Response to a Deliverability Rant

Justin Foster from WhatCounts, an email service provider based in Seattle, wrote a very lengthy posting about email deliverability on the WhatCounts blog yesterday.  There’s some good stuff in it, but there are a couple of things I’d like to clarify from Return Path‘s perspective.

Justin’s main point is spot-on.  Listening to email service providers talk about deliverability is a little bit like eating fruit salad:  there are apples and oranges, and quite frankly pineapples and berries as well.  Everyone speaks in a different language.  We think the most relevant metric to use from a mailer’s perspective is inbox placement rate.  Let’s face it – nothing else matters.  Being in a junk mail folder is as good as being blocked or bounced.

Justin’s secondary point is also a good one.  An email service provider only has a limited amount of influence over a mailer’s inbox placement rate.  Service providers can and must set up an ironclad email sending infrastructure; they can and must support dedicated IP addresses for larger mailers; they can and must support all major authentication protocols — none of these things is in any way a trivial undertaking.  In addition, service providers should (but don’t have to) offer easy or integrated access to third-party deliverability tools and services that are on the market.  But at the end of the day, most of the major levers that impact deliverability (complaint rates, volume spikiness, content, registration/data sources/processes) are pulled by the mailer, not the service provider.  More on that in a minute.

I’d like to clarify a couple of things Justin talks about when it comes to third-party deliverability services.

Ok, so he’s correct that seed lists only work off of a sample of email addresses and therefore can’t tell a mailer with 100% certainty which individual messages reach the inbox or get blocked or filtered.  However, when sampling is done correctly, it’s an incredibly powerful measurement tool.  Email deliverability sampling gives mailers significantly more data than any other source about the inbox placement rate of their campaigns.  Since this kind of data is by nature post-event reporting, the most interesting thing to glean from it is changes in inbox placement from one campaign to another.  As long as the sampling is done consistently, that tells a mailer the most critical need-to-know information about how the levers of deliverability are working.

For example, we released our semi-annual deliverability tracking study for the first half of 2005 yesterday, which (download the whitepaper with tracking study details here or view the press release here).  We don’t publicly release mailer-specific data, but the data that went into this study about specific clients is very telling.  Clients who start working with us and have, say a 75% inbox placement rate — then work hard on the levers of deliverability and raise it to 95% on a sampled basis, can see the improvements as their sales and other key email metrics jump by 20%.  Just because there’s a small margin of error on the sample doesn’t render the process useless.

Second, Justin issues a big buyer beware about Bonded Sender and other “reputation” services (quotes deliberate – more on that in a minute as well).  Back in June, we released a study about Bonded Sender clients which showed that mailers who qualified for Bonded Sender saw an average of a 21% improvement in inbox delivery rates (range of 15%-24%) at ISPs who use Bonded Sender such as MSN, Hotmail, and Roadrunner.  We were pretty careful about the data used to analyze this.  We only looked at mailers who were clients both before and after joining the Bonded Sender program for enough time to be relevant, and we looked at a huge number (100,000+) of campaigns.  Yes, it’s still “early days” for accreditation programs, but we think we’re off to a good start with them given this data, and the program isn’t all that expensive relative to what mailers pay for just about everything else in their email deployment arsenal.

Finally, let me come back to the two “more on that in a minute” points from above.  I’ll start with the second one — Bonded Sender is an accreditation program, or a whitelist, NOT a reputation service.  Accreditation and Reputation services are both critical components in the fight to improve inbox placement of legitimate, permissioned, marketing emails, but they’re very different kinds of programs (a little background on why they’re important and how they fit with authentication here).

Accreditation services like Bonded Sender work because, for the very best mailers, third parties like TRUSTe essentially vouch that a mailer is super high quality — enough so that an ISP can feel comfortable putting mail from that mailer in the inbox without subjecting it to the same level of scrutiny as random inbound mail.

