Fig Wasp #879

I have 7 categories of books in my somewhat regular reading rotation:  Business (the only one I usually blog about), American History with a focus on the founding period, Humor, Fiction with a focus on trash, Classics I’ve Missed, Architecture and Urban Planning (my major), and Evolutionary Biology.  I’m sure that statement says a lot about me, though I am happy to not figure it out until later in life.  Anyway, I just finished another fascinating Richard Dawkins book about evolution, and while I usually don’t blog about non-business books, this one had an incredibly rich metaphor with several business lessons stemming from it, plus, evolution is running rampant in our household this week, so I figured, what the heck?

The Dawkins books I’ve read are The Selfish Gene (the shortest, most succinct, and best one to start with), The Blind Watchmaker (more detail than the first), Climbing Mount Improbable (more detail than the second, including a fascinating explanation of how the eye evolved “in an evolutionary instant”), The Ancestor’s Tale (very different style – and a great journey back in time to see each fork in the evolutionary road on the journey from bacteria to humanity), and The God Delusion (a very different book expounding on Dawkins’ theory of atheism).  All are great and fairly easy to read, given the topic.  I’d start with either The Selfish Gene or maybe The Ancestor’s Tale if you’re interested in taking him for a spin.

So on to the tale of Fig Wasp #879, from this week’s read, Climbing Mount Improbable.  Here’s the thing.  There are over 900 kinds of fig trees in the world.  Who knew?  I was dimly aware there was such a thing as a fig tree, although quite frankly I’m most familiar with the fig in its Newton format.  Some species reproduce wildly inefficiently — like wild grasses, whose pollen get spread through the air, and with a lot of luck, 1 in 1 billion (with a “b”) land in the right place at the right time to propagate.  At the opposite end of the spectrum stands the fig tree.  Not only do fig trees reproduce by relying on the collaboration of fig wasps to transport their pollen from one to the next, but it turns out that not only are there over 900 different kinds of fig trees on earth, there are over 900 different kinds of fig wasps — one per tree species.  The two have evolved together over thousands of millenia, and while we humans might take the callous and uninformed view that a fig tree is a fig tree, clearly the fig wasps have figured out how to swiftly and instinctively differentiate one speices from another.

So what the heck does this have to do with business?  Three quick lessons come mind.  I’m sure there are scores more.

1. Collboration only works when each party benefits selfishly from it.  Fig wasps don’t cross-pollenate fig trees bcause the fig trees ask nicely or will fire them if they don’t.  They do their job because their job is independently fulfilling.  If they don’t — they probably die of starvation.  They’re just programmed with a very specific type of fig pollen as their primary input and output.  We should all think about collaboration this way at work.  I wrote a series of posts a couple years back on the topic of Collboration Being Hard, and while all the points I make in those posts are valid, I think this one trumps all.  Quite frankly, it calls on the core principle from the Harvard Project on Negotiation, which is that collaboration requires a rethinking of the pie, so that you can expand the pie.  That’s what the fig trees and fig wasps have done, unwittingly.  Each one gets what it needs far more so than if it had ever consulted directly with the other.  The lesson:  Be selfish, but do it in a way that benefits your company.

2. Incredibly similar companies can have incredibly distinct cultures.  900+ types of fig tree, each one attracting one and only one type of fig wasp.  Could there be anything less obvious to the untrained human eye?  I assume that not only would most of us not be able to discern one tree or wasp type from another, but that we wouldn’t be able to disdcern discern any of the 900+ types of trees or wasps from thousands or hundreds of thousands or millions (in the case or urbanites) types of trees or bugs in general!  But here’s the thing.  I know hundreds of internet companies.  Heck, I know dozens of email companies.  And I can tell you within 5 minutes of walking around the place or meeting an executive which ones I’d be able to work for, and which ones I wouldn’t.  And the older/bigger the company, the more distinct and deeply rooted its culture becomes.  The lessons:  don’t go to work for a company where you’d even remotely uncomfortable in the interview environment; cultivate your company’s culture with same level of care and attention to detail that you would your family — regardless of your role or level in the company!

