Return Path Core Values, Part II

As I said at the beginning of this series, I was excited to share the values that have made us successful with the world and to also articulate more for the company some of the thinking behind the statements.

You can click on the tag for all the posts on the 13 Return Path’s core values, but the full list of the values is below, with links to each individual post, for reference:

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 it and learn from it
6. We believe in being transparent and direct
7. We challenge complacency, mediocrity, and decisions that don’t make sense
8. We believe that results and effort are both critical components of execution
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

As I noted in my initial post, every employee as of August 2008 was involved in the drafting of these statements.  That’s a long post for another time, but it’s an important part of the equation here.  These were not top-down statements written by me or other executives or by our People team.  Some are more aspirational than others, but they are the aspirations of the company, not of management!

We were excited to close the sale of our Consumer Insights business last week to Edison, as I blogged about last week on the Return Path blog.  But it brought back to mind the great Yogi Berra quote that “it ain’t over ’til it’s over.”

We’ve done lots of deals over our 18 year existence.  Something like 12 or 13 acquisitions and 5 spin-offs or divestitures.  And a very large number of equity and debt financings.

We’ve also had four deals that didn’t get done.  One was an acquisition we were going to make that we pulled away from during due diligence because we found some things in due diligence that proved our acquisition thesis incorrect.  We pulled the plug on that one relatively early.  I’m sure it was painful for the target company, but the timing was mid-process, and that is what due diligence is for.  One was a financing that we had pretty much ready to go right around the time the markets melted down in late 2008.

But the other two were deals that fell apart when they were literally at the goal line – all legal work done, Boards either approved or lined up to approve, press releases written.  One was an acquisition we were planning to make, and the other was a divestiture.  Both were horrible experiences.  No one likes being left at the altar.  The feeling in the moment is terrible, but the clean-up afterwards is tough, too.  As one of my board members said at the time of one of these two incidents – “what do you do with all the guests and the food?”

What I learned from these two experiences, and they were very different from each other and also a while back now, is a few things:

• If you’re pulling out of a deal, give the bad news as early as possible, but absolutely give the news.  We actually had one of the “fall apart at the goal line” deals where the other party literally didn’t show up for the closing and never returned a phone call after that.  Amateur hour at its worst
• When you’re giving the bad news, do it as directly as possible – and offer as much constructive feedback as possible.  Life is long, and there’s no reason to completely burn a relationship if you don’t have to
• Use the due diligence and documentation period to regularly pull up and ask if things are still on track.  It’s easy in the heat and rapid pace of a deal to lose sight of the original thesis, economic justification, or some internal commitments.  The time to remember those is not at the finish line
• Sellers should consider asking for a breakup fee in some situations.  This is tough and of course cuts both ways – I wouldn’t want to agree to one as a buyer.  But if you get into a process that’s likely to cause damage to your company if it doesn’t go through by virtue of the process itself, it’s a reasonable ask

But mostly, my general rule now is to be skeptical right up until the very last minute.

Because deals are not done until they are done.

The Gift of Feedback, Part II

I’ve written a few times over the years about our 360 feedback process at Return Path.  In Part I of this series in early 2008, I spelled out my development plan coming out of that year’s 360 live review process. I have my new plan now after this year’s process, and I thought I’d share it once again.  This year I have four items to work on:

1. Continue to develop the executive team.  Manage the team more aggressively and intentionally.  Upgrade existing people, push hard on next-level team development, and critically evaluate the organization every 3-6 months to see if the execs are scaling well enough or if they need to replaced or augmented
2. Formalize junior staff interaction.  Create more intentional feedback loops before/after meetings, including with the staff member if needed, and cultivate acceptance of transparency; get managers to do the same.  Be extra skeptical about the feedback I’m getting, realizing that I may not get an accurate or complete picture
3. Foster deeper engagement across the entire organization.  Simplify/streamline company mission and balanced scorecard through a combination of deeper level maps/scorecards, maybe a higher level scorecard, and constant reinforcing communication.  Drive multi-year planning process to be fun, touching the entire company, and culminating in a renewed enthusiasm
4. Disrupt early and often, the right way.  Introduce an element of productive disruption/creative destruction into the way I lead, noting item 2 around feedback loops

Thanks to everyone internally who contributed to this review.  I appreciate your time and input.  Onward!

(This is the seventh and final post in a series documenting the work I did in Colorado on the Governor’s COVID-19 Innovation Response Team – IRT.  Other posts in order are 1, 2, 3, 4, 5, and 6.)

