Book Short:  Sloppy Sequel

SuperFreakonomics, by Steven Levitt and Stephen Dubner, wasn’t a bad book, but it wasn’t nearly as good as the original Freakonomics, either.  I always find the results of “naturally controlled experiments” and taking a data-driven view of the world to be very refreshing.  And as much as I like the social scientist versions of these kinds of books like Malcolm Gladwell’s The Tipping Point and Blink (book; blog post), there’s usually something about reading something data driven written by a professional quant jock that’s more reassuring.

That’s where SuperFreakonomics fell down a bit for me.  Paul Krugman has described the book in a couple different places as “snarky and contrarian.”  I typically enjoy books that carry those descriptors, but this one seemed a bit over the top for economists — like a series of theories looking for data more than raw data adding up to theories.Nowhere is this more true than the chapter on climate change.  It’s a shame that that chapter seems to be swallowing up all the public discussion about the book, because there are some good points in that chapter, and the rest of the book is better than that particular chapter, but such is life.

As with all things related to the environment, I turned to my friend Andrew Winston’s blog, where he has a good post about how the authors kind of miss the point about climate change…and he also has a series of links to other blog posts debunking this one chapter.  If you’re into the topic, or if you read the book, follow the chain here for good reading.  My conclusion about this chapter, being at least somewhat informed about the climate change debate, is that the book seems to have sloppy writing and editing at best, possibly deliberately misleading at worst.  (Incidentally, the reaction in the blogosphere seems highly emotional, other than Andrew’s, which probably doesn’t serve the reactors well.)

But I’ll assume the best of intentions.  Some of the points made aren’t bad – there is no debate about the problem or the need to solve it, the authors express legitimate concern that current solutions, especially those requiring behavioral change, will be too little too late, and most interestingly, they show an interest in alternative approaches like geo-engineering.  I hadn’t been familiar with that topic at all, but I’m now much more interested in it, not because it’s a “silver bullet” approach to dealing with climate change, but because it’s a different approach, and complex problems like climate change deserve to have a wide range of people working on multiple types of solutions.  I met Nathan Myhrvold once (I almost threw up on him during a job interview, which is another story for another day), and it makes me very happy that his brilliance is being applied to this problem as a general principle.

As I said, though, beyond this one chapter, the book is good-not-great.  But it certainly is chock full of cocktail party nuggets!

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

Entrepreneur’s Perspective on Non-Competes

(Note: I just found this post in the “drafts” folder and realize I never put it up! It was written months ago, although I just updated it a bit.)

Bijan Sabet kicked off the discussion about non-competes by asserting that they are a barrier to innovation and that they are unenforceable in California anyway, so why bother?

Fred continued the discussion and made some good assertions about the value of non-competes, summarizing his points as:

Non-competes are very much in the interests of our portfolio companies. But the non-competes need to be tightly defined and the term of the non-compete needs to be paid for by the portfolio company if the employee was forced out of the company. The non-competes should certainly apply to all senior management team members and all key employees (like star engineers and such). It takes a lot of work to build a company. You should not risk all that knowledge and talent being able to walk out the door and set up shop across the street.

Brad and Jason/Ask the VC are generally on board with Fred’s view.

We’ve had non-competes since the beginning at Return Path.  I am generally in agreement with Fred’s parameters, but to spell out ours:

1. Our non-competes are very narrowly defined.  I had a very bad taste in my mouth when AOL acquired my former company, MovieFone, back in 1999 and stuck a 3-year non-compete in front of me that would have prohibited me from working anywhere else in the Internet.  I think the language was something like “can’t work in any business that competes with AOL or AOL’s partners in the businesses they are in today or may enter in the future.”  It was just silly.  Our non-competes apply very narrowly to existing direct competitors of the part of Return Path in which the given employee works.

2. We do not pay for non-competes.  Because our non-competes are very narrowly defined, we don’t expect to pay for someone to sit on the sidelines.  If people leave, or even if people are fired, they have 99.99% of the companies in the world as potential employers. 

3. We are willing to excuse people from non-competes if they are laid off.  Fair is fair.  However, we still expect our confidentiality and non-solicit agreements to remain in full force.

4. Everyone signs the same non-compete.  100% of the people, 100% of the time.  Same language.  No exceptions.  Again, this comes back to how narrowly defined the non-compete is.  It shouldn’t just be limited to senior executives.  Obviously you have to respect local laws of places like California or   Europ which have different views of non-competes.  If these cause in equalities in your employee base by geography, we make an effort to “re-equalize” in other ways.

