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.

This is another in a series of postings that relate to Fred’s and Brad’s various postings about venture capital funding. (Please note I have added an 11th item in response to a comment by Jack Sinclair, Return Path’s VP of Finance and my partner in crime on all transactions for the past five years.)

I think the most important part of the venture financing process is negotiating the term sheet. Although they’re only 2-3 pages long, term sheets contain summaries of all the critical aspects of a financing, and once they’re signed, the remainder of the financing process is significantly more “automatic.” Based on the financings I’ve seen and worked on – both as a VC and as an entrepreneur – my Top 10 (now 11) biggest takeaways for entrepreneurs are as follows (not in any particular order):

1. Get a good lawyer. I mean a really good one. Not just one who you are comfortable with and who is productive and doesn’t charge you too much (as Brad says, your wife’s brother’s friend’s neighbor), but one who knows venture financings like the back of his or her hand. They’re out there, many of them have worked on both sides of these transactions – for VCs and for entrepreneurs, and they can save your ass. No matter how many deals you’ve worked on, your lawyer has worked on more of them. Return Path’s lawyer, David Albin from Finn Dixon & Herling, is great if you need one.

2. Focus on terms that matter, otherwise known as Pick your battles. A typical VC term sheet will have at least 20 terms spelled out in it. There are only a few that really matter in the end, although you should at least make sure your lawyer is comfortable that the others are reasonable and somewhat standard. Spend time on valuation, the type of security, the option pool, Board composition, and your own compensation and rights.

2a (new). Sacrifice valuation for a clean security. Everyone always thinks that price/valuation is the most important thing to maximize in a deal. However, the structure of the security can be much more important in the long run. Whether the VCs buy 33% of your company or 30% of your company is much less important than having a capital structure that’s easy for an outsider to understand and want to join (e.g., investment banker or later-stage VC).

3. Always have a BATNA (Best Alternative to a Negotiated Agreement – a fancy way of saying Plan B). This is probably the most important piece of advice I can offer, and it extends to any negotiation, not just term sheets. If you have two or three VCs who are interested in funding you, I can guarantee you will end up with better terms from the highest quality investor in the group if you play the negotiation well. If you have one term sheet, you have zero leverage in your negotiation. Yes, you will spend 2-3x the amount of time on the process, but it’s well worth it.

4. Be prepared to pay up for high quality investors. There is a world of difference between good VCs and bad VCs (both the individual partners and the firms) that will ultimately have a lot to do with how successful your company can become. The quality of your VC isn’t more important than the quality of your product or your team, but it’s right up there. But – and this is an important but – you should expect to “pay” for quality in the form of slightly weaker terms (whether valuation or type of security). This is where having a BATNA really comes in handy.

5. Ask for references. Don’t be shy – prospective VCs are checking up on you…you have every right to do the same with them. Ask them for references of CEOs they’ve worked with. Ask them for a CEO they’ve had to fire as a reference. The good ones will give you the full roster of everyone they’ve ever funded and tell you to call anyone. The bad ones will give you two names and ask for time to prep them ahead of time.

6. Don’t let the VC get away with negotiating a point by saying “we always do it this way.” That’s just not true. VCs may have a preferred way of doing deals or handling a specific term, but every deal they’ve ever done is different, and they know it. If there’s a compelling reason for them to insist on a particular term, you have the right to hear it (if it’s important to you).

7. If you have multiple investors in the syndicate, insist on a single investor counsel and a lead investor. This is essential to (a) protect your sanity, and (b) prevent you from paying zillions of dollars in legal fees. You have to make the VCs stick to it, though – they can’t come back and re-trade the deal after it’s been negotiated. This is also helpful in getting a syndicate cooperating with each other and aligning the members’ interests, particularly if it has investors who have participated in different rounds of the company’s financing. Do expect to play moderator constantly throughout the process, however, to ensure that it goes smoothly.

8. Try do deal in advance with follow-on financings. When an investor doesn’t participate in a follow-on financing, it creates a total nightmare for you. Other investors will want to punish their wayward colleague and can create massive collateral damage in the process to common shareholders and management. Just as VCs will insist on something called “pre-emptive rights” (the right to invest in future financings if they want), you and your lawyer should insist on some protection in the event that one of your investors abandons you when you are raising more capital.

9. Handle the term sheet negotiation carefully. Whether it’s an initial round or a follow-on round, how you handle yourself in this negotiation sets the tone for the next stage of your relationship with the VC. The financing is the line of demarcation between you and the VC courting each other, and the VC joining your board and effectively becoming your boss.

