It’s the end of a long September 11 in New York City. We thought everyone would want to see the Tribeca close-up of the “twin beams” memorial that comes out from time to time to evoke the memory of the fallen towers.

The beams are truly amazing, reaching up high into the sky, seemingly endless. While they are geographically incorrect from this particular view (the towers stood behind and to the left of the new construction of the new 7 World Trade Center), they do the job and from most views look in place.

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?

Email and Business Development: Two Great Tastes…

Interestingly, Chris Baggott offers compelling evidence for the opposite view he intended in his recent posting claiming email is not an acquisition tool.  I respect Chris as a thought leader in the email marketing services industry and am a fan of what he and his colleagues have done in building Exact Target, but I think he’s dead wrong on this one.

Email is a phenomenal customer retention tool, no question about it.  I totally agree with the claim that website owners should never let a prospect escape from their website without signing up for an email program.  It’s very true that spending money on website traffic can go to waste if a browser never buys or returns — or worse, if you pay the same search keyword fee time and time again to reach the same browser. 

However, his own post starts to lay out the reasons why email is, in fact, also really good for acquisition marketing:  because we all still love it, we spend a lot of time reading and responding to it, and we value the information it brings to us.  In short , it’s got all the strongest attributes of a great acquisition medium: reach, frequency and, most importantly, trust.  Isn’t that what advertisers look for when they are trying to figure out whether to spend their acquisition dollars in print, radio, TV, outdoor, or direct response vehicles?

In fact, more consumers and B2B professionals spend more time in their inboxes than they do consuming any other form of media — digital or not.  So, if you want to reach your target, you need to be using acquisition email.  And definitely never let a prospect come to your web site without giving you his or her email address for future contact!

Just because email is so extraordinary a retention and customer relationship tool, doesn’t exclude the reality that it also works really well to reach new prospects.  Smart marketers use email for both.

Victory for Email:  AOL Enhanced Whitelist to Stay

It’s official.  AOL will keep its organic Enhanced Whitelist, clarifying that is not planning on replacing it with Goodmail’s email stamp program.  Goodmail will now be ONE way, not the only way, to reach AOL inboxes.  Charles Stiles, the postmaster for AOL, confirmed this earlier today on the phone with me, and I announced the news on CNBC’s Power Lunch (view the clip here).

This is a huge win for all companies who strive to do email the right way, earning the solid reputations that drive deliverability and response rates.  Paying for inbox reach is akin to only having paid search engine marketing – it works for some business models, not others; some consumers like paid ads, some don’t.  By having multiple ways to vet email inbox delivery, consumers keep a level of control over the process and marketers can decide which delivery solutions they do and don’t need.

When the news broke last week that the enhanced whitelist was going away, we took a pretty vocal stance that it was a bad idea for the email industry, our clients and consumers.  It was not so much Goodmail that we were against (though we do not think that email stamps are the right solution to spam for many reasons), but the notion that the only way to gain inbox assurance was by buying it.   We’re happy to see that AOL agrees with that.

So, email marketers and publishers, we encourage you to keep the important thing in mind:  your email reputation remains critical in getting delivered at AOL and every other ISP.  Do what you can to make sure your reputation is solid, and your email program will benefit with high delivery and response rates.

Whiplash at Google

A friend of mine who works at Google invited me over to have lunch last week. It was fun to see their NY office — it had a similar fun vibe to their main campus in Mountain View. But it was a study in contrast in terms of how they treat guests.

First, I had to sign a one-sided NDA in order to enter the premises. Totally offputting as the first point of contact and a requirement to even have lunch. I know other companies do that was well but was surprised given the whole “do no evil” thing to see it at GOOG.

But then of course, there was the free super gourmet cafeteria:  hazelnut-encrusted wild halibut, braised fennel and leeks, lavash, and seared scallop and seaweed with a ponzu vinaigrette.  I’m not even sure what ponzu vinaigrette is, but I can attest that it is yummy.

Mostly, it was just interesting to see what the Google machine has built in Manhattan — 1,200 people (including 300+ engineers, which is truly astounding) and growing!

The Business of Being a Scumbag, Part II

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

Zombie Computer Network Commits Click Fraud

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

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

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

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

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

Big Apple, Little Company

Ed Daciuk, on of my blog subscribers, questions:  What is your view on the benefits of being in NYC as a startup?

Fred wrote a good posting several months ago and a related one this week on early stage investing in the NYC market from the perspective of a venture capitalist.  His main points:  (1) NYC is a great place to invest in early stage tech-related businesses as long as they’re not "core technology" businesses like semiconductor or hardware, because (2) core technology companies are more exciting to investors, and therefore the investors have clustered around those companies in places like Silicon Valley or Boston.  He also thinks this dynamic is changing as more and more successful companies are started as technology-enabled service businesses as opposed to pure tech companies.

As someone who’s been in tech-enabled services businesses in NYC for 10 years now, I couldn’t agree more with this last point.  But I thought I’d address Ed’s question from the entrepreneur’s perspective as well.

