Whiplash at Google, Part II

My former colleague Brian Westnedge points me to this article that gives more detail on my earlier notes about Google’s very large NYC-based engineering team.  The article also provides a good general assessment of NYC as a location for tech companies.  Thanks, Brian!

Stuck in the Middle

I was trying to explain the current state of Return Path’ Postmaster Network online advertising business (email lists, lead gen, RSS) to someone from outside the industry the other day, when it occurred to me that many online marketing vehicles are still split between running on the offline paradigm and running on the online paradigm.  I don’t have a lot of detailed stats on all of this at my fingertips, but bear with my observations.

To me, the offline paradigm has always been characterized by big agency buys, driven by thematic/brand oriented creative campaigns that cost a fortune to develop.  This is even true to a large extent for direct marketing, although the mechanics are different.  It’s relied on lots of third party intermediaries to connect the audience (or more specifically, estimates of the audience) to the marketer.  It has paid all of these people on a percentage of the media spend, which is so massive that a 10% override on it can keep you in business and be dissociated from effort expended or value created.  Many of the original forms of online media — banners, lists — still operate partially in this world.  This part of the online ad market is growing, but more slowly than others.

Contrast this with the online paradigm that has been characterized by automated buying, rapid testing cycles, small up-front dollar outlays, and an “always on” marketing that’s not necessarily tied to a big campaign.  It’s been much more marketplace, aggregator, and bid-driven and frequently has marketers connecting straight to their audience, or at least to the media vehicle that their audience is on.  Fees are success-based or labor-based.  This is the part of the market that’s exploding in popularity.

So why are some parts of online marketing stuck in the middle today?  It seems to me that the things that are related to the offline paradigm in some way are still living in that paradigm, while things that are truly new in the last 5+ years are freed from those shackles.  So some things, like email list rental and banner buys, go through an agency or a broker (or sometimes both), because, well, that’s how clients have always rented mailing lists or bought column inches in magazines.  But anyone with a credit card can start bidding for keywords on Google or Yahoo, or post offers to an affiliate network, trying out their own creative and optimizing it within minutes or hours.

The thing I find so interesting about this is that all of these different online marketing tactics, whether old school or new school, are trying to do the same things — generate more sales/leads/customers, and build brand.  But the legacy machinery of old world marketing and advertising still lingers in the background while the new machinery of search and automated marketing/bidding engines are gaining steam.

It will be interesting to see how this all shakes out over time, but I’d be surprised if there’s a lot of the purchasing of high value online real estate that continues to be in the control of old-style agencies and brokers for too much longer.  It’s just getting too easy for marketers to control their own destiny.  What I think is even more fascinating is the possibility that these new technologies and techniques might move upstream to influence how “old media” is bought as well over time, as seen in both Yahoo’s and Google’s recent deals with offline media brokers (and even, one could argue, the YouTube acquisition).  There’s no logical reason why marketers shouldn’t be able to bid on 30-second TV commercials across the major networks and cable stations and not be held to big up-front commitments and markups.  Oh, right, and come back to the network afterwards and ask for a make good if the ad doesn’t drive enough sales on the back-end.

Maybe agencies and brokers will change…maybe some courageous traditional media vehicles will change…or maybe a little of both, but old school online customer acquisition marketing won’t be stuck in the middle forever.  The scale and ROI will guarantee it.

Right, That’s MY Job

I made a dumb comment at our recent Board meeting that got me thinking.  We came into the meeting with, in addition to lots of the regular updating and reporting, one specific strategic topic we wanted guidance on from the Board about something that’s been nagging the management team for a while without an obvious solution.

We had a great conversation about the topic with the Board and got very clear guidance as to their perspective on what we should do.  I agreed with most of it, albeit with a couple modifications, but more than anything else, I was happy for the note of clarity on an issue with which we’d been struggling as a management team. 

So my comment in the meeting was "that’s pretty clear direction, we’ll go do that" (or something along those lines).  Whereupon one of my Board members politely reminded me that actually it’s not the Board’s job to make things happen, only to give advice and counsel, and that I shouldn’t take their words as gospel and assume they’ll work.  Right.  Good point.

The Board is my boss (I am on the Board, but so are five other people), and while there are some items where the Board does have the final say, the overwhelming majority of my actions and the actions within the company are really up to us.  We can seek guidance when we feel we need it, but that guidance doesn’t come with a guarantee that it will work operationally — nor does it give me the ability to absolve myself if things don’t work out in the end.