I’ll start the final post in this series by sharing the overview and retrospective deck that we created my last day and the two days after.  Governor Polis is going to share this with the National Governors Association in case other states are interested in our model or learnings. This pdf, which you’re welcome to download or just view in SlideShare, is a good overview of what we did and where things stood as of Saturday, March 28, noting that by the time you’re reading this post, half of it may be obsolete! 

I am normally a small government guy.  But not when this kind of thing hits. This whole thing calls for consistent national government response to the disease – potentially even global government coordination at a level we’ve never seen before (let alone the level that’s fashionable these days).  I’m not sure I’d want a Chinese style lockdown (although that may prove to have been effective), but South Korea’s pattern of learning from SARS and MERS, bulking way up on labs, reagents, epidemiologists, ventilators, etc., and then passing legislation that allows for deeply intrusive tracking in case of a public health emergency like this seems to be the way to go.  

Certainly, leaving responses up to individual states, counties, and cities is a problem.  It’s inefficient and on average ineffective, although I think our group made some extraordinary progress on a few fronts.  But the scale of the effort in an individual state of 6mm people with the associated resources just pales in comparison to what a strong federal response would be.  Of course…the federal government has to actually believe in the need for a rapid and comprehensive response and have the wherewithal to pull it off for that to work.

As for our federal government’s economic responses, that’s a different story.  At some point, the government literally won’t be able to afford to fill in the economic holes left behind by the virus (you could argue that we can’t even afford the $2T we’ve already ponied up since we are terrible at saving money when times are good and run huge deficits even then).  I’m not sure what will happen then.  

But government aside, I hope the response across the country and the world is enough to take the edge off this disease long enough for supply chains and healthcare systems to be able to properly respond.  I hope that people who have the means will continue to support local businesses and individual/freelance service providers like housekeepers, gardeners, music teachers, tutors, and coaches through this stretch, even if those people aren’t able to provide those services.  And I hope all the people who are on the ground working the problem – from frontline healthcare workers to my new friends in the Colorado state government and on the volunteer side – get the recognition they deserve for the extraordinary efforts they are undertaking to drive solutions and get everyone through this.

Special thanks to Governor Polis and his staff for the opportunity to do this work, to Brad for roping me into it and then letting me rope him into leading the private sector side, and to Kacey, Kyle, and Sarah, my new friends, for making it all work and for continuing the work after I left.

Please, Keep Not Calling (Thank You!)

It’s been three years since the federal government passed one of its better pieces of legislation in recent memory, creating the Do Not Call Registry which is a free way of dramatically reducing junk phone solicitations.  At the time, registrations were set to expire every three years.  When I signed up my phone number, I stuck a note in my calendar for today (three years later) to renew my registration.  I was planning on blogging about it to remind the rest of the world, too.

To my great surprise, when I went to the site today, I saw this note:

Your registration will not expire. Telephone numbers placed on the National Do Not Call Registry will remain on it permanently due to the Do-Not-Call Improvement Act of 2007, which became law in February 2008.

That’s two great pieces of legislation.  What will they think of next?

It’s Copyright Time

Brad must be off his game this year, so…time to update all those copyrights to say 2008.  Or as Brad gently suggested last year, make that field variable so you never have to worry about it again!  (Thanks to our CTO Andy Sautins for the reminder here.)

More Good Inc.

Last year I was pleased and proud to write about our debut on the Inc. 500 list of America’s fastest growing companies.  At that time I wrote that “Now our challenge, of course, is STAYING on the list, and hopefully upping our ranking next year!”  Well, I am again please and proud to announce that we, in fact, stayed on the list.  (You can read all the Inc. coverage here and see our press release about the ranking here.)

Unfortunately, we didn’t make the second part of our goal to up our rank.  But, we did up our growth – our three-year revenue growth rate was 18% higher than last year.  This is a testament to the hard work of our team (now 150 strong!) and wouldn’t be possible without the support of our many great clients (now 1,500 strong!).  Most importantly, we see no end in sight.  In fact, 2008 promises to be an even bigger year for us as we poise for continued growth.  By the way, would you like to be part of a team that has now ranked as one of America’s fastest growing companies two years in a row?  Check out our Careers page and join the team that is advancing email marketing, one company at a time.

People First

I do not think it’s telling that my fourth post in this series of posts on Return Path’s core values (kickoff post, tag cloud) is something called People First.  Ok, it probably should have been the first post in the series.  To be fair, it is the first value on our list, but for whatever reason, the value about Ownership was top of mind when I decided to create this series.