There are no real, time-tested reputation services for mailers in the market today.  We’re in the process of launching one now called Sender Score.  Sender Score (and no doubt the other reputation services which will follow it) is designed to help mailers measure the most critical levers of deliverability so they can work at solving the underlying root cause problems that lead to low inbox placement.  This is really powerful stuff, and it will ultimately prove our (and Justin’s) theory that mailers have much more control over their inbox placement rate/deliverability than service providers.

Where does all this lead?  Two simple messages:  (1) if you outsource your email deployment to an email service provider, pick your provider carefully and make sure they do a good job at the infrastructure-related levers of email deliverability that they do control.  (2) whether you handle email deployment in-house or outsource it to a service provider, your inbox placement rate is largely in your control. Make sure you do everything you can to measure it and look closely at the levers, whether you work with a third-party deliverability service or not.

Apologies for the lengthy posting.

The Value (and Limitations) of Benchmarking

I think I am starting to drive my team nuts a little bit. I have suggested, prodded, and executed a ton of external benchmarking projects this year, all of which have different leaders inside Return Path doing both systematic and ad hoc phone calls and meetings with peer companies and aspirational peer companies to understand how we compare to them in terms of specific metrics, practices, and structures.  It’s some combination of the former management consultant in me rearing its head, and me just trying to make sure that we stay ahead of the curve as we rapidly scale our business this year.

Why go through an exercise like this?  One answer is that you don’t want to reinvent the wheel.  If a non-competitive comparable company has solved a problem or done some good creative thinking, then I say “plagiarize with pride,” especially if you’re sharing your best practices with them.  The reality of scaling a business is that things change when you go from 50 to 100 people, or 150 to 300, or 300 to 1,000 — and unless you and your entire executive team have “been there, done that” at all levels, or unless you are constantly replacing execs, there’s not exactly an instruction manual for the work you have to do.

But a second, equally valuable answer, is that benchmarking can uncover both problems and opportunities that you didn’t know you had, or at least validate theories about problems and opportunities that you suspect you have.  Learning that comparable companies convert 50% better on their marketing funnel than you do, or that they systematically raise prices 5-7% per year regardless of new feature introduction (I’m just making these examples up) can help you steer the ship in ways you might not have thought you needed to.

What are the limitations of benchmarking?  As our CTO Andy said to me the other day, sometimes no one else has the answer, either.  We do run into this regularly – for example, a tough technical problem where literally no one else does it well like disaster recovery.  Or in how to solve channel conflict problems or streamline commission plans.

Also, sometimes you find out that you are actually best in class at a particular function.  In those cases, while one could just chalk up the exercise to a waste of time, I still think there is learning to be had from studying others.  And if there are a couple other companies who are also best in class, I always encourage group brainstorming among the top peers about how to push the envelope further and be even better.  This can even take the form of a regular peer group meeting/forum.

On the whole, I find benchmarking a good management practice and in particular a good use of time.  But like everything, it’s situational, and you have to understand what you’re looking for when you start your questioning.  You also have to be prepared to find nothing – and go back to your own drawing board.  Good entrepreneurs have to be great at both inventing and, as I noted above, plagiarizing with pride.

(The following post was written by one of Return Path’s long-time senior managers, Chris Borgia, who runs one of our data science teams and has run other support organizations in the past, both at Return Path and at AOL.  I don’t usually run guest posts, but I loved the topic with Chris suggested it, and it’s a topic that I’d only have a limited perspective on!)

Managing Up in a Growing, Global Workplace

For many years, I thought “managing up” was a cheap way of getting ahead. I thought someone who managed up was skilled at deceiving their boss into thinking they were more accomplished than they really were.

I have since learned that managing up, or managing your boss, is not devious, but is actually a valuable discipline. When you learn to manage up successfully, you empower your boss to better represent your interests to influencers in the organization.

If you are a manager, you should realize that in addition to managing your boss, you can help your employees effectively manage you. When our employees help us to be successful, we are further enabled to invest in their success. This symbiosis is seen in any relationship – the more you help the other person, the more they will be able to – and want to – help you. If you are a manager, it’s important to realize that your employees should be managing up, and you can encourage them to do so by being vulnerable, admitting ignorance, and asking for support.

