I was trading emails a few weeks ago Elliot Noss from Tucows about the current state of the economy after being on a panel together about it, and he wrote:

The market is fascinating right now. Heated competition AND layoffs and hiring freezes. It feel like an old European hotel where there are two faucets, one is too hot and the other too cold.

While a quick rant about European hotel bathrooms could be fun…we’ll just stick to the sink analogy. As anyone who has ever tried to use one of these sinks that Elliot describes knows, they’re hard to use and illogical. Sure, sometimes you want freezing water and sometimes you want scalding water (I guess), but often, you want something in between. And the only way to achieve that is to turn on both freezing and scalding at the same time? That’s weird.

Then I was on another email thread recently with a group of CEOs, when John Henry from Ride With Loop said this:

Whatever the climate, we all surely agree there is no bad time to build a good business.

How true that is!

But here’s the worrisome part. It’s impossible to predict what’s going to happen next. We are in uncharted territory here with a land war in Europe, a partial global oil embargo of a top tier oil producer, a pandemic, supply chain problems, etc. etc. There are days and circumstances where everything feels normal. Plenty of businesses, especially in the tech sector, are kicking ass. And yet there are days and circumstances that feel like 2001 or 2009. It’s tough to navigate as a startup CEO. Yes, it’s obvious you should try to have a couple years of cash on hand, and that you should be smart about investments and not get too far ahead of revenue if you’re in certain sectors (presumably if you’re in an R&D intensive field and weren’t planning to have revenue for years on end, life isn’t all that different?). But beyond that, there’s no clear playbook.

And that’s where the worrisome line comes in. I saw Larry Summers on Meet the Press last weekend, who predicted that

a recession would come in late 2023.

Wait, what? Aren’t things messed up now? Yes, inflation is high, the stock market is down, and interest rates are creeping up. But the economy is still GROWING. Unemployment is still LOW. Summers’ point is a reminder that contraction is likely, but it may still be a ways off, it depends how the Fed handles interest rate hikes (and about a zillion other things), and it’s impossible to predict. That was more worrisome to me. If we’re navigating choppy waters now, it may not just be for a couple of quarters. It may be that 4-6 quarters from now, we are in for 2-3 quarters of contraction. That is a more than most companies are able to plan for from a cash perspective.

Frothy macro environments lead to bad businesses getting created, too many lookalike businesses popping up, or weak teams getting funded. When the tide goes out, as they say, you can see who is swimming naked. But if you’re building a good business, one that has staying power and a clear value proposition, with real people or clients paying real money for a real product or service, and if you’re serious about building a good company, keep on keeping on. Be smart about key decisions, especially investment decisions, but don’t despair or give up.

We’ll all get through this.

How to Get Laid Off – an Employee’s Perspective

One of my colleagues at Return Path  saw my post about How to Quit Your Job about 5 years ago and was inspired to share this story with me.  Don’t read anything into this post, team!  There is no other meaning behind my posting it at this time, or any time, other than thinking it’s a very good way of approaching a very difficult situation, especially coming from an employee.

In 2009 I was working at a software security start up in the Silicon Valley.  Times were exceedingly tough, there were several rounds of layoffs that year, and in May I was finally on the list. I was informed on a Tuesday that my last day was that Friday.  It was a horrible time to be without a job (and benefits), there was almost no hiring at all that year, one of the worst economic down turns on record.  While it was a hard message,  I knew that it was not personal, I was just caught up on a bad math problem.

After calling home to share the bad news, I went back to my desk and kept working. I had never been laid off and was not sure what to do, but I was pretty sure I would have plenty of free time in the short term, so I set about figuring out  how to wrap things up there.  Later that day the founder of the company came by, asked why I had not gone home, and I replied that I would be fine with working till the end of the week if he was okay with it.  He thanked me.

Later that week, in a meeting where we reviewed and prioritized the projects I was working on, we discussed who would take on the top three that were quite important to the future of the company.  A few names were mentioned of who could keep them alive, but they were people who I knew would not focus on them at all.  So I suggested they have me continue to work on them, that got an funny look but when he thought about it , it made sense, they could 1099 me one day a week.  The next day we set it up.  I made more money than I could of on unemployment, but even better I kept my laptop and work email, so I looked employed which paid off later. 

That one day later became two days and then three, however, I eventually found other full time work in 2010.  Layoffs are hard,  but it is not a time to burn bridges.   In fact  one of the execs of that company is a reference and has offered me other opportunities for employment.

