My latest book (I’m a co-author along with Brad Feld and Mahendra Ramsinghani), Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, is now live on Amazon – today is publication day! The book is a major refresh of the first edition, now eight years old. I was quoted in it extensively but not an official author – Brad and Mahendra were nice enough to share that with me this time. The book includes a lot of new material and new voices, including a great Foreword by Jocelyn Mangan from Him for Her and Illumyn. It’s aligned with Startup CEO and Startup CXO in look and in format and is designed to be an easy-to-read operator’s manual to private company boards of directors. Brad also blogged about it here.

We’ve done a lot of work around startup boards at Bolster the past couple of years, including working with over 30 CEOs to help them hire amazing new independent board members. Our landmark Board Benchmark study last year highlighted the problem with startup boards, but also the opportunity that lies within: not enough diversity on the boards, but also not nearly enough independent directors — and a lot of open seats for independent directors that could be filled. That conclusion led me to my Startup Board Mantra of 1-1-1: Independent directors from Day 1, 1 member of the management team, and 1 independent for every 1 investor.

As we posted on the Bolster blog last week, our quick refresh of the Board Benchmark study revealed some good news and some bad news about progress on diversity in the boardroom with startups. The good news is that the needle is starting to move very slowly, and that independent directors present the best opportunity to add diversity to boards. Our data shows that half of all new directors brought onto boards in the last year were independents, and of those, 57.9% were women and 31.6% were non-White board members. Those numbers are well above the prior study’s benchmarks of 36% and 23%, respectively (our experience running board searches skews even further to women and non-White directors being hired).

The bad news is how slowly the needle is moving — only 20% of open independent board seats were filled over the previous year, which is a lot of missed opportunity. The main takeaway is that while overall representation on boards is still skewed largely White and male, the demographic profile of new board appointments looks a lot different from the representation on boards today, indicating that CEOs are making intentional changes to their board composition.

Startup boards are a great way to drive grassroots change to the face of leadership in corporate America. More CEOs need to follow up by filling their open board seats and fulfilling their stated desires to improve diversity in the boardroom. This takes time and prioritization — these are the places where we see board searches either never get off the ground, or falling down once they do, for all the searches we either run or pitch at Bolster.

Hopefully Startup Boards will help the startup ecosystem get there.

Book Short: The Most Rapacious Guys in the Room

I just finished The Smartest Guys in the Room, by journalists Bethany McLean and Peter Elkind. This is the story of Enron, and what a tale it is! The book is a good quick business novel read. It reminded me a lot of Barbarians at the Gate, except that it made me far angrier. I’m not sure if that’s because I’m at a different place in my career now than I was 10 years ago and therefore have a different appreciation for what goes on in companies, or if the Enron guys were just far worse than anyone surrounding RJR Nabisco. But in any case, as my Grandpa Bill would have said, this one certainly raised my hackles.

Anyway, I can’t even get into the details without working myself into a frenzy about these crooks, but suffice to say there are lots of “what not to do” lessons in this book, starting with CEO Ken Lay’s wuss-like, disconnected approach to leading the company and ending with CFO Andy Fastow’s insane rationalizations for using the company as his own piggy bank. Anyway, I thought it would just be easier to just list out a few simple things to look for in your own company if you’re concerned you might be having some financial scandals within.  You know you have a problem if…

– Your company has 3,000 off-balance sheet special purpose entities, including 800 in the Caymans

– Your CEO has waived your company code of ethics twice so that the CFO could negotiate deals for his own profit against the company

– Your President combatively calls an analyst an asshole on an earnings call when asked why the company couldn’t produce a balance sheet and cash flow statement with its income statement and earnings release

– Your staffers meet someone from your auditor and say “oh, you’re the guy that won’t let us do something”

– Your accounting department becomes viewed as a major profit center because of its treatment of revenue

It’s truly astonishing what these bozos thought they could get away with. Thank God they’re going to jail. Thanks to my colleague Patty Mah (a friend of the author) for this book.

Book Short: Smaller is the New Small

Last month, it was Microtrends. This month, it’s MIT Professor Ted Sargent’s The Dance of Molecules: How Nanotechnology is Changing Our Lives. It seems like all the interesting things in life are just getting smaller and smaller. (Note to self: lose some weight.)

Sargent’s book is geeky but well-written. He dives into a couple dozen examples across many fields and disciplines of how nanotechnology holds extraordinary promise for solving some of mankind’s toughest scientific challenges — while creating a few new ethical and economic ones.