There are many books and articles on managing up or managing one’s boss. The essentials are fairly consistent:

• Understand your boss’s goals, priorities, and needs
• Know your boss’s strengths and weaknesses
• Set mutual expectations to build trust
• Communicate and keep your boss informed

You’ll need to be intentional about the essentials no matter where you work, but there are additional challenges of managing up in a growing, global workplace like Return Path. In a growing company, you’re likely to work for a boss who is new to their role, the company or the industry. In a global company, you may report to a boss who works in another office, or even in another country. The fundamental aspects of managing up are the same, but these situations can require a tailored approach.

When your boss is new to their role, the company, or the industry

In a growing company, you’re likely to report to someone who is new to their role in the company, new to the company itself, or even new to the industry. You can be invaluable to your boss in closing the knowledge gap and enabling them to make the best decisions for you and your team.

• Process Help your boss understand how the department operates. How are goals and priorities determined? How do people communicate? What does the team expect from the boss?
• People If your boss doesn’t know the people, they may lack the appropriate empathy in a given situation. Help them understand your team’s needs and how their decisions impact the people.
• Decision Making Your boss will likely need additional data to help them make decisions. Providing your boss with this data up front, saving them from admitting ignorance, will go a long way to developing a strong relationship.
• Context Sometimes your boss won’t know what they don’t know, so providing your boss the context around issues, decisions, and goals will enable them to make the best decisions for your team.

When your boss works in another office or country

In a global workplace, it’s likely that at some point you will have a boss who works in another office or even in another country. Having a remote boss offers many opportunities for managing up.

• Visibility Your boss doesn’t see you – or possibly others on the team – every day, so you might want to communicate more about the day-to-day operations of the team. At times, it will feel like you are sharing minutia, but it’s likely your boss will find this valuable in developing a complete understanding of what is going on.
• Insight If you work in a core office, you have a tremendous opportunity to be your boss’s eyes and ears.  What are you seeing or hearing locally that might change your boss’s plans or perspective? What are people worried about? Are there any rumors your boss should be aware of?
• Culture If your boss is in a different country, you will need to develop a relationship that considers any cultural differences. Cultural differences are seen in office attire, working hours, email habits, vacation schedules, and more. Bosses in some cultures may expect more deference, while in others they may expect more direct honesty. Understanding your boss’s culture, and helping her understand yours, will develop mutual respect and expectations to make each other successful.

Your relationship with your boss is a symbiotic one. Your boss can’t be successful unless you are, so they are your champion.  Learning to effectively manage up, especially in a growing, global workplace, is not nefarious business. Your boss will represent and support you to the best of their abilities. The more you enable your boss, the better they can support you, and everybody wins.

The People Who Go the the Trainer the Most Are the Onese Who Were int eh Best Shape to Begin With

Have you ever noticed this?  That the people working out with trainers in the gym are usually in great shape?  So why do they keep working with the trainer?  So they maintain their awesome level of fitness, of course!

The lesson for business is the same.  Just because you have a strong suit doesn’t mean you can afford to ignore it and rest on your laurels (at least not for very long).  This is true in good times, and in bad times. 

When things are going well, it can feel like it’s the right time to turn your focus to new things, or to fixing broken things.  And that is true to some extent, but it can’t come at the expense of continuing to develop what’s working.

And the temptation to “cut and coast” in the areas of the business that are working well is especially strong when times get tough and resources are stretched.  In fact, the situation is the opposite.  When times get tough and resources are stretched, it’s even more important to double down on the parts of the business that work well. 

Why is all of this true? 

–Your strong suits have a disproportionate impact on business results.  Are you a product-first organization?  Then great product is what makes your organization successful.  Keep producing more of it.  Are you a sales-dominant organization?  Sell more.   Are you a people-first organization?  Your people don’t become less important over time.  Why would you – in any business environment – do less of what makes you successful?