Book Short:  The Little Engine that Could

Authors Steven Woods and Alex Shootman would make Watty Piper proud.  Instead of bringing toys to the children on the other side of the mountain, though, this engine brings revenue into your company.  If you run a SaaS business, or really if you run any B2B business, Revenue Engine:  Why Revenue Performance Management is the Next Frontier of Competitive Advantage, will change the way you think about Sales and Marketing. The authors, who were CTO and CRO of Eloqua (the largest SaaS player in the demand management software space that recently got acquired by Oracle), are thought leaders in the field, and the wisdom of the book reflects that.

The book chronicles the contemporary corporate buying process and shows that it has become increasingly like the consumer buying process in recent years.  The Consumer Decision Journey, first published by McKinsey in 2009, chronicles this process and talks about how the traditional funnel has been transformed by the availability of information and social media on the Internet.  Revenue Engine moves this concept to a B2B setting and examines how Marketing and Sales are no longer two separate departments, but stewards of a combined process that requires holistic analysis, investment decisions, and management attention.

In particular, the book does a good job of highlighting new stages in the buying process and the imperatives and metrics associated with getting this “new funnel” right.  One that resonated particularly strongly with me was the importance of consistent and clean data, which is hard but critical!  As my colleague Matt Spielman pointed out when we were discussing the book, the one area of the consumer journey that Revenue Engine leaves is out is Advocacy, which is essential for influencing the purchase process in a B2B environment as well.

One thing I didn’t love about the book is that it’s a little more theoretical than practical. There aren’t nearly enough detailed examples.  In fact, the book itself says it’s “a framework, not an answer.”  So you’ll be left wanting a bit more and needing to do a bit more work on your own to translate the wisdom to your reality, but you’ll have a great jumping off point.

Why I joined the DMA Board, and what you can expect of me in that role

I don’t normally think of myself as a rebel. But one outcome of the DMA’s recent proxy fight with Board member Gerry Pike is that I’ve been appointed to the DMA’s Board and its Executive Committee and have been labeled “part of the reform movement” in the trade press. While I wasn’t actively leading the charge on DMA reform with Gerry, I am very enthusiastic about taking up my new role.

I gave Gerry my proxy and support for a number of reasons, and those reasons will form the basis of my agenda as a DMA Board member. As a DMA member, and one who used to be fairly active, I have grown increasingly frustrated with the DMA over the past few years.

1. The DMA could be stronger in fighting for consumers’ interests. Why? Because what’s good for consumers is great for direct marketers. Marketing is not what it used to be, the lines between good and bad actors have been blurred, and the consumer is now in charge. The DMA needs to more emphatically embrace that and lead change among its membership to do the same. The DMA’s ethics operation seems to work well, but the DMA can’t and shouldn’t become a police state and catch every violation of every member company. Its best practices and guidelines take too long to produce and usually end up too watered down to be meaningful in a world where the organization is promoting industry self-regulation. By aggressively fighting for consumers, the DMA can show the world that a real direct marketer is an honest marketer that consumers want to hear from and buy from.

2. Despite a number of very good ideas, the DMA’s execution around interactive marketing has been lacking. The DMA needs to accept that interactive marketing IS direct marketing – not a subset, not a weird little niche. It’s the heart and soul of the direct marketing industry. It’s our future. The acquisition of the EEC has been one bright spot, but the DMA could do much more to make the EEC more impactful, grow its membership, and replicate it to extend the DMA’s reach into other areas of interactive marketing, from search to display advertising to lead generation. The DMA’s staff still has extremely limited experience in interactive marketing, they haven’t had a thought leader around interactive on staff for several years, and their own interactive marketing efforts are far from best practice. Finally, the DMA’s government affairs group, perhaps its greatest strength, still seems disproportionately focused on direct mail issues. The DMA should maintain its staunch support of traditional direct marketers while investing in the future, making interactive marketing an equal or larger priority than traditional direct marketing. We have to invest in the future.

3. Finally, I think the DMA suffers from a lack of transparency that doesn’t serve it well in the hyper-connected world we live in here in 2009 – that’s a nice way of saying the organization has a big PR problem. The organization does a lot of great work that never gets adequately publicized. This whole proxy fight episode is another example, both in the weak response from the DMA and also in a lot of the complaints Gerry lodged against the organization, many of which the organization says are untrue or misleading. Senior DMA execs or Board members should be blogging. They should be active thought leaders in the community. They should be much more engaged with their members to both understand member needs and requirements and more aggressively promote their agenda.