First, why is New York a great place for a startup?

1. Access to customers.  There is far greater concentration of major corporations and agencies headquartered in and around the NYC area, making it much easier to see and talk to prospects and customers in this market.

2. Lots of talent.  There are lots of people, meaning there are lots of people to hire.  Some disciplines are easier than others to find talent, but the labor pool is just huge.

3. Convenience.  This is always one of NYC’s main selling points, and it applies here as well.  It’s mainly a collection of little things like being able to see a customer or investor in minutes by foot or mass transit and late night food delivery, but all those extra minutes you save here and there add up!

4. Idea generation.  The density and complexity of the city’s business landscape make it a natural for stimulating great ideas, especially in the service and media sectors.

5. Work ethic.  New Yorkers are accustomed to working startup hours in many professions — banking, consulting, law, etc., so it’s much more natural to have a team pounding away at the office early and late than it is in other geographies.

But it’s not all that easy.  New York can also be a difficult place for a startup because:

1. It’s expensive.  Very expensive.  People cost more, benefits cost more, T&E costs more, rent costs more.

2. Space is limited.  There’s no such thing as starting out in someone’s garage, because there are no garages — only teeny tiny apartments.  And no one takes a lease with room to grow because that extra space comes at such a premium.

3. Good money is harder to find.  As Fred says, it’s getting better, but the environment still isn’t as rich with high quality VCs as places like Silicon Valley or Boston.

4. Even when you do find good money, valuations are tougher.  For whatever reason, I’ve always found that "west coast" valuations are more generous than "east coast" valuations.

On balance, I’d say it’s probably a wash — there are plusses and minuses of NYC as a place for startups.  But it’s definitely not, as conventional wisdom would have it, an inhospitable environment for startups.

My 360 on Your 360

Last year, I wrote about the 360 review process we do at Return Path, which is a great annual check-in on staff development and leadership/management.  In Part I of What a View, I described the overall process.  In Part II, I talked specifically about how my review as CEO worked, which is a little different.

This year, we changed the format of our reviews in two ways. First, for senior staff, we continued to do the live, moderated discussions, but we dropped having people also fill out the online review form.  It was duplicative, and the process already consumes enough time that we decided to cut that part out, which I think worked well. 

Second, for my review, instead of having the Board review me separately from the senior staff, I combined efforts and had all of them participate in my live moderated discussion together.  I also think this worked well, although we did receive some feedback about how to modify the format slightly for next year.  It was great for the Board to get a window into how the team feels about me, and vice versa, and it produced a single, unified development plan for me, which is much more helpful than two sets of feedback about different questions and issues.

The one theme that came out of this year’s live reviews, which is definitely worth thinking about, is the impact of the Heisenberg Uncertainty Principle, that once something is observed, the act of observing it can actually change it.  Because the live discussions are face to face (anonymous to the person being reviewed, but not anonymous among the reviewers), some people mentioned that they were conscious of what they were saying in the presence of others in the company.  Others didn’t particularly care about that but did say things that could be construed as negative about some of their fellow reviewers.  Someone came up to me after one session and said "I wonder what the rest of the group thought of my comments — I need a 360 on your 360!"

The reality is that transparency is a good thing.  There shouldn’t be any state secrets about someone’s performance, especially when the person is in a senior management position.  All people always have things they can improve upon, and the open discussion around what they are and why they happen produce MUCH better results for the people being reviewed, uncomfortable as it may be at times.

The sessions are confidential, so participants should feel comfortable that their thoughts won’t be shared outside the room.  Plus, we provide a mechanism to give feedback that really is hard to provide in public for whatever reason via email or one-on-one conversations with the moderator.

Choose Voice, Part II

One reader writes to me: 

I am a vice president at a startup that isn’t in great shape.  We have some customers and a product that is meeting some market needs, but we’re way off our plan and don’t show signs of changing our trajectory in a material way.  I disagree with the direction our CEO is taking things, which is ok, but more important, our CEO refuses to listen to me when I try to discuss and debate strategy with her.  One of our board members has asked me what I thought we should do.  I don’t want to be disloyal to our CEO, and I want to seem like a team player who rallies behind the decision even if I don’t agree with it, but at the same time, I feel strongly that we’re going the wrong way and don’t want to be associated with a failed strategy or failed company.  What do I do?

My response:

Honesty really and truly is the best policy.  Always.  It just depends how you go about expressing it.

I talked about this a little bit a few weeks back in my post on Exit, Voice, and Loyalty.  Here are your options when you disagree with the system:  quit your job in protest (exit), express your opinions (voice), or suck it up and follow (loyalty).  I always say — choice voice.

If you and the CEO are at odds about the issues but she is being rational about it, you should try to encourage a broader, open debate with others.  Maybe not the whole board, maybe not the whole senior management team, but a smaller group.  Tell her that you are just concerned for the company’s future and feel like more rigorous conversation is required.  Do it in such a way that it’s her idea to call the meeting and lay out the options.  If the company is truly going sideways and she’s a rational being, she must be thinking about multiple options, even if she has an opinion about one of them.

