Driving Out of the Bubble

It’s easy for those of us who live in the Internet bubble to confuse the words “startup” and “entrepreneur” with the word “technology.”  Every once in a while, I am struck by a fantastic entrepreneurial idea that’s low-tech or no-tech. 

In the last few weeks, I’ve learned of two of them — oddly, very similar ideas.  They’re both going after the New York City black car limo market (all those car services that take business travelers to and from airports and meetings), which is a lucrative but kind of gritty business.  I’ve used black car services for 16 years now, and while I’ve found one that’s pretty good, they all have massive customer service problems and are pretty expensive.  It’s a market ripe for revolution.  But how to execute it?

Kid Car New York is one new service that is attacking this market with an alternative car service that’s oriented around families and kids.  The cars are mini-vans.  The drivers are trained in safety and friendly.  The cars all have car seats and bases in them, which are sanitized from one passenger to the next.  The drivers are actually employees with benefits — this company is trying to do to car services what Starbucks did to convenience store workers.  There is a membership/subscription pricing model that makes it feel more like a club.  While it’s moderately more expensive than black car competition, Kid Car is a natural alternative that appeals to a big niche audience.  The entrepreneur is a friend and former Return Pather, Topher McGibbon.  He’s excited about revolutionizing a sleepy, rough industry.  Mariquita and I have used Kid Car for a bunch of trips with the kids, and it’s like night and day.

In a different way, Ozocar is doing the same thing.  It’s a black car service with a fleet 100% made up of Toyota Priuses (if that’s the plural — I keep wanting to call them Prii). That’s the hook.  If you care about your carbon footprint but still have to do things like fly on planes and get to and from airports, why wouldn’t you pick a service that’s more environmentally friendly?  I tried Ozocar last night for the first time, and it was perfectly fine.  Plus, I felt better about myself the whole 18 minutes home from LaGuardia. 

Ozocar reminds me of my friend Andrew Winston’s book, Green to Gold (I posted about it here), and how businesses can be both more sustainable and more valuable at the same time.  Both Ozocar and Kid Car are great examples of innovation being driven by customer needs and market opportunity unrelated to high tech.  They’re great services, and I hope they succeed.  I just wonder how businesses like these get funded with all of the venture focus in the world on high tech and life sciences.

Last week I wrote about The Tension That Will Come With the Future of Work.  No one knows what the post-pandemic world of office vs. remote work will look like, but there are going to be some clear differences between how people will respond to being in offices or not being offices going forward.  As I said in that post, I think the natural, gravitational pull for senior people will be to do more remote work, because of a combination of their commutes, their personal time, their work setups at home, and their level of seniority…but with the possible exception of engineers, “all remote” may actually not be in the best interest of a number of junior or more introverted team members.

Two things popped up in the last few days that are making it clear to me that there’s another issue all of us — whether you’re a CEO or CXO or an entry level employee — will face.  We’ve become much more efficient in how we do our jobs and run our lives.  In my case, I’ll go ahead and say it — I’m addicted to the efficiency and scarcity of social interactions in my work life now in a way that I’m going to find hard to unwind, so I’m calling it “ruthless efficiency.”

Example 1 is a time-based example.  I’ve been doing virtually all client-related meetings, whether sales calls or customer success calls, in 30 minutes over Zoom or equivalent for a year now.  Sometimes I even get one done in 15 minutes.  Very, very rarely, I’ll book one for an hour.

One of my Bolster colleagues who lives not too far away in Connecticut is having drinks with a very important potential partner one night next week as the temperatures outside warm up here in the northeast.  She invited me to join — and really, I should join.  But then “ruthless efficiency math” sets into my thinking.  Instead of a 30 zoom, this will take me three hours – an hour drive each way plus the meeting.  Maybe I get lucky and I can do a call or two from the car, but is the meeting really worth 4-6x the amount of time just so I can be in person?  Even though this is the kind of thing I would have done without hesitation a year ago…that calculus is really hard to make from where I sit today.

