Prepping RSS for Prime Time, Part II

David Daniels from Jupiter wrote a good article yesterday in ClickZ about RSS and email marketing.  It reads like a response to comments he received after publishing his main report on this topic earlier in the month.  He tackles three main points:  spam/clutter, personalization, and the (impending) flood of vendors.  It’s definitely worth a quick read if you care about the RSS/email debate and space.

I addressed this topic a little bit last June here, although somehow I forgot about the personalization challenge.  I think RSS is closer to prime time than it was then, but it’s still not quite ready to go toe to toe with email or other forms or more direct/addressable media yet.

A Ball Bearing in the Wheels of E-Commerce

As an online marketing professional, I’ve long understood intellectually how e-commerce works, how affiliate networks function, and why the internet is such a powerful selling tool.  But I got an email the other day that drove this home more directly.

When I started my blog about a year and a half ago, I set myself up as an Amazon affiliate, meaning that any time someone clicks on a link to Amazon from one of my postings or on the blog sidebar, I get paid a roughly 4% commission on anything that person buys on Amazon on that session.

According to the email report I just got from Amazon on Q2 sales driven by my blog, I am responsible for driving traffic that buys about $2,500 worth of merchandise from Amazon every quarter, which yields about $100 to me in affiliate fees.  All I really link to are business books that I summarize in postings, although people who click from my blog to Amazon end up buying all sorts of random things (according to my report, last quarter’s purchases included a Kathy Smith workout DVD and a new socket wrench set in addition to lots of copies of Jim Collins’ Built to Last and Malcolm Gladwell’s Blink.

This is a true win-win-win — Amazon gets traffic for a mere 4% of sales, a relatively low marketing cost; I get a small amount of money to cover the various fees associated with my blog (Typepad, Newsgator, Feedburner), and people who read my blog pay what they’re going to pay to Amazon anyway – and maybe get something they otherwise wouldn’t have gone out to get in the process.

My blog is certainly not a top 1,000 blog, or probably not even a top 10,000 blog in terms of size of audience.  This is merely a microcosm that proves the macro trends.  If I’m driving $10,000 per year of business to Amazon, now I REALLY understand how there are now approximately 500,000 people who make their LIVING by selling goods on eBay, and how probably another 500,000 people are making good side money or possibly even making their living by running offers and affiliate marketing programs from their web sites.  I’m like a little ball bearing in the finely tuned but explosively growing wheel of e-commerce.

If my quarterly affiliate fees keep growing, I’ll find something more productive or charitable to do with them than keep them for myself.  But for now, I am covering my costs and marveling on a personal level at how all this stuff works as well as it does.

Gmail – I Don’t Get It, Part II

Back in June, I blogged about Google’s new Gmail service, how I didn’t understand the fuss, and how its features would ultimately be replicated and true usership stalled at a couple million.  I stand by those assertions (just look at what Yahoo, Hotmail, and Lookout have done to the landscape since then), but my company Return Path published some data today that’s interesting on this topic.

We run the largest Email Forwarding and Email Change of Address service around, so our data on email switching is pretty solid — we’ve had about 16 million consumers register a change of email with us in total, and about 25,000 new ones come in every single day to report a new ISP.  So our numbers are probably pretty good relative to each other (ISP to ISP or month to month at the same ISP), but they’re certainly not meant to be correct on an absolute basis.

– In July, we saw 375 people join Gmail, in August, 802, and in September, 2,396.  To put these numbers in context, we see 50,000-100,000 new users every month at Hotmail  and Yahoo, and even 5,000-15,000 new users every month at smaller ISPs like AOL, Earthlink, Comcast, and Roadrunner.  These numbers are obviously on the rise, but they’re still pretty small.  In all fairness, though, G-mail is still invitation-only, at least in theory.

– Gmail is mainly stealing share from Hotmail and Yahoo, twice as rapidly from Hotmail as from Yahoo — and twice as rapidly from Yahoo as from AOL.

Read the full article in eMarketer here.

After I saw the article this morning, I asked my colleagues Jack Sinclair and Jennifer Wilson to tell me how many people we saw leaving Gmail every month, an interesting metric to offset the one most people are interested in covering.  The answer at this point is also revealing.  While we recorded 2,396 new Gmail users in September, we also recorded 741 people leaving Gmail in the same month.   That’s a sign to me that a lot of people are trying it out to see what the buzz is all about, but many are quickly switching back after a little experimentation.

And yes, we also took a look at how many people are leaving Yahoo, Hotmail, and AOL every month relative to the number of people joining those services.  Hotmail and Yahoo do a lot of treading water (lots of people leaving, lots of people joining), but let’s just say I wouldn’t want to be the guy in charge of AOL subscriptions these days.