3. Leadership is irrelevant when the operating system is tight.  You think fig wasps have a CEO?  Or a division president who reports into the CEO that oversees both fig wasps and fig trees, making sure they all cross-pollenate before the end of the quarter?  Bah.  While as a CEO, you may be the most important person in the organization sometimes, or in some ways, I can easily construct the argument that you’re the least important person in the shop as well.  If you do your job and create an organization where everyone knows the mission, the agenda, the goal, the values, the BHAG, whatever you want to call it — withoutit needing to be spelled out every day — you’ve done your job, because you’ve made a company where people rock ‘n’ roll all night and every day without you needing to be in the middle of what they’re doing. 

I’m sure there are other business lessons from evolutionary biology…send them along if you have good thoughts to share!

Book Short: The Anti-Level-5 Leader

The Five Temptations of a CEO, another short leadership fable in a series by Patrick Lencioni, wasn’t as meaningful to me as the last one I read, The Four Obsessions of an Extraordinary Executive (post, link), but it wasn’t bad and was also a quick read.

The book to me was the 30 minute version of all the Level-5 Leadership stuff that Collins wrote about in Good to Great and Built to Last. All that said, it was a good quick read and a reminder of what not to do. The temptations are things that most CEOs I’ve ever known (present company very much included) have at least succumbed to at one point or another in their career. That said, you as a CEO should quit or be fired if you have them in earnest, so hopefully if you do have them, you recognize it and have them in diminishing quantities with experience, and hopefully not all at once:

– The temptation to be concerned about his or her image above company results

– The temptation to want to be popular with his or her direct reports above holding them accountable for results

– The temptation to ensure that decisions are correct, even if that means not making a decision on limited information when one is needed

– The temptation to find harmony on one’s staff rather than have productive conflict, discussion, and debate

– The temptation to avoid vulnerability and trust in one’s staff

I’m still going to read the others in Lencioni’s series as well. They may not be the best business books ever written, but they’re solid B/B+s, and they’re short and simple, which few business books are and all should be!

Just Ask a 5-Year Old

I heard this short but potent story recently. I can’t for the life of me remember who told it to me, so please forgive me if I’m not attributing this properly to you!

So there you go. What makes us get de-skilled or dumber as we get older? Nothing at all! It’s just our expectations of ourselves that grow. The bar goes up for what it takes to count yourself as knowing how to do something with every passing year. Why is that? When we were 5 years old, all of us were about the same in terms of our capabilities. Singing, painting, dancing, tying shoes. But as we age, we find ourselves with peers who are world class specialists in different areas, and all of a sudden, our perception of self changes. Sing? Me? Are you kidding? Who do I look like, Sting?

I see this same phenomenon in business all of the time. The better people get at one thing, the worse they think they are at other things. It’s the rare person who wants to excel at multiple disciplines, and more important, isn’t afraid to try them. But we’ve seen lots of success over the years at this at Return Path. The account manager who becomes a product manager. The tech support guy who becomes a software developer. The sales rep who becomes an account manager.

I love these stories! My anecdotal evidence suggests that people who do take this kind of plunge end up just as successful in their new discipline, if not more so, because they have a wider range of skills, knowledge, and perspectives on their job. Or it could just be that the kind of people who WANT to do multiple types of jobs are inherently stronger employees. Not sure which is the cause and which is the effect.

It’s even more rare that managers allow their people the freedom to try to be great at new things. It’s all too easy for managers to pigeonhole people into the thing they know how to do, the thing they’re doing now, the thing they first did when they started at the company. “Person X doesn’t have the skills to do that job,” we hear from time to time.

I don’t buy that. Sure, people need to be developed. They need to interview well to transition into a completely new role. But having the belief that the talent you have in one area of the company can be transferable to other areas, as long as it comes with the right desire and attitude, is a key success factor in running a business in today’s world. The opposite is an environment where you’re unable to change or challenge the organization, where you lose great people who want to do new things or feel like they are being held back, and where you feel compelled to hire in from the outside to “shore up weaknesses.” That works sometimes, but it’s basically saying you’d rather take an unknown person and try him or her out at a role than a known strong performer from another part of the organization.

And who really wants to send that message?

Why Do Companies Sell?