Example 2 is an expense-based example.  We have spent basically $0 for a year on T&E.  Now we are planning some kind of a multi-day team meeting a few weeks from now around the 1-year anniversary of the company to work on planning for the next couple quarters.  The quarterly offsite, including travel, hotels, etc., has been a deeply-ingrained part of my leadership Operating System for 20-25 years now.  OF COURSE we should do this meeting in person and offsite if the public health environment allows it and people are comfortable.  But then “ruthless efficiency math” sets into my thinking.  What’s this meeting going to cost?  $10,000?  Depends where we do it and how many team members come since we have people in multiple cities.  But YIKES, that’s a lot of money.  We are a STARTUP.  Shouldn’t we use money like that for some BETTER purpose?

Forget the big things.  I think we all realize that we don’t have to hop on a plane now and do a day trip to the other coast or Europe or Asia for a couple meetings unless those meetings are do-or-die meetings.  It’s these little things that will be tough to readjust now that we’ve all gotten used to having hours upon hours, and dollars upon dollars, back on our calendars and balance sheets because we’ve gotten addicted to the amazing, and yet somewhat ruthless efficiency of the knowledge worker, pandemic, work from anywhere, get it done in 30 minutes on a screen way of life.

I wrote a post the other day about innovating employee benefits practices, and I realized I’d never documented a couple other ways in which we have always tried to innovate People practices. Here’s one of them: the Open Expense Policy, which I wrote about in the second edition of Startup CEO in a new chapter on Authentic Leadership when talking about the problem of the “Say-Do” gap.  Here’s what I wrote:

I’ll give you an example that just drove me nuts early in my career here, though there are others in the book.  I worked for a company that had an expense policy – one of those old school policies that included things like “you can spend up to $10 on a taxi home if you work past 8 pm unless it’s summer when it’s still light out at 8 pm” (or something like that).  Anyway, the policy stipulated a max an employee could spend on a hotel for a business trip, but the CEO  (who was an employee) didn’t follow that policy 100% of the time.  When called out on it, did the CEO apologize and say they would follow the policy just like everyone else? No, the CEO changed the policy in the employee handbook so that it read “blah blah blah, other than the CEO, President, or CFO, who may spend a higher dollar amount at his discretion.”

When we started Return Path, we had a similar policy. It was standard issue. But then over time as our culture became stronger and our People First philosophy and approach became something we evangelized more, we realized that traditional expense was at odds with our deeply held value of trusting employees to make good decisions and giving them the freedom and flexibility they needed to do their best work.

So we blew up the traditional policy and replaced it with a very simple one — “use your best judgment on expenses and try to spend the company’s money like it’s your own.” That policy is still in place today for our team at Bolster. We do have people sign off on expense requests that come in through the Expensify system, mostly because we have to, but unless there is something extremely profligate, no one really says a word.

Similar to what happened when we switched to an Open Vacation policy, we had some concerns from managers about employees abusing the new un-policy, so we had to assure them we’d have their back. But do you know what happened when we implemented the new policy? We got a bunch of emails from team members thanking us for trusting them with the company’s money. And the average amount of expenses per employees went down. That’s right, down. Trusting people to exercise good judgment and spend the company’s money as if it was their own drove people to think critically about expenses as opposed to “spend to the limit.”

I don’t think in 15+ years of operating with an Open Expense policy that any of us have had to call out an employee’s expenses as being too high more than once or twice. That’s what the essence of employee trust is about. Manage exceptions on the back end, don’t attempt to control or micromanage behavior on the front end.

Agile Reading

While not exactly a laugh a minute, Lean Software Development:  An Agile Toolkit, by Mary and Tom Poppendieck, is a good read for anyone who is a practitioner of agile development — or anything agile.  (Note:  if you want a laugh a minute, read Who Moved My Blackberry?, which as Brad says, is hilarious — kind of like The Office in book form).

As I wrote about here and here, Return Path now does both agile development and agile marketing.  The book draws many interesting comparisons between manufacturing and engineering, which I found quite interesting, and not just because I’m a former management consultant — there’s something that’s just easier to visualize about how an assembly line works than about how code is written.  The foundation of the book is writings and sidebar anecdotes about 22 Tools, all of which are helpful to understand the principles which underly and power a successful agile process.

Concepts such as seeing and eliminating waste, empowering a team while still managing to lead it, and why small-batch work and application of the theory of constraints makes sense across the board are made easy to understand and easy to apply by the authors.

Thanks to my colleague Ed Taussig for this book.