– Your strong suits are bellwethers for employee insight into the organization.  The things that your company does that are best in class are the things that employees take their cues from, and that employees have the most pride in.  Let those things go – and you risk alienating your most enthusiastic employees.  This isn’t to say that companies should have “third rails,” things that are the equivalent of Social Security or the Pentagon, where the minute someone talks about a budget cut, hysteria ensues.  And it’s not about silly perks (you can be a people-first organization whether or not you have “bring your pet to work day”).  But whatever is important to you one day can’t suddenly be unimportant the next day without risking a high degree of employee whiplash.

– Your strong suits compensate for your weaknesses.  The last two points are all about strong suits being out in front.  But I’d argue that your strong suits do more than that.  They protect you from your weaknesses.  Think about it metaphorically, and relating back to the title of this post, think about the body.  When you have a broken leg, your arms get stronger because you need to use them to crutch yourself around.  If you also broke your arms, you’d have a real problem!  In business, it’s the same.  Strong sales teams tend to compensate for weak marketing teams – invest less in sales, it actually hurts marketing, too.  Strong product can compensate for weak sales teams – so more stagnant product hits twice as hard.

All this may sound obvious.  There are other comparable axioms like “put your best people on your biggest opportunities,” and “manage to your strengths and compensate for your weaknesses.”  And yet, the temptations to coast are real.  So get going to that gym and see your trainer for your weekly appointment.  Even if you’re in great shape.

Part of creating the best place to work  is learning how to self manage – very, very well.  This is an essential part of Creating an environment of trust , but only one part.  What does self-management mean?  First, and most important, it means realizing that you are in a fishbowl.  You are always on display.  You are a role model in everything you do, from how you dress, to how you talk on the phone, to the way you treat others, to when you show up to work. 

But what are some specifics to think about while you swim around in your tank?

1. Don’t send mixed signals to the team.  You can’t tell people to do one thing, then do something different yourself
2. Remember the French Fry Theory of being a CEO.  My friend Seth has the French Fry theory of life, which is simply that you can always eat one more French fry.  You’re never too full for one more fry.  You might not order another plate of them, but one more?  No problem.  Ever.  As a CEO, you can always do one more thing.  Send one more email.  Read one more document.  Sometimes you just need to draw the line and go home and stop working!  (See my earlier post  here  on how Marketing is like French Fries for another example.)
3. Regularly solicit feedback, then internalize it and act on it.  Do reviews for the company.  Do anonymous 360s (I’ve written about these regularly here). Get people a review that has ratings and comments from their boss, their peers, and their staff.  Do them once a year at a minimum.  And do one for yourself.  They’re phenomenal.  Everyone needs to improve, always.  Our head of sales Anita always says “Feedback is a gift, whether you want it or not.”  Make sure you do them for yourself as well.  Include your Board.  If you don’t agree with the feedback you are being given that is likely a data point that you have a BLIND SPOT.  Being defensive about feedback is dangerous.  If you don’t get it/don’t like then do some more work to better understand it.  Otherwise you will forever be defensive and never develop in this area
4. Maintain your sense of humor.  It’s not only the best medicine, it’s the best way to stay sane and have fun.  Who doesn’t want to have fun at work?
5. Keep yourself fresh:  Join a CEO peer group.  Work with an executive coach.  Read business literature (blogs, books, magazines) like mad and apply your learnings.  Exercise regularly.  Don’t neglect your family or your hobbies.  Keep the bulk of your weekends, and at least one two-week vacation each year, sacrosanct and unplugged.  As Covey would say, Sharpen the Saw

You set the tone at your company.  You can’t let people see you sweat too much – especially as you get bigger.  You can’t come out of your office after bad news and say “we’re dead!”  You can make a huge difference by being a great role model, swimming around in your fishbowl.

Return Path Makes The List of “Best Places to Work” in Colorado

Long-time readers of this blog no doubt understand my central philosophy when it comes to management.   I believe that people come first.  When employees are happy they make our clients happy.  Happy clients happily pay for our services, which tends to make our investors happy.  When you start with the people, everyone wins.