10. Finally don’t forget to say thank you at the end of the process. Whether you send a formal email, a handwritten note, or a token gift, be sure to thank your VCs after a financing. They’re putting their butt on the line for your company, they’re investing in YOU, and they’re making it possible for you to pursue your dream. That deserves a thoughtful thanks in my book.

Sorry for the long posting. The next one or ones in this series will be on valuation, preferences, and “Venture Capital deal algebra.”

I haven’t taken a poll to figure out the overlap between people who read this blog and people that bought the first edition of Startup CEO, but I’m guessing there’s a high degree of it. If you are familiar with the book, I don’t want to bore you with a recap of what I wrote, but I thought I would devote the next several blogs to new ideas in the second edition. First, the new cover art from the publisher is kind of cool:

The first question you might have is, “Why a second edition? Didn’t you say everything you needed to say the first time?” The answer to that is, yes, I did say everything I had to say at the time, and the first edition is pretty comprehensive as a field guide. But that was about a dozen years into what turned out to be a 20-year journey, and after we sold Return Path in 2019, I had time to reflect on all that happened. I learned a lot of new lessons between the first and second editions, we had a lot of first-time experiences, we scaled the company significantly, and we sold it. None of those things are, in and of themselves, worthy of a second edition, but collectively they help tell the story of startup to exit and tell it from a perspective of creating a sustainable business over nearly two decades. 

But there are other reasons, too, besides new lessons learned. Eight years is a lifetime in terms of changes to micro-trends, language, business in general, and the world around us. I wanted to update the book to make it contemporary so that it can speak to a new generation of CEOs. The second edition is more than a new cover and obvious updates on the number of employees or revenues. I added topics that reflect heightened responsibilities of CEOs around moral and ethical leadership in an increasingly transparent and socially conscious world. How do you navigate a politically charged and divisive society? For example, the State of Indiana passed a law intended to not force people to do things that contravened their religious beliefs but it had the side effect of legal descrimination against LGBT citizens. It was contentious, with rallying cries in business and society for one side or the other, and those same sentiments were found within our employee population. 

How should CEOs handle a situation that conflicts with their core values? There are no easy answers, but avoiding them doesn’t make the problem go away. 

Whether it’s the #metoo movement, high-profile failures of leadership like airline employees dragging customers off of planes, or something as simple as unconscious bias in the workplace, the best CEOs now need to approach their jobs differently. I didn’t write about that in the first edition, but the second edition has an entire chapter devoted to “Authentic Leadership” and provides guidelines and advice to help CEOs. The book went to press early in the COVID-19 pandemic and prior to all the protests around racial injustice surrounding the George Floyd killing, so nothing in it specifically addresses any of those issues.  In some ways, though, that may be better at the moment since the book is more about frameworks and principles than about specific responses to current events.

I also added a new section with several chapters on the ins and outs of selling a business. Startup exits are the important culmination of the startup experience and something that the first edition only briefly touched on. Obviously, I was still CEO of a growing company and although we had an opportunity or two to sell within those first years, we never pulled the trigger. The first edition talks about that process at a surface level, but the second edition has far more content and detail since we had completed a sale transaction. 

The first edition of the book has sold close to 40,000 copies as of the writing of the second edition, which blew me away when I tallied it all up. I’ve received many notes of thanks from readers all over the world for the book, and I’m glad that the content has proved useful to so many people, noting from some of the more critical reviews on Amazon that it certainly doesn’t scratch everyone’s itch. I hope the changes in the new edition add even more value to the lives of entrepreneurs and startup management teams. That’s really who the book is written for.

Here are some places to go to pre-order the book:

• Directly from the publisher, Wiley
• From Amazon
• From Books-a-Million
• From Indie Bound 
• From BN.com

I have a limited number of free copies of the book that I can send out, and oddly, they are only print copies since the book publishing ecosystem hasn’t figured out an efficient way for authors to distribute free Kindle copies of books yet.  As a bonus incentive for reading all the way to the end of this post, I will be happy to send a free copy to the first 5 people who comment on this post on the blog and ask for one.

I Don’t Want to Be Your Friend (Today)

The biggest problem with all the social networks, as far as I can tell, is that there’s no easy and obvious way for me to differentiate the people to whom I am connected either by type of person or by how closely connected we are.