Startup CEO: The Online Course Part II

Startup CEO the online course offered by the Kauffman Fellows Academy is back this fall starting September 15!  As many of you know, the course is based on my book Startup CEO: A Field Guide to Scaling Your Business.

When the course first ran earlier this year, I wasn’t sure what to expect.  Hundreds of students from six continents signed up, all eager to learn as much as they could about entrepreneurship and how to develop their startups.  The students worked together in teams to develop their startup ideas on the unique online educational platform NovoEd.  I was amazed at the enthusiasm of students who dove into lectures and the book and then exchanged ideas in the forums.  It was very powerful to see cohorts of students from all over the world sharing their experiences together, almost like the CEO peer group that I write about in the book.

The real power of it really hit me when I was in Brazil  this last spring at a dinner and one of the attendees approached me and told me he was one of the Startup CEO students and how much he was enjoying the course.

To bring the class to life, we began holding Google hangouts moderated by KFA VP and former CNN correspondent Rusty Dornin.  The students could write in questions live during the hangout or watch the recorded version later.  The hangouts were not only informative but fun.

Here are a few comments from students in the winter course:

“The lectures and the hangouts were incredibly insightful. I’m sure I’ll avoid a good number of mistakes I would have surely made without taking this class!

“I enjoyed the high quality of the lecturers and their very practical experience and guidance. This included the excellent visiting lecturers and whilst I was unable to join the hangouts in real time (I’m in Australia) I was able to watch the recordings”

In addition, Brad Feld and Jason Mendelson’s course Venture Deals  based on their popular book Venture Deals: Be Smarter than Your Lawyer and Venture Capitalist will begin September 29th.  Brad Feld and other celebrated investors will also be featured in hangouts for the course and Brad loves to dive into the forums.

I am looking forward to this next round and our global discussion of how to create and manage successful startups.

As most of you know by now, I wrote a book that was published last fall called Startup CEO:  A Field Guide to Scaling Up Your Business.  I’m excited to announce that, starting on January 20th, the book has now been turned into Kauffman Fellows Academy (KFA) online course called Startup CEO.  Similarly, Brad Feld and Jason Mendelson’s highly successful Venture Deals is also going to launch as Venture Deals KFA online course on February 24th. Both will be offered initially on the NovoEd platform.

The parties involved in getting it off the ground (besides me) were the team at Kauffman Fellows Academy and NovoEd.  Clint Korver, a serial entrepreneur and Stanford adjunct professor, spearheaded the project, and between filming the course and now, he switched jobs from KFA to be the COO at NovoEd, so he has been on all sides of this.   NovoEd is a very unique online educational platform that gives students the ability internationally to work together in teams and collaborate on assignments and peer review one another’s work.  So far over 1,300 people have signed up for Startup CEO from countries as far-flung as the China, Brasil, Iran, the U.K., Australia and, of course, Silicon valley..  This is an exciting extension of the book for me to watch unfold.

The class itself is a very unique format, a bit of “the entrepreneur’s studio” model.  For each chapter of the book (there are 48), I filmed a 5-10 minute Q&A with Clint in front of a live audience of a dozen startup CEOs in New York.  This was a serious production – much more than I expected – with a three-person former CNN production team of Kevin Rockwell, Chuck Afflerbach, and led by former Emmy Award winning CNN Correspondent Rusty Dornin.  Preparing for the class this way was fun and gave me a good opportunity to further crystallize the main point or theme of each chapter.  Having a live audience was super helpful to see what worked and what didn’t work.

New Media Deal, Part II – the We Media Deal

My original New Medial Deal posting from August, 2004, is my favorite posting of all 220 or so that I’ve done to date. It has the most clicks of any posting I’ve done. People mention it to me all the time. I even used it as the foundation for the preface to our book at Return Path, Sign Me Up!

The general thesis (although the original posting is short and worth reading) is simple. Old Media was one-way communication – they produce it, you consume it, and Old Media had a deal with us: they give us free or cheap content, we tolerate their advertising. Think about your favorite radio station or an episode of The Office on TV. The New Media deal is an Internet derivative of that, that is founded on some degree of two-way communication: they give us free services and more targeted advertising in exchange for some of our personal data — just like the Old Media deal, we are willing make a small sacrifice, in this case, some pieces of our anonymity, in a heartbeat if the value exchange is there. This is true of everything from personalized stock quotes on My Yahoo! to the New York Times on the Web. The New Media Deal doesn’t replace the Old Media Deal, it just adapts it to the new environment.