The science is for the most part beyond me, but the practical applications are fascinating:

– making solar power the sole source of global energy needs a possibility

– detecting cancer at the level of a single cancer cell rather than waiting to discover a grape-sized tumor; curing that cancer through embedded “pharmacy on a chip” drugs that release the right drugs over long periods of time locally at the spot of the disease

– figuring out how to keep proving the ever-more-challenging Moore’s law when only 4 years from now, parts of a transistor will need to be only 5 atoms across

– curing blindness with wireless retinal implants

Once every year or so, I read a book that makes me sad I didn’t go into engineering or science. The Dance of Molecules is that kind of book.

Book Short:  a Corporate Team of Rivals

One of the many things I have come to love about the Christmas holiday every year is that I get to go running in Washington DC.  Running the Monuments is one of the best runs in America.  Today, at my mother-in-law’s suggestion, I stopped i8n at the Lincoln Memorial mid-run and read his second inaugural address again (along with the Gettysburg Address).  I had just last week finished Doris Kearns Goodwin’s Team of Rivals:  The Political Genius of Abraham Lincoln, and while I wasn’t going to blog about it as it’s not a business book, it’s certainly a book about leadership from which any senior executive or CEO can derive lessons.

Derided by his political opponents as a “second-rate Illinois lawyer,” Lincoln, who arrived somewhat rapidly and unexpectedly on the national scene at a time of supreme crisis, obviously more than rose to the occasion and not only saved the nation and freed the slaves but also became one of the greatest political leaders of all time.  He clearly had his faults — probably at the top of the list not firing people soon enough like many of his incompetent Union Army generals — but the theme of the book is that he had as one of his greatest strengths the ability to co-opt most of his political rivals and get them to join his cabinet, effectively neutering them politically as well as showing a unity government to the people.

This stands in subtle but important contrast to George Washington, who filled his cabinet with men who were rivals to each other (Hamilton, Jefferson) but who never overtly challenged Washington himself.

Does that Team of Rivals concept — in either the Lincoln form or the Washington form — have a place in your business?  I’d say rarely in the Lincoln sense and more often in the Washington sense.

Lincoln, in order to be effective, didn’t have much of a choice.  Needing regional and philosophical representation on his cabinet at a time of national crisis, bringing Seward, Chase, and Bates on board was a smart move, however much a pain in the ass Chase ended up being.  There certainly could be times when corporate leadership calls for a representative executive team or even Board, for example in a massive merger with uncertain integration or in a scary turnaround.  But other than extreme circumstances like that, the Lincoln model is probably a recipe for weak, undermined leadership and heartache for the boss.

The Washington model is different and can be quite effective if managed closely.  One could argue that Washington didn’t manage the seething Hamilton and frothy Jefferson closely enough, but the reality is that the debates between the two of them in the founding days of our government, when well moderated by Washington, forged better national unity and just plain better results than had Washington had a cabinet made up of like-minded individuals.  As a CEO, I love hearing divergent opinion on my executive team.  That kind of discussion is challenging to manage — at least in our case we don’t have people at each other’s throats — but as long as you view your job as NOT to create compromises to appease all factions but instead to have the luxury of hearing multiple well articulated points of view as inputs to a decision you have to make, then you and your company end up with a far, far better result.

Book Short:  Finishing First

The Power of Nice:  How to Conquer the Business World with Kindness, by Linda Kaplan Thaler and Robin Koval, is one of those “airport books” that takes about an hour to read.  I had an ear-to-ear grin reading the book, in part because, well, it’s just a happy book, filled with anecdotes about how a smile here or a gesture of kindness there made a difference in someone’s life — both personally and professionally.

But part of my interest in the book was also driven by a long-standing debate we have at Return Path over whether we’re “too nice” as a company and whether we should have “sharper elbows.”  I was struck by a few comments the authors made, things you would expect like “nice doesn’t mean naïve” as well as things you wouldn’t like “help your enemies.”  To me, that says it all about success in business:  you can be a fierce competitor externally and demand accountability internally and still be a warm and kind person, and that’s the best (and most rewarding) place to be.

Book Short: Sequel Not Worth It

Mastering the 7 Essentials of High Growth Companies, by David Thomson, was a poor sequel to the solid Blueprint to a Billion [review] [buy]– and not worth reading if you’ve read the original.  It was very short for its price and contained mildly interesting examples of “blueprint companies” that augmented the original book but didn’t uncover any new material or add any thinking to the mix.  Basically, it was like another couple chapters that should have been part of Blueprint.

