A Lighter, Yet Darker, Note

I’ve been meaning to post about this for some time now since my colleague Tami Forman introduced me to this company.  It’s a riot.

You know all those well-intentioned, but slightly cheesy motivational posters you see in places like dentists’ offices?  The kind that talk about “Perseverence” and “Commitment” and “Dare to Dream” and have some beautiful or unique, usually nature-centric image to go with them and their tag line?

For the sarcastic among us, you must visit Despair, Inc.’s web site, in particular any of the “Individual Designs” sections featured on the left side navigation.  The posters are brilliant spoofs on the above, with such gems as “Agony” and “Strife” and “Despair” (whose tag line is “It’s always darkest just before it goes pitch black”).  E.L. Kersten is one funny, albeit strange dude.

Worth a look, and everything is for sale there, too, in case you need to have these posted in a back room somewhere.

Return Path Core Values

At Return Path, we have a list of 13 core values that was carefully cultivated and written by a committee of the whole (literally, every employee was involved) about 3 years ago.

I love our values, and I think they serve us incredibly well — both for what they are, and for documenting them and discussing them publicly.  So I’ve decided to publish a blog post about each one (not in order, and not to the exclusion of other blog posts) over the next few months.  I’ll probably do one every other week through the end of the year.  The first one will come in a few minutes.

To whet your appetite, here’s the full list of values:

1. We believe that people come first
2. We believe in doing the right thing
3. We solve problems together and always present problems with potential solutions or paths to solutions
4. We believe in keeping the commitments we make, and communicate obsessively when we can’t
5. We don’t want you to be embarrassed if you make a mistake; communicate about them and learn from them
6. We believe in being transparent and direct
7. We challenge complacency, mediocrity, and decisions that don’t make sense
8. We value execution and results, not effort on its own
9. We are serious and passionate about our job and positive and light-hearted about our day
10. We are obsessively kind to and respectful of each other
11. We realize that people work to live, not live to work
12. We are all owners in the business and think of our employment at the company as a two-way street
13. We believe inboxes should only contain messages that are relevant, trusted, and safe

Do these sound like Motherhood and Apple Pie?  Yes.  Do I worry when I publish them like this that people will remind me that Enron’s number one value was Integrity?  Totally.  But am I proud of my company, and do I feel like we live these every day…and that that’s one of the things that gives us massive competitive advantage in life?  Absolutely!  In truth, some of these are more aspirational than others, but they’re written as strong action verbs, not with “we will try to” mushiness.

I will start a tag for my tag cloud today called Return Path core values.  There won’t be much in it today, but there will be soon!

(This is a bonus quick 5th post, inspired by long time StartupCEO.com reader Daniel Clough, to the series that ended last week about Scaling CPO’s- the other posts are: When to Hire your First Chief People Officer, What does Great Look like in a Chief Privacy Officer, Signs your Chief Privacy Officer isn’t Scaling, and How I Engage With The Chief People Officer.)

As I’ve noted over the years, the Chief People Officer role is a tough one to get right and a tough one to scale with the organization if what you’re really looking for is a strategic business partner who can lead not just the important blocking and tackling in HR but innovates the people part of your organization, building new systems and programs, approaches recruiting as building great teams instead of filling seats, helps manage your company operating system, and developing and coaching leaders.

A number of later stage CEOs I mentor have come to me over the years when they have a sub-par Chief People Officer and said something like “I’m going to put HR under my CFO.” To me, that’s a bit of a cop-out – it’s acknowledging that the person in the role isn’t strong enough to be a full-throated executive, but the CEO doesn’t want to go through the hassle or expense of replacing them.

Here’s my answer when I hear that from a CEO: “Ok, then your CFO will actually now become your Chief People Officer.  You must have a Chief People Officer on the exec team reporting to you.”

There are few things about which I have a stronger point of view. Someone in your organization must have strategic oversight for human capital. If it’s not your head of HR and you can’t bear recruiting/replacing that person, then it needs to be whoever your put that person under. Or it’s you. But at even mid-scale companies, why would you take that responsibility on yourself?

The Business of Being a Scumbag, Part II

From today’s Direct Newsline email newsletter (no apparent way to link to it) comes another view into how the Internet Axis of Evil carries out its mission.

Zombie Computer Network Commits Click Fraud

A global network of 34,000 “zombie” computers infected with a Trojan Horse virus is being used to commit click fraud against pay-per-click (PPC) advertisers, according to software security research firm PandaLabs.