But what about the new generation of services that have popped up on the web around peer production?  The ones that aren’t one-way communication or two-way communication, but community-oriented communciation.  (Note I am resisting hard calling them Web 2.0, but you know it’s there somewhere.)  Does the New Media Deal still apply, or are we on to something else?  I think the rules are morphing once again, and now there’s a new deal — let’s call it the We Media Deal — that builds on the “data as part of the value exchange” moniker of the New Media Deal. Like its predecessor deals, the We Media Deal doesn’t replace the New Media Deal or the Old Media Deal, it just adapts it for new types of services.

The We Media Deal has two components to it:  (1) the value of the service to you increases in lock-step as you contribute more data to it, and (2) the more transparent the value exchange, the more willing you are to share your data.

Ok – that sounds very academic – what do I mean in plain English? Let’s break it down.

1. The value to you increases in lock-step as you contribute more data.  This is something that probably wasn’t obvious with the original New Media Deal, since it wasn’t clear that if you gave My Yahoo! incrementally more data (one more stock quote, for example), you’d get more relevant ads or services.  It’s a pretty static value exchange.  But think about the new generation of web services around peer production.

– The more you use Delicious to bookmark web pages, the more relevant it becomes to you, and the more dependent you become on it as your own “Internet within an Internet.”

– The more you wite a blog or post photos to Flickr, the more engrained the act of blogging becomes in your daily existence — you start looking at the world, ever so slightly, through the lens of “that would make an interesting posting” (trust me).

– The more you use Wikipedia (or wikis in general), the more committed you become to Wikipedia as your first go-to source for information, and the more you get infected with the desire to contribute to it.

The bottom line with the first part of the We Media Deal is that the more you give to the system, the more you want and need out of the system.  A big part of peer production is that most people fundamentally, if quietly, want to belong to any bit of community they can find.  All these new web services of late have transformed the mass Internet from a read platform to a read/write platform, so now everyone can have a say in things.  The same reason eBay is cooler and bigger than the New York Times on the Web will drive this new generation of services, and new spins on old services, forward.

2. Next up — the more transparent the value exchange, the more willing you are to share your data.  Transparecy rules.  When you contribute to the web, you’re exposed, so why is trasparency a help and not a hindrance?  Let’s look at the same 3 examples.

– Delicious let’s you delete your account and all your personal data.  They’re blatant about it during the sign-up process.  The result?  It increases your trust in the network since you can easily exit at any time.

– Blogging and Flickr couldn’t be more transparent.  They’re personal printing presses.  If you’re good at it, you really have to think before you write. It’s you – you’re really hanging out there transparent for all the world to see – therefore you’re even more invested in what you write and derive even more value from the activity.

– Similarly, Wikipedia tracks who changes what, and if you make an error, the community will correct it in an astonishingly short time frame, keeping you honest.

The good news is that, while the We Media Deal is coming of age, our New Media Deal is alive and well and growing stronger as the web evolves as well.  Free services and more targeted advertising in exchange for some of your personal data makes a ton of sense when the right balance of service and data is there.  Transparency and control make the We Media Deal an even stronger stronger bond between company and individual, mostly because the bond is between company and community — the deal gets more solid the more we as individuals invest in it.

Was anyone else as appalled as I am by the contents of Connie Loizos’s recent article, Coming out of COVID, investors lose their taste for board meetings? The stories and quotes in the article about VCs reducing their interest and participation in Board meetings, not showing up, sending the junior associate to cover, etc. are eye opening and alarming if widespread. 

The reasons cited in the article are logical—overextended VCs, Zoom fatigue, and newbie directors. Connie’s note that “privately, VCs admit they don’t add a lot of value to boards” is pretty funny to read as a CEO who has heard a ton of VCs talk about how much value they add to boards (although the good ones DO add a lot of value!).  

For the most part, everything about the substance of this article just made me angry.  

Disengaged or dysfunctional boards aren’t just bad for CEOs and LPs; they’re bad for everyone. If the world has truly become a place where the board meeting is nothing more than a distraction for CEOs, and investors think it’s a tax they can’t afford, then it’s time to hit the reset button on boards and board meetings. 

