that a platform alone can’t provide.

Consumers often fall into the trap of believing that the solution to all of their online worries is to deny access to their data. But the reality is that, if they take steps like opting out of online tracking, the quality of their online experience will deteriorate dramatically. Rather than being served relevant ads and content that relates to their browsing behaviors and online preferences, they’ll see random ads from the highest bidder. Unfortunately some companies take personalization to an extreme, but an online experience devoid of personalization would feel oddly generic to the average consumer.

There’s been a lot of attention in the media lately—and rightfully so—about privacy policies and data privacy practices, specifically as they relate to data collection and access by third parties. The new GDPR regulations in the EU have driven much of this discussion, as has the potential misuse of private information about millions of Facebook users.

One of Return Path’s core values is transparency, including how we collect, access and use data.  Our situation and relationship with consumers is different from those of other companies. If anyone has additional questions, please reach out.

9/11’s 10th

I wasn’t yet writing this blog on 9/11 (no one was writing blogs yet), and if I had had one, I’m not sure what I would have written.  The neighborhood immediately surrounding the World Trade Center had been my home for more than seven years before the twin towers fell, and it continued to be my home for more than seven years after they fell.  That same neighborhood was Return Path‘s home for its first 18 months or so, across two different offices.  Like all Americans, the attack felt personal.  Like all New Yorkers, it was in our face.  But it hit home in a different way for those of us who lived and worked in Lower Manhattan.

For the seven years after the attacks, I stopped by Ground Zero on the morning of 9/11 to reflect and memorialize the event.  I won’t be doing that this year — between living outside the city, the kids, and the likely overwhelming crowds, it doesn’t make sense.  So this post will have to suffice as this year’s reflection on the 10th anniversary of that awful day.

My memories from that day and the weeks that followed are a little jumbled now, as memories often are.  The things I remember most vividly, both personal and professional, are:

• The smell and the smoke.  Up until the New Year, over 3 months after the attacks, a plume of smoke was rising from Ground Zero, and the air had a putrid smell of burning everything — building materials, fuel, fragments of life
• I had left the city that morning to drive to a meeting in Danbury, Connecticut at Pittney-Bowes with our then head of sales, Dave Paulus.  We both received calls on our cell phones at the same instant from Mariquita and Pam telling us to turn on the news, that a plane had crashed into the World Trade Center.  For a while, everyone assumed it was an accident.  We continued with our meeting, although it kept getting interrupted with more bad news coming in via our senior contact’s assistant, until she wheeled a TV into the conference room so we could watch for ourselves
• I couldn’t get back into the city that night, so Dave and I crashed at my Grandma Hazel’s house in Westchester.  When I finally did get home, Mariquita and I met up and stayed with our friends Christine and Andrew on the upper west side and listened all night to the fighter planes cruising up and down the Hudson River, sentries on patrol
• When we finally could go back to our apartment, we had to go on foot from Canal Street south, and we had to show proof of residence (in our case, a copy of our lease) to get past the military guards.  With no traffic allowed and no subways running in Lower Manhattan for a week or two, the streets had an eerie emptiness about them.  The prevalence of national guardsmen and NYPD patrols toting machine guns made it feel like a war zone
• At work, where the Internet 1.0 meltdown was still in process, we were in the middle of negotiating a life-saving financing and acquisition of Veripost with Eric Kirby and George.  We hit the pause button on everything, but we picked back up and dusted ourselves off within a day and got those deals done within a few weeks and saved the company
• We had one junior employee in our New York office who got into his car on the afternoon of 9/11, drove to New Hampshire, and never contacted us again.  Just completely blew a fuse and dropped out.  It wasn’t until we tracked down his parents a few days later that we even knew he was safe and sound
• I was fortunate not to lose anyone close in the attacks, but my friend Morten lost over a dozen close friends who were all traders from his town in New Jersey.  He attended every single funeral.  How he got through that (and how others got through their many losses) remains beyond my comprehension, even today

The only thing I have really blogged about over the years related to 9/11 was my post Morning in Tribeca in 2004 when the skeleton of WTC7, the first rebuilt building, was going up.  Now that the Freedom Tower is rising, it finally feels like the Ground Zero site has great forward momentum and will in fact be fully renewed in a few years once the bulk of this construction is done and the tenants have moved in.  That will be a great day for New York, and for America.

Americans have long operated under an unwritten deal with media companies (for our purposes here, let’s call this the Old Media Deal). The Old Media Deal is simple: we hate advertising, but we are willing to put up with an amazing amount of it in exchange for free or cheap content, and occasionally one of those ads slips through to the recesses of our brain and influences us in some way that old school marketers who trade in non-addressable media can only dream of. Think about it:

– 30 minutes of Friends has 8 minutes of commercials (10 in syndication!)
– The New York Times devotes almost 75% of its total column inches to ads
– We get 6 songs in a row on the radio, then 5 minutes of commercials
– The copy of Vogue‘s fall fashion issue on my mom’s coffee table is about 90% full page ads

The bottom line is, advertising doesn’t bug us if it’s not too intrusive and if there’s something in it for us as consumers.

Since I started working in “New Media” in 1994, I’ve thought we had a significantly different New Media Deal in the works. The New Media deal is that we as American consumers are willing to share a certain amount of personal information in exchange for even better content, more personalized services, or even more targeted marketing — again, as long as those things aren’t too intrusive and provide adequate value. Think about how the New Media Deal works:

– We tell Yahoo that we like the Yankees and that we own MSFT stock in order to get a personalized home page
– We tell Drugstore.com what personal health products we buy so we can buy our Q-tips and Benadryl more quickly
– We tell The New York Times on the Web our annual income in order to get the entire newspaper online for free
– We let PayTrust know how much money we spend each month so that we can pay our bills more efficiently
– We let Google scan our emails to put ads in in them based on the content to get a free email account
– We give their email address out to receive marketing offers (even in this day and age of spam) by the millions every day

Anyway, after a few years of talking somewhat circuitously about this New Media Deal, my colleague Tami Forman showed me some research the other day that backs up my theory, so I thought it was time to share. In a study conducted by ChoiceStream in May 2004, 81% of Internet users expressed a desire for personalized content; 64% said they’d provide insight into their preferences in exchange for personalized product and content recommendations; 56 would provide demographic data for the same; and 40% said they’d even agree to more comprehensive clickstream and transaction monitoring for the same. All of these responses were stronger among younger users but healthy among all users. Sounds like a New Media Deal to me.

Don’t get me wrong — I still think there’s a time and a place for anonymity. It’s one of the great things about RSS for certain applications. And privacy advocates are always right to be vigilant about potential and actual abuses of data collection. But I think it’s becoming increasingly clear that we have a New Media Deal, which is that people are willing to sacrifice their anonymity in a heartbeat if the value exchange is there.

P.S. Quite frankly, I wish I could give spammers a little more personalized information sometime. They’re going to email me anyway — they may as well at least tell me to enlarge a part of my body that I actually have.