Fred has a good post today about Facebook and why they shouldn’t sell the company now, in which he makes the assertion that companies sell “because of fear, boredom, and personal financial issues.”  He might not have meant this in such a black and white way, and while those might all be valid reasons why companies decide to sell, let me add a few others:

• Market timing:  As they say, buy low – sell high.  Sometimes, it’s just the right time to sell a business from the market’s perspective.  Valuations have peaks and troughs, and sometimes the troughs can last for years.  Whether you do an NPV/DCF model that says it’s the right time to sell, or you just rely on gut (“we aren’t going to see this price again for a long time…”), market timing is a critical factor
• Dilution:  Sometimes, market conditions dictate that it isn’t the best time to sell, BUT company conditions dictate that continuing to be competitive, grow the top line, and generate long-term profits requires a significant amount of incremental capital or dilution that materially changes the expected value of the ultimate exit for existing shareholders (both investors and management)
• Fund life:  Fortunately, we haven’t been up against this at Return Path, but sometimes the clock runs out on venture investors’ funds, and they are forced into a position of either needing to get liquidity for their LPs or distribute their portfolio company holdings.  While neither is great for the portfolio, a sale may be preferable to a messy distribution

Fred’s reasons are all very founder-driven.  And sometimes founders get to make the call on an exit.  But factoring in a 360 view of the company’s stakeholders and external environments can often produce a different result in the conversation around when to exit.

A Thankful Moment

While there are certainly some aspects of being a CEO that are full of those proverbial thankless tasks…there are some moments that are just the opposite.  And boy are those rewarding.

I had one this morning.  While I frequently get nice emails or handwritten cards from employees after they interview or start or get a promotion or raise — and those are all great — this is one I can easily blog about because it’s online.

Yesterday was the first official day of work for Neil Schwartzman, who actually joined us many months ago as a consultant running compliance for our Sender Score Certified whitelist but just finally became a full-time employee as we set up a Canadian entity and International entity and whatever our lawyers and accountants told us we had to do in order to be legit about hiring out of the country.

Neil’s thank you post is very entertaining (I promise, our objective isn’t to have employees drinking and slacking off!), but more than that, rewarding in that he says we do a good job at Return Path of walking the walk around ethics, reputation, and high standards in what we do for the email ecosystem.  Now that’s rewarding.

But in some ways, it’s even more meaningful coming from Neil.  Just as he says he took a risk in coming to work with us, we took a risk in bringing him on board.  As a leading voice in the anti-spam community, Neil is exactly the kind of person that spooks out some of our clients who think of anti-spammers as the enemy.  Our view is, as you can imagine, more nuanced.  Anti-spammers who do their job well are a legitimate marketer’s best friend because they are keeping the inbox clean of actual spam.  As we tell our clients, we are a big tent here — the only way we will solve our clients’ deliverability problems is by working WITH the receivers of the world on common language, rules, standards, and metrics — not working AGAINST them.  And that’s where Neil has done such a great job for us so far — bringing his unique perspective on the spam problem and working alongside many others on our deliverability team like Tom Bartel, Tom Sather, Leslie Price, Melinda Plemel to help keep the world safe for email.

So thanks, Neil…and right back at you!

Try It On For Size

I’ve always been a big fan of taking a decision or a change in direction I’m contemplating and trying it on for size.  Just as you never know how a pair of pants is really going to fit until you slip them on in a dressing room, I think you need to see how decisions feel once you’re closing in on them.

Here’s why:  decisions have consequences.  No matter how prescient leaders are, no matter if they’ve been trained in chess-like (three-moves-ahead) thinking, they can almost never perfectly foresee all the downstream reactions and effects of decisions.  Figuring out how to create “mental fittings” is a skill that I think is critical for CEOs and other leaders.

When I try something on for size, I’m usually trying to accomplish one of a few things.  Sometimes, I’m simply trying to see how words sound when they come out of my mouth.  As Homer Simpson periodically muses, “did I think that, or did I say that out loud?”  There’s no substitute for articulating a new phrase, or theory, out in the open and seeing if it sounds the way YOU expect it to.  Other times, I’m trying to see how different messages or stories play with different audiences.  Will employees think it’s exciting when we announce X, or scary, or confusing?  Will a customer understand the new positioning of our company when you include the new product?  Will investors understand the story in 9 words or less?  Finally, there are times when my objective in trying something on for size is to understand specific downstream effects of a decision.  Throwing something out into the open and taking copious notes as people give you their “blink” concerns and reactions are invaluable.