5. We enforce non-competes in all situations.  I don’t believe in selective enforcement.  That sends the wrong message to employees.  We have had a couple instances where junior people have left and brazenly gone to a competitor.  While we have never blocked someone from starting a new job, we would if there wasn’t another resolution.  Fortunately, in those cases for us, we have contacted the employee and the hiring company and been able to work out a deal — the employee went to work in a non-competitive part of the new company, we struck a commercial relationship between us and the hiring company, etc.

6. We try to play by the rules when hiring people who have non-competes.  I think consistency is important here show to employees.  If we expect people to respect our non-compete, we should respect other companies’ non-competes.  This doesn’t mean we don’t try hard to lure competitors’ people to us when the situation warrants — it just means that if a non-compete is relevant and in effect, we will either make a deal with the other company, or in special circumstances, we will pay the employee to sit on the sidelines and ride out the non-compete.  This is a tricky process, but we’ve had it work before, and we’d do it again for the right person.

Our people and intellectual capital are a huge source of competitive advantage.  They are also the product of massive investment that we make in developing our people.  A good, narrow, non-compete is important for the company and can be done in ways that are fair to employees who are the beneficiaries of the training and development as well as their employment.  I think that’s part of the social contract of a great workplace.  Non-competes don’t stifle innovation — they protect investments that lead to innovation.  I suppose the same argument could be made of patents, some of which make more sense than others, but that’s the subject of another rant sometime.

But at the end of the day, it’s up to us to retain our people by providing a great place to work and advance careers so this whole thing is a non-issue!

Pendulum Swinging Back?

The TechCrunch news du jour is that Jason Calacanis has stopped blogging and is instead using email to communicate with his circle. 

It’s interesting to note that after months (years?) of “email is dead” stories specifically around blogging, RSS feeds, and social media in general, the pendulum seems to be swinging back to email.  You should read Jason’s words yourself, but his notes are mainly that there’s too much noise and self-promotion in the blogosphere, while email promotes intimacy and efficiency.

Not surprisingly, TechCrunch is a doubter, but we’ll have to see.

Book Short: What’s For Dinner Tonight, Honey?

The Paradox of Choice: Why More is Less, by Barry Schwartz, presents an enlightening, if somewhat distressing perspective on the proliferation of options and choices facing the average American today. The central thesis of the book is that some choice is better than no choice (I’d rather be able to pick blue jeans or black jeans), but that limited choice may be better in the end than too much choice (how do I know that the jeans I really want are relaxed cut, tapered leg, button fly, etc.?). We have this somewhat astonishing, recurring conversation at home every night, with the two of us sitting around paralyzed about where to eat dinner.

The author’s arguments and examples are very interesting throughout, and his “Laffer curve” type argument about choice vs. too much choice rings true. While there’s obviously no conclusive proof about this, the fact that our society is more rife with depression than ever before at least feels like it has a correlation with the fact that most of us now face a proliferation of choices and decisions to make exponentially more than we used to. The results of this involve ever-mounting levels of regret, or fear of regret, as well as internal struggles with control and expectations. Perhaps the best part of the book is the final chapter, which ties a lot of the material of the book together with 11 simple suggestions to cope better with all the choices and options in life — summed up in the last few words of the book suggestions that “choice within constraints, freedom within limits” is the way to go. Amen to that. We all need some basic structure and frameworks governing our lives, even if we create those constructs ourselves. The absence of them is chaos.

Overall, this is a good social science kind of read, not overwhelming, but definitely interesting for those who are students of human psychology, marketing, and decision making. It’s squarely in the genre of Gladwell’s The Tipping Point and Blink, and Robert Cialdini’s Influence, most of which I’ve written about recently, and though not as engaging as Gladwell, worth a read on balance if you like the genre.

Thanks to my friend Jonathan Shapiro for this book.

In Search of Automated Relevance

A bunch of us had a free form meeting last week that started out as an Email Summit focused on protocols and ended up, as Brad put it, with us rolling around in the mud of a much broader and amorphous Messaging Summit.  The participants (and some of their posts on the subject) in addition to me were Fred Wilson (pre, post), Brad Feld,  Phil Hollows, Tom Evslin (pre, post), and Jeff Pulver (pre, post).  And the discussion to some extent was inspired by and commented on Saul Hansell’s article in the New York Times about “Inbox 2.0” and how Yahoo, Google, and others are trying to make email a more relevant application in today’s world; and Chad Lorenz’s article in Slate called “The Death of Email” (this must be the 923rd article with that headline in the last 36 months) which talks about how email is transitioning to a key part of the online communications mix instead of the epicenter of online communications.