In short, I will be an independent voice who advocates for progress and change in the areas that I consider to be most important, and I will be transparent and open about expressing my views. I’ve already been clear with the existing DMA Board and management that I do have this agenda, and that I hope the organization will embrace it. If they do, even if only in part, I think it will be to the DMA’s benefit as well as the benefit of its members. If they reject it wholesale, my interest in long-term involvement will be fairly low.

That’s the story. As I said up front, I am taking up this new role with enthusiasm and with the belief that the DMA is open to change and progress. We’ll see how it goes, and I will blog about it as often as I can.

Do you have thoughts on the future of the DMA? I’d love to hear from you. You can leave a comment below or email me directly at matt at returnpath dot net.

Less is More

I have a challenge for the email marketing community in 2009. Let’s make this the Year of “Less is More.”

Marketers are turning to email more and more in this down economy. There’s no question about that. My great fear is that just means they’re sending more and more and more emails out without being smart about their programs. That will have positive short term effects and drive revenues, but long term it will have a negative long term impact on inboxes everywhere. And these same marketers will find their short term positive results turning into poor deliverability faster than you can say “complaint rate spike.”

I heard a wonderful case study this week from Chip House at ExactTarget at the EEC Conference. One of his clients, a non-profit, took the bold and yet painful step of permissioning an opt-out list. Yikes. That word sends shivers down the spine of marketers everywhere. What are you saying? You want me to reduce the size of my prime asset? The results of a campaign done before and after the permission pass are very telling and should be a lesson to all of us. The list shrank from 34,000 to 4,500. Bounce rate decreased from 9% to under 1%. Spam complaints went from 27 to 0 (ZERO). Open rate spiked from 25% to 53%. Click-through from 7% to 22%. And clicks? 509 before the permissioning, 510 after. This client generated the same results, with better metrics along the way, by sending out 87% LESS EMAIL. Why? Because they only sent it to people who cared to receive it.

This is a great time for email. But marketers will kill the channel by just dumping more and more and more volume into it. Let’s all make Less Is More our mantra for the year together. Is everyone in? Repeat after me…Less Is More! Less Is More!

A Better Way to Shop

I love Zappos.com.  It’s rapidly becoming the only place I buy shoes.  Their web site experience is ok – not perfect, but pretty good, but their level of service is just unbelievable.  They are doing for e-commerce (shoes in particular) what Eos is doing for air travel.

They’re always great at free shipping and have always been super responsive and very personal and authentic when it comes to customer service.  But today took the cake.  I emailed them when I placed an order for new running shoes because I also wanted to buy one of those little “shoe pocket” velcro thingies that straps onto shoelaces and holds keys and money for runners.  I didn’t find one on the Zappos site and just asked if they carried the item in case I missed it.

Less than 24 hours later, I got an email reply from Lori, a Customer Loyalty Representative there, who apologized for not carrying the item — and then provided me with a link to buy it on Amazon.com which she had researched online herself.

Zappos’s tag line on their emails says it all:

We like to think of ourselves as a service company that just happens to sell shoes.

Does your company think of itself and its commitment to customer service like that?

(This post was written by my colleague Bethany Crystal and originally published on the Bolster blog yesterday. While I am still trying to figure out what posts to put on this blog vs. Bolster’s blog since the blogs are pretty similar, I will occasionally run something in both places.)

At Bolster, we believe that 2021 will mark the rise of the on-demand economy for executives. More than ever before, executives are seeking out roles that distinctly aren’t full-time for a variety of reasons – they’re in between full-time roles and want to stay engaged and meet a wide range of potential employers; they’re retired or semi-retired/post-exit and want to keep working, just not full-time; they’re fully employed but are looking for advisory opportunities to help others; or they are committed to the more flexible lifestyle that being an on-demand affords. As business leaders, you might be wondering how to take advantage of this trend and incorporate on-demand talent onto your existing team. Don’t worry – we’ve got you covered.

Let’s start with a quick primer on the distinct types of on-demand talent. Here are the four most common themes we see among our member network at Bolster:

The Four Types of On-Demand Talent

1. Interim: Someone who is partially or fully dedicated to working with your company, but only temporarily (you can think of them as “filling a gap”)
2. Fractional: Someone who works part-time (or “fractionally”) with your company on an ongoing basis (they “own” the function on a long-term, part-time basis)
3. Advisor or Coach: Someone who supports your existing team by offering external advising, coaching, or mentorship as needed (this might be on a temporary or long-term basis)
4. Project-Based: Someone who is brought on to complete a specific project or a fixed span of work (this is the closest to typical consulting work)

Depending on your business needs, the capacity of your existing team, and your resourcing, you might find it useful to have one or more on-demand executives in the mix at any given time. We’ve also found this can be a great way to keep things fresh at the leadership level and make sure new ideas are circulated with some regularity.

