Angry, Defiant, and Replete with Poor Grammar

I didn’t see Bush’s farewell address on TV on Thursday, but Mariquita and I did see his press conference on Monday.  It was exactly what you’d expect it to be and quite frankly just like the last eight years:  angry, defiant, and replete with poor grammar.

I’ve said repeatedly that I think Bush has destroyed the Republican party and will go down in history as one of the worst presidents this country has ever had, if not the worst.  It’s not surprising that his tone at the end is as the title of this post describes.  But it is a shame.  His whole administration is a shame.  The really sad part is that it didn’t have to be.  People make mistakes — even really bad ones.  And they can recover from them and go on to do great things in life if two conditions exist:

1. They solicit feedback on their performance, and

2. The internalize and act on that feedback

Bush not only didn’t “get” these two points; he seemed to revel in them.  “Not paying attention to polls” and “At least you know where I stand” seemed to him to be pillars of strength as opposed to pillars of ignorance and complete and total lack of intellectual curiosity.  You don’t have to try to win a popularity contest to find out when something is going wrong on your watch.  And you can be bold, admit a failure, learn from it, and move on instead of just digging yourself deeper and deeper into the same hole.

I read a great article in The Economist last night that summarized its current view of Bush’s legacy, and in fact it noted a bunch of areas in which Bush appeared to learn from his mistakes, though he probably wouldn’t phrase it that way.  The fact that his second administration did do more to reach out to key allies in Germany and France is one example.  And to the article’s credit, it even noted some of Bush’s accomplishments, or at least the areas in which his thinking was right — those those are just dwarfed in the end by his failings.  

At any rate, I’m delighted he’ll be leaving office on Tuesday.  Inauguration day is one of my favorite days in America, and I look forward with optimism to the incoming administration as I always do, regardless of how I voted.

But as for Bush, I think I’d rather have the pilot of that USAir flight as my commander in chief.  Now there’s a guy (I don’t even know his name, and I probably never will) who had a quick grasp of a difficult situation and produced a brilliant and elegant solution in short order!

Please, Let There Be Another Explanation

One of the things I was most excited about with an Obama presidency was that it finally seemed as if we had a real leader in the hot seat.  Someone who might actually be able to run an effective government instead of a bureaucracy paralyzed by partisanship.  I still have this hope.

But I also hope what we’re seeing around the stimulus bill is not what we’re in for the next four years.  What I’m seeing is a complete absence of leadership around the problem.  Seems to me, taking lessons from the corporate world, that Obama should have done two things that would have gotten the program passed in a bipartisan way much more quickly:

1. Build true consensus ahead of time and make the congressional leaders do the sales job in a bipartisan way.  It’s great that Obama went up to the Republican caucus to talk to them and get their point of view, but shouldn’t he have gathered the top 2-3 leaders of each party and each house of congress in his office (or in theirs) to whiteboard this whole thing out ahead of time, so that those people could be bought in and then go on to convince others?  Few successful major corporate initiatives are launched without a careful eye to how all major stakeholders will react so that the majority will be on board.

2. Link the plan to the election in an obvious way.  Obama can credibly claim that the election was a decisive call for change.  He can also credibly claim a small number of priority items that clearly emerged as points of change — reducing/eliminating our dependence on foreign oil, vastly expanded access to health care, reducing taxes on the middle class, and fixing the problem of the revolving door between lobbyists and government as the relevant ones here (there are others around foreign policy and the wars, of course).  Why isn’t the stimulus package pumping money in the economy to the specific ends that were articulated during the campaign, at least for 60-80% of the money, anyway? Seems to me like that’s the best way not just to sell the program to Congress and the American people, but to actually have it stand for something other than 535 people’s pet local projects.  Again, in corporate America, once everyone has agreed on a strategy and goals, it’s much easier to define a path forward around how to execute the details.

I hope something else is going on here — perhaps Obama just wants to make Congress look like a bunch of idiots, so they self destruct and ultimately yield more power to the White House — but my fear is that our new leader needs some lessons in leadership.

Education and Entrepreneurship

Fred posted his thoughts the other day that you don’t need a college degree to be a successful entrepreneur. He is clearly right in that one CAN be successful without it.  Gates, Zuckerberg, Dell have proven that. 

I’ve always said that I didn’t think an MBA was a prerequisite for a successful business career.  That’s easy for me to say, as I don’t have one despite many years of applying, deferring, cancelling, reapplying and general hand-wringing over whether or not to go in the mid-90s.  An MBA is probably a positive on a resume for the most part (hard to argue it’s a negative), but it’s not a prerequisite.  Every time I see “MBA preferred” on a job posting, I cringe (we never say that at Return Path).  Really?  You’d *prefer* to hire someone with an MBA over someone with two additional years of relevant work experience? 