It is thought to be the largest click-fraud bot network detected so far, and comes at a time when advertisers are reported to be growing increasingly worried about wasting their performance-ad dollars on unqualified clicks.

The firm reported Friday that, according to data it has observed, the computers are infected with the Clickbot.A bot and controlled remotely through several Web servers. This allows the fraudsters to define the Web pages on which the ads are hosted and set the maximum number of clicks from a single IP address, in order to elude detection software. The system can also evade fraud detection by sending click requests from different unrelated IP addresses.

“Renting and selling of botnets has become a genuine business model for cyber crooks,” explained PandaLabs director Luis Corrons, in a statement. “The scam we have now uncovered exploits infected systems to generate profits through ‘par-per-click systems, instead of by installing spyware sending spam.”

This is how it works.  It’s the same whether you’re talking about spam, viruses, click fraud, phishing, or survey fraud.

Firsts, Still

After more than 13 years in the job, I run into “firsts” less and less often these days.  But in the past week, I’ve had three of them. They’re incredibly different, and it’s awkward to write about them in the same post, but the “firsts” theme holds them together.

One was incredibly tragic — one of our colleagues at Return Path died suddenly and unexpectedly.  Even though we’ve lost two other employees in the last 18 months to cancer, there was something different about this one.  While there’s no good way to die, the suddenness of Joel’s passing was a real shock to me and to the organization, and of course more importantly, to his wife.

The second was that I came face to face with a judge in the state of Delaware for the first time around some litigation we’re in the middle of now.  While I can’t comment on this for obvious reasons, you never think when you decide to incorporate in Delaware that a trip to a courthouse in Wilmington is in your future.

The third, which can only be described as bittersweet, is that we had our first long-time employee retire!  Now THAT’S something you never think about when you run a startup.  But Sophie Miller Audette, one of our first 20 employees going back to 2000 and the sixth longest tenured person at the company today, has decided to retire and move on to other adventures in her already rich life.  A quick search on my blog reveals that I’ve blogged about Sophie three times since I started OnlyOnce 9 years ago (as of next week).  The first time was in 2004 when I quoted her memorable line, “In my next life, I want to come back as a client.”  The second and third times were in 2005 and were about the company’s commitment to helping to find a cure for Multiple Sclerosis, which Sophie was diagnosed with almost 10 years ago now.  Sophie has been an inspiration to many of us for a long time, and while we’ll miss her day-to-day, she’ll always be part of the Return Path family.  Picture of her, me, and Anita at her “retirement dinner” earlier this week below.

I always say that one of the best parts about being in this job for this long is that there are always new challenges and new opportunities to learn and grow.  The last couple weeks, full of firsts, proved the point!

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.

What a View, Part III

We are in the middle of our not-quite-annual senior team 360 review process this week at Return Path.  It’s particularly grueling for me and Angela, our SVP of People, to sit in, facilitate, and participate in 15 of them in such a short period of time, but boy is it worth it!  I’ve written about this process before — here are two of the main posts (overall process, process for my review in particular, and a later year’s update on a process change and unintended consequences of that process change). I’ve also posted my development plans publicly, which I’ll do next month when I finalize it.

This year, I’ve noticed two consistent themes in my direct reports’ review sessions (we do the live 360 format for any VP, not just people who report directly to me), which I think both speak very well of our team overall, and the culture we have here at Return Path.

First, almost every review of an executive had multiple people saying the phrase, “Person X is not your typical head of X department, she really is as much of a general business person and great business partner and leader as she is a great head of X.”  To me, that’s the hallmark of a great executive team.  You want people who are functional experts, but you also need to field the best overall team and a team that puts the business first with understandings of people, the market, internal dependencies, and the broader implications of any and all decisions.  Go Team!

Second, almost every review featured one or more of my staff member’s direct reports saying something like “Maybe this should be in my own development plan, but…”  This mentality of “It’s not you, it’s me,” or in the language of Jim Collins, looking into the mirror and not out the window to solve a problem, is a great part of any company’s operating system.  Love that as well.

Ok.  Ten down, five to go.  Off to the next one…

Steve Bayle has a similar posting to my How to Negotiate a Term Sheet posting from a couple weeks ago. While he has a lot of good points, his view is far more cynical than mine. I think an entrepreneur can be friends with his or her investors and board members and that their interests for the company are more often than not aligned. Of course an entrepreneur’s personal career goals may differ from an investor’s goals for the company, but that’s apples and oranges.