Here are four things that need to happen in this reset:

VCs need to do their job well or stop doing it. The argument that investors did too many deals in the pandemic so now they don’t have any time is a particularly silly one, since the pandemic reduced the amount of time VCs needed to spend on individual board meetings as well. I used to have four board meetings each year with directors who were traveling for the meetings, having dinners, spending time with the team and sitting in on committee meetings. 

Today, boards are lucky to have one in-person meeting a year (more on that later). And as everything else takes less time, and there’s little transit, any given VC should have doubled the time they spend on board meetings.

Serving on a board post-investment is a central part of the VC role. They have obligations to the founders they back and to the LPs they represent. The entire role is “find deals, execute deals, manage the portfolio.” 

If they no longer have time for the third job, they need to admit that to both founders and LPs before stepping down. If a VC can’t be bothered to focus on minding their investments and adding value, they should work with the company to find their replacement.  

CEOs need to take their job as leader of the board seriously. Would a good CEO just throw their hands up if they found management team meetings boring or a waste of time? No. They’d fix the structure of the team or meetings. If not, they shouldn’t be the CEO. 

It’s no different with boards. Whether or not the CEO is the board chair, they’re the leader of the organization. So, one of the few “must do” items in their job description is leading the board. The board is part of the CEO’s team, just like the management team. 

CEOs get to call the meetings, run the meetings, and insist on attendance. The CEO’s obligation is to make it easy and meaningful for everyone so the board isn’t a tax but rather a secret weapon for the company’s success. As my long-time independent director Scott Weiss used to tell me, boards consume whatever you put in front of them. Garbage in, garbage out. That means paying careful attention to the board materials, to meeting etiquette, and everything in between.

If the CEO doesn’t know how to do that, they should find a CEO mentor who can teach them, observe some well run boards in action through their network, or read Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, a book I just published along with co-authors and VCs Brad Feld and Mahendra Ramsinghani.

Here’s one tip on making Board prep more efficient: work your Operating System and your Board Book formats so you do one set of reporting for the company and management team that is 95% reusable without any changes for your board.

The format for Board meetings needs to evolve. Board meetings need to evolve in our world of hybrid work just as office work needs to evolve. The format that works for in-person can’t just “lift and shift” to Zoom as is, indefinitely.

Here’s how I’m steering my board:

• I insist on one or two “old school” meetings per year, meaning in-person attendance required, half a day long, and including a meal and even an activity. If I’m only going to see my directors together infrequently, I make it mandatory, but I also make it worthwhile and fun.
  
• Remote meetings that happen between the in-person meetings are becoming shorter and tighter. I still send out a lot reading material beforehand, but I make sure to keep the focus on a fixed number of major topics to keep the discussion engaging.
  
• We need a new set of expectations around Zoom meeting etiquette for long meetings. It’s okay to ask people to close their email, browser, and Slack before the meeting starts. If a meeting is more than two hours long, a 15 minute break in the middle is important. Use breakout rooms to mix up topic discussions and working sessions.
  
• I am trying a new meeting format to maximize director conversation and team development. I start every meeting with a director-only session for half an hour that’s not exactly an Executive Session but is more fun and social—usually including a nonwork discussion topic, as if we were sitting around the dinner table having a cocktail. That gets the conversational juices flowing. Then when my team and observers join the meeting, I ask those people to turn their video off, and I ask directors to adjust their Zoom setting to “hide participants not on video” to keep the number of Zoom squares down to the bare minimum. Any time a team member or observer wants to engage in a particular topic, they turn their video on. Then we follow the meeting with Executive Session and Closed Session and a single-director debrief with me. That is a lot of moving pieces to manage, I find that but doing so keeps the meeting fresh and well paced.
  
• Finally, I’m following Fred Wilson’s advice and running a very short survey post-meeting to ask directors basic questions so they can summarize their thinking for me and the team: What are we doing well? What do we need more work on? And did the meeting meet your expectations?

Companies need to Follow the Rule of 1s

The secret to engaged and diverse boards is to mix up their membership more than most companies do. Our Board Benchmark study at Bolster indicates that the vast majority of private company boards have no independent directors at all—only founders and investors—and every year, the vast majority of the “open independent seats” specified in those companies’ charters go unfilled. 