Anyway, at Return Path,

We believe that people come first

And we aren’t shy about saying it publicly, either.  This came up in a lengthy interview I did with Inc. Magazine last year when we were profiled for winning an award as one of the top 20 small- and mid-sized businesses to work for in America.  After re-reading that article, I went back and tried to find the slide from our investor presentations that I referred to.  I have a few versions of this slide from different points in time, including one that’s simpler (it only has employees, clients, and shareholder on it) but here’s a sample of it:

That pretty much says it all.  We believe that if we have the best and most engaged workforce, we will do the best job at solving our clients’ problems, and if we do that well, our shareholders will win, too.

How does this “people first” mentality influence my/our day-to-day activities?  Here are a few examples:

• We treat all employees well, regardless of level or department.  All employees are important to us achieving our mission – otherwise, they wouldn’t be here.  So we don’t do a lot of things that other companies do like send our top performing sales reps on a boondogle together while the engineers and accountants slave away in the office as second-class citizens.  That would be something you might see in a “sales first” or “customer first” culture
• We fiercely defend the human capital of our organization.  There are two examples I can think of around this point.  First, we do not tolerate abusive clients. Fortunately, they are rare, but more than once over the years either I or a member of my senior team has had to get on the phone with a client and reprimand them, or even terminate their contract with us, for treating one of our employees poorly and unprofessionally. And along the same lines, when all economic hell broke loose in the fall of 2008, we immediately told employees that while we’d be in for a rough ride, our three top priorities were to keep everyone’s job, keep everyone’s compensation, and keep everyone’s health benefits. Fortunately, our business withstood the financial challenges and we were able to get through the financial crisis with those three things intact.
• We walk the walk with regard to employee feedback.  Everyone does employee satisfaction surveys, but we are very rigorous about understanding what areas are making people relatively unhappy (for us, even our poor ratings are pretty good, but they’re poor relative to other ratings), and where in the employee population (office, department, level) those issues lie.  We highlight them in an all-hands meeting or communication, we develop specific action plans around them, and we measure those same questions and responses the next time we do a survey to see how we’ve improved
• We invest in our people.  We pay them fairly well, but that’s not what I’m talking about.  We invest in their learning and growth, which is the lifeblood of knowledge workers.  We do an enormous amount of internal training.  We encourage, support, and pay for outside training and education.  We are very generous with the things that allow our employees to be happy and healthy, from food to fitness to insurance to time off to a flexible environment to allowing them to work from another office, or even remotely, if their lives require them to move somewhere else
• I spend as little time as I possibly can managing my shareholders and as much time as I can with employees and prospective employees.  That doesn’t mean I don’t interact with my Board members – I do that quite a bit.  But it does mean that when I do interact with them, it’s more about what they can do for Return Path and less about reporting information to them.  I do send them a lot of information, but the information flow works well for them and simultaneously minimizes my time commitment to the process:  (1) reporting comes in a very consistent format so that investors know WHAT to expect and what they’re looking at, (2) reporting comes out with a consistently long lead time prior to a meeting so investors know WHEN to expect the information, (3) the format of the information is co-developed with investors so they are getting the material they WANT, and (4) we automate as much of the information production as possible and delegate it out across the organization as much as possible so there’s not a heavy burden on any one employee to produce it
• When we do spend time with customers (which is hopefully a lot as well), we try to spread that time out across a broad base of employees, not just salespeople and account managers, so that as many of our employees can develop a deep enough understanding of what our customers’ lives are like and how we impact them

There are plenty of companies out there who have a “shareholder first” or “customer first” philosophy.  I’m not saying those are necessarily wrong – but at least in our industry, I’ll bet companies like that end up with significantly higher recruiting costs (we source almost half our new hires from existing employee referrals), higher employee churn, and therefore lower revenue and profit per employee metrics at a minimum.  Those things must lead to less happy customers, especially in this day and age of transparency.  And all of those things probably degrade shareholder value, at least over the long haul.

Welcome to the new Return Path.

For a tech company to grow and thrive in the 21st century it must be in a state of constant adaptation. We have been the global market leaders in email deliverability since my co-founder George Bilbrey coined that term back in 2002. In fact, back in 2008 we announced a major corporate reorganization, divesting ourselves of some legacy businesses in order to focus on deliverability as our core business.  