Of course, the main thing to avoid when trying decisions or changes in direction on for size is creating chaos!  There are a few ways to create chaos.  One is by having your “try it on for size” conversation with an employee turn into a de facto decision because the employee takes your words and then deliberately acts on them.

Alternatively, the same thing could happen inadvertently because even though the employee knows intellectually not to act on your comments, he or she starts to incorporate them subconsciously, thinking they are likely to become the law of the land.

Another is by creating false expectations and disappointment if you decide an idea doesn’t fit when you try it on, and then you scrap it, leaving behind a trail of the idea for others to see and discuss.  All the same can be said with customers or investors or any other stakeholder.  Your words as CEO or any kind of a leader can be quite powerful, and trying something on for size can have real unintended consequences if not done carefully.

In all cases, the best antidotes are communication and judgment.  Make sure if you are trying something on for size internally that you communicate early and often to your audience that all you are doing is just that – trying something on, and follow up with people afterwards to make sure your intent really sunk in.  But judgment is also critical.  Pick your target audience for a fitting on carefully, make sure to blend trusted internal AND external associates, and make sure to rotate who you talk to about new things so you don’t develop a consistent bias in your idea generation.

I’d like to think that Mark Twain would wholeheartedly approve of me paraphrasing his famous quote for this purpose, but I’m getting a little tired of all these reports about how email is dead. The latest one comes in the form of an op-ed in Computerworld this week. This will be a longer post than usual — my apologies in advance.

The writer talks about how email will die soon because there are too many issues with viruses, spam, IT management costs, and employment practices. The writer says email is close to having a bigger downside than upside, and that email will go the way of the typewriter or the floppy disk drive.

I say that this is a writer who has a bad IT department or a bad email service, a stunning lack of faith in technology’s ability to overcome adversity, and perhaps a misunderstanding of basic economic productivity.

Email is alive and well, as far as I can tell:

– Consumer email adoption is huge and rising. Every time I see one of those market research surveys from Pew or NFO, email activity and adoption is on the rise. It’s the number one Internet-based activity, with nearly 100% of people using it and a huge percentage of those people addicted to it.

– Email business usage is now mission critical for most employees. Enough said, for this audience, anyway. Economic productivity gains from email usage are outpacing the costs of having email system administrators and spam filters by orders of magnitude. For a quick flashback, compare the time spent firing off an email to 5 members of your staff, cc’ing your boss, and bcc’ing two of your other colleagues to the analog analog of making phone calls, holding meetings, or dictating/longhanding a memo, typing it with carbon paper or even using a photocopier, then physically distributing it.

– Spam filters are getting better by the day. While there is still a cat-and-mouse game going on between spammers and spam filters that will always result in a certain amount of false positives (good email that gets filtered) or false negatives (spam that sneaks into your inbox anyway), how many heavy email users can honestly say that their actual inbox spam problem is worse now than it was a year ago? The false positive and false negative problems will be largely solved in one way or another within 24 months. They won’t be completely solved despite Bill Gates’ optimistic prognostications, but they’ll be well under control to the point of being inconsequential.

– People are signing up for email newsletters and marketing at astonishing rates. If email was on the way out, this is the single metric you’d expect to be falling as a precursor to the crash. Well, guess what? This metric is on the rise! My company alone is getting almost 80,000 people each day to sign up for our various email-related services. Many companies who sell direct to consumers online are generating upwards of 25% of their revenue via email. Those are not exactly the signs of a sick medium.

– The email industry will not allow itself go the way of the typewriter (by the way, you will note, there was never really a “typewriter industry” the way that email has turned into its own sector). There are simply too many companies, with too much at stake, with too much capital to invest and too much reward to be gained, to permit obsolesence.

For those of you who know that my company Return Path is in the email business, you may say that my comments are self-serving, and I suppose that’s true. I’m always open to a disruptive technology, but changing human behavior is much more difficult than replacing floppy disks with DVDs or hard drives, and at this point, email as a viable communication medium is much less about the technology than about human behavior. It takes a “super disruptive” technology to make that fundamental a change.

Perhaps the writer of that op-ed should think about another technology with much grizzlier characteristics that would be sure to put it on the verge of extinction. The technology is dirty. It’s smelly. It’s terrible for the environment. Some say it’s imperling the future of the planet. All it tries to do is a simple thing, but it can cost people who live at the U.S. median income level as much as 15% of their net income every year (all headier issues than those created by email). We all generally refer to that technology as the automobile. Does anyone think that the cars is going away soon?