Ok, phew, that’s all the background. 

With everyone else’s commentary on this subject already logged, most of which I agree with, I’ll add a different $0.02.  The buzzword of the day in email marketing is “relevance.”  So why can’t anyone figure out how to make an email client, or any messaging platform for that matter, that starts with that as the premise, even for 1:1 communications?  I think about messaging relevance from two perspectives:  the content, and the channel.

Content.  In terms of the content of a message, I think of relevance as the combination of Relationship and Context.  The relationship is all about my connection to you.  Are you a friend, a friend of a friend, or someone I don’t know that’s trying to burrow your way onto my agenda for the day?  Are you a business that I know and trust, are you a carefully screened and targeted offer coming from an affiliate of a business I trust, or are you a spammer? 

But as important as the relationship is to the relevance of your message to me, the context is equally important.  Let’s take Brad as an example.  I know him in two distinct contexts:  as one of my venture investors, and as an occasional running partner.  A message from Brad (a trusted relationship) means very different things to me depending on its context.  One might be much more relevant than the other at any moment in my life.

Channel.  The channel through which I send or receive a message has an increasing amount to do with relevance as well.  As with content, I think of channel relevance as the combination of two things –  device, and technology.  For me, the device is limited to three things, two with heavy overlap.  The first is a fixed phone line – work or home (I still think cell service in this country leaves a lot to be desired).  The second is a mobile device, which could mean voice but could also mean data.  The third is a computer, whether desktop or laptop.  In terms of technology, the list is growing by the day.  Voice call, email, IM, Skype, text message, social network messaging, and on and on.

So what  do I mean about channel relevance?  Sometimes, I want to send a message by email from my smartphone.  Sometimes I want to send a text message.  Sometimes I want to make a phone call or just leave a voicemail.  Sometimes I even want to blog or Twitter.  I have yet to desire to send a message in Facebook, but I do sometimes via LinkedIn, so I’m sure I’ll get there.  Same goes for the receiving side.  Sometimes I want to read an email on my handheld.  Sometimes a text message does the job, etc.  Which channel and device I am interested in depends to some extent on the content of the message, per above, but sometimes it depends on what I’m doing and where I am.

So what?  Starting to feel complex?  It should be.  It is.  We all adjusted nicely when we added email to our lives 10 years ago.  It added some communication overhead, but it took the place of some long form paper letters and some phone calls as well.  Now that we seem to be adding new messaging channels every couple weeks, it’s becoming increasingly difficult to get the relevance right.  Overlaying Content (Relationship and Context) with Channel (Device and Technology) creates a matrix that’s very difficult to navigate.

How do we get to a better place?  Technology has to step in and save the day here.  One of the big conclusions from our meeting was that no users care about or even know about the protocol – they just care about the client they interact with.  Where’s the ultra flexible client that allows me to combine all these different channels, on different devices?  Not a one-size-fits-all unified messaging service, but something that I can direct as I see fit?  There are glimmers of hope out there – Gmail integrating IM and email…Simulscribe letting me read my voicemail as an email…Twitter allowing me to input via email, SMS, or web…even good old eFax emailing me a fax – but these just deal with two or three cells in an n-dimensional matrix.

As our CTO Andy Sautins says, software can do anything if it’s designed thoughtfully and if you have enough talent and time to write and test it.  So I believe this “messaging client panacea” could exist if someone put his or her mind to it.  One of the big questions I have about this software is whether or not relevance can be automated, to borrow a phrase from Stephanie Miller, our head of consulting.  Sure, there is a ton of data to mine – but is there ever enough?  Can a piece of software figure out on its own that I want to get a message from Brad about “running” (whatever channel it comes in on) as a text message on my smartphone if we’re talking about running together the next day, but otherwise as an RSS feed in the same folder as the posts from his running blog, but a voicemail from Brad about “running the company” (again, regardless of how he sends it) as an email automatically sorted to the top of my inbox?  Or do I have to undertake an unmanageable amount of preference setting to get the software to behave the way I want it to behave?  And oh by the way, should Brad have any say over how I receive the message, or do I have all the control?  And does the latter question depend on whether Brad is a person or a company?