As long as both parties behave like grown ups, have a healthy dose of self-awareness, communicate openly, regularly, and clearly, and realize that successful business relationships require no less effort than successful marriages, the entrepreneur/VC relationship can work brilliantly. Call me an idealist (or maybe it’s just that I have great VCs), but entrepreneurship is all about making things a reality, isn’t it?

Gmail as Competition – Another View?

This week, while many from the industry have been in Brussels at the outstanding yet oddly-named MAAWG conference for ISPs and filtering companies, internet marketing pundit Ken Magill had a scary, scary headline related to Google’s insertion of ads in email — Is Gmail Feeding Your Customers to the Competition?

The assertion is that Gmail’s contextual ad program, combined with image blocking in commercial emails, could easily lead to a situation where one of your subscribers doesn’t see your own content but then sees an ad for a competitor in the sidebar.

Scary, I admit, but how much is that really happening?

We analyzed some data from our Postmaster Direct business that is quite revealing, but in a completely counter-intuitive way.

The overall response rate for our mailings sent out in May across all clients, all campaigns, and all ISPs/domains was just under 2%.  The response rate for our mailings in May to Gmail users, on the other hand, was about 3.5%, a whopping 75% BETTER.

Even more stunning is the comparison of response rates in the same time period for subscribers who have joined Postmaster Direct in the last 6 months.  That’s probably a more useful analysis, since the number of Gmail subscribers has grown steadily over time.  On that basis, our overall response rate for May mailings, again across all clients, campaigns, and ISPs/domains, is just over 2.8%.  Howerver, for mailings in May to Gmail users, average response rates were about 5.6%, or 100% BETTER.

I’m not sure what to make of this.  My theory about this at the moment is that Gmail users are generally more sophisticated and therefore are better about keeping their inbox clean and only full of solicited offers, so therefore the user base is more responsive.  But who knows?  What I do make of it is that the issue Ken raises probably isn’t having a big impact on advertisers — or if it is, then Gmail users must be EVEN MORE responsive relative to the rest of the world.

Thanks to Ed Taussig, our director of software development for our list and data group, for this analysis.  Ed is also co-author of our corporate blog’s posting about subject line character length optimization, also a must-read for online marketers if you haven’t seen it.

As we wrote in Bolster’s Founding Manifesto, one of the reasons we started Bolster was to create a new way; a faster, easier, and more cost-effective way, for startup and scaleup CEOs to grow their boards of directors and make them more diverse.

There’s a lot of research out there that the more independent a board is, the better it performs for companies — and that there’s a high degree of correlation between more independent boards and higher performing companies as well. There’s also a lot of research out there that shows that teams which have diversity of gender and race/ethnicity perform better. And everyone who has ever been on a high-functioning board of directors knows that a board is a team.

These facts are well known, yet it is still the case that most private company boards are overwhelmingly made up of founders and investors who are still largely white and male. I believe that the lack of independence and diversity on boards is a big miss for the whole startup ecosystem, and it’s a part of the startup game that we at Bolster want to help change.

Startup boards are tricky things. One of the very unique aspects of a CEO’s job that sets it apart from other executive positions is building and leading a board of directors. But most startup CEOs have either little or no experience building and leading a board, so that part of the job tends to default to a “because that’s the way I assume it’s always been done” kind of task. Of course, if you’re not intentional about building and managing a board, you’re likely to get lousy results. 

Building, shaping, and leading a world class board is one of the single most important things startup CEOs can do to help their businesses thrive and become industry leaders. It’s on par with building and leading an executive team. I’ve seen amazing companies held back by weak and ineffective boards and investor syndicates, and I’ve seen so-so companies succeed because the strategic advice, experience, and accountability coming out of the board room drives the management team in extraordinary ways.

So how is Bolster helping startup CEOs change the game with respect to Boards? We are doing three things. 

First, as you know, what gets measured gets managed. Our first-of-its-kind Board Benchmark application will soon produce an industry standard set of data around private company boards. You can’t find data on private company boards but we’ll soon have important data like size, composition (independents/management/investors), independent director compensation and diversity (gender/race-ethnicity/age). This will help answer questions that I know I have had many times over the years as a CEO such as 

• How big should my board be at this stage? 
• How many independent directors should I have? 
• What is the right profile of an independent director? 
• How many options should I give a board member? 