Business Opportunities for On-Demand Talent

While every company’s on-demand talent needs will vary, we’ve already seen a few patterns emerge from the 2,000 executives in our member network. Here are a few times to think about bringing on-demand work to your business.

Choose interim work if you need…

• A temporarily placeholder at the exec level
  Whether unexpected or planned, transitions at the executive level can come with a high cost: Any week that goes by with an unfilled seat adds more work to the team, contributes to business lag, or both. While full executive searches can take six months (or more!) to get right, many CEOs find it helpful to bring on interim help as a “stopgap” in the meantime. The most obvious benefit of interim on-demand work is to prevent your business from falling behind in areas where you may not have a deep bench below the executive level. And you might also consider that bringing in a seasoned professional as you conduct your full-time search will give your team a proxy to compare against, making that placement process a bit easier. Last – while it’s not a guarantee, there’s always the chance that your interim hire is a great fit for you and wants to stick around for the long term! You then benefit from an on-the-job “interview” or audition.
• Surge capacity staffing
  Imagine a situation where your business doesn’t need an executive in a particular function. You’re small, scrappy, and you’re getting along perfectly well with the team you have in place – and you can fill in the bits of executive leadership required for that function yourself from time to time. But then something pops up where you need to be the CEO and can’t afford to ALSO be the CXO. An interim CXO could be the right solution. For example, the 3-5 months run-up to a Series A or B financing could be a good time to bring on an experienced CFO if your only relevant team members are handling AP, AR, and Payroll. Or you could be working on your company’s public launch with a less experienced marketing team and an agency – and an interim CMO could make all the difference between success and sideways.
• Parental leave coverage
  With a growing business trend of increased parental leave coverage, CEOs are starting to use interim executives to fill holes that might temporarily exist on the leadership team. Interim work is particularly useful if there isn’t an obvious “second in command” role on that team who might take on a stretch project in their absence. Implemented correctly, bringing on an interim exec can also help to squash any fears of “getting replaced” while someone is away on leave. As an added bonus, bringing in a new face (if only temporarily) can give the remaining team a chance to “try out” a new leadership style and share feedback about what worked and didn’t work during the interim period.

Choose fractional work if you need…

• A seasoned professional’s experience and skillset (but not all the time)
  Before every full-time leadership hire, there is the sticky “in between” period of need. That’s the period when some work starts piling up, but not quite enough to fill an entire work week for one person at the executive level – or the period when you know you need a more seasoned leader in a function but just can’t afford one full-time. If you don’t have an experienced executive in the role, you miss opportunities for effectively setting up scalable practices and processes. Often, a lack of senior focus in a functional area means that you miss strategic opportunities, and sometimes it also means that you expose yourself to risk that could be avoided with the right person having ownership of the function. This is the perfect time to introduce fractional work to your business. The most classic example of fractional executive talent is the CFO who oversees the bookkeeping and accounting for several companies at once. But you can find a fractional executive for just about anything. You might consider this type of on-demand executive if you don’t yet have anyone in that functional area, if you have a team of less experienced specialists or even a more junior generalist leader in that functional area, if you want a taste of what it’d be like to dedicate more resources there, or if you need just a few things done right, without having to think about them yourself.

Choose advisory or coaching work if you need…

• Mentorship for your current executives
  Sometimes it’s helpful to see what “great” looks like in order to achieve greatness yourself. If you’re looking for a way to give a current leader an added boost to their development plan, consider bringing on someone who can serve as a mentor or advisor on a temporary or long-term basis. Someone who has been in your shoes before and can give advice and guidance based on their experience. This on-demand exec role has two big benefits: The first being that it demonstrates to your executive team that you’re committed to their ongoing success and growth, which boosts morale (and hopefully performance). The second is that you’ll be able to equip your current team with the tools they each need to scale instead of having to bring on a new wave of executives for each business stage. The advisor or coach usually works a few hours per month, once they’ve set up a strong coaching relationship.
• Access to top talent without the full-time price tag
  Just as remote work unlocked the potential to find “the best of the best” without geographic constraints, on-demand work does the same at the executive level. More and more, we’re seeing CEOs incorporate advisors to their business as a way to gain exposure to best in class talent (at a fraction of the cost). This can be a great way to introduce subject matter or functional expertise into your organization without committing to a full-time salary.