What does this mean for marketers?  That’s the $64,000 question.  I’m not sure if truly Automated Relevance is even an option today, but marketers can do their best to optimize all four components of my relevance equation:  content via relationship and context, and channel via device and technology.  A cocktail of permission, deep behavioral analysis, segmentation, smart targeting, and a simple but robust preference center probably gets you close enough.  Better software that works across channels with built-in analytics – and a properly sized and whip smart marketing team – should get you the rest of the way there.  But technology and practices are both a ways off from truly automated relevance today.

I hope this hasn’t been too much rolling around in the mud for you.  All thoughts and comments (into my fancy new commenting system, Intense Debate) are welcome!

Clients at Different Levels

Recently, I’ve become more aware that we have a huge range of clients when it comes to the level of the person we interact with at the client organization.  I suppose this has always been true, but it’s struck me much more of late as we’ve really ramped up our client base in the social networking/web 2.0 arena, where most of our clients are CEOs and COOs as opposed to Email Marketing Managers.

Of course, we don’t care who our day-to-day client is, as long as the person is enough of a decision maker and subject matter expert to effectively partner with us, whether it’s on deliverability via Sender Score or on list management or advertising via the Postmaster Network.  There are two main differences I have seen between the levels of client.  I suppose neither one is an earth-shattering revelation in the end, though.

First, the CEO/COO as client tends to be a MUCH MORE ENGAGED and knowledgeable client.  Some of these people know far, far more about the ins and outs of micro details of their businesses (and in the case of deliverability, the micro details of how ISPs filter email) than our average client.  I’d expect this type of client to be in command of the macro details of his or her business, but the level of "in the weeds" knowledge is impressive.  These clients are thirsty for information that goes beyond the scope of our work together.

Second, the CEO/COO as client is MUCH MORE PASSIONATE about his or her business.  It pisses them off when their email doesn’t get delivered.  They care deeply that our Postmaster opt-in might impact their registration rates by 0.5%.  They get very animated in discussions and tend to nod and gesture a lot more than take notes in a notebook.

My main takeaway from this?  If you run a business — how do you make sure your front line people are as fired up as you are?  You may never be able to give people the same kind of macro view you have of the company or the industry (although you can certainly make a good effort at it), but keeping people excited about what they do and igniting their intellectual curiosity on a regular basis will almost certainly lead to more successful outcomes in the details of your company.

The Wheels of Justice Move Slowly

I am on Jury Duty this week, or Jury Service, as it seems to have been renamed since the last time I did it.  Although it’s a pain and disruptive to my schedule, I never mind doing this — it’s all part of the social contract here, right? 

I have two main observations so far from my general view of the world:

1.  How on earth does the justice system actually function?  "Business hours" are basically 10-12 and then 2:30-4:00.  I assume that at least some work happens before and after, but yeesh.  If I ran my business that way…well, you know.  Could it be that our government might be a little more effective if people worked a little more?

2.  On a very impressive note, the courthouse now has free wi-fi in it.  You should have heard people applaud when the clerk announced that.  The processes and systems may be antiquated here, but at least they figured this one thing out!

Personal Reputation

There was a recent New York Times article that covered a relatively new company called Rapleaf that aggregates publicly available and privately submitted data about individuals, mostly from social networks, and then resells that data in bulk to marketers to help them target advertising more effectively, supposedly to names they already have permission to mail.  I’m sure the company would think I butchered that description, but it’s close, anyway.

While there are a lot of comments and posts flying around about the ethics of that data collection, I won’t focus on that here.  Publicly available data is publicly available data.  This isn’t a lot different than banks swapping your data to create a FICO score, Abacus swapping your purchase data to cataloggers, or InfoUSA compiling tax and DMV records.

What I think is interesting is the notion of having a global online personal reputation, which, despite Rapleaf’s verbiage, isn’t exactly what they’re doing at scale just yet.  I have often wondered if such a thing would work, especially since Return Path has gotten big into the corporate reputation business through our Sender Score service that monitors companies’ email sending reputations.

Here’s why I think it’s a good idea: the world of peer production and user generated content means that everyone can publish any media at any time.  As a result, the amount of content that’s available out there has exploded to unmanageable proportions.  Lots of sites are and have been working on making it easier to find and discover stuff.  That’s a good start.  But how are we going to start figuring out what things we want to consume and who to trust when even the most efficient search and discovery mechanisms produce too many options?  Think about it like this — you’d never buy something on eBay from someone who had a crappy seller reputation as noted by other eBay buyers who had bought things from the same seller.  Would you watch a random YouTube video (even if you liked the subject) if the producer had a horrible rating?  Would you bother trying to get into that person’s blog?  Would you allow someone to introduce that person to you via LinkedIn?