At Return Path we invest a lot in our people.  And we invest a lot in Team People – what we call “Human Resources” – to support those people. 

So what a great honor to see all that hard work and investment pay off in the form of a “Best Places to Work” honor!  The Society for Human Resources Management named us one of its “Best Places to Work in Colorado” at an awards banquet last Friday.  You can read more about how we won this award on the Return Path blog.

Of course a CEO can set the agenda and make certain decisions to support a great work environment.  But it is the 150 people who come to Return Path every day who make it the amazing place that it is.  I could not be more thankful for each and every one of them – their passion, dedication, teamwork and kindness all come together to create a company that I would want to work for even if I wasn’t the CEO.

The Best Place to Work, Part 4: Be the Consummate Host

Besides Surrounding yourself with the best and brightest , Creating an environment of trust,  and Managing yourself very, very well, it’s important for you as a creator of The Best Place to Work to Be the Consummate Host.

What does that mean?  This is how I approach my job every day.  I think of the company as a party, where I’m the host.  I want everyone to have a good time.  To get along with the other guests.  To be excited to come back the next time I have a party (e.g., every day).

By the way, I always have co-hosts, as well – anyone who manages anyone in the company.  If I can’t do something specific below, someone on my executive team does it.  Sometimes, two of us do it!  Examples include:

• I interview people like I’m a bouncer at an exclusive club.  We do very personal new employee orientations.  We do personal check-ins after 30 and 90 days to make sure new employees are on track
• I attend every company function that I can and work the room as a host, even if it’s not “my” event – sometimes it means sacrificing long conversations and conversations with friends for smaller ones and meeting new people
• I call every employee (voicemail ok) and write a note and/or send a gift every anniversary of their employment with the company
• I write notes to people when they do something great or get a promotion

Full series of posts here.

OnlyOnce is 8 years old this week, which is hard to believe. So it is fitting that I got halfway through a new post this morning, then a little alarm bell went off in my head that I had written something similar before.  The topic is around moderation versus extremes.  I first wrote about this topic in 2005 in a post called Shifting Gears but I have thought about it more recently in a different way. 

Instead of phrasing this as a struggle between “Meden Agan,” which is Greek for “everything in moderation,” and “Gor oder gornischt,” which is Yiddish for “all or nothing,” I’d like to focus here on the value of occasionally going to an extreme. And that value is around learning. Let me give three examples:

-We were having a buy vs. build conversation at work a few months back as we were considering an acquisition. Some people in the room had an emotional bias towards buy; others toward build. So we framed the debate this way:  “Would you acquire the company for $1 instead of building the technology?” (Yes!) “Would you buy it for $10mm?” (No!) Taking the conversation to the extremes allowed us to focus on a rational answer as opposed to an emotional one — where is the price where buy and build are in equilibrium?

– With my colleague Andrea, I completed a 5-day juice fast a few weeks back. It was good and interesting on a bunch of levels. But I came away with two really interesting learnings that I only got from being extreme for a few days:  I like fruits and veggies (and veggie juices) a lot and don’t consume enough of them; and I sleep MUCH better at night on a relatively empty stomach

– Last year, I overhauled my “operating system” at work to stop interviewing all candidates for all jobs and stop doing 90-day 1:1 meetings with all new employees as well. I wrote about this in Retail, No Longer. What finally convinced me to do it was something one of my colleagues said to me, which was “Will you be able to keep these activities up when we have 500 employees?” (No) “So what is the difference if you stop now and save time vs. stopping in 6 months?” Thinking about the extreme got me to realize the full spectrum

It may not be great to live at the extremes, but I find extremes to be great places to learn and develop a good sense of what normal or moderate or real is.

In From the Perimeter

I’m at the Direct Marketing Association’s annual massive trade show (DMA*05) in Atlanta.  While there are lots of things to potentially blog about, I think the most interesting one is the simplest.  When I started attending the DMA’s shows six years ago, the only interactive marketeing companies who exhibited were email vendors and the occasional sweepstakes company — and any interactive marketing company who did bother to show up was relegated to a small booth space in a corner of the trade show floor, away from the real action.  A friend of mine once told me it was easy for him to hit all the email guys at DMA — just walk around the perimeter of the room.