That said, I’d note that there are things one gets out of a good college education that are critical to success in life.  Yes, they can be learned outside the classroom.  But unlike business school material, which is in many cases the stuff of work experience and more easily augmented by observation and the occasional business article or book (as far as I can tell), the things one learns in college which are applicable to entrepreneurship aren’t about the subject matter of the course.  They are things like:

– learning and applying new concepts quickly

– critical reasoning

– crisply presenting ideas

– respecting deadlines and guidelines

– understanding and appreciating other points of view

As with business school, these things *can* be learned outside a university environment, and certainly there are unusually talented people who have these traits hard wired.  But I do think the university environment cultivates and nurtures these skills in a way that is easier than the “do it yourself” world of teenage entrepreneurship. 

Five Years On

As of this past weekend, I’ve been blogging on OnlyOnce for five years.  My main reflection as I was thinking about it during this morning’s run is that blogging is different.  I started blogging to try out what was at the time the “new, new thing” (there were almost no CEO blogs at the time), just like I have tried out lots of other new technologies or web services from time to time over the years — from Skype to Facebook to Twitter to about 50 others.

You’ll never see a tweet from me about an anniversary of using Twitter.  Or any other comparable from that above list.  Blogging has ended up being fundamentally different.  It’s not just another expression of my status updates or another way to connect with friends and colleagues.  It’s become a core part of my business operating system, although I suppose that’s the case for many other tools as well. 

I think the main difference is that OnlyOnce has become a true form of creative expression for me.  It’s like (I imagine) writing a book or composing a piece of music. I’m not suggesting it’s high art, but I view it more as an ongoing project than most other online tools or sites I’ve tried out over the years.

Here’s to the next five years of it.

A Network of Teams, Not an Integrated System

We were in and out of the hospital a lot back in March/April for the last few weeks with one of our kids (she’s ok now).  One of us was with her 24 hours a day for the 10-11 days she was hospitalized, with lots of down time, which gave me lots of time to observe health care in action.  While she ultimately got very good care at a very good hospital, it was incredibly clear to me that the hospital functioned as a network of teams, not as an integrated system.

The nurses were great.  Followed their routine practices and responded to doctors’ orders on cue.  Same with the nursing assistants.  Same with the docs.  Same with the phlebotomists and labs.  Same with the hospital support staff.  But the hand-offs from one team to the next, and from one shift to the next within a team, were seriously lacking.

What was wrong with this?  Nothing was optimized around the patient.  I mentioned this to my father-in-law, who is an HMO executive, and he noted that the concept of “patient-centric care” was a hot topic in managed care right now — but that it had also been a hot topic 10-15 years ago, to no apparent end (and not just in this one hospital that we were at).  Seems like customer relationship management became a persistent priority in the rest of the business world years ago.  Why hasn’t this stuck in health care?

This was a great exercise for me in thinking about the customer-centric view of a business.  We talk here at Return Path about “stapling yourself to a customer” to see what they see.  Every business should go through that exercise at some level regularly to make sure they’re functioning as an integrated system as far as the outside world is concerned.

Ten Characteristics of Great Investors

Fred had a great post today called Ten Characteristics of Great Companies.  This link includes the comments, which numbered over 70 when I last looked.  Great discussion overall, especially for Fred’s having come up with the list on a 15-minute subway ride.  Fred used to write a series of posts about VC Chiches, and I would periodically write a Counter-Chiche post from the entrepreneur’s perspective.  This post inspired me to do the same.

So I’ve taken 15 minutes here, pretended I’m on the subway, and here is my list of Ten Characteristics of Great Investors, in no particular order:

1. Great investors know how to give strategic advice without being in the operating weeds of a company
2. Great investors get to know whole management teams, not just CEOs — in fact, great investors become part of the extended management team of their portfolio companies
3. Great investors invite you to do diligence on them by giving you a list of every CEO they’ve ever worked with and asking you to pick the ones you want to talk to
4. Great investors ask great questions
5. Great investors don’t publicly take credit for the success of their investments, even if they were major drivers of that success
6. Great investors show up for meetings on time and don’t spend the meeting using their smartphone
7. Great investors treat their portfolio companies’ money as if it were their own money when spending it on things like lawyers or travel
8. Great investors look for connections to make between their portfolio companies or relevant people but have a strong relevance filter and don’t send junk
9. Great investors never have a ready-made list of the ways they add value to companies — and they specifically never talk about the help they give in recruiting executives or making sales/bus dev introductions
10. Great investors recognize when they have a conflict around a portfolio company and are clear to represent their separate points of view separately

I’m not sure I’ll be invited to present this anywhere, but there it is for discussion.