It is not a bad buy in lieu of the original if you haven’t read either one yet, as Blueprint is a bit longer than necessary, but otherwise, you can skip this one.

On a side note – the author’s interactive scorecard is a decent diagnostic tool (though also, I am sure, a lead gen tool for his consulting business).

Book Short:  Go Where They Ain’t

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, by W. Chan Kim and Renée Mauborgne isn’t bad, but it could literally be summed up by the title of this post.  I think it’s probably a better book for people who aren’t already entrepreneurs.

That said, there are two chapters that I found pretty valuable.  One is called “Reconstruct Market Boundaries,” which is a great way of thinking about either starting a new business or innovating an existing one.  It’s a strategy that we’ve employed a few times over the years at both Return Path and Authentic Response.  It’s hard to do, but it expands the available territory you have to cover.  The classic Jack Welch/GE “we don’t just sell jet engines, we sell AND SERVICE jet engines” which expanded their addressable market 9x.

The other useful chapter was “Get the Strategic Sequence Right.”  The sequence of questions to answer, according to the authors, is:

• Will buyers get enough utility out of it?
• What’s the right price?
• Can you cost it low enough to make good margin?
• Are you dealing with adoption hurdles?

The reason I found this sequence so interesting is that I think many entrepreneurs mix the order up once they get past the first one.  It’s easy to start with market need and then quickly jump to adoption hurdles, cost things out, and go with a cost-plus pricing strategy.  The book documents nicely why this order is more productive.  In particular, pricing first, then costing second, is both more market-focused (what will people pay?) and more innovative (how can I think creatively to work within the constraint of that price point?).

The common theme that’s most interesting out of the book is that new frameworks for thought produce killer innovation.  That’s clearly something most entrepreneurs and innovators can hang their hat on.

Another CEO with whom I trade notes on the craft of running a company asked me this question the other day, and I thought the answer would make a for a good blog post.  Any product team (or other kind of team) who has Agile practices, does some kind of a Daily Standup (DSU) meeting in which each team member reviews progress against goals for a given period and highlights issues where he or she is blocked and needs help.  I wrote about Return Path‘s journey to implement Agile across the whole company last year here.

My meeting routines have been shaped over the years but the current versions are largely influenced by Lencioni’s Death by Meeting, which is worth a read. My blog post isn’t all that helpful about this specific subject, but it’s here.  Anyway…here’s what I wrote to my friend:

I love our DSU. We do it at 11 eastern because we have people in Colorado and California on it. We just make the time. We block 15 minutes, but most people block the full :30 and sometimes a small sub group will need to stay late to cover something in more depth (we call that the after-party or the 16th minute). If I had everyone in the same time zone, I would do it at 8:30 or 9:00. 

We usually just “run the calendar” at the DSU. What’s everyone doing today, anything notable from yesterday, anything people need broader quick hit updates on, especially things that are cross-team. It’s great daily connectivity. We have tried to run the exec team like a true agile team in the past with cards and demos, etc., but that didn’t really work other than the occasional time when all of us were working on something together (e.g. Annual budgeting and planning), since a lot of our work as leaders is down, not across. 

We do the meeting Tuesday through Friday. We probably cancel 1 a week on average if too many people have to miss it. People know it’s a priority and not to schedule over it unless unavoidable, but sometimes travel, client conflicts, etc. invade. 

Mondays we still do our Weekly Tactical for an hour. I have a whole standing agenda format for that (as well as our Monthly Strategies for 2-3 hours and Quarterly Offsites for a couple days). I find that the Weekly Tactical actually goes much better with the four DSUs because we don’t have to spend time checking in on the basics…so we are much more effective in using that time on bigger items like sales forecast and recruiting review, progress against major initiatives and OKRs, having other people come in and present things to us, etc. 

I enjoy reading books written by people I know. I can always picture the person narrating the book, or hear their voice saying the words, I can periodically see their personality showing through the words on the page, and books bring out so much more detail than I’d ever get from a conversation. Loved: How to Rethink Marketing for Tech Products, by Martina Lauchengco, is one of those books. Martina is an operating partner at Costanoa Venture Capital, an investor in both Return Path and Bolster, and I’d known Martina for several years before she joined Costanoa through Greg Sands. She’s the best product marketer on the planet. She’s the also one of the nicest people around.