Now, if the CEO isn’t being rational, you have a different challenge.  If that’s the case, and if you think she’s wrong, and if the company is going sideways, I’d say the likelihood of you staying as a long-term employee of that company with that CEO is low anyway, so it’s worth taking a little more risk. 

But I think you can do it in ways that mitigate your personal risk with the CEO.  One thing you could do is go to one board member and express your concern confidentially, tell the board member that he should force the CEO to call the same kind of open forum I described above.  Another thing you could do is to send an anonymous email to one or more board members expressing the same.  Another is to see how like-minded other senior managers are — and if lots of people agree with you, gang up and either stage an intervention with the CEO, or go as a group to the board.  And if the board just blindly backs the CEO without rigorous debate and laying out options, that should cause you to rethink where you work anyway.

UPDATED:  one executive coach who reads my blog just wrote in his $0.02:  The answer in my view is simple, which I should think you would prefer if it were your organization, you tell the CEO that you are going to the Board with your concerns and then if that does not trigger some more favorable process you do so, albeit, with the CEO’s knowledge.

What Convergence Really Means

Rebecca Lieb wrote a great column last week in ClickZ about Advertising Week and how disappointed she was in it.  The article is worth a read for many reasons, but there was one quote in particular that stuck out to me as I re-read it tonight.

Some people talk about convergence as the coming together of old media and new media.  Others talk about digial meeting analog.  Still others talk about the melding of cable, telco, Internet, and wireless.  A brave few even talk about direct marketing and brand advertising.

But Rebecca quoted the head of global advertising for American Express, who really nailed what convergence means in the world of media today — the convergence of advertising and publishing:

“No longer can we view our job as filling gaps between other peoples’ content,” said Scotti. “Soon, there won’t be gaps to fill because everything is content.”

Boy, isn’t that the truth?  And it’s not just the much-hyped world of user-generated content, YouTube, Facebook, MySpace, and blogs.

It’s as much about advertisers getting smarter and becoming content publishers themselves.  Think about any good email you get from a marketer.  What makes it good?  Sure, a nice discount, maybe free shipping, certainly a relevant offer based on your preferences and purchase behavior.  But the other thing that makes it good is the presence of content to surround and drive the marketing messages.  The applesauce around the pill, if you will.

It works.  We see it every day.  And we only see more of it happening in the future as consumers get smarter and more discerning about the brands with which they choose to interact.

Book Short:  You’d Never Run Your Business This Way…

I am an unabashed conservative, so you might wonder what I was doing reading  A Country That Works, by union chief Andy Stern, the President of SEIU (Service Workers International Union) this weekend.  Well, part of it is that my mother-in-law Carmen works for him.  Part was that he was quite inspiring during his recent appearance on the Colbert Report a week or two ago.  And part was that I always like reading about different points of view, especially with the current, somewhat dismal state of the Republican leadership in Washington.

The book was very short and a worthwhile read.  I may not agree with Stern on some of his illustrations of the problems — his statistical presentations were a bit apples-to-oranges at times — and some of his solutions, which were a bit high on the big-government-tax-and-spend side for me, but the book was very plain-speak, apolitical, and solution-oriented, all of which I found refreshing.

He certainly had at least one underlying premise about “labor as electricity ” (compete on something else other than forcing wages to go lower) that is making me think hard about my long-standing philosophical opposition to federally-mandated minimum wages.  His notion of the importance of a global labor movement to act as a check/balance on corporate globalization both make sense.  Actually, now that I think about it, those two things put together start working well as one plank in a solution to global poverty.

But the best part of the book was the fact that Stern is clear that, like his ideas or hate them,  he is at least proposing that we DEAL with them.  America is missing serious debate about some critical issues facing our society.  Anyone who doesn’t think we have serious problems facing our future around retirement savings, education, and health care is not facing reality.  The debate happening in Washington today is weak at best, and over-politicized.

The bottom line is that I think we’re in danger as a country of boiling the frog when it comes to some major structural issues in our society, and, most important to me, You’d Never Run Your Business This Way.  Any good entrepreneur knows that when danger lurks around the corner, you have to reinvent yourself, and we as a country aren’t doing that at this moment when we’d benefit from it greatly for the long term.  Stern displays that mix of optimism for the future and serious reality check today known as the Stockdale Paradox and revered by Jim Collins in his two books on corporate leadership, Good to Great and Built to Last.

My biggest criticism of the book was that it was too short.  It was basically 1/3 Andy’s story, 1/3 SEIU’s story, and 1/3 labor’s story — and it could have been at least twice as long and gone into more detail on Stern’s points, especially in the last chapter where he starts spelling out his plan to get America back on track.  But presumably when Stern runs for national office or gets a cabinet appointment someday (no inside knowledge here, but the book certainly reads that way), he’ll flesh things out a bit!