Starting next week, we’re opening up our Board Benchmark application to any company who creates a free Bolster account. It will tell us a lot about the baseline across the ecosystem, and it will answer a lot of questions startup and scaleup CEOs have but can’t get answers to. Although this is an ongoing real-time benchmark tool, I’ll post some results here when we have enough critical mass to start reporting out.

Second, Bolster is in the talent business, and helping match VC-backed companies with a strong diverse slate of board candidates who are well-matched with their company is at the core of our business. We are already working on many searches for independent board members, and we’ll only be doing more of them as our client base and member base grow.

Finally, this blog post is the beginning of a whole series of posts about startup boards that we hope will demystify them a bit and help change the world’s thinking about how to grow them. Some of the material I will borrow from other blog posts I’ve written, or from the Board of Directors section of Startup CEO. Some will come from other influential VC and CEO bloggers and from Brad Feld and Mahendra Ramsinghani’s book Startup Boards. But much of the content will be new. And because Bolster is a two-sided marketplace, roughly half of the content will be aimed at startup CEOs and the other half at executives who are interested in serving on boards and aren’t sure how to get from where they are today into a board room. We’ll be sending out all the CEO posts as an eBook to CEOs who complete the Board Benchmark study, and all the Member posts as an eBook to Bolster members who fill out their Board profiles. I’ll post both of those eBooks here eventually as well.

For CEOs, the topics we will cover include 

• The purpose of a board
• Size and composition on boards
• Board evolution & turnover
• Diversity in the boardroom and the importance of appointing first-time directors
• What to look for in a director
• How to recruit and interview directors
• How to onboard directors, especially first time directors
• How to compensate directors
• How to build a director bench or Advisory Board
• How to evaluate your board

For executives searching for a board role, the topics we will cover include 

• What startup corporate boards look like
• How to prepare yourself to get on your first board
• Should you serve on an advisory board?
• How to interview for a Board role
• What you need to know about board compensation
• How to approach your first board meeting
• How to think about corporate governance as a board member
• How to be a great board member
• How to give advice or difficult feedback as a board member
• Making sure your voice is heard during a board meeting
• How to know if you’re doing a good job as a board member

We believe that boards can make or break a company and we intend to chart a new course for startup boards. I look forward to sharing thoughts and data with you on that topic in the weeks to come.

Book Short:  Blogging Alone?

I usually only blog about business books, but since I read Bowling Alone: The Collapse and Revival of American Community, by Robert Putnam, because of its connection to the topic of Internet community and social media, I’ll record some thoughts about and from it here.

It’s an interesting read, although a little long.  Putnam’s basic thesis is that America’s social capital — the things that have brought us physically and emotionally together as a country throughout much of the 20th century such as church, voting, and participation in civic organizations like the PTA or the Elks Club — are all severely on the decline.  The reasons in Putnam’s view are television (you knew all those re-runs of The Brady Bunch would eventually catch up to you), suburban sprawl, two-career families, and “generational values,” which is Putnam’s way of saying things like people in their 60s all read newspapers more than people in their 50s, who all read newspapers more than people in their 40s, etc.  He believes the decline is leading to things like worse schools, less safe neighborhoods, and poorer health.

The book does a good job laying out the decline in social capital with some really interesting and somewhat stunning numbers, but the book’s biggest shortcoming is that Putnam doesn’t do the work to determine causation.  I buy that there’s a correlation between less voting and less safe neighborhoods, for example, but the book doesn’t convince me that A caused B as opposed to B causing A, or C causing both A and B.  What I really wanted at the end of the book was for Putnam to go mano-a-mano with the Freakonomics guy for a couple hours.  Preferably in those big fake sumo suits.

The book was published in 2000, so probably written from 1997-1999, and therefore its treatment of the Internet was a little dated — so I found myself wanting more on that topic since so much of the social media revolution on the Internet is post-2004.  His basic view of the Internet is that it is in fact a bright spot in the decline of community, but that it’s changing the nature of communities.  Now instead of chatting with whoever is bowling in the next lane over at the Tuesday night bowling league on Main Street, we are in an online discussion group with other people who own 1973 BMW 2002 series cars, preferably the turbo-charged ones.  So the micro-communities of the Internet circa 2000 are more egalitarian (“on the Internet, no one knows you’re a dog”), but more narrow as well around interests and values.

What has social media done to Putnam’s theories in the last seven or eight years?  How have things like blogging, MySpace, LinkedIn, YouTube, and Photobucket changed our concept of community in America or in the world at large?  I welcome your comments on this and will write more about it in the future.