It’s 2005, and oh how things have changed.  The DMA put the “Interactive Marketing Pavilion” center stage this year, literally in the middle of the floor.  Besides Return Path, loads of other interactive marketing companies (and not just the email and sweeps guys!) have prime real estate at the show.  Within eyeshot of our booth are fellow email companies SilverPop, StrongMail, WhatCounts, Accucast, and ExactTarget, as well as analytics companies like Omniture, online ad companies like Blue Lithium, Kanoodle, and Advertising.com, lead gen companies like Cool Savings, and even a search firm or two.

The move is more than symbolic and more than just the fact that online marketing vendors have been around long enough to bid on better booth locations (although no doubt both of those things are true).  It’s representative of the way mainstream marketers now conduct business — increasingly online and increasingly multi-channel.  Online is another important part of the mix, not the stepchild.

Online marketing firms are now in from the perimeter, and we are happy to be here!

Book Short: There is No Blueprint to $1B

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

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

– Create and sustain a breakthrough value proposition

– Exploit a high growth market segment

– Marquee/lighthouse customers shape the revenue powerhouse

– Leverage big brother alliances for breaking into new markets

– Become the masters of exponential returns

– The management team: inside-outside leadership

– The Board: comprised of essentials experts

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

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

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

Startup CEO (OnlyOnce – the book!)

One of the things I’ve often thought over the years since starting Return Path in 1999 is that there’s no instruction manual anywhere for how to be a CEO.  While big company CEOs are usually groomed for the job for years, startup CEOs aren’t…and they’re often young and relatively inexperienced in business in general.  That became one of the driving forces behind the creation of my blog, OnlyOnce (because “you’re only a first time CEO once”) back in 2004.

Now, over 700 blog posts later, I’m excited to announce that I’m writing a book based on this blog called Startup CEO:  A Field Guide to Building and Running Your Company.  The book is going to be published by Wiley & Sons and is due out next summer.  The book won’t just be a compendium of blog posts, but it will build on a number of the themes and topics I’ve written about over the years and also fill in lots of other topics where I haven’t.

The catalyst for writing this book was Brad Feld.  Brad has been a friend, mentor, investor, and Board member for over a decade.  We’ve had many great times, meals, and conversations together over the years, not the least of which was staggering across the finish line together at the New York City Marathon in 2005.  Brad started writing books a few years ago, and I’ve been peripherally involved with them, first with Do More Faster:  TechStars Lessons to Accelerate Your Startup (I contributed one of the chapters) and then with Venture Deals:  Be Smarter Than Your Lawyer and Venture Capitalist (I wrote all the “Entrepreneur Perspective” sidebars).

Those are great books, and they’ve been incredibly well received by the global entrepreneurial community.  But then Brad got the bug, and now he’s in the middle of writing FOUR new books with Wiley that will all come out over the next year.  They are:

• Startup Communities:  Building an Entrepreneurial Ecosystem in Your City
• Startup Life:  Surviving and Thriving in a Relationship with an Entrepreneur
• Startup Metrics:  Making Sense of the Numbers in Your Startup
• Startup Boards:  Reinventing the Board of Directors to Better Support the Entrepreneur

These four books, plus the two earlier ones, plus Startup CEO, are all part of the Startup Revolution series.  While I’ll continue to do most of my blogging and posting here on OnlyOnce, I’d also encourage you to check out the Startup Revolution site and sign up to be a member of that community.  I’ll be doing some things on that site as well in connection with Startup CEO, and it’s a more concentrated place to post and comment on all things Startup.  In addition, we’ll be putting a bunch of add-ons to the book on that site closer to publication time.

I hope Startup CEO becomes a standard for all new CEOs.  I don’t think I have all the answers, but at least others can benefit by learning from my 13 years of successes and mistakes!  Now all I have to do is go write the darned thing.