It’s hard work hiring a new independent board member, and it rarely rises to the top of the CEO’s priority list. But the more independent the board is, and the more diverse the board is in every way (in terms of demographics as well as experience and background), the more robust the conversations around the table become, and the more valuable the board is to the CEO.

My Rule of 1s for building highly effective boards is simple:

• Add independent directors to your board on Day 1
• Try to limit your Board to 1 founder/team member
• Then, for every 1 investor on your board,
• Add 1 independent director

A great board is one of a company’s greatest assets. A weak board can kill a company. A mediocre board is just a waste of time. There’s no question that running an effective board, or serving as an effective director, takes serious time and energy and diligence. But that’s not a reason not to try.

(This post first ran on TechCrunch+ and is also running on the Bolster blog)

As I stared at a dugout of dispirited 14 year old boys Saturday afternoon in our tournament championship game, I found myself talking to my fellow coach Mitch about a book I’d read a few years ago (turns out 14) called Confidence: How Winning Streaks and Losing Streaks Begin and End, written by HBS professor Rosabeth Moss Kantor. While that original blog post is pretty specific to something that was going on at that point in time in my prior company, the thinking in the book about momentum and the role it plays in our psychology, about sports, about business, and about life in general, is timeless.

Watching this team of teens go through ups and downs within an hour was incredibly stark and clear. In the first inning, we made three errors (just jitters from being in the championship…the Bulldogs are better than that!). Those opened the door for our opponent to post a few runs and take a quick lead. It was as if the wind had been taken out of our sails, as if all 11 kids just took a punch to the gut. They were shocked and pretty listless in the dugout, and nothing the coaches could do or say shook them out of it. They just *knew* they were going to lose, so why try? Their confidence was gone. It wasn’t until we staged our own big rally, later in the game, where all of a sudden, one, then two, then three base hits and the kids were going bananas, up at the fence of the dugout and screaming, cheering each other on and feeling all of a sudden like we could win the game.

The swing in momentum took about 5 minutes in each direction. And all that was involved was a couple quick negative/positive indicators/actions.

The bottom line is that we still lost the game 10-5. But the energy that came from a couple positive developments that stopped a downward spiral and started an upward one was palpable and instructive. As one of my other fellow coaches Jay said to the boys after the game, “Boys, the lesson from today is that Everything Matters. We lost 10-5, but when we were only down by 5 runs with the bases loaded, how much did we regret those couple of errors in the first inning? Without those, we would have been down by 2 runs with victory in reach.”

It’s the same in startups.

When you run a startup, you regularly take three punches to the gut in a row — a client cancels on you, you have a web site outage, an employee quits — and all of a sudden, you view the world through a dark lens of, as my long-time friend and Board member Scott Weiss used to say, WFIO, short for We’re F#%ked, It’s Over (pronounced whiff-ee-oh).

And then, the opposite happens, and it’s like the heavens part and the angels start singing a hallelujah chorus. You win a big new deal. You get unexpected positive press or a key blogger or tweet creates massive buzz for you. Your CFO pings you with the news that revenue is surprisingly high this month. WFIO is suddenly replaced with what I’ll call WGTWIA — We’re Going to Win It All (let’s pronounce it wig-twee-uh).

And what’s the difference? Probably nothing big. Probably a couple small things that just happened to break in the right or wrong direction at the right time. That call or email you decided not to return for a couple days until it was too late. That presentation you could have spent an extra 45 minutes perfecting instead of half-assing. That extra run through a new module of code you wrote to make sure it’s fully debugged. Just like a few silly errors in 14-year old baseball because you had the jitters early in a big game.

Everything Matters. In sports, in business, in life. Anything you think is a “throw away” can turn out in retrospect to have made the difference between winning and losing, between success and failure.

This is a topic we write about obsessively in Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams — in fact, it’s basically the whole point of the book! I’ll write some more specific posts here in the coming weeks that take some excerpts from the book, but Bolster is putting on three free and open webinars we’re calling our “Bolster-up Series” over the coming weeks that I want to share with everyone who reads StartupCEO.com.