This is a point worth thinking about no matter what role you play in your organization.  Most people, most of the time, have a lot of latitude in how they go about their job.  Sometimes, the boss tells you what to do.  But most of the time, you’re on your own, and while you can and should get advice from above when necessary, the most successful people in business are the ones that take the guidance and factor it into their own decision-making and initiative as opposed to blindly following.

Half Your Waking Hours

I just came back from our annual Board/Management ski trip (and Board meeting) — we had about half of both groups join, which is typical given the time commitment.  We had a great time, and the conversation for the three days was a nice blend of business and personal. 

The thing that struck me during the weekend — and I am reminded of this regularly in the office and at other work events as well — is how much I genuinely enjoy the company of the people with whom I work.  Whether it’s my senior staff, my Board, or anyone I can think of in other roles within Return Path, we can manage to have a good time together and have fun as well as be productively thinking about and discussing work.

With generic assumptions of 8 hours of sleep a night and 8 hours of work a day (neither one being true of course, but canceling each other somewhat out here), we spend half our waking hours on the job.  So we might as well choose to work with people that we get along with!  That doesn’t mean everyone we hire at Return Path has to be like-minded or have the same sense of humor.  But it does mean that we look for people who have that spark in their eye that says "I get it"; it means we want to find people who are articulate and have strong convictions and are not afraid to speak their mind; and it means we screen for people who can be light-hearted and don’t take themselves too too too seriously when we recruit, interview, and hire.

Think about that "half your waking hours" thing the next time you’re hiring someone.  Which candidate (of the technically qualified ones who are in the right zone in terms of compensation) would you rather spend your day with?  In my former career in management consulting, we used to call this the "Cleveland Airport test" — as in, if you were stuck in the Cleveland Airport with this candidate, would you be happy or sad about it?

Half Your Waking Hours

I just came back from our annual Board/Management ski trip (and Board meeting) — we had about half of both groups join, which is typical given the time commitment.  We had a great time, and the conversation for the three days was a nice blend of business and personal. 

The thing that struck me during the weekend — and I am reminded of this regularly in the office and at other work events as well — is how much I genuinely enjoy the company of the people with whom I work.  Whether it’s my senior staff, my Board, or anyone I can think of in other roles within Return Path, we can manage to have a good time together and have fun as well as be productively thinking about and discussing work.

With generic assumptions of 8 hours of sleep a night and 8 hours of work a day (neither one being true of course, but canceling each other somewhat out here), we spend half our waking hours on the job.  So we might as well choose to work with people that we get along with!  That doesn’t mean everyone we hire at Return Path has to be like-minded or have the same sense of humor.  But it does mean that we look for people who have that spark in their eye that says "I get it"; it means we want to find people who are articulate and have strong convictions and are not afraid to speak their mind; and it means we screen for people who can be light-hearted and don’t take themselves too too too seriously when we recruit, interview, and hire.

Think about that "half your waking hours" thing the next time you’re hiring someone.  Which candidate (of the technically qualified ones who are in the right zone in terms of compensation) would you rather spend your day with?  In my former career in management consulting, we used to call this the "Cleveland Airport test" — as in, if you were stuck in the Cleveland Airport with this candidate, would you be happy or sad about it?

Book Short:  A Primer on Viral Marketing

“People talk about Andy,” writes Seth Godin in the foreward to Andy Sernovitz’s new book, Word of Mouth Marketing:  How Smart Companies Get People Talking.   “He’s a living, breathing example of the power of word of mouth.”  Andy’s the CEO of WOMMA, the Word of Mouth Marketing Association, and a former colleague of mine.

Ever since reading The Tipping Point, I keep looking for the secret sauce around viral marketing.  What is it that makes something cool enough to buzz about?  My conclusion from reading Andy’s book is that secret sauce doesn’t exist.  Like everything else, being buzzworthy comes from hard work, being inherently good, AND using the techniques and understanding in Andy’s book.  Tables like “The Three Reasons People Talk About You” and “The Five T’s of Word of Mouth Marketing” are worth the price of the book in and of themselves, as they explain how to manage, handle, and drive viral marketing — once you have your own secret sauce down.

Andy’s wanted to write a book for a long time (in fact, he got us started on ours), and I’m glad he finally did it.  If you’re interested in an easy-to-follow, practical, hands-on guide to viral, or word-of-mouth marketing, this is the book for you.