Book Short:  Sloppy Sequel

SuperFreakonomics, by Steven Levitt and Stephen Dubner, wasn’t a bad book, but it wasn’t nearly as good as the original Freakonomics, either.  I always find the results of “naturally controlled experiments” and taking a data-driven view of the world to be very refreshing.  And as much as I like the social scientist versions of these kinds of books like Malcolm Gladwell’s The Tipping Point and Blink (book; blog post), there’s usually something about reading something data driven written by a professional quant jock that’s more reassuring.

That’s where SuperFreakonomics fell down a bit for me.  Paul Krugman has described the book in a couple different places as “snarky and contrarian.”  I typically enjoy books that carry those descriptors, but this one seemed a bit over the top for economists — like a series of theories looking for data more than raw data adding up to theories.Nowhere is this more true than the chapter on climate change.  It’s a shame that that chapter seems to be swallowing up all the public discussion about the book, because there are some good points in that chapter, and the rest of the book is better than that particular chapter, but such is life.

As with all things related to the environment, I turned to my friend Andrew Winston’s blog, where he has a good post about how the authors kind of miss the point about climate change…and he also has a series of links to other blog posts debunking this one chapter.  If you’re into the topic, or if you read the book, follow the chain here for good reading.  My conclusion about this chapter, being at least somewhat informed about the climate change debate, is that the book seems to have sloppy writing and editing at best, possibly deliberately misleading at worst.  (Incidentally, the reaction in the blogosphere seems highly emotional, other than Andrew’s, which probably doesn’t serve the reactors well.)

But I’ll assume the best of intentions.  Some of the points made aren’t bad – there is no debate about the problem or the need to solve it, the authors express legitimate concern that current solutions, especially those requiring behavioral change, will be too little too late, and most interestingly, they show an interest in alternative approaches like geo-engineering.  I hadn’t been familiar with that topic at all, but I’m now much more interested in it, not because it’s a “silver bullet” approach to dealing with climate change, but because it’s a different approach, and complex problems like climate change deserve to have a wide range of people working on multiple types of solutions.  I met Nathan Myhrvold once (I almost threw up on him during a job interview, which is another story for another day), and it makes me very happy that his brilliance is being applied to this problem as a general principle.

As I said, though, beyond this one chapter, the book is good-not-great.  But it certainly is chock full of cocktail party nuggets!

Investment in the Email Ecosystem

Last week, my colleague George Bilbrey posted about how (turns out – shocking!) email still isn’t dead yet.

Not only is he right, but the whole premise of defending email from the attackers who call it “legacy” or “uninteresting” is backwards.  The inbox is getting more and more interesting these days, not less.  At Return Path, we’ve seen a tremendous amount of startup activitiy and investment (these two things can go together but don’t have to) in in front end of email in the past couple years.  I’d point to three sub-trends of this theme of “the inbox getting more interesting.”

First, major ISPs and mailbox operators are starting to experiment with more interesting applications inside their inboxes.  As the postmaster of one of the major ISPs said to me recently, “we’ve spent years stripping functionality out of email in the name of security – now that we have security more under control, we would like to start adding functionality back in.”  Google’s recent announcement about allowing third-party developers to access your email with your permission is one example, as is their well-documented experiment with NetFlix’s branded favicon showing up in the inbox starting a few months back.  And Hotmail’s most recent release, which has been well covered online (including this article which George wrote in Mediapost a couple months ago) also includes some trials of web-like functionality in the inbox, as well as other easy ways for users to view and experience their inboxes other than the age-old “last message in on top” method.  Yahoo has done a couple things along these lines as well of late, and one can assume they have other things in the works as well.

I wouldn’t be surprised if many ISPs roll out a variety of enhanced functionality over the next couple of years, although these systems can take a lot of time to change.  Although some of these changes present challenges for marketers and publishers, these are generally major plusses for end users as well as the companies who send them email – email is probably the only Internet application people spend tons of time in that’s missing most state of the art web functionality.

Second, although Google Wave got a lot of publicity about reinventing the inbox experience before Google shut it down a couple weeks ago, there are probably a dozen startups that are working on richer inboxes as well, either through plug-ins or what I’d call a “web email client overlay” – you can still use your Yahoo!, Hotmail, Gmail, or other address (your own domain, or a POP or IMAP account), but read the mail through one of these new clients.  Regardless of the technology, these companies are all trying, with different angles here or there, to make the inbox experience more interesting, relevant, productive, and in many cases, tied into your “social graph” and/or third-party web content.

The two big ones here in terms of active user base are Xobni, an Outlook plugin that matches social graph to inbox and produces a lot of interesting stats for its users; and Xoopit, which recently got acquired by Yahoo and wraps content indexing and discovery into its mail client.

Gist matches social graph data and third-party content like feeds and blogs into something that’s a hybrid of plugin and stand-alone web application.  That sounds a little like Threadsy, although that’s still in closed beta, so it’s hard to tell exactly what’s going to surface out of it.  There’s also Zenbe and Kwaga, and Xiant, which focus on creating a more productive inbox experience for power users.