Steve Bayle has a similar posting to my How to Negotiate a Term Sheet posting from a couple weeks ago. While he has a lot of good points, his view is far more cynical than mine. I think an entrepreneur can be friends with his or her investors and board members and that their interests for the company are more often than not aligned. Of course an entrepreneur’s personal career goals may differ from an investor’s goals for the company, but that’s apples and oranges.

As long as both parties behave like grown ups, have a healthy dose of self-awareness, communicate openly, regularly, and clearly, and realize that successful business relationships require no less effort than successful marriages, the entrepreneur/VC relationship can work brilliantly. Call me an idealist (or maybe it’s just that I have great VCs), but entrepreneurship is all about making things a reality, isn’t it?

We just spent three days whitewater rafting in Glacier National Park, Montana.  It was great fun for many reasons, but one thing that really struck me is how rare it is to completely unplug these days.  No cell phone, no email, no TiVo, no electricity.  Not even an iPod.  Just a raft, a tent, and an open fire for cooking.  And I’d venture to guess that of the 15 other people on our trip besides the two of us, not a single one even knows what a blog is, let alone writes one.  In many ways, those three days of being unplugged were as refreshing as two weeks on many other vacations.

Today, we are announcing the big news that my company, Return Path, has acquired NetCreations, Inc. Since there ought to be some small perk for subscribing to a CEO’s ramblings on a blog or via RSS, I thought I’d give everyone here the heads up before the news hits the wire tomorrow. (I am fully aware that this is also an excuse for a rare bit of self-promotion, so my apologies in advance.)

We are very excited about this move. It puts, under one roof, a great client base and an unparalleled collection of advanced, ROI-generating email services: customer acquisition, customer retention, delivery assurance, and quick turnaround market research.

Most marketers and publishers we talk to say the two hardest things to execute in email are building their customer database and getting their email into the inbox (not blocked and filtered). Now, we can help them with both, and more. We are very excited to join forces with NetCreations to create an email powerhouse in New York and Colorado…and a big welcome to Mike Mayor and his team to Return Path.

That’s not just the title of a mediocre 1980’s sitcom starring Tony Danza, it’s a question I get periodically, including last week in an interview. A writer I know is working on an article on entrepreneurship and asked me, “Before you started your own business, how did you like working for other people?”

The question made me think a little bit. I know what she was asking — how I liked being the boss instead of working for one — but the way she phrased it is interesting and revealing about what it’s like to be a CEO. One of the biggest differences between being in a company and starting or running one is that you’re not working for a person, you’re working for many people.

As CEO of the company, I work for a Board and shareholders, I work for our customers, and I work for our employees. That’s how I approach the job, anyway.

Return Path’s Board of Directors is my boss, even though I’m one of the people on it. I report to the Board, and the Board is responsible for hiring and (hopefully not) firing the CEO, so technically, that’s my boss. The Board is also made up (for small private companies, anyway) of representatives of our biggest shareholders. As the main owners of the business, they are concerned with the growth, profitability, and overall health of the company, and they want to make sure we are building shareholder value day in, day out. That’s one very important perspective for me to have every day.

But I also work for our customers. I have to see myself as serving them — and more important, I have to steer the organization to believe that our customers are at the top of our food chain. If I do, then things will go well in the business. We will have the right products in the market at the right time to bring in new accounts. We will have a tremendous service delivery organization that wows customers and keeps them coming back for more. We will beat out our competition any day of the week. We will keep people paying our bills!

Most important, though, I work for our employees. This is very simple. An organization thrives because the people who make it up come to work inspired, focused, and productive. When they don’t, it doesn’t. I can’t wave a wand and make everyone happy all the time, but I try to focus a significant part of my time on making sure this is a great work environment; that the managers and executives are religiously focused on developing, managing, and motivating their teams; and that we’re doing a good job of communicating our mission, our values, and why each person’s job is important to the cause. This one’s the hardest of the three to get right, but it’s worth the effort.

Certainly, I don’t respond to each of my “bosses” every day as I would a direct supervisor, but in the long haul, I have to balance out the needs and interests of all three constituencies in order to have the organization be successful.

We spent the weekend in Hudson, New York, a charming, urban-renewing town about two hours north of the city. My cousins Michael & Marianne opened a wine store called Hudson Wine Merchants on the main drag in town, Warren Street (343 Warren St. to be exact, you should definitely check it out if you’re ever in Hudson).

The store opened for the first time Friday evening, and we had the first full day on Saturday. Mariquita and I, and some other friends of Michael & Marianne’s, helped do everything from stock the shelves, to clean the windows, to use the price tag gun (fun!), to work the register and the very fickle POS software, to watch my cousin’s daughter as she rode her tricycle through the store. It was fun but exhausting. It inspired a few different postings here, which I’ll work on in the coming days.

The first thought I had is that being CEO of a two-person company has a lot in common with being CEO of a 200-person company, or, I imagine, a 20,000-person company:

– You worry incessantly about keeping your customers happy and providing a great customer experience and the right product

– You have numbers running in the back of your head all the time. How much are you selling? At what margin? Are you making money?