Lucky 7, or the 7 Year Itch?

Today is the seventh anniversary of the founding of Return Path.  There are days when it feels like it’s been much longer, but most of the time, I feel like we’re still in the first quarter of the game here.  The business is completely different than what we started and what we ever thought it would be, but it’s healthy, growing, and we’re having more and more fun every day.

When I started the business, another more seasoned entrepreneur told me, "however long you think it’s going to take to build a great business — triple it."  I’m not sure how long I thought it was going to take for us to hit scale and really take off, but it certainly wasn’t this long.  It’s good to have enough stamina to stick with something that has promise, even if the early days are rough or uncertain.

I may be different from a lot of entrepreneurs, but I am not feeling the 7 Year Itch to move on, do something different, start something new.  The business is as exciting to me today as the day we started it, if not more so.  I feel like we just finished Lucky 7, and now we’re looking forward to Year 8.  As we’ve been chanting in the office today…Eight is Great!  Eight is Great!  (or as one of our European colleagues emailed me today:  fr: Huit, c’est super!  de: Acht ist wunderbar!  it: Forza otto!)

Congratulations to our team, and thanks to our team, customers, and investors for all their hard work and support these past 7 years.

Counter Cliche:  Connected at the Top

Fred hasn’t written an official VC Cliche of the Week for a while, but his post yesterday on Connectors is close enough — in it, he talks about how he likes to be a good Connector between people and thinks it’s a quality of great VCs.

First, we should give credit to Malcolm Gladwell for a great definition of Connectors in The Tipping Point.  Gladwell not only defines Connectors as Fred has but also defines two other types of people who are critical in the social networking/buzz building arena:  Mavens and Salesmen.  I’d argue that a great VC has to have a bit of all three!

But in terms of entrepreneurs (the point of the counter cliche series), is being a Connector a prerequisite for success?  I think the answer is nuanced, but it’s probably no.  I’ve met great CEOs who are fairly introverted and whose brains don’t work in the Connector kind of way.  And they can be great at developing product, even running operations.  But if you’re an entrepreneur and not a Connector, you’d better have one or more of them on your management team (think sales or business development or marketing) to make up for that missing piece of the equation to make sure your company is connecting the dots outside the corporate walls.  Otherwise, you’re sure to miss out on opportunities.

The one area where I would say that being a Connector is critical for an entrepreneur is internally within the company.  If you’re going to lead the troops effectively, you do need to be able to make Connections between people within the company, especially as the business grows.  And off-topic a bit (literally if not figuratively), you also need to be able to connect with your staff members on a personal level and make sure that people are connected to the company and its mission.  I’m not sure these are things that an entrepreneur can delegate as long as he or she is CEO.

• Kevin Menzie
  Slice of Lime, Inc. CEO Kevin Menzie, who I have known for years, writes a good summary of his thoughts on the early days of getting a startup off the ground and growing fast!
  (tags: Entrepreneur)

Another Entrepreneur Blog

My friend Jason Devitt, founder and CEO of mobile application company Vindigo, is contemplating his next career move and has started to blog more actively about entrepreneurship (after a 9-month around-the-world honeymoon which made for a great travel blog).

His most recent post is about what it takes to be an entrepreneur, which I thought was great, and he promises more good ones on related topics to come soon.

Counter Cliche:  Between Permission and Forgiveness

In today’s VC Cliche of the Week, Fred actually takes a Counter Cliche position himself when he talks about how in a startup, it’s NOT usually better to beg for forgiveness than to ask for permission, as the team needs to be aligned and on the same page.  But Fred does go on to say that startups as organizations need to act like mavericks, essentially that the organization needs to break some eggs in the industry in order to make an omelet.

I actually think in most organizations — particularly companies who used to be startups but are growing out of that phase (which is where we are at Return Path now) — there’s something in between Asking for Permission ahead of time and Begging for Forgiveness after the fact.  I’d call it the Courtesy of Notification. 

It comes down to practicality.  Consensus is usually good, but sometimes you just have to forge ahead with your initiative.  A healthy organization is one where most of the players know the rules and framework and mission and are empowered to make things happen.  There are lots of circumstances where "just doing it" makes sense, but making sure that relevant people at least know "it" is happening will save a lot of heartache down the road and probably create a safety valve to make sure there are no radically adverse unintended consequences.

So make sure you think about who in your organization is affected by the things you do, and when charging forward on your own, at least give your colleagues the Courtesy of Notification.