Furthermore, services like OtherInbox and Boxbe aim to help users cut through the clutter of their inboxes and simultaneously create a more effective means for marketers to reach customers (say what you will about that concept, but at least it has a clear revenue model, which some of the other services listed above don’t have).

Finally, a number of services are popping up which give marketers and publishers easy-to-use advanced tools to improve their conversion or add other enhanced functionality to email.  For example, RPost, a company we announced a partnership with a couple months back, provides legal proof of delivery for email with some cool underlying technology.  LiveClicker (also a Return Path partner) provides hosted analytics-enabled email video in lightweight and easy-to-use ways that work in the majority of inboxes.

Sympact (another Return Path partner) dynamically renders content in an email based on factors like time of day and geolocation – so the same email, in the same inbox, will render, for example, Friday’s showtimes for New York when I open it in my office on Friday afternoon but Saturday’s showtimes for San Francisco after I fly out west for the weekend.  And a Belgian company called 8Seconds (you guessed it, another Return Path partner) does on-the-fly multivariate testing of email content in a way that blows away traditional A/B methods.  While these tools require some basic things to be in place to work optimally, like having images on by default or links working, they don’t by and large require special deals with ISPs to make the services function.

While these tools are aimed at marketers, they will also make end users’ email experiences much better by improving relevance or by adding value in other ways.

Some of this makes me wonder whether there’s a trend that will lead to disaggregation of the value chain in consumer email – splitting the front end (what consumers see) from the back end (who runs the mail server).  But that’s probably another topic for another day.  In the meantime, I’ll say three cheers for innovation in the email space.  It’s long overdue and will greatly enrich the environment in the coming years as these services gain adoption.

Father/Mother Knows Best?

USA Today had an interesting article today about how founder-led companies perform better than their non-founder-led counterparts, with a 15-year stock price appreciation of 970% vs. the S&P 500 average of 222%.  That’s pretty powerful data.

The general reasons cited in the article include

founders having deep industry knowledge…having a powerful presence in the company…having a huge financial stake in the success of the business…not looking for the next job so can take a long-term perspective…being street fighters early on

I think all those are true to some extent.  And it’s certainly true, as one of the CEOs interviewed for the article said, that it’s not because founders are smarter or harder working.  But to add to the dialog, I think there are two other big reasons founders may be more successful at generating long-term returns for their companies.  One is much more tactical than the other.

1. Founders have a deep, emotional connection to the business.  For many of us, and certainly for the 15-year-plus variety mentioned in the article, a founder’s company represents his or her life’s work.  Whether or not your name is on the door like Michael Dell, as a founder, your personal reputation and in many cases (perhaps in an unhealthy way), your sense of self worth is tied to the success of the business.  I’m not suggesting that “hired” CEOs don’t also care about their reputations, but there is something different about the view you have of a business when you started it.

2. Founders have longer tenures.  The article didn’t say, but my guess is that for the 15 years analyzed, the average tenure of the founder-led companies was 15 years…and the average for the S&P 500 was something like 5 years.  And while 5 years may seem like a long time in this day and age of job hopping, it’s not so long in the scheme of running and building an enterprise.  It takes years to learn an industry, years to build relationships with people, and years to influence a culture.  Companies that trade out CEOs every few years are by definition going to have less solid and consistent strategies and cultures than those who have more stability at the top, and that must influence long-term value as much as anything else.

I’m sure there are other reasons as well…comment away if you have some to add!

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!

GEOITS

This is another gem that I picked up years ago from my boss at MovieFone — the “Great Employment Office In The Sky.”  It’s a simple but powerful concept:

• the organization is grappling with a difficult employee situation, and
• the likely path is that the employee needs to leave the organization either immediately or sometime in the future, and
• it’s impossible for the organization to figure out how to get from A to B for whatever reason, then
• the employee resigns of his or her own accord, or
• the employee does something that leaves the organization no choice but to terminate him or her immediately with no gray area

This has come up time and again over the years for us, and it’s an incredible relief every time it happens.  I hate admitting that.  We try to be swift (and fair) in dealing with tough employee situations.  But the reality is that it’s quite difficult.  The easiest termination situation I have ever had as a manager — ironically the first one I ever did almost 15 years ago — was still hard, because (a) we’re all human, (b) difficult conversations are difficult, and (c) even the most clear-cut situations usually have some element of fuzziness or doubt lurking in the background.

I don’t know why the GEOITS happens.  It probably has a lot to do with employees being perceptive and also recognizing that things aren’t going well.  I am not sure I have a settled or consistent view of karma and larger forces at work in the workplace.  But I’m glad there is a GEOITS at work at least once in a while!