Product Marketing is a tricky discipline. A brand marketer on my leadership team years ago referred to it somewhat derisively as a “tweener” function, one of those things that’s not quite marketing and not quite product. We didn’t get the function right for many years at Return Path because we treated it that way, thinking “well, it’s neither fish nor fowl, so we’re not quite sure what to do with it.” Then we hired Scott Roth, who has gone on to have a storied career as a multi-time CEO. Scott’s background was in product marketing. He said to me in his interview process, “Product Marketing isn’t a tweener function with no home. It’s a glue function. It holds product and marketing together.” It’s amazing how that simple change in framing, combined with great leadership, led us to completely rethink the function and make it one of the most important functions in the company.

Martina brings that to live with Loved. Simply put, Loved is a handbook or a field guide to running the Product Marketing function. I can imagine it being a section of Startup CXO in that way — it’s incredibly practical, hands-on, how-to, and rich with examples from Martina’s amazing career at Microsoft, Netscape, Silicon Valley Product Group, and Costanoa. And she believes in Agile Marketing, which is always a plus in my book (and I find rare in marketers).

Martina has lots of great frameworks and stories in the book – key responsibilities of product marketing, key metrics, the release scale, the connection to Geoffrey Moore’s TALC, strategies for messaging, pricing and packaging, and more. I won’t spoil more than one here, but I will paraphrase one that I found particularly impactful, a bit of a checklist on the essence of great product marketing:

• Share data around shifting trends in buyer behavior
• Connect your product’s purpose with broader trends
• Rebrand to make your product seem bigger than it is (and save room for expansion down the road)
• Make it free, especially if you’re defining a new category
• Share the “why” and advance access with influencers

If the measure of a book’s impact is how many pages you dog ear or highlight, this says it all about Loved.

Wither the News? (Plus a Bonus Book Short)

It’s unusual that I blog about a book before I’ve actually finished it, but this one is too timely to pass up given today’s news about newspapers.  The Cult of the Amateur: How Today’s Internet is Killing Our Culture, by Andrew Keen, at least the first 1/2 of it, is a pretty intense rant about how the Internet’s trend towards democratizing media and content production has a double dirty underbelly:

poor quality — “an endless digital forest of mediocrity,”

no checks and balances — “mainstream journalists and newspapers have the organization, financial muscle, and and credibility to gain access to sources and report the truth…professional journalists can go to jail for telling the truth” (or, I’d add, for libel)

So what’s today’s news about newspapers?  Another massive circulation drop — 3.6% in the last six months.  Newspaper readership across the country is at its lowest level since 1946, when the population was only 141 million, or less than half what it is today.  The digital revolution is well underway.  Print newspapers are declining asymptotically to zero.

Don’t get me wrong.  I’m an Internet guy, and I love the democratization of media for many reasons.  I also think it will ultimately force old media companies to be more efficient as individual institutions and as an industry in order to survive (not to mention more environmentally friendly).  But Keen has good thoughts about quality and quantity that are interesting counterpoints to the revolution.  I hope at least some newspapers survive, change their models and their cost structures, and start competing on content quality.  The thought that everyone in the world will get their news ONLY from citizen journalists is scary.

I’m curious to see how the rest of the book turns out.  I’ll reblog if it’s radically different from the themes expressed here.

Update (having finished the book now): Keen puts the mud in curmudgeon. He doesn’t appear to have a good word to say about the Internet, and he allows his very good points about journalistic integrity and content quality and our ability to discern the truth to get washed up in a rant against online gambling, porn, and piracy. Even some of his rant points are valid, but saying, for example, that Craigslist is problematic to society because it only employs 22 people and is hugely profitable while destroying jobs and revenue at newspapers just comes across as missing some critical thinking and basically just pissing in the wind. His final section on Solutions is less blustry and has a couple good examples and points to offer, but it’s a case of too little, too late for my liking.

Book Short:  Why Not Both?

Craig Hickman’s Mind of a Manager, Soul of a Leader talks about how tapping the natural tension between managers and leaders allows an organization to achieve its best.  It covers dozens of topical areas and for each compares how a prototypical manager handles the area (practical, reasonable, decisive) vs. how a prototypical leader handles it (visionary, empathetic, and flexible).  Of course, the book describes the ideal organization as “balanced an integrated” between the two extremes.

My take for startups, a topic not addressed in the book, is that the job of the entrepreneur CEO is to be both manager and leader, and try to do both roles effectively without driving the team nuts.  The book says that “managers wield authority, leaders apply influence.”  Entrepreneurs have to be comfortable with both styles.  Thanks to my colleague Stephanie Miller for giving me a copy of this one.