 Since then Return Path has grown tremendously thanks to that focus, but we have grown to the point where it’s time for us to redefine ourselves once again.  Now we’re launching a new chapter in the company’s history to meet evolving needs in our marketplace. We’re establishing ourselves as the global market leaders in email intelligence. Read on and I’ll explain what that means and why it’s important.

What Return Path Released Today

We launched three new products today to improve inbox placement rate (the new Inbox Monitor,  now including subscriber-level data), identify phishing attacks (Email Brand Monitor), and make it easier to understand subscriber engagement and benchmark your program against your competition (Inbox Insight, a groundbreaking new solution). We’ve also released an important research study conducted by David Daniels at The Relevancy Group.

The report’s findings parallel what we’ve been hearing more and more recently. Email marketers are struggling with two core problems that complicate their decision making: They have access to so much data, they can’t possibly analyze it fast enough or thoroughly enough to benefit from it; and too often they don’t have access to the data they really need.

Meanwhile they face new challenges in addition to the ones email marketers have been battling for years. It’s still hard to get to the inbox, and even to monitor how much mail isn’t getting there. It’s still hard to protect brands and their customers from phishing and spoofing, and even to see when mail streams are under attack. And it’s still hard to see engagement measurements, even as they become more important to marketing performance.

Email Intelligence is the Answer

Our solution to these problems is Email Intelligence. Email intelligence is the combination of data from across the email ecosystem, analytics that make it accessible and manageable, and insight that makes it actionable. Marketers need all of these to understand their email performance beyond deliverability. They need it to benchmark themselves against competitors, to gain a complete understanding of their subscribers’ experience, and to accurately track and report the full impact of their email programs.  In fact, we have redefined our company’s mission statement to align with our shift from being the global leader in Email Deliverability to being the global leader in Email Intelligence:

We analyze email data and build solutions that generate insights for senders, mailbox providers, and users to ensure that inboxes contain only messages that users want

The products we are launching today, in combination with the rest of our Email Intelligence Solution for Marketers that’s been serving clients for a decade, will help meet these market needs, but we continue to look ahead to find solutions to bigger problems. I see our evolution into an Email Intelligence company as an opportunity to change the entire ecosystem, to make email better, more welcome, more effective, and more secure.

David’s researchoffers a unique view of marketers’ place in the ecosystem, where they want to get to, how much progress they’ve made, and how big a lead the top competitors have opened up against the rest. (It can also give you a sense of where your efforts stack up vs. the rest of the industry.) There are definitely some surprises, but for me the biggest takeaway was no surprise at all: The factors that separate the leaders are essentially the core components of what we define as Email Intelligence.

Hackoff – The Blook, Part II

A few weeks back, I posted about a new blook (book delivered in single episodes via blog) called Hackoff.com – An Historic Murder Mystery Set in the Internet Bubble and Rubble, by Tom Evslin.  A few weeks into it, and I’m hooked.  It’s:

– complete and total brain candy, or mental floss as Brad calls it

– a great 2 minute break in the middle of the day (episodes are delivered once a day during the week)

– a very entertaining reminder about some of the wacky things that went on back in the Internet heyday

– a good look into some of the processes that go on behind the scenes in taking a company public

If you haven’t started the blook yet and want to give it a try, you can catch up on all of the first episodes and subscribe to the new ones here.   You can also preorder a hardcover copy of the book here on Amazon.com.

Learn Word of Mouth Marketing

Our friend, former RP colleague, and WOM guru Andy Sernovitz is hosting a small-group word of mouth marketing seminar. Usually he only does private training for companies at a very large price, so this is a rare chance for 50 people to get the best introduction to word of mouth that there is.  I blogged about his book a while back here.

We’ve arranged for a $250 discount for our clients. Use code “welovereturnpath” when you register (kind of catchy code, isn’t it?).

This is a very practical, hands-on course. In one intense day, you will:

• Master the five steps of word      of mouth marketing
• Construct an action plan that      your company can start using the very next day
• Get the same training that      big corporations (Microsoft, TiVo, eBay) have received — for a fraction      of what they paid
• Know how to translate word of      mouth marketing into real ROI
• Participate in an active,      intense day of practical brainstorming (not boring theory)
• Learn from Andy Sernovitz,      the guy who literally wrote the book on word of mouth marketing

Andy promises you will learn a repeatable, proven marketing framework that is easy to execute, affordable, and provides measurable results within 60 days.

More information: http://events.gaspedal.com

Chicago: July 30 and September 4

Pass it on: http://events.gaspedal.com/banners