Here’s why I think it will be difficult to make it work: I’m not convinced that there is such a thing as an accurate universal measure of someone’s reputation.  Yes,  you CAN certainly aggregate a lot of information about people from publicly available sources online.  And many of those sources do have data that point to someone’s reputation.  But do they translate well across sources and dimensions?  To go back to the prior example, if a person has a bad reputation as a seller on eBay…does that mean I don’t want to read his blog?  Or just that I don’t want to buy stuff from him sight unseen?  He might be a marvelous writer but a thief.  Or maybe he has a great credit score but is lousy at follow up.  Also, the notion that someone can lobby for and garner a whole slew of private recommendations from friends on the system, while a nice idea to complement and correct inaccuracies of public data, feels like a system ripe for gaming.

Anyway, it’s an interesting concept, and I look forward to seeing how it unfolds.

Keeping Commitments

Today’s post is another in the series about our 13 core values at Return Path, about making commitments.  The language of our value specifically is:

We believe in keeping the commitments we make, and we communicate obsessively when we can’t

Making and keeping commitments is not a new value – it’s one of Covey’s core principles if nothing else.  I’m sure it has deeper roots throughout the history of mankind.  But for us, this is one of those things that is hard wired into the social contract of working here.  The value is more complicated than some of the other ones we have, and although it is short, it has three components that worth breaking down:

• Making commitments:  Goal setting, whether big company-wide goals, or smaller “I’ll have it to you by Tuesday” goals, is the foundation for a well-run, aligned, and fast-paced organization
  
• Keeping commitments:  If you can’t keep the overwhelming majority of your commitments, you erode the trust of your clients or colleagues and ultimately are unable to succeed
  
• Communicating when commitments can’t be met:  Nobody is perfect.  Sometimes circumstances change, and sometimes external dependencies prevent meeting a goal.  The prior two parts of this value statement are, in my mind, pay to play.  What separates the good from the great is this third piece — owning up loud and clear when you’re in danger of blowing a goal so that those who are counting on you know how to reset their own work and expectations accordingly
  

It’s worth noting on this one that the goal is as relevant EXTERNALLY as it is INTERNALLY.  Internal commitments are key around building an organization that knows how to collaborate and hand work off from group to group.  External commitments — from meeting investor expectations to client deliverables — keep the wheels of commerce flowing.

I’m enjoying articulating these values and hope they’re helpful for both my Return Path audience and my much larger non-Return Path audience.  More to come over time.

An Execution Problem

My biggest takeaway from the TED Conference this week is that we — that is to say, all of us in the world — have an execution problem.  This is a common phrase in business, right?  You’ve done the work of market research, positioning, and strategy and feel good about it.  Perhaps as a bigger company you splurge and hire McKinsey or the like to validate your assumptions or develop some new ones.  And now all you have to do is execute — make it happen.  And yet so many businesses can’t make the right things happen so that it all comes together.  I’d guess, completely unscientifically, that far, far more businesses have execution problems than strategic ones.  Turns out, it’s tough to get things to happen as planned BUT with enough flexibility to change course as needed.  Getting things done is hard.

So what do I mean when I say that humanity has an execution problem?  If nothing else, the intellectual potpourri that is TED showed me this week that we know a lot about the world’s problems, and we don’t lack for vision and data on how to solve them.  A few of the things we heard about this week are the knowledge — and in many cases, even real experiences — about how to:

– Steer the evolution of deadly disease-causing bacteria to make them more benign within a decade

– Build world class urban transportation systems and growth plans to improve urban living and control pollution

– Drive down the cost of critical pharmaceuticals to developing nations by 95%

– Dramatically curb CO2 emissions

We have the knowledge, and yet the problems remain unsolved.  Why is that?  Unlike the organized and controlled and confined boundaries of a company, these kinds of problems are thornier to solve, even if the majority of humans agree they need to be solved.  Whether the roadblock is political, financial, social — or (d) all of the above — we seem to be stuck in a series of execution problems.

The bright spot out of all of this (at least from this week’s discussions) is that, perhaps more than ever before in the history of mankind, many of our most talented leaders AND our wealthiest citizens are taking more of a personal stake in not just defining the problems and solutions, but making them happen.  They’re giving more money, buiding more organizations, and spending more time personally influencing society and telling and showing the stories.  It will take years to see if these efforts can solve our execution problems, but in the meantime, the extraordinary efforts are things we can all be proud of.