Choose project work if you need…

• A fixed-scope expert engagement at the executive level
  Just as tools like Task Rabbit made it possible to find experts to accomplish tasks on a personal level (such as moving furniture or painting a bedroom), on-demand talent makes it possible to find seasoned executives to complete one-off projects at an expert level. That’s why, on Bolster, we ask each each member to indicate what roles they can take on, and also what projects they can be hired to do. As a CEO, you might consider outsourcing some of the crunchy stuff at the exec level that might take a lot of time, or in cases where you need a quick turnaround to get to an MVP. Common projects we’ve seen to date include building sales commission plan structures, designing a go-to-market launch plan for a new product, running due diligence on an acquisition, overhauling pricing and packaging, working on a strategic plan, TAM analysis, budgeting process, or creating a diversity & inclusion strategy for the company.
• An experimental project that won’t distract the current team
  One final area where you might consider on-demand work is for a project that feels more like an addendum to your current business, or an early experiment. At Bolster, we brought on an on-demand executive to help us think through and roll out a brand new product that we’re in the early days of testing right now. We’ve seen other CEOs use project-based work at the exec level for things like evaluating market expansion possibilities or speccing out the MVP of a potential new product.

This is just a short list of some of the possibilities where on-demand talent might support you in your business today. One of our favorite parts about this type of work is just that – the flexibility it offers to you and your team. Whether your business is just getting started or if you’re operating on all cylinders, don’t forget to consider on-demand work as part of your CEO toolkit for this year and beyond.

– Bethany Crystal, February 2, 2021

The Best Place to Work, Part 0

I keep getting questions about a deck I’ve used several times at Techstars, Seedcamp, DreamIt, and the like which is called “7 Ideas for Creating the Best Place to Work.”  So today I will launch a 7-part series over the next 7 weeks to describe my 7 points.  As always, this is not intended to be perfect or comprehensive, but it is a bit of lessons learned over the last 12-13 years at Return Path.  It’s just 7 ideas – not the only 7 ideas.  And there’s nothing magic about the number 7, despite what George Costanza says.  Or Steven Covey.

Here’s the outline:

1. Surround yourself with the best and brightest
2. Create an environment of trust
3. Manage yourself very, very well
4. Be the consummate host
5. Be the ultimate enabler
6. Let people be people
7. Create a thankful atmosphere

Let’s go!  I will create a tag cloud for this series called Best Place to Work.

What Kind of Entrepreneur Are You?

I think there are two kinds of entrepreneurs, and sometimes, you can be both.  There is the kind that starts businesses, and there is the kind that builds businesses.

The kind of entrepreneur who starts businesses but usually doesn’t like running or building them are typically serial entrepreneurs.  How can you spot one?  They:

• Have an idea a minute and a bit of ADD – they are attracted to bright shiny objects – they can’t focus
  • Would rather generate 1 good and idea and 19 bad ones than just 1 good one
  • Are always thinking about the next thing, only excited by the possibility of what could be, not by what is
  • Are more philosophical and theoretical than practical
  • Probably shouldn’t run businesses for more than a few months
  • Are likely to frustrate everyone around them and get bored themselves
  • Are really fun at cocktail parties
  • Say things like “I thought of auctions online way before eBay!”

The second kind of entrepreneur is the kind of person who can run businesses but may or may not come up with the idea.  Typically, these people:

• Care about success, not about having the idea
• Love to make things work
• Would rather generate 1 idea and execute it well than 2 ideas
• Are problem solvers
• Are great with people
• May be less fun at cocktail parties, but you’d want them on your team in a game of paintball or laser tag

It’s the rare one who can do both of these things well.  But you know them when you see them.  Think Dell or Microsoft…or even Apple in a roundabout way if you consider the fact that Jobs hired Cook (and others) to partner with them to run the business.

OnlyOnce, Part II

After more than six years, my blog starting looking like, well, a six-year old blog on an off-the-shelf template.  Thanks to my friends at Slice of Lime, OnlyOnce has a new design as of today as well as some new navigation and other features like a tag cloud and Twitter feed (and a new platform, WordPress rather than Typepad).  I know many people only read my posts via feed or email (those won’t change), but if you have a minute, feel free to take a look.  The site also has its own URL now – https://onlyonceblog.wpengine.com.

With my shiny new template, I may add some other features or areas of content over time, as well.  There are still a couple things that are only 95% baked, but I love the new look and wanted to make if “official” today.  Thanks to Kevin, Jeff, Mike, Lindsay, and everyone at Slice of Lime for their excellent design work, and for my colleague Andrea for helping do the heavy lifting of porting everything over to the new platform.

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.