I have about 400 on Facebook and 600 on LinkedIn.  And I’m still adding ones as new people get on the two networks for the first time.  While it seems to people in the industry here that “everyone is on Facebook,” it’s not true yet.  Facebook is making its way slowly (in Geoffrey Moore terms) through Main Street.  Main Street is a big place.

But not all friends are created equal.  There are some where I’m happy to read their status updates or get invited to their events.  There are some where I’m happy if they see pictures of me.  But there are others where neither of these is the case.  Why can’t I let only those friends who I tag as “summer camp” see pictures of me that are tagged as being from summer camp?  Why can’t I only get event invitations from “close friends”?  Wouldn’t LinkedIn be better if it only allowed second and third degree connections to come from “strong” connections instead of “weak” ones?

It’s also hard to not accept a connection from someone you know.  Here’s a great example.  A guy to whom I have a very tenuous business connection (but a real one) friends me on Facebook.  I ignore him.  He does it again.  I ignore him again.  And a third time.  Finally, he emails me with some quasi-legitimate business purpose and asks why I’m ignoring him — he sees that I’m active on Facebook, so I *must* be ignoring him.  Sigh.  I make up some feeble excuse and go accept his connection.  Next thing I know, I’m getting an invitation from this guy for “International Hug a Jew Day,” followed by an onslaught of messages from everyone else in his address book in some kind of reply-to-all functionality.  Now, I’m a Jew, and I don’t mind a hug now and then, but this crap, I could do without. 

I mentioned this problem to a friend the other day who told me the problem was me.  “You just have too many friends.  I reject everyone who connects to me unless they’re a really, super close friend.”  Ok, fine, I am a connector, but I don’t need a web site to help me stay connected to the 13 people I talk to on the phone or see in person.  The beauty of social networks is to enable some level of communication with a much broader universe — including on some occasions people I don’t know at all.  That communication, and the occasional serendipity that accompanies it, goes away if I keep my circle of friends narrow.  In fact, I do discriminate at some level in terms of who I accept connections from.  I don’t accept them from people I truly don’t know, which isn’t a small number.  It’s amazing how many people try to connect to me who I have never met or maybe who picked up my business card somewhere.

The tools to handle this today are crude and only around the edges.  I can ignore people or block them, but that means I never get to see what they’re up to (and vice versa).  That eliminates the serendipity factor as well.  Facebook has some functionality to let me “see more from some people and less from others” — but it’s hard to find, it’s unclear how it works, and it’s incredibly difficult to use.  Sure, I can “never accept event invitations from this person,” or hide someone’s updates on home page, but those tools are clunky and reactive.

When are the folks at LinkedIn and Facebook going to solve this?  Feels like tagging, basic behavioral analysis, and checkboxes at point of “friending” aren’t exactly bleeding edge technologies any more.

Jim Collins, in both Good to Great and Built to Last talked about the BHAG – the Big, Hairy Audacious Goal – as one of the drivers of companies to achieve excellence.  Perhaps that’s true, especially if those goals are singular enough and simplified enough for an entire company of 100-1000-10000 employees to rally around.

I have also observed over the years that both star performers and strong leaders drive themselves by setting large goals.  Sometimes they are Hairy or Audacious.  Sometimes they are just Big.  I suppose sometimes they are all three.  Regardless, I think successfully managing to and accomplishing large personal goals is a sign of a person who is driven to be an achiever in life – and probably someone you want on your team, whether as a Board member, advisor, or employee, assuming they meet the qualifications for the role and fit the culture, of course.

I’m not sure what the difference is between Hairy and Audacious.  If someone knows Jim Collins, feel free to ask him to comment on this post.  Let’s assume for the time being they are one and the same.  What’s an example of someone setting a Hairy/Audacious personal goal?  My friend and long-time Board member Brad Feld set out on a quest 9 years ago to run a marathon in each of the 50 states by the age of 50.  Brad is now 9 years in with 29 marathons left to go.  For those of you have never run a marathon (and who are athletic mortals), completing one marathon is a large, great and noteworthy achievement in life.  I’ve done two, and I thought there was a distinct possibility that I was going to die both times, including one I ran with Brad .  But I’ve never felt better in my life than crossing the finish tape those two times.  I’m glad I did them.  I might even have another one or two in me in my lifetime.  But doing 50 of them in 9 years?  That’s a Hairy and Audacious Goal.