As for the comparison of the typewriter to email, I’ll quote Twain again: “History doesn’t repeat itself – at best it sometimes rhymes.”

The Rumors of Email’s Demise Have Been Greatly Exaggerated, Part II

Fred beat me to it.  There was an interesting article floating around yesterday about how Korea, which is one of the cutting edge nations in terms of technology usage, is finding that younger people prefer electronic communications like SMS text messaging and IM to email.  Fred says he sees that trend here in his teenage kids as well.

It will be interesting to see how this develops.  It may be over the long haul that more personal communication happens over SMS and IM, but I’m still a believer in email for more formal business communications, any longer form note, and distribution of content or marketing that is best served on a larger screen and in a less intrusive way.

For Whom the Bell Tolls

I don’t understand why everyone in the world hasn’t yet signed up for VOIP services from companies like Vonage. We just did it a couple of weeks ago at home. In terms of quality, it’s virually indistinguidhable from a POTS land line. You can have as many numbers as you want on the same account. TiVo works with it. You can keep your old phone number. There are no minimums and no contracts. They don’t have to come to your house to get it to work. They’ve even figured out how to get 911 and 311 to work with it.

It’s got tons of other cool features, as well, but even if all you do with it is use it like your old phone or fax line, all it costs is $15/month with a $40 startup cost for 500 minutes/month (they also have $25/month for unlimited calling). I hate to sound like an ad for the thing, but it’s just a better way of having a phone at home. The only real risk is an outage with your cable modem, and while that does happen from time to time, most people now have cell phones as a backup, and if your modem is out, calls go straight into voicemail.

We’ve had one or two phone lines at home forever and bounced around over the years from Verizon to Sprint to AT&T depending on who had the best deal of the month. No matter which carrier we’ve used, we don’t use our home phone that much, and we’ve always paid between $50-100/month per line for the privilige. No longer!

Anyway, I don’t know much about Vonage, and they may have tons of competitors. From a business perspective, then, I don’t know who is going to win this war…but as my board member Greg Sands says, I certainly know who’s going to lose it. I wouldn’t want to be a big old phone company today!

Why is Seth Godin so Grumpy?

Permission marketing guru Seth Godin says we should all Beware the CEO blog. His logic? Blogs should have six characteristics: Candor, Urgency, Timeliness, Pithiness, Controversy, and maybe Utility — and apparently in his book, CEOs don’t possess those characteristics.

Certainly, CEOs who view blogs as a promotional tool are wasting their time, or are at least missing a fundamental understanding about the power of blogs and interactivity.

But many of the ones I read (and the one I write) do their best to be anything but promotional. One of my colleagues here describes my blog as “a peek inside the CEO’s head,” which is a great way of putting it. And I still stand by my earlier posting about the value of the blog to me and to the company — hardly “annual report fluff.”

How’s that for honest, timely, controversial, and pithy, Seth?

When Do You Hire a Real Head of Sales?

A fellow entrepreneur I’m friendly with who’s got a really early stage company asked me the other day when he should hire his first head of sales.

I think the answer completely depends on what kind of business you’re in and how dependent it is on external relationship building, and also what kind of entrepreneur you are. But I tried to distill my answer down to three things for him to think about:

If your company requires a meaningful amount of customer participation before your initial product is launched, you need to invest in sales months ahead of anticipated revenue. This was the case for us at Return Path. We hired our first head of sales five months before our anticipated launch because we needed to have 10-12 beta customers on board in order to have a successful launch.

If you can wait until your product is developed and ready to ship before selling it, you can afford to wait longer if you’re handling early market development and requirements yourself. However, when you find that you don’t have time to call back interested high value prospects within a single business day because of competing priorities to get your business off the ground, it’s definitely time to bring someone in. This is especially true if you’re in a buzz business where you have prospects calling YOU to ask if they can try out your product or service.

Finally, in either case, the trick is timing. The moment you actually need a head of sales is too late to start looking for one, since that process can take a few months. So what you have to do is make your best effort at figuring out 2-3 months ahead of time when that urgent need will pop up and start your recruiting efforts then.