– You work your ass off and frequently put business first in order to see it succeed

– You think about the little things, the big things, everything, 24 hours a day

Obviously, there are many differences between running a two-person company and running a much larger organization as well; of course, the biggest is managing, developing, and worrying about lots of employees’ welfare. But it struck me that there are more similarities than meet the eye.

There’s been much coverage in the news of Saturday’s passing of President Ronald Reagan, but I will add a new wrinkle by trying to distill down what I know and remember of The Great Communicator’s leadership style into a few simple lessons of note for CEOs.

Lesson 1: Sunny optimism motivates the people you lead, but only when it’s balanced with hard-headed realism. Reagan’s message that tomorrow can be a better day than today was powerful and timely for the American psyche, but he didn’t just assume that because he said it, it would be true. He backed up his message with (a) an understanding that the American economy itself was in the doldrums in the late ’70s, and (b) policies designed to fix the economy. Whether you agree with those policies or not, you have to respect the fact that Reagan as a leader wasn’t just talk — he combined the talk with reality-based action. That’s super important when communicating key messages to a company of any size.

Lesson 2: Simplicity of messaging beats out measured intellectualism in broad-based communications. Reagan’s view of the 40-year-old Cold War when he took office was “we will win, and they will lose.” Much easier to rally around than messages of detente and containment (this quote came from an editorial by former Reagan staffer Peter Robinson in today’s Wall St. Journal). Similarly, the bigger and more diverse the group you’re talking to inside your company or in a speech or in the press, the more important it is to boil your key message down to something people can easily take away with them and repeat at home later to their spouse or friends.

Lesson 3: Nobody’s perfect, and you don’t have to be perfect either. He may have been, electorally, the most popular president of our generation, but Reagan certainly had his many and sometimes glaring faults. History will acknowledge his faults but overall judge him on his performance. It was noted (also in today’s Journal, I think) that Reagan got a lot of little things wrong, but in the end, he will be remembered because he got a few big things very, very right. Perfection is something that most mortals can’t achieve, certainly not in a high profile position like President or CEO of anything, whether a 10-person startup or a nation.

Love him or hate him, the man was one of the most prominent leaders of our time. I’m sure there are more lessons from Reagan’s legacy than these three for CEOs, but this is a start, anyway.

Yes, that’s me. I’m in an ice pocket inside a glacier on Antarctica, the most interesting place Mariquita and I have ever been, and I think the most interesting place on earth. We were there last winter with a great tour company called Adventure Network and had the trip of a lifetime.

And yes, the picture does have something to do with the theme of the blog, You’re Only a First Time CEO Once. 🙂

Change of Name

Fellow CEO Greg Reinacker posted an open question on his blog about whether he should change the name of his company, NewsGator. This is a GREAT topic.

We struggled with it for years at MovieFone, because at some point, the Internet became a huge part of the business, and the name seemed antiquated. Plus, everyone knew us by the phone number, 777-FILM (or whatever number it happened to be in any given city). But it had 10 years of brand equity at that point behind it.

Return Path used to be called uLocate.com a really long time ago, and we changed the name to be less “dot com” three months after we got started (that’a story for another posting as well). People ask me all the time if I sitll think that Return Path is the best name possible for the company. I’m sure there’s a better one out there, but I am sure it’s going to be hard to convince me to change it. Why? Let’s start with these 3 reasons:

1. It’s close enough. We’re in the email business, in general, and Return Path is a good name for people in the industry to remember (it’s the first two words in every email header) for people in the industry, and it’s easy enough to say.

2. It has good equity. Almost five years in, most of our customers and industry watchers know it. Of course, it’s not Coke and has limited equity in the grand scheme of things, but its equity relative to the size of our enterprise is meaningful. That’s the important part. There’s a reason GE is still called GE even though its primary business is financial services now.

3. I have no idea what business we’re going to be in three years from now. Ok that’s an overstatement. I’m pretty sure we’ll still be in email. But while there are perhaps more appropriate names for us today, in today’s dynamic technology market, the company might look very different down the road, and changing a name is painful enough that I wouldn’t do it without a MAJOR event underway like a dramatic change of focus for the company, or a massive acquisition.

That said, if I had happened to name the company CompuTyco or EmailEnron, I’d change it because the collateral damage or risk thereof. If my mom had named me Adolph, Osama, or Saddam, I’d also be headed down to the courthouse to switch to a new one. They’re not as evil as a bad dictator of course, but Gator has so much baggage — they changed their own name to Claria!

So Greg, change that name despite the challenges outlined above. You’re lucky in that t’s still early enough for you. Just make sure you pick a new name that’s flexible and extensible into other areas in case the business you have in three years isn’t the business you have today. And don’t bother with an expensive naming consultant (let me know if you want to hear about that nightmare). Just have a good, structured brainstorm with your team.