For me, I think the Big goal may be more personally useful than the Hairy or Audacious.  The difference between a Big goal and a Hairy/Audacious one?  Hard to say.  Maybe Hairy/Audacious is something you’re not sure you can ever do, where Big is just something that will take a long time to chip away at.  For example, I started a quest about 10-12 years ago to read a ton of American history books, around 50% Presidential biographies, from the beginning of American history chronologically forward to the present.  This year, I am up to post-Civil War history, so roughly Reconstruction/Johnson through Garfield, maybe Arthur.  I read plenty of other stuff, too – business books, fiction, other forms of non-fiction, but this is a quest.  And I love every minute of it.  The topic is great and dovetails with work as a study in leadership.  And it’s slowly but surely making me a hobby-level expert in the topic.  I must be nearing Malcolm Gladwell’s 10,000 hours by now.

The reason someone sets out on a personal quest is unclear to me.  Some people are more goal-driven than others, some just like to Manage by Checklist, others may be ego-driven, some love the challenge.  But I do think that having a personal quest can be helpful to, as Covey would say, Sharpen the Saw, and give yourself something to focus personal time and mental/physical energy on.

Just because someone isn’t on a personal quest doesn’t mean they’re not great, by the way.  And someone who is on a quest could well be a lunatic.  But a personal quest is something that is useful to look for, interesting and worth learning more about if discovered, and potentially a sign that someone is a high achiever.

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.

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!

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.

(This is the sixth 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, and 5.)

As these posts have been running, a few people have asked me to quickly compare this experience to the experience of being a Startup CEO.  And that’s an interesting way to think about it. In a lot of ways, the couple of weeks of getting the IRT up and running felt like starting up a new business, only a lot more intense.  Following the outline of sections in Startup CEO:  a field guide to scaling up your business…

Part One: Storytelling.  The whole timeframe was super compressed.  It took us 2 days to be able to spend 4 hours writing our initial pitch deck defining scope, structure, and staffing request – and that was while we were working hard on our first two workstreams.  In a startup environment, that process would have taken much longer, involved more customer discovery and product/market fit research and spending 100% of our time on that. But then we got our “approval and funding” in about 45 minutes – that would have taken weeks and involved dozens of pitch meetings.  In terms of creating the organization’s Mission, Vision, and Values, we didn’t even bother, although I think it helped that the three of us were generally on the same page with how to work and that urgency was the essence of our job. The larger emergency operations team that we were more or less embedded in also had a very clear set of values and operating principles on display…although we didn’t actually go read them, I think they were in sync with our view of our team’s mission and principles.  In terms of “bringing our story to life,” that was wholly unnecessary!

Part Two: Building The Company’s Human Capital.  Like a startup, getting it right with the first handful of employees means everything.  In this case, the first two deputies on the team, handpicked by the Governor’s staff, were awesome and critical.  Bringing someone in from the private sector to run a public sector team only works when the rest of the team is incredibly knowledgeable about how the machinery of state government works.  And in the end, I think Sarah will be a better leader for the team than I was because she had a combination of private and public sector experience (and within her public sector experience, she had a lot of emergency response experience).  In general, the recruiting process was soooo different than private sector and public sector normally are. The first two team members handpicked the best people they knew in other relevant parts of the government. People were brought onto the team after one short phone call.  Other state departments heads loaned their people willingly. No such thing as a comp negotiation or a reference check. There were a bunch of other things under the “Human Capital” heading that are interesting notes/comparables as well. First, feedback in a compressed-timeframe emergency is something that you absolutely can’t skip – and you can’t wait for a formal process either.  Our team was pretty good about giving feedback at least daily in a semi-structured way as well as in the moment. We didn’t really have time to get into things like career pathing and compensation and firing. We did, after about 6 days at the suggestion of Kacey, our Chief of Staff, move the team to almost entirely remote (other than leadership and occasional critical meetings). This worked surprisingly well for a workforce probably unaccustomed to remote work.  The rest of the world is also learning how to do a lot of that now, too.