In this series, I’ll be doing short interviews with CEOs who we work with at Bolster on the different aspects of scaling specific functions, how they diagnosed those problems, and how they leveraged on-demand executive talent to solve those problems. The three events are:

• 7/20 2:00-2:30pm EST: Signs your Finance function isn’t scaling and what to do about it with MediaWallah founder and CEO Nancy Marzouk.
• 8/12 2:00-2:30pm EST: Signs your Revenue function isn’t scaling and what to do about it with Ozcode CEO Shimon Hason.
• 9/15 2:00-2:30pm EST: Signs your Marketing function isn’t scaling and what to do about it with Drip CEO John Tedesco.

You can sign up for the first one on Finance by clicking here.

How Much Marketing Is Too Much Marketing?

It seems like a busy holiday season is already underway for marketers, and hopefully for the economy, shoppers as well.  Just for kicks, I thought I’d take a rough count of how many marketing messages I was exposed to in a given day.  Here’s what the day looked like:

5:30 a.m. – alarm clock goes off with 1010 WINS news radio in the middle of an ad cycle – 2 ads total.  Nice start to the day.

5:45-6:30 – in the gym, watching Today In New York News on NBC for 30 minutes, approximately 6 ad pods, 6 ads per pod – 36 ads total.  So we’re at 38, and it’s still dark out.

7:00 – walk to subway and take train to work, then walk to office from subway.  Probably see 6 outdoor ads of various kinds on either walk, then about 8 more on the subway within clear eyeshot – 20 ads total.

7:30 – quick scan of My Yahoo – 2 ads total.

7:32 – read Wall St. Journal online, 15 page views, 3 ads per page – 45 ads total.

7:40 – Catch up on RSS feeds and blogs, probably about 100 pages total, only 50% have ads – 50 ads total (plus another 25 during the rest of the day).

7:50 – Sift through email – even forgetting the spam and other crap I delete – 10 ads total (plus another 10 during the rest of the day).

8:00-noon – basically an ad free work zone, but some incidental online page views are generated in the course of work – 25 ads total, plus a ton of Google paid search ads along the way.

Noon-1 p.m. – walk out to get lunch and come back to office, so some outdoor ads along the path – 12 ads total.

1-7 p.m. – same work zone as before – 25 ads total, plus lots of Google.

7 p.m. – walk to Madison Square Garden to see the Knicks get clobbered by Milwaukee, see lots of outdoor ads along the way – 20 ads total.

7:30-9:30 – at the Garden for the Knicks game, bombarded by ads on the scoreboards, courtside, sponsorship announcements, etc.  Approximately 100 ads total (and that’s probably being exceptionally generous).

9:30 – subway ride and walk home – 14 ads total.

10:00 – blitz through episodes of The Daily Show and West Wing in TiVo.  8 minutes of :30 advertising per half hour, or 48 ads total, fortunately can skip most of them with TiVo.

11:00 – flip through issue of The New Yorker before bed – 50 ads total.

Total: 492 ads.

I’m sure I missed some along the way, and to be fair, I am counting the ads I skipped with TiVo — but hey, I’m also not counting all the ads I saw on Google, so those two should wash each other out.  On the other hand, if I drove to and from work in California, I’d have seen an extra 100 billboards, and if I read the New York Times print edition, I’d have seen an extra 100 print ads.

Approximate cost paid to reach me as a consumer today (assuming an average CPM of $10): just under $5.  Sanity check on that — $5/day*200 million Americans who are “ad seers”*365 days is a $365 billion advertising industry, which is probably in the right ballpark.

What are the two ads I consciously acted on?  An offer from LL Bean through email (I’m on their list) for a new fleece I’ve been meaning to get, and a click on one of the Google paid search results.  No doubt, I subconsciously logged some good feelings or future purchase intentions for any number of the other ads.  Or at least so hope all of the advertisers who tried to reach me.

What’s the message here?  A very Seth Godin-like one.  Nearly all of the marketing thrown at me during the day (Seth would call it interrupt marketing) — on the subway, at the Garden, on the sidebar of web pages — is just noise to me.  The ones I paid attention to were the ones I WANTED to see:  the email newsletter I signed up for from a merchant I know and love; and a relevant ad that came up when I did a search on Google.

Brand advertising certainly has a role in life, but permission and relevance rule the day for marketers.  Always.