Part Three: Execution.  This whole experience was 97% execution.  In fact, we had a hard time finding time for things like strategy and planning because there was a crushing amount of work to do (welcome to emergency response), and a small team to do it.  We didn’t have to worry about raising money, budgeting, forecasting, reporting, and some of the other major execution steps in the private sector. We did do a good job of creating goals and milestones for our workstreams, but even that took a couple of weeks, and in retrospect, I wish we’d been able to do some of those sooner.  In terms of how our work got done, we were very conscious of creating daily meeting routines to structure our day and work – but there was no such thing as even a weekly meeting (let alone monthly strategics or quarterly offsites!), only daily meetings, multiple times per day. One thing that was interesting – I talk in the book about being deliberate and consistent with your platforms, especially around communication.  Channel proliferation is a real issue today (much more so than when I wrote the book), but we had an interesting mismatch at the beginning. The public sector team was used to email, text, and Google hangouts for comms. Nothing else. The private sector team used those things but was a lot more comfortable with Trello, Zoom, and Slack. Thank goodness both teams used G-Suite and not a mix of that and LiveOffice. But getting everyone on the team to converge on a couple systems is a work in progress and was messy, as evidenced in this great moment where Kacey was holding a laptop up to an actual whiteboard to show one of our private sector teams how she was thinking about something. 

Part Four: Building and Leading a Board of Directors.  This is kind of N/A, although the proxy for it in our case on the IRT was the leadership structure of the Emergency Operations Center and then the Governor and the part of his cabinet that was keyed into the emergency response.  In this regard, the main differences between the private sector and public sector were speed/formality (no room for formality when you’re meeting daily or at a moment’s notice!), and, interesting, the need for integration. A company reports to its board on how it’s doing.  This team had to use its “board” to make sure it was integrating with other state agencies and initiatives. In this way, the team functioned more like a business unit within a company than an actual company.

Part Five: Managing Yourself So You can Manage Others.  This was obviously critical…and obviously quite difficult.  And within the overall Emergency Operations Center (outside of our team, the real emergency professionals), there were people, including leaders, who were working 7 days/week for multiple weeks on end, and long days, too.  At one point, the EOC leader posted this note on the wall, and he frequently took time in daily briefings to encourage everyone to take a day or two off and take care of themselves physically.  He role-modeled that behavior as well. You can only run a sprint for so long. Once it becomes clear it’s a marathon, well, you know.

Stay tuned for the final post in the series tomorrow…

Email Marketing 101

We just published a book!  Sign me Up! A marketer’s guide to creating email newsletters that build relationships and boost sales is now available on Amazon.com.  The book is authored by me and my Return Path colleagues Mike Mayor, Tami Forman, and Stephanie Miller.  What’s it about?

– At its core, the book is a very practical how-to guide.  Any company — large or small — can have a great email newsletter program.  They’re easy, they’re cheap, and when done well, they’re incredibly effective.

– This book helps you navigate the basics of how to get there, covering everything from building a great list, to content and design, to making sure the emails reach your customers’ inboxes and don’t get blocked or filtered.

– Our central philosophy about email marketing, which permeates the advice in the book, is covered in my earlier New Media Deal posting (which is reproduced in part in the book’s Preface) — that customers will sign up for your email marketing in droves if you provide them a proper value exchange for the ability to mail them.

– I’d encourage you to buy the book anyway, but in case you need an extra incentive, we are also donating 10% of book sales to Accelerated Cure, a research organization dedicated to finding a cure for Multiple Sclerosis, in honor of our friend and colleague Sophie Miller.

More postings to come about the process of writing, publishing, and marketing a book in 2005 — boy was the experience we had different than it would have been 10 years ago.

Desperately Seeking an Owner for “Other”

A couple weeks ago in Living with Less…For Good, I mentioned that we’re on a crusade against extraneous expenses at Return Path these days, as is pretty much the rest of the world.

After a close review of our most recent month’s financials, we have a new target:  “Other.”  A relatively inconspicuous line on the income statement, this line, which different companies call different things such as “Other G&A” and “General Office,” is inherently problematic NOT because it inherently encompasses a huge amount of expenses, although it might, but rather because it inherently doesn’t have an owner and rarely has a budget.

As we dug into the gory details of “Other” our accounting system (btw – we LOVE Intacct – great web-based application for better information flow and transparency), our Exec team came to this realization the other day.  It’s not that we buy too many pens, per se.  It’s that the absence of someone being in charge of that line item means that no one manages it to a budget – or even just manages it to some kind of reasonability test.  What we found in the details was that there are definitely more areas we can do better at managing expenses here.  No individual item is going to change our income statement profile, but little things do add up to big things in the end.

Whether it’s duplication of expenses, too much FedEx, forgotten recurring items, or the storage locker that we don’t even know what’s in any more, we’re spotting little ways to save money left and right.

For us going forward, we are going to put someone in charge of this line item, develop a budget, and without forcing big-company-like procurement policies on